GlobeNewswire Inc | Jan 27, 2021 04:15PM EST

January 27, 2021

(Loan Growth (excluding PPP loans1) for 2020 of 9.9%)

SOUDERTON, Pa., Jan. 27, 2021 (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 year ended December31, 2020 of $46.9 million, or $1.60 diluted earnings per share, compared to net income of $65.7 million, or $2.24 diluted earnings per share, for the year ended December31, 2019. Net income for the quarter ended December31, 2020 was $25.9million, or $0.88 diluted earnings per share, compared to net income of $15.5 million, or $0.53 diluted earnings per share, for the quarter ended December31, 2019.

Pre-tax pre-provision income1 for the year ended December31, 2020 was $97.7 million, an increase of $9.1 million, or 10.3%, from the comparable period in the prior year. Pre-tax pre-provision income1 for the quarter ended December31, 2020 was $22.9 million, an increase of $1.8 million, or 8.6%, from the fourth quarter of 2019.

One-Time Items For the QuarterThe financial results for the quarter ended December31, 2020 included a $1.4 million ($1.1 million after-tax), or $0.04 diluted earnings per share, restructuring charge associated with the Corporation's previously announced financial service center optimization plan. The financial results for the quarter ended December31, 2020 also included a charge of $1.1 million ($877 thousand after-tax), or $0.03 diluted earnings per share, in other expense related to the extinguishment of long-term debt. During the fourth quarter of 2020, the Corporation modified the vesting criteria for outstanding performance-based restricted stock grants to better reflect the current operating environment. As a result of these modifications, a benefit of $928 thousand ($733 thousand after-tax), or $0.03 diluted earnings per share, was recognized in salaries, benefits and commissions for the quarter ended December 31, 2020.

COVID-19As a result of the impact of COVID-19, we have taken various actions to support our customers and the communities we collectively serve, including modifying outstanding loans and leases and waiving certain deposit service charges. Loans and leases that were modified via principal and/or interest deferrals were done so 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 been categorized as troubled debt restructurings. These loans and leases had a combined principal balance of approximately $68.0 million as of December 31, 2020, which represents approximately 1.4% of the loan portfolio, excluding Paycheck Protection Program ("PPP") loans1. 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 December31, 2020, the Corporation reduced its allowance for credit losses resulting in a reversal of provision for credit loss expense of $8.7 million, of which $11.6 million (after-tax benefit of $9.2 million), or $0.31 diluted earnings per share, was attributable to changes in economic-related assumptions within the Corporations CECL model offset by a reserve increase attributable to loan growth. During the year ended December 31, 2020, the Corporation recorded CECL related charges of $40.8 million, of which $27.4 million (after-tax charge of $21.6 million), or $0.74 diluted earnings per share, was attributable to changes in economic related assumptions within the CECL model.

LoansGross loans and leases, excluding PPP loans1, increased $436.2 million, or 9.9%, from December 31, 2019 primarily due to increases in commercial real estate loans. Gross loans and leases, excluding PPP loans1, increased $112.8 million, or 9.6% (annualized), from September30, 2020 primarily due to increases in commercial real estate loans. DepositsTotal deposits increased $882.6 million, or 20.2%, from December31, 2019 primarily due to increases in commercial, consumer and public funds deposits. Total deposits increased $31.1 million, or 2.4% (annualized), from September30, 2020 primarily due to an increase in consumer deposits offset by a decrease in commercial deposits.

Net Interest Income and MarginNet interest income of $174.4 million for the year ended December31, 2020 increased $5.1 million, or 3.0%, from the prior year primarily due to lower deposit costs and growth in loans partially offset by a decrease in loan and investment yields. Net interest margin, on a tax-equivalent basis, was 3.16% for the year ended December31, 2020 compared to 3.59% for the year ended December31, 2019. Excess liquidity reduced net interest margin by approximately fourteen basis points for the year ended December31, 2020 compared to eight basis points for the year ended December31, 2019. This excess liquidity was primarily driven by strong deposit balance growth during 2020. PPP loans reduced net interest margin by seven basis points for the year ended December31, 2020 compared to no impact for the year ended December31, 2019. Excluding the impacts of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.37% for the year ended December31, 2020 compared to 3.67% for the year ended December31, 2019. For the year ended December 31, 2020, PPP loans contributed $7.9 million to net interest income. As of December 31, 2020, $7.7 million of net deferred fees remained on the balance sheet, which represents approximately 63% of the initial deferred fee amount.

Net interest margin, on a tax-equivalent basis, was 3.02% for the fourth quarter of 2020, compared to 3.02% for the third quarter of 2020 and 3.44% for the fourth quarter of 2019. Excess liquidity reduced net interest margin by approximately thirteen basis points for the quarter ended December 31, 2020 compared to eighteen basis points for the quarter ended September 30, 2020 and twelve basis points for the quarter ended December 31, 2019. This excess liquidity was primarily driven by strong deposit balance growth in 2020. PPP loans reduced net interest margin by seven basis points for the quarter ended December 31, 2020 compared to ten basis points for the quarter ended September 30, 2020 and had no impact for the quarter ended December31, 2019. Excluding the impacts of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.22%, 3.30% and 3.56% for the quarters ended December 31, 2020, September 30, 2020 and December 31, 2019, respectively. For the quarter ended December 31, 2020, PPP loans contributed $3.1 million to net interest income, of which $369 thousand related to forgiveness activity.

Noninterest IncomeNoninterest income for the quarter ended December31, 2020 was $20.1 million, an increase of $4.0 million, or 24.6%, from the comparable period in the prior year. Noninterest income for the year ended December31, 2020 was $78.3 million, an increase of $12.9 million, or 19.7%, from the comparable period in the prior year.

Net gain on mortgage banking activities increased $3.3 million, or 316.5%, for the quarter and $12.5 million, or 316.7%, for the year ended December31, 2020 from the comparable periods in the prior year, due to an increase in volume and expansion of margins.

Other income increased $923 thousand, or 91.1%, for the quarter ended December 31, 2020 and $3.3 million, or 127.3%, for the year ended December31, 2020 from the comparable periods in the prior year. Fees on risk participation agreements for interest rate swaps increased $1.0 million for the quarter ended December 31, 2020 and $4.4 million for the year ended December31, 2020 from the comparable periods in the prior year, driven by increased customer activity due to the current rate environment. Gain on sale of small business administration (SBA) loans decreased $482 thousand for the year ended December31, 2020 from the prior year due to decreased SBA loan sale activity. Equity securities measured at fair value decreased $266 thousand for the year ended December31, 2020 from the prior year.

Service charges on deposit accounts decreased $1.1 million, or 18.5%, for the year ended December31, 2020 from the prior year due to the waiving of certain deposit service charges for customers in response to COVID-19 during the second quarter of 2020 and reduced customer activity in the third and fourth quarters of 2020.

Other service fee income decreased $1.8 million, or 19.2%, for the year ended December31, 2020 from the prior year. Mortgage servicing right amortization increased $1.4 million for the year ended December31, 2020 from the prior year driven by the decline in interest rates and their impact on prepayment activity. Interchange income decreased $308 thousand for the year ended December31, 2020 from the prior year due to decreased customer transaction activity.

Noninterest ExpenseNoninterest expense for the quarter ended December31, 2020 was $41.7 million, an increase of $4.3 million, or 11.4%, from the comparable period in the prior year. Noninterest expense for the year ended December31, 2020 was $155.0 million, an increase of $8.9 million, or 6.1% from the prior year.

Salaries, benefits and commissions increased $1.7 million, or 7.7%, for the quarter ended December 31, 2020 and increased $4.9 million, or 5.6%, for the year ended December31, 2020 from the comparable periods in the prior year. The increases were 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 quarters of 2019, annual merit increases and increased variable compensation due to strong mortgage banking activity. The increases in salaries, benefits and commissions were offset by the benefit of the previously discussed performance-based restricted stock modifications and $1.3 million of incremental capitalized compensation related to origination of PPP loans. Deposit insurance premiums increased $423 thousand, or 123.7%, for the quarter and $1.8 million, or 232.2%, for the year ended December 31, 2020 from the comparable periods in the prior year primarily due to an FDIC small bank assessment credit of $1.1 million, of which $988 thousand was recognized during the third quarter of 2019 and $114 thousand was recognized during the fourth quarter of 2019, and an increased assessment base for 2020 due to asset growth. Restructuring charges increased $1.4 million for the quarter and year ended December 31, 2020 from the comparable periods in the prior year due to the impact of the financial service center optimization plan discussed previously. Other expense increased $615 thousand, or 9.6%, for the quarter and $1.3 million, or 5.7%, for the year ended December31, 2020 from the comparable periods in the prior year primarily due to charges from the extinguishment of long-term debt discussed previously.

Asset Quality and Provision for Credit LossesNonperforming assets were $40.5 million at December31, 2020, compared to $41.9 million at September30, 2020 and $39.3 million at December31, 2019. Other real estate owned includes a $7.1 million property, which transferred to other real estate owned during the second quarter of 2020. The property is under an agreement of sale and is expected to be sold during the first quarter of 2021.

Net loan and lease charge-offs were $618 thousand during the fourth quarter of 2020 and $4.6million for the year ended December31, 2020. The reversal of provision for credit losses was $8.7 million for the fourth quarter of 2020, due to a reserve decrease of $8.2 million related to loans and leases and $690 thousand related to unfunded commitments, offset by a reserve increase of $176 thousand related to investment securities. The provision for credit losses was $40.8 million for the year ended December31, 2020, of which $39.4 million related to loans and leases, $786 thousand related to reserves for unfunded commitments, and $569 thousand related to investment securities.

Net loan and lease charge-offs were $558 thousand during the fourth quarter of 2019 and $2.6 million for the year ended December31, 2019. The provision for loan and lease losses was $2.2 million for the fourth quarter of 2019 and $8.5 million for the year ended December31, 2019.

The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.56% at December 31, 2020, compared to 1.76% at September 30, 2020, and 0.81% at December 31, 2019. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment, excluding PPP loans1, was 1.72% at December31, 2020, compared to 1.95% at September 30, 2020.

Tax Provision The effective income tax rate was 17.5% for the year ended December31, 2020 compared to an effective income tax rate of 17.9% for the year ended December31, 2019. The Corporation's effective income tax rate reflects the benefits of tax-exempt income from investments in municipal securities and loans and leases.

DividendOn January 27, 2021, Univest declared a quarterly cash dividend of $0.20 per share. The dividend will be paid on February 24, 2021 to shareholders of record as of February 10, 2021.

Conference CallUnivest will host a conference call to discuss fourth quarter and year end 2020 results on Thursday, January 28, 2021 at 9:00 a.m. EST. Participants may preregister at https://dpregister.com/sreg/10150871/e00405b3c0. The general public can access the call by dialing 1-888-338-6515.A replay of the conference call will be available through February 28, 2021 by dialing 1-877-344-7529; using Conference ID: 10150871.

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 $6.3 billion in assets and $4.1 billion in assets under management and supervision through its Wealth Management lines of business at December31, 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 York, 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 trends or factors affecting the financial services industry and, specifically, the financial condition and results of operations, markets and products of Univest. These forward-looking statements involve certain risks and uncertainties in that there are a number of important factors that could cause Univest's future results to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to: (1) competition; (2) changes in interest rates; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and credit 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.

Additionally, 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 whether the gradual reopening of businesses will result in a meaningful increase in economic activity. 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; (2) if the economy is unable to substantially reopen, and higher levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase; (3) collateral for loans, especially real estate, may decline in value; (4) our allowance for credit losses may have to be increased if borrowers experience financial difficulties; (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; (7) 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; (8) our wealth management revenues may decline with continuing market turmoil; (9) 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; (10) our cyber security risks are increased as the result of an increase in the number of employees working remotely; (11) Federal Deposit Insurance Corporation premiums may increase if the agency experience additional resolution costs; and (12) further and sustained decline in our stock price or other triggering event could result in an impairment charge being recorded. Univest undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

(UVSP - ER)

Univest Financial CorporationConsolidated Selected Financial Data (Unaudited)December 31, 2020(Dollars in thousands) Balance Sheet (Period 12/31/20 09/30/20 06/30/20 03/31/20 12/31/19 End)Assets $ 6,336,496 $ 6,382,831 $ 6,125,312 $ 5,464,768 $ 5,380,924 Investment securities,net of allowance for 373,176 368,830 397,852 423,521 441,599 credit lossesLoans held for sale 35,529 14,465 31,082 11,417 5,504 Loans and leases held 5,306,841 5,211,856 4,951,809 4,448,825 4,386,836 for investment, grossAllowance for credit 83,044 91,870 86,217 68,216 35,331 losses, loans and leasesLoans and leases held 5,223,797 5,119,986 4,865,592 4,380,609 4,351,505 for investment, netTotal deposits 5,242,715 5,211,603 4,869,329 4,407,303 4,360,075 Noninterest-bearing 1,690,663 1,714,505 1,725,819 1,318,270 1,279,681 depositsNOW, money market and 2,988,277 2,940,879 2,623,025 2,452,021 2,474,384 savingsTime deposits 563,775 556,219 520,485 637,012 606,010 Borrowings 311,421 416,104 515,722 323,363 263,596 Shareholders' equity 692,472 669,107 654,873 651,551 675,122 Balance Sheet (Average) For the three months ended, For the twelve months ended, 12/31/20 09/30/20 06/30/20 03/31/20 12/31/19 12/31/20 12/31/19Assets $ 6,353,519 $ 6,265,605 $ 6,000,790 $ 5,409,561 $ 5,400,591 $ 6,006,877 $ 5,224,583 Investment securities,net of allowance for 369,511 385,221 411,957 441,900 445,932 402,011 461,841 credit lossesLoans and leases, gross 5,253,720 5,070,037 4,836,858 4,388,584 4,280,430 4,888,801 4,148,619 Deposits 5,222,452 5,030,398 4,794,669 4,349,984 4,374,586 4,850,890 4,186,339 Shareholders' equity 676,426 661,947 660,950 673,460 672,647 668,201 652,453 Asset Quality Data (Period End) 12/31/20 09/30/20 06/30/20 03/31/20 12/31/19 Nonaccrual loans andleases, including nonaccrual troubled debtrestructuredloans and leases $ 31,692 $ 30,019 $ 26,141 $ 36,626 $ 38,578 Accruing loans andleases 90 days or more 1,392 3,573 1,193 1,777 143 past dueAccruing troubled debtrestructured loans and 53 53 53 54 54 leasesTotal nonperforming 33,137 33,645 27,387 38,457 38,775 loans and leasesOther real estate owned 7,355 8,270 8,642 516 516 Total nonperforming $ 40,492 $ 41,915 $ 36,029 $ 38,973 $ 39,291 assetsNonaccrual loans andleases / Loans and 0.60 % 0.58 % 0.53 % 0.82 % 0.88 % leases held forinvestmentNonperforming loans andleases / Loans and 0.62 % 0.65 % 0.55 % 0.86 % 0.88 % leases held forinvestmentNonperforming assets / 0.64 % 0.66 % 0.59 % 0.71 % 0.73 % Total assets Allowance for credit $ 83,044 $ 91,870 $ 86,217 $ 68,216 $ 35,331 losses, loans and leasesAllowance for creditlosses, loans and leases 1.56 % 1.76 % 1.74 % 1.53 % 0.81 % / Loans and leases heldfor investmentAllowance for creditlosses, loans and leases/ Loans and leases heldfor investment, 1.72 % 1.95 % 1.94 % 1.53 % 0.81 % excluding PaycheckProtection Program loans(1)Allowance for creditlosses, loans and leases/ Nonaccrual loans and 262.03 % 306.04 % 329.82 % 186.25 % 91.58 % leases held forinvestmentAllowance for creditlosses, loans and leases/ Nonperforming loans 250.61 % 273.06 % 314.81 % 177.38 % 91.12 % and leases held forinvestment For the three months ended, For the twelve months ended, 12/31/20 09/30/20 06/30/20 03/31/20 12/31/19 12/31/20 12/31/19Net loan and lease $ 618 $ (35 ) $ 3,576 $ 489 $ 558 $ 4,648 $ 2,551 charge-offs (recoveries)Net loan and leasecharge-offs (annualized) 0.05 % (0.00 %) 0.30 % 0.04 % 0.05 % 0.10 % 0.06 %/Average loans andleases (1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document.

Univest Financial Corporation Consolidated Selected Financial Data (Unaudited) December 31, 2020 (Dollars in thousands, except per share data) For the three months ended, For the twelve months ended, For the period: 12/31/20 09/30/20 06/30/20 03/31/20 12/31/19 12/31/20 12/31/19 Interest income $ 51,334 $ 50,612 $ 49,980 $ 52,019 $ 53,369 $ 203,945 $ 214,093 Interest expense 6,813 6,758 6,462 9,551 10,940 29,584 44,861 Net interest 44,521 43,854 43,518 42,468 42,429 174,361 169,232 income(Reversal ofProvision) provision (8,721 ) 3,935 23,737 21,843 2,225 40,794 8,511 for credit lossesNet interest incomeafter provision for 53,242 39,919 19,781 20,625 40,204 133,567 160,721 credit lossesNoninterest income: Trust fee 1,974 1,915 1,924 1,890 1,912 7,703 7,826 incomeServicecharges on deposit 1,371 1,187 890 1,397 1,551 4,845 5,946 accountsInvestmentadvisory commission 4,144 4,005 3,540 4,255 4,064 15,944 15,940 and fee incomeInsurancecommission and fee 3,512 3,776 4,067 4,732 3,609 16,087 16,571 incomeOther 2,092 2,093 1,488 1,870 2,229 7,543 9,341 service fee incomeBank owned 733 741 732 734 741 2,940 3,179 life insurance incomeNet gain onsales of investment 54 57 65 695 13 871 54 securitiesNet gain onmortgage banking 4,323 5,860 3,515 2,744 1,038 16,442 3,946 activitiesOther income 1,936 2,171 1,779 67 1,013 5,953 2,619 Total noninterest 20,139 21,805 18,000 18,384 16,170 78,328 65,422 incomeNoninterest expense: Salaries, benefits and 23,613 24,059 21,700 23,836 21,933 93,208 88,289 commissionsNet occupancy 2,697 2,609 2,478 2,574 2,534 10,358 10,221 Equipment 951 972 923 995 1,027 3,841 4,170 Data processing 2,961 2,862 2,750 2,760 2,685 11,333 10,450 Professional fees 1,436 1,321 1,264 1,317 1,475 5,338 5,563 Marketing and 575 463 535 402 710 1,975 2,594 advertisingDeposit insurance 765 707 615 504 342 2,591 780 premiumsIntangible expenses 282 283 321 330 374 1,216 1,595 Restructuring charges 1,439 - - - - 1,439 - Other expense 7,015 5,251 5,374 6,059 6,400 23,699 22,428 Total noninterest 41,734 38,527 35,960 38,777 37,480 154,998 146,090 expenseIncome before taxes 31,647 23,197 1,821 232 18,894 56,897 80,053 Income tax expense 5,773 5,078 (264 ) (606 ) 3,384 9,981 14,334 (benefit)Net income $ 25,874 $ 18,119 $ 2,085 $ 838 $ 15,510 $ 46,916 $ 65,719 Net income per share: Basic $ 0.88 $ 0.62 $ 0.07 $ 0.03 $ 0.53 $ 1.60 $ 2.24 Diluted $ 0.88 $ 0.62 $ 0.07 $ 0.03 $ 0.53 $ 1.60 $ 2.24 Dividends declared per $ - $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.60 $ 0.80 shareWeighted average 29,274,915 29,226,627 29,187,197 29,286,200 29,327,169 29,243,773 29,299,599 shares outstandingPeriod end shares 29,295,052 29,241,302 29,201,985 29,164,782 29,334,629 29,295,052 29,334,629 outstanding

Univest Financial CorporationConsolidated Selected Financial Data (Unaudited)December 31, 2020 For the three months ended, For the twelve months ended,Profitability Ratios 12/31/20 09/30/20 06/30/20 03/31/20 12/31/19 12/31/20 12/31/19(annualized) Return on average 1.62 % 1.15 % 0.14 % 0.06 % 1.14 % 0.78 % 1.26 %assetsReturn on average assets, 1.69 % 1.15 % 0.14 % 0.06 % 1.14 % 0.80 % 1.26 %excluding restructuringcharges (1) Return on average 15.22 % 10.89 % 1.27 % 0.50 % 9.15 % 7.02 % 10.07 %shareholders' equityReturn on averageshareholders' equity, 15.89 % 10.89 % 1.27 % 0.50 % 9.15 % 7.19 % 10.07 %excludingrestructuring charges (1)Return on average tangible 20.53 % 14.82 % 1.73 % 0.68 % 12.40 % 9.52 % 13.82 %common equity (1)Return on average tangible 21.44 % 14.82 % 1.73 % 0.68 % 12.40 % 9.76 % 13.82 %common equity, excludingrestructuring charges (1)Net interest margin 3.02 % 3.02 % 3.18 % 3.48 % 3.44 % 3.16 % 3.59 %(FTE)Efficiency ratio (2) 63.8 % 58.0 % 57.7 % 62.8 % 63.0 % 60.6 % 61.4 %Efficiency ratio, excluding 61.6 % 58.0 % 57.7 % 62.8 % 63.0 % 60.0 % 61.4 %restructuring charges (1) (2) Capitalization Ratios Dividends declared to net 0.0 % 32.3 % 278.7 % 699.9 % 37.8 % 37.4 % 35.7 %income (3)Shareholders' equity to 10.93 % 10.48 % 10.69 % 11.92 % 12.55 % 10.93 % 12.55 %assets (Period End)Tangible common equity to 8.40 % 7.96 % 8.06 % 8.99 % 9.59 % 8.40 % 9.59 %tangible assets (1)Common equity book value $ 23.64 $ 22.88 $ 22.43 $ 22.34 $ 23.01 $ 23.64 $ 23.01 per shareTangible common equity book $ 17.66 $ 16.89 $ 16.41 $ 16.31 $ 17.01 $ 17.66 $ 17.01 value per share (1) Regulatory Capital Ratios (Period End)Tier 1 leverage 9.08 % 8.97 % 9.15 % 9.90 % 10.02 % 9.08 % 10.02 %ratioCommon equity tier 1 10.77 % 10.52 % 10.73 % 10.79 % 11.03 % 10.77 % 11.03 %risk-based capital ratioTier 1 risk-based 10.77 % 10.52 % 10.73 % 10.79 % 11.03 % 10.77 % 11.03 %capital ratioTotal risk-based 15.31 % 15.35 % 13.72 % 13.65 % 13.78 % 15.31 % 13.78 %capital ratio (1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document.(2) Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income.(3) As announced in the September 30, 2020 Earnings Release, the Corporation changed the timing of future dividend declarations and payments.

Univest Financial Corporation Average Balances and Interest Rates (Unaudited) For the Three Months Ended, Tax Equivalent December 31, 2020 September 30, 2020 Basis Average Income/ Average Average Income/ Average (Dollars in Balance Expense Rate Balance Expense Rate thousands)Assets: Interest-earningdeposits with other $ 296,258 $ 82 0.11 % $ 368,181 $ 100 0.11 %banksU.S. government 6,998 36 2.05 6,998 36 2.05 obligationsObligations ofstate and political 14,269 129 3.60 18,004 167 3.69 subdivisionsOther debt and 348,244 1,237 1.41 360,219 1,610 1.78 equity securitiesFederal Home LoanBank, Federal 29,838 438 5.84 28,651 419 5.82 Reserve Bank andother stockTotalinterest-earningdeposits,investments and 695,607 1,922 1.10 782,053 2,332 1.19 otherinterest-earningassets Commercial,financial, and 824,374 7,366 3.55 807,376 7,330 3.61 agricultural loansPaycheck Protection 497,035 3,133 2.51 500,549 2,811 2.23 Program loansRealestate?commercial 2,518,056 24,388 3.85 2,358,971 23,547 3.97 and constructionloansRealestate?residential 1,025,818 10,345 4.01 1,009,407 10,380 4.09 loansLoans to 27,427 289 4.19 28,663 309 4.29 individualsMunicipal loans and 258,627 2,776 4.27 267,364 2,839 4.22 leasesLease financings 102,383 1,690 6.57 97,707 1,662 6.77 Gross loans and 5,253,720 49,987 3.79 5,070,037 48,878 3.84 leasesTotalinterest-earning 5,949,327 51,909 3.47 5,852,090 51,210 3.48 assetsCash and due from 53,360 56,715 banksAllowance forcredit losses, (92,766 ) (87,046 ) loans and leasesPremises and 55,653 55,755 equipment, netOperating lease 34,272 33,875 right-of-use assetsOther assets 353,673 354,216 Total assets $ 6,353,519 $ 6,265,605 Liabilities: Interest-bearing $ 838,323 $ 537 0.25 % $ 725,580 $ 468 0.26 %checking depositsMoney market 1,213,585 898 0.29 1,116,628 897 0.32 savingsRegular savings 905,918 341 0.15 901,716 449 0.20 Time deposits 582,782 2,034 1.39 525,656 2,214 1.68 Total time andinterest-bearing 3,540,608 3,810 0.43 3,269,580 4,028 0.49 deposits Short-term 15,091 2 0.05 130,359 97 0.30 borrowingsLong-term debt 169,623 611 1.43 208,776 742 1.41 Subordinated notes 193,244 2,390 4.92 155,945 1,891 4.82 Total borrowings 377,958 3,003 3.16 495,080 2,730 2.19 Totalinterest-bearing 3,918,566 6,813 0.69 3,764,660 6,758 0.71 liabilitiesNoninterest-bearing 1,681,844 1,760,818 depositsOperating lease 37,616 37,170 liabilitiesAccrued expensesand other 39,067 41,010 liabilitiesTotal liabilities 5,677,093 5,603,658 Shareholders' Equity:Common stock 157,784 157,784 Additional paid-in 296,810 296,272 capitalRetained earnings 221,832 207,891 and other equityTotal shareholders' 676,426 661,947 equityTotal liabilitiesand shareholders' $ 6,353,519 $ 6,265,605 equityNet interest income $ 45,096 $ 44,452 Net interest spread 2.78 2.77 Effect of netinterest-free 0.24 0.25 funding sourcesNet interest margin 3.02 % 3.02 %Ratio of averageinterest-earningassets to average 151.82 % 155.45 % 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 beenincluded in the average loan balances. Tax-equivalent amounts for the threemonths ended December 31, 2020 and September 30, 2020 havebeen 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 December 31,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 $ 296,258 $ 82 0.11 % $ 205,703 $ 860 1.66 % banksU.S. government 6,998 36 2.05 7,297 37 2.01 obligationsObligations ofstate and political 14,269 129 3.60 35,938 324 3.58 subdivisionsOther debt and 348,244 1,237 1.41 402,697 2,684 2.64 equity securitiesFederal Home LoanBank, Federal 29,838 438 5.84 30,653 514 6.65 Reserve Bank andother stockTotalinterest-earningdeposits,investments and 695,607 1,922 1.10 682,288 4,419 2.57 otherinterest-earningassets Commercial,financial, and 824,374 7,366 3.55 830,757 9,197 4.39 agricultural loansPaycheck Protection 497,035 3,133 2.51 - - - Program loansRealestate?commercial 2,518,056 24,388 3.85 2,040,442 23,526 4.57 and constructionloansRealestate?residential 1,025,818 10,345 4.01 966,370 11,566 4.75 loansLoans to 27,427 289 4.19 31,694 458 5.73 individualsMunicipal loans and 258,627 2,776 4.27 325,939 3,323 4.04 leasesLease financings 102,383 1,690 6.57 85,228 1,528 7.11 Gross loans and 5,253,720 49,987 3.79 4,280,430 49,598 4.60 leasesTotalinterest-earning 5,949,327 51,909 3.47 4,962,718 54,017 4.32 assetsCash and due from 53,360 50,794 banksAllowance forcredit losses, (92,766 ) (34,392 ) loans and leasesPremises and 55,653 57,043 equipment, netOperating lease 34,272 34,693 right-of-use assetsOther assets 353,673 329,735 Total assets $ 6,353,519 $ 5,400,591 Liabilities: Interest-bearing $ 838,323 $ 537 0.25 % $ 566,904 $ 941 0.66 % checking depositsMoney market 1,213,585 898 0.29 1,074,066 3,749 1.38 savingsRegular savings 905,918 341 0.15 798,145 870 0.43 Time deposits 582,782 2,034 1.39 648,726 3,261 1.99 Total time andinterest-bearing 3,540,608 3,810 0.43 3,087,841 8,821 1.13 deposits Short-term 15,091 2 0.05 30,404 63 0.82 borrowingsLong-term debt 169,623 611 1.43 153,049 795 2.06 Subordinated notes 193,244 2,390 4.92 94,786 1,261 5.28 Total borrowings 377,958 3,003 3.16 278,239 2,119 3.02 Totalinterest-bearing 3,918,566 6,813 0.69 3,366,080 10,940 1.29 liabilitiesNoninterest-bearing 1,681,844 1,286,745 depositsOperating lease 37,616 37,867 liabilitiesAccrued expensesand other 39,067 37,252 liabilitiesTotal liabilities 5,677,093 4,727,944 Shareholders' Equity:Common stock 157,784 157,784 Additional paid-in 296,810 294,731 capitalRetained earnings 221,832 220,132 and other equityTotal shareholders' 676,426 672,647 equityTotal liabilitiesand shareholders' $ 6,353,519 $ 5,400,591 equityNet interest income $ 45,096 $ 43,077 Net interest spread 2.78 3.03 Effect of netinterest-free 0.24 0.41 funding sourcesNet interest margin 3.02 % 3.44 % Ratio of averageinterest-earningassets to average 151.82 % 147.43 % interest-bearingliabilities Note 1: For rate calculation purposes, average loan and lease categories include 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 beenincluded in the average loan balances. Tax-equivalent amounts for the three months ended December 31, 2020 and 2019 havebeen calculated using the Corporation?s federal applicable rate of 21.0%.

Univest Financial Corporation Average Balances and Interest Rates (Unaudited) For the Twelve Months Ended December 31, 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 $ 274,372 $ 574 0.21 % $ 141,774 $ 2,876 2.03 % banksU.S. government 7,132 145 2.03 14,665 254 1.73 obligationsObligations ofstate and political 23,065 825 3.58 50,360 1,693 3.36 subdivisionsOther debt and 371,814 7,697 2.07 396,816 10,406 2.62 equity securitiesFederal Home LoanBank, Federal 29,726 1,746 5.87 31,446 2,154 6.85 Reserve Bank andother stockTotalinterest-earningdeposits,investments and 706,109 10,987 1.56 635,061 17,383 2.74 otherinterest-earningassets Commercial,financial, and 817,489 30,657 3.75 815,472 40,496 4.97 agricultural loansPaycheck Protection 342,920 8,072 2.35 - - - Program loansRealestate?commercial 2,312,996 94,962 4.11 1,936,073 91,634 4.73 and constructionloansRealestate?residential 1,007,915 42,047 4.17 950,743 46,031 4.84 loansLoans to 28,792 1,332 4.63 31,912 1,976 6.19 individualsMunicipal loans and 283,495 11,857 4.18 331,831 13,262 4.00 leasesLease financings 95,194 6,498 6.83 82,588 5,904 7.15 Gross loans and 4,888,801 195,425 4.00 4,148,619 199,303 4.80 leasesTotalinterest-earning 5,594,910 206,412 3.69 4,783,680 216,686 4.53 assetsCash and due from 52,000 48,877 banksAllowance forcredit losses, (73,459 ) (32,389 ) loans and leasesPremises and 55,888 58,237 equipment, netOperating lease 34,277 35,712 right-of-use assetsOther assets 343,261 330,466 Total assets $ 6,006,877 $ 5,224,583 Liabilities: Interest-bearing $ 692,049 $ 2,173 0.31 % $ 500,295 $ 2,790 0.56 % checking depositsMoney market 1,113,039 5,551 0.50 995,403 15,843 1.59 savingsRegular savings 874,366 2,057 0.24 802,865 3,660 0.46 Time deposits 572,103 9,835 1.72 677,199 13,276 1.96 Total time andinterest-bearing 3,251,557 19,616 0.60 2,975,762 35,569 1.20 deposits Short-term 86,658 327 0.38 56,882 1,012 1.78 borrowingsLong-term debt 189,410 2,879 1.52 156,366 3,236 2.07 Subordinated notes 134,949 6,762 5.01 94,695 5,044 5.33 Total borrowings 411,017 9,968 2.43 307,943 9,292 3.02 Totalinterest-bearing 3,662,574 29,584 0.81 3,283,705 44,861 1.37 liabilitiesNoninterest-bearing 1,599,333 1,210,577 depositsOperating lease 37,557 38,791 liabilitiesAccrued expensesand other 39,212 39,057 liabilitiesTotal liabilities 5,338,676 4,572,130 Shareholders' Equity:Common stock 157,784 157,784 Additional paid-in 296,023 293,784 capitalRetained earnings 214,394 200,885 and other equityTotal shareholders' 668,201 652,453 equityTotal liabilitiesand shareholders' $ 6,006,877 $ 5,224,583 equityNet interest income $ 176,828 $ 171,825 Net interest spread 2.88 3.16 Effect of netinterest-free 0.28 0.43 funding sourcesNet interest margin 3.16 % 3.59 % Ratio of averageinterest-earningassets to average 152.76 % 145.68 % interest-bearingliabilities Note 1: For rate calculation purposes, average loan and lease categories include 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 beenincluded in the average loan balances. Tax-equivalent amounts for the twelve months ended December 31, 2020 and 2019 havebeen calculated using the Corporation?s federal applicable rate of 21.0%.

Univest Financial Corporation Loan Portfolio Overview (Unaudited) (Dollars in As of December 31, 2020 thousands) Total % of $ Balance ModifiedIndustry Outstanding Commercial of LoansDescription B Loan PPP $ (1) Modified as a % of alance (excl Portfolio Loans (2) Portfolio PPP) (2)CRE - Retail $ 342,910 8.6 % $ 239 $ 3,950 1.2 % Animal Production 263,623 6.6 706 40 - CRE - 1-4 FamilyResidential 245,022 6.2 1,282 - - InvestmentCRE - Office 237,752 6.0 - - - CRE - Multi-family 201,995 5.1 - - - Real EstateLenders, Secondary 181,493 4.6 4,318 52 - Market FinancingHotels & Motels 175,923 4.4 2,407 24,296 13.8 (Accommodation)CRE - Industrial / 169,015 4.3 139 - - WarehouseNursing andResidential Care 154,736 3.9 7,935 - - FacilitiesSpecialty Trade 117,301 2.9 67,267 109 0.1 ContractorsCRE - Mixed-Use - 116,506 2.9 - 8,237 7.1 ResidentialProfessional,Scientific, and 92,857 2.3 - - - Technical ServicesCRE - Medical 92,196 2.3 - - - OfficeHomebuilding(tract developers, 87,027 2.2 12,931 - - remodelers)MerchantWholesalers, 75,241 1.9 17,674 - - Durable GoodsEducation 68,846 1.7 72,072 2,637 3.8 Crop Production 66,998 1.7 270 - - Motor Vehicle and 66,516 1.7 11,391 - - Parts DealersFabricated MetalProduction 62,077 1.6 12,760 - - ManufacturingAdministrative and 59,708 1.5 28,814 100 0.2 Support ServicesFood Services and 58,067 1.5 15,971 2,893 5.0 Drinking PlacesWoods Product 50,079 1.3 3,886 - - ManufacturingIndustries with >$50 million in $ 2,985,888 75.2 % $ 260,062 $ 42,314 1.4 % outstandingsIndustries with<$50 million in $ 990,450 24.8 % $ 223,711 $ 18,228 1.8 % outstandingsTotal Commercial $ 3,976,338 100.0 % $ 483,773 $ 60,542 1.5 % Loans $ Balance ModifiedConsumer Loans and Total of LoansLease Financings Outstanding PPP $ (1) Modified as a % of Balance Loans (2) Portfolio (2)RealEstate-Residential $ 487,600 $ - $ 7,444 1.5 % Secured forPersonal PurposeReal Estate-HomeEquity Secured for 166,609 - 3 - Personal PurposeLoans to 27,482 - 35 0.1 IndividualsLease Financings 165,039 - - - Total - ConsumerLoans and Lease $ 846,730 $ - $ 7,482 0.9 % Financings Total $ 4,823,068 $ 483,773 $ 68,024 1.4 % (1) Includes($7.7) million of net deferred fees.(2) Loan modifications referenced above were made in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications andReporting for Financial Institutions Working with Customers Affected by the Coronavirus and therefore were not classified as TDRs as of December 31, 2020.

Univest Financial Corporation Non-GAAP Reconciliation December 31, 2020 Non-GAAP to GAAP ReconciliationManagement uses non-GAAP measures in its analysis of the Corporation'sperformance. These measures should not be considered a substitute for GAAPbasis measures nor should they be viewed as a substitute for operating resultsdetermined in accordance with GAAP. Management believes the presentation of thenon-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a properunderstanding of the financial results of the Corporation. See the table belowfor additional information on non-GAAP measures used throughout this earningsrelease. For the three months ended, For the twelve months ended, 12/31/20 09/30/20 06/30/20 03/31/20 12/31/19 12/31/20 12/31/19 Restructuring $ 1,439 $ - $ - $ - $ - $ 1,439 $ - charges (a)Tax effect ofrestructuring (302 ) - - - - (302 ) - chargesRestructuringcharges, net $ 1,137 $ - $ - $ - $ - $ 1,137 $ - of tax Shareholders' $ 692,472 $ 669,107 $ 654,873 $ 651,551 $ 675,122 $ 692,472 $ 675,122 equityGoodwill (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) Otherintangibles (2,458 ) (2,736 ) (3,017 ) (3,333 ) (3,658 ) (2,458 ) (3,658 ) (b)Tangible common $ 517,455 $ 493,812 $ 479,297 $ 475,659 $ 498,905 $ 517,455 $ 498,905 equity Total assets $ 6,336,496 $ 6,382,831 $ 6,125,312 $ 5,464,768 $ 5,380,924 $ 6,336,496 $ 5,380,924 Goodwill (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) Otherintangibles (2,458 ) (2,736 ) (3,017 ) (3,333 ) (3,658 ) (2,458 ) (3,658 ) (b)Tangible assets $ 6,161,479 $ 6,207,536 $ 5,949,736 $ 5,288,876 $ 5,204,707 $ 6,161,479 $ 5,204,707 Averageshareholders' $ 676,426 $ 661,947 $ 660,950 $ 673,460 $ 672,647 $ 668,201 $ 652,453 equityAverage goodwill (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) Average otherintangibles (2,606 ) (2,889 ) (3,185 ) (3,506 ) (3,853 ) (3,045 ) (4,430 ) (b)Average tangible $ 501,261 $ 486,499 $ 485,206 $ 497,395 $ 496,235 $ 492,597 $ 475,464 common equity Net income before $ 31,647 $ 23,197 $ 1,821 $ 232 $ 18,894 $ 56,897 $ 80,053 taxesProvision for (8,721 ) 3,935 23,737 21,843 2,225 40,794 8,511 credit lossesPre-taxpre-provision $ 22,926 $ 27,132 $ 25,558 $ 22,075 $ 21,119 $ 97,691 $ 88,564 income Loans and leasesheld for $ 5,306,841 $ 5,211,856 $ 4,951,809 $ 4,448,825 $ 4,386,836 $ 5,306,841 $ 4,386,836 investment, grossPaycheckProtection (483,773 ) (501,580 ) (498,978 ) - - (483,773 ) - Program ("PPP")loansGross loans andleases excluding $ 4,823,068 $ 4,710,276 $ 4,452,831 $ 4,448,825 $ 4,386,836 $ 4,823,068 $ 4,386,836 PPP loans (a) Associatedwith financial centeroptimization plan(b) Amount doesnot include servicing rights



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