Univest Corporation of Pennsylvania - Univest Bank and Trust Co. - Reports Second Quarter Earnings
(firmenpresse) - SOUDERTON, PA -- (Marketwire) -- 07/27/11 -- 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 second quarter. Univest reported net income of $4.5 million or $0.27 diluted earnings per share for the quarter ended June 30, 2011, compared to $3.7 million or $0.23 diluted earnings per share for the comparable period in the prior year. Net income for the six months ended June 30, 2011 was $8.4 million or $0.50 diluted earnings per share, compared to $6.7 million or $0.40 diluted earnings per share for the comparable period in the prior year.
Total deposits decreased $43.9 million for the quarter and $65.0 million year to date. The decrease was primarily a result of a decline of public fund balances due to anticipated seasonal runoff of tax deposits. Total public fund balances decreased $29.9 million for the quarter and $49.2 million for the first six months.
Gross loans and leases decreased $3.4 million from March 31, 2011 and $32.5 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 and uncertain economic environment.
Net interest income increased $705 thousand or 3.86% to $19.0 million in the second quarter of 2011 compared to the second quarter of 2010. The net interest margin on a tax-equivalent basis for the second quarter of 2011 remained at 4.24% from the first quarter ended March 31, 2011 and increased 13 basis points compared to 4.11% in the second quarter 2010.
Net interest income of $37.8 million for the first six months ended June 30, 2011 increased $2.4 million or 6.81% compared to the six months ended June 30, 2010. The net interest margin on a tax-equivalent basis for the six months ended June 30, 2011 increased 19 basis points to 4.24% from 4.05% for the six months ended June 30, 2010.
The increases in the net interest income and the net interest margin year to date 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 FHLB advances from $54 million at June 30, 2010 to $5 million at December 31, 2010. FHLB advances at June 30, 2011 remained at $5 million.
For the quarter ended June 30, 2011, Univest reported total non-interest income of $8.7 million compared to $8.1 million for the comparable period in the prior year. This $637 thousand or 7.90% increase was mainly attributed to a $569 thousand net gain on sales of securities primarily from the sale of mortgage-backed securities. Other factors contributing to the overall increase were an increase in insurance commissions and fee income of $176 thousand and an increase in trust fee income of $125 thousand. The increase in non-interest income was partially offset by a $456 thousand decline in service charges on deposit accounts primarily due to the amendments to Regulation E which were implemented on August 15, 2010; and a $260 thousand negative valuation adjustment for an other real estate owned commercial property based on the updated fair value. Additionally, the second quarter of 2010 was impacted by a net loss on the ineffective portion of a fair value swap of $516 thousand, which was terminated in August, 2010.
Total non-interest income for the six months ended June 30, 2011 was $16.5 million compared to $16.3 million for the six months ended June 30, 2010. The increase of $189 thousand was a result of increases from the sale of securities of $482 thousand, trust fee income of $250 thousand, investment advisory commissions and fees of $148 thousand and insurance commissions and fees of $133 thousand. The increase was offset by a decline of $902 thousand of service charges on deposit accounts, mainly due to the amendments to Regulatory E which were implemented on August 15, 2010; a decline of $632 thousand of net gain on mortgage banking activities as a result of negative fair value adjustments on the mortgage pipeline, as mortgage demand has softened due to a continued slow purchase market for housing; a net change of $254 thousand attributed to fair value write-downs on other real estate owned commercial property; and a litigation settlement in the first quarter of 2010. Additionally, the six months ended June 30, 2010 was impacted by a net loss on the ineffective portion of a fair value swap of $826 thousand, which was terminated in August, 2010.
Non-interest expense for the second quarter of 2011 decreased $503 thousand or 3.00% compared to the second quarter of 2010 as a result of a decline in deposit insurance premiums of $236 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 off of the average consolidated total assets less average tangible equity. Additionally, the decrease was attributed to a $524 thousand decline in marketing and advertising expenses during the quarter. These decreases for the quarter were partially offset by premises and equipment expenses and increases in salaries and benefits.
For the six months ended June 30, 2011, non-interest expenses decreased $836 thousand or 2.46% compared to the same period in the prior year. This was attributed to a decline of $663 thousand in salaries and benefits as a result of higher deferred loan origination costs partially offset by higher commissions expense, restricted stock 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 $120 thousand in deposit insurance premiums and a $619 thousand decline in marketing and advertising expenses. These decreases were partially offset by an increase in premises and equipment expense.
Non-accrual loans and leases, including non-accrual troubled debt restructured loans, were $43.5 million at June 30, 2011 compared to $38.6 million at March 31, 2011 and $45.2 million at December 31, 2010. The increase in non-accrual loans was mainly due to the migration of one large Shared National Credit to a theatre to non-accrual status. This relationship represented $11.3 million in the aggregate of which $2.6 million was charged-off during the quarter and the remaining $8.7 million was moved to non-accrual with sufficient estimated collateral at June 30, 2011. The theatre continues to be open and operating. As a result of the $2.6 million charge-off, net loan and lease charge-offs increased from $3.2 million for the previous three months to $5.8 million at June 30, 2011. For the six months ended June 30, 2011, net loan and lease charge-offs were $9.0 million or 1.24% of average loans and leases compared to $5.4 million or 0.77% for the six months ended June 30, 2010.
Nonperforming loans and leases as a percentage of total loans and leases equaled 3.42% at June 30, 2011 compared to 3.07% at March 31, 2011 and 2.23% at June 30, 2010. Other real estate owned decreased from $6.1 million at March 31, 2011 to $5.0 million at June 30, 2011 due to the sale of one commercial property.
The provision for loan and lease losses was $5.6 million for the second quarter of 2011 compared to $5.1 million for the quarter ended March 31, 2011 and $4.9 million for the quarter ended June 30, 2010. The allowance for loan and lease losses as a percentage of total loans and leases for both the first and second quarters of 2011 was 2.27% compared to 2.01% at June 30, 2010. The allowance for loan and lease losses to nonperforming loans and leases equaled 66.26% at June 30, 2011, which declined from 74.12% at March 31, 2011. The allowance for loan and lease losses to nonperforming loans and leases was 90.08% at June 30, 2010.
Univest continues to remain well-capitalized at June 20, 2011. Univest's total risk-based capital at June 30, 2011 was 16.25%, well in excess of the regulatory minimum for well capitalized status of 10% for total risk-based capital.
On July 1, 2011, Univest Corporation paid a quarterly cash dividend of $0.20 per share, which represented a 4.96% 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: 27.07.2011 - 12:24 Uhr
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