(Source: MARKETWIRE)Univest Corporation of Pennsylvania (NASDAQ: UVSP), parent company of Univest National Bank and Trust Co. of Souderton, Pa., today announced financial results for the second quarter ended June 30, 2009. Univest reported net income of $2.7 million or $0.21 diluted earnings per share for the quarter ended June 30, 2009, compared to net income of $5.9 million or $0.46 diluted earnings per share for the quarter ended June 30, 2008. Net income for the second quarter of 2009 included a special FDIC assessment of $609 thousand after-tax.

For the six months ended June 30, 2009, Univest reported net income of $6.5 million or $0.50 diluted earnings per share compared to net income of $12.6 million or $0.98 diluted earnings per share reported for the six months ended June 30, 2008. The decrease year over year is primarily due to an increase in the provision for loan and lease losses of $4.2 million along with death benefit claims on bank owned life insurance policies in the prior year of $1.9 million. Additionally, FDIC deposit insurance premiums increased $2.0 million year over year.

"While our second quarter performance did not meet our expectations, we remain focused on our long term objectives during this very challenging economic time," said William S. Aichele, chairman, president and chief executive officer of Univest Corporation. "Our steadfast approach to doing business helped sustain us during the quarter. Our diversified platform of financial solutions and strong commitment to our customers, communities, employees and shareholders continue to differentiate us from our competitors. We believe Univest is well positioned to take advantage of the growth opportunities this current market disruption presents, and we look to the future with optimism."

Net Interest Income and Margin

Net interest income increased $608 thousand or 3.7% in the second quarter of 2009 from the second quarter of 2008. The result is from the growth in average loans of $79 million or 5.7% combined with a decrease in the cost of interest-bearing liabilities.

The net interest margin on a tax equivalent basis for the second quarter of 2009 increased 12 basis points to 3.87% compared to 3.75% for the second quarter of 2008. The increase in the net interest margin can be attributed to increased loan volume and declines in the cost of interest-bearing liabilities exceeding the declines in yields on total interest earning assets.

The net interest margin on a tax equivalent basis for the six months ended June 30, 2009 increased 11 basis points to 3.82% compared to 3.71% for the comparable period in the prior year. The increase in net interest margin is primarily due to increased loan volume and declines in the cost of interest-bearing liabilities exceeding the declines in yields on total interest earning assets. Average loans increased $85 million or 6.2% year over year, which was driven by an increase in average commercial loans of $102 million or 10.2%.

Non-Interest Income

Total non-interest income declined slightly for the quarter ended June 30, 2009 compared to the quarter ended June 30, 2008. For the quarter ended June 30, 2009, Univest reported total non-interest income of $7.8 million compared to $8.0 million for the comparable period in the prior year. This decline is due to $1.4 million of revenue from death benefit claims on bank owned life insurance in the prior year. Excluding this item, total non-interest income increased $1.2 million or 19.0%. This increase is primarily due to increased mortgage banking revenue of $651 thousand for the quarter ended June 30, 2009 compared to the same period in the prior year and increased revenues from the acquisitions of Trollinger Consulting Group and Liberty Benefits, Inc. at the end of 2008.

Total non-interest income for the six months ended June 30, 2009 declined $1.7 million compared to the corresponding period in the prior year. This decline is due to $1.9 million of revenue from death benefit claims on bank owned life insurance in the prior year and other than temporary impairment on bank equity securities of $1.4 million recorded during the six months ended June 30, 2009 compared to $235 thousand recorded during the six months ended June 30, 2008. Excluding these items, total non-interest income increased $1.3 million compared to the same period in the prior year primarily due to increased mortgage banking revenue of $1.1 million along with increased revenues from the acquisitions of Trollinger Consulting Group and Liberty Benefits, Inc.

Non-Interest Expense

Non-interest expense for the second quarter of 2009 increased $1.7 million, or 11.3%, primarily due to higher FDIC insurance costs, salaries and employee benefits expense. FDIC insurance costs increased $1.4 million quarter over quarter primarily due to premium increases affecting all financial institutions along with the special assessment levied on all banks which cost Univest $937 thousand during the quarter. Salary and employee benefits expenses increased primarily due to increased pension costs, normal merit increases and increased headcount due to the acquisitions of Trollinger Consulting Group and Liberty Benefits, Inc. along with increased staff from our recent mortgage banking initiative.

Non-interest expense for the six months ended June 30, 2009 increased $3.6 million, or 12.5%, primarily due to higher FDIC insurance costs, salaries and employee benefits expense. FDIC insurance costs increased $2.0 million year over year. Salaries and employee benefits expense increased $2.7 million primarily due to increased pension expenses of $535 thousand along with normal merit increases combined with increased headcount from the acquisitions completed at the end of the year along with our recent mortgage banking initiatives.

Credit Quality and Provision for Loan and Lease Losses

Nonaccrual loans and leases were $5.8 million at June 30, 2009 compared to $3.7 million at March 31, 2009 and $5.0 million at December 31, 2008. Nonperforming loans and leases as a percentage of total loans and leases equaled 0.75% at June 30, 2009 compared to 0.45% at March 31, 2009 and 0.45% at December 31, 2008. The increase from the prior quarter and year-end is primarily due to an increase in restructured loans. Net loan and lease charge-offs for the six months ended June 30, 2009 were $1.8 million or 0.25% of average loans and leases compared to $2.7 million or 0.39% for the six months ended June 30, 2008. The provision for loan and lease losses was $5.4 million for the second quarter of 2009 compared to $2.3 million for the corresponding quarter in the prior year. For the six months ended June 30, 2009, the provision for loan and lease losses was $7.5 million compared to $3.3 million in the prior year. The increase in the provision is due to the deterioration of underlying collateral and economic factors. As a result of the increased provision, the allowance for loan and leases as a percentage of total loans and leases increased to 1.28% from 1.01% at March 31, 2009 and 0.90% at December 31, 2008. The allowance for loan and lease losses to nonperforming loans and leases equaled 172.30% at June 30, 2009.

On July 1, 2009, Univest Corporation paid a quarterly cash dividend of $0.20 per share.

About Univest Corporation

Headquartered in Souderton, Pa., Univest Corporation of Pennsylvania (www.univest.net) and its subsidiaries serve the financial needs of residents, businesses, and nonprofit organizations in Bucks, Chester, Montgomery and Lehigh counties. Univest National Bank and Trust Co., member FDIC and Equal Housing Lender, offers customers 32 financial service centers, 12 retirement financial services centers, and 38 ATM locations throughout the region, and is the parent company of Univest Capital, Inc., a small ticket commercial finance business; Univest Insurance, Inc., an independent insurance agency headquartered in Lansdale, Pa., which serves commercial and personal customers; and Univest Investments, Inc., Member FINRA and SIPC, a full-service broker-dealer and investment advisory firm. For more information on Univest Corporation of Pennsylvania and its subsidiaries, please visit www.univest.net.

This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. Such factors include the possibility that increased demand or prices for the Company's financial services and products may not occur, changing economic and competitive conditions, technological developments, and other risks and uncertainties, including those detailed in the company's filings with the Securities and Exchange Commission.

                     Univest Corporation of Pennsylvania                    Consolidated Selected Financial Data                                 6/30/2009 (Dollars in thousands) Balance Sheet  (Period  End)        06/30/09     03/31/09     12/31/08     09/30/08     06/30/08            -----------  -----------  -----------  -----------  ----------- Assets     $ 2,086,821  $ 2,065,901  $ 2,084,797  $ 2,046,390  $ 2,012,659 Securities     425,774      410,357      432,266      406,965      419,804 Loans and  leases,  gross       1,466,005    1,455,492    1,450,436    1,441,899    1,398,269 Allowance  for loan  and lease  losses         18,824       14,720       13,118       14,954       13,713 Loans and  leases,  net         1,447,181    1,440,772    1,437,318    1,426,945    1,384,556 Total  deposits    1,565,076    1,573,052    1,527,328    1,507,527    1,504,007 Non-interest  bearing  deposits      222,877      218,148      221,863      226,606      233,436 NOW, Money  Market  and  Savings       833,825      819,659      795,495      783,830      788,177 Time  deposits      508,374      535,245      509,970      497,091      482,394 Borrowings     265,457      245,962      312,736      304,368      275,343 Shareholders'  equity        208,358      206,238      203,207      204,251      203,138 Balance                    For the three months ended,  Sheet     ---------------------------------------------------------------  (Average)   06/30/09     03/31/09     12/31/08     09/30/08     06/30/08            -----------  -----------  -----------  -----------  ----------- Assets     $ 2,077,565  $ 2,059,965  $ 2,028,900  $ 2,020,537  $ 2,044,987 Securities     413,142      419,995      403,783      412,271      450,070 Loans and  leases,  gross       1,471,243    1,446,157    1,437,727    1,422,774    1,392,177 Deposits     1,560,317    1,555,964    1,523,964    1,503,402    1,560,015 Shareholders'  equity        208,321      204,544      205,384      205,062      205,464 Balance    For the six months ended  Sheet     ------------------------ (Average)    06/30/09     06/30/08            -----------  ----------- Assets     $ 2,068,700  $ 2,025,337 Securities     416,550      445,802 Loans and  leases,  gross       1,458,768    1,373,380 Deposits     1,558,152    1,562,853 Shareholders'  equity        206,443      202,954 Asset Quality Data (Period  End)        06/30/09     03/31/09     12/31/08     09/30/08     06/30/08            -----------  -----------  -----------  -----------  ----------- Nonaccrual  loans and  leases    $     5,762  $     3,675  $     5,029  $     7,871  $     6,992 Troubled  debt  restruct-  ured            3,324          747          380          563          423 Other real  estate  owned           2,812        2,824          346          346            - Nonperforming  assets         13,737        9,355        6,900       10,358       10,422 Allowance  for loan  and lease  losses         18,824       14,720       13,118       14,954       13,713 Nonperforming  loans and  leases /  Loans and  leases           0.75%        0.45%        0.45%        0.69%        0.75% Allowance  for loan  and lease  losses /  Loans and  leases           1.28%        1.01%        0.90%        1.04%        0.98% Allowance  for loan  and lease  losses /  Nonperfoming  loans          172.30%      225.39%      200.15%      149.36%      131.58%                                For the three months ended,            ---------------------------------------------------------------              06/30/09     03/31/09     12/31/08     09/30/08     06/30/08            -----------  -----------  -----------  -----------  ----------- Net loan  and lease  charge-  offs      $     1,248  $       554  $     4,263  $     1,804  $     1,582 Net loan  and lease  charge-  offs (annualized)  / Average  loans and  leases           0.34%        0.16%        1.18%        0.50%        0.46%            For the six months ended            ------------------------             06/30/09     06/30/08            -----------  ----------- Net loan  and lease  charge-  offs      $     1,802  $     2,670 Net loan  and lease  charge-  offs (annualized)  / Average  loans and  leases           0.25%        0.39%                     Univest Corporation of Pennsylvania                    Consolidated Selected Financial Data                               June 30, 2009 (Dollars in thousands, except per share data)                                 For the three months ended,                 ---------------------------------------------------------- For the period:  06/30/09    03/31/09    12/31/08    09/30/08    06/30/08                 ----------  ----------  ----------  ----------  ---------- Interest income $   24,529  $   24,402  $   26,455  $   26,661  $   26,935 Interest  expense             7,356       8,057       9,630      10,148      10,370                 ----------  ----------  ----------  ----------  ----------    Net interest     income          17,173      16,345      16,825      16,513      16,565 Provision for  loan and lease  losses              5,353       2,156       2,427       3,046       2,297                 ----------  ----------  ----------  ----------  ---------- Net interest  income after  provision          11,820      14,189      14,398      13,467      14,268 Noninterest  income:    Trust fee     income           1,325       1,425       1,171       1,578       1,628    Service charges     on deposit     accounts         1,692       1,613       1,723       1,719       1,708    Investment     advisory     commission     and fee     income             917         907         536         581         642    Insurance     commissions     and fee     income           1,813       1,986       1,128       1,266       1,271    Bank owned     life insurance     income             408         157          25         241       1,734    Net loss on     sales of and     impairments on     securities        (245)     (1,140)       (122)       (692)       (213)    Gain on sales     of loans held     for sale           669         261          21          26          16    Other income      1,247         965         846         845       1,193                 ----------  ----------  ----------  ----------  ---------- Total  noninterest  income              7,826       6,174       5,328       5,564       7,979 Noninterest  expense Salaries and  benefits            9,417       9,432       8,291       7,935       8,019 Premises and  equipment           2,125       2,233       2,225       2,110       2,085 Deposit  insurance  premiums            1,477         583         477         183          64 Other expense        3,771       3,255       3,874       3,437       4,917                 ----------  ----------  ----------  ----------  ---------- Total  noninterest  expense            16,790      15,503      14,867      13,665      15,085                 ----------  ----------  ----------  ----------  ---------- Income before  taxes               2,856       4,860       4,859       5,366       7,162 Applicable  income taxes          187       1,024       1,054       1,176       1,288                 ----------  ----------  ----------  ----------  ---------- Net income      $    2,669  $    3,836  $    3,805  $    4,190  $    5,874                 ==========  ==========  ==========  ==========  ========== Per Common  Share Data: Book value per  share          $    16.00  $    15.87  $    15.71  $    15.83  $    15.80 Net income per  share:    Basic        $     0.21  $     0.30  $     0.30  $     0.33  $     0.46    Diluted      $     0.21  $     0.30  $     0.29  $     0.33  $     0.46 Dividends per  share          $     0.20  $     0.20  $     0.20  $     0.20  $     0.20 Weighted  average shares  outstanding    13,023,148  12,977,369  12,921,814  12,874,648  12,855,379 Period end  shares  outstanding    13,023,704  12,996,291  12,938,514  12,905,326  12,858,376                   For the six months                         ended                 ---------------------- For the period:  06/30/09    06/30/08                 ----------  ---------- Interest income $   48,931  $   54,942 Interest  expense            15,413      22,532                 ----------  ----------    Net interest     income          33,518      32,410 Provision for  loan and lease  losses              7,509       3,296                 ----------  ---------- Net interest  income after  provision          26,009      29,114 Noninterest  income:    Trust fee     income           2,750       3,255    Service     charges on     deposit     accounts         3,305       3,366    Investment     advisory     commission     and fee     income           1,824       1,257    Insurance     commissions     and fee     income           3,799       3,329    Bank owned     life insurance     income             565       2,525    Net loss on     sales of and     impairments     on securities   (1,385)       (157)    Gain on sales     of loans held     for sale           930          35    Other income      2,212       2,112                 ----------  ---------- Total  noninterest  income             14,000      15,722 Noninterest  expense Salaries and  benefits           18,849      16,187 Premises and  equipment           4,358       4,142 Deposit  insurance  premiums            2,060         107 Other expense        7,026       8,257                 ----------  ---------- Total  noninterest  expense            32,293      28,693                 ----------  ---------- Income before  taxes               7,716      16,143 Applicable  income taxes        1,211       3,548                 ----------  ---------- Net income      $    6,505  $   12,595                 ==========  ========== Per Common  Share Data: Book value per  share          $    16.00  $    15.80 Net income per  share:    Basic        $     0.50  $     0.98    Diluted      $     0.50  $     0.98 Dividends per  share          $     0.40  $     0.40 Weighted  average shares  outstanding    13,000,406  12,847,230 Period end  shares  outstanding    13,023,704  12,858,376                     Univest Corporation of Pennsylvania                    Consolidated Selected Financial Data                               June 30, 2009                                     For the three months ended,                           ------------------------------------------------ Profitability Ratios  (annualized)             06/30/09  03/31/09  12/31/08  09/30/08  06/30/08                           --------  --------  --------  --------  -------- Return on average assets      0.52%     0.76%     0.75%     0.82%     1.16% Return on average  shareholders' equity         5.14%     7.61%     7.37%     8.13%    11.50% Net interest margin (FTE)     3.87%     3.76%     3.83%     3.79%     3.75% Efficiency ratio (1)         63.96%    65.70%    64.51%    59.35%    57.51% Capitalization Ratios Dividends paid to net  income                      97.60%    67.75%    67.94%    61.50%    43.77% Shareholders' equity to  assets (Period End)          9.98%     9.98%     9.75%     9.98%    10.09%                              Year to date                           ------------------ Profitability Ratios  (annualized)             06/30/09  06/30/08                           --------  -------- Return on average assets      0.63%     1.25% Return on average  shareholders' equity         6.35%    12.48% Net interest margin (FTE)     3.82%     3.71% Efficiency ratio (1)         64.78%    56.27% Capitalization Ratios Dividends paid to net  income                      80.00%    40.81% Shareholders' equity to  assets (Period End)          9.98%    10.09% (1) Total operating expenses to net interest income before loan loss provision plus non-interest income adjusted for tax equivalent income. 

 CONTACT: Jeff Schweitzer UNIVEST CORPORATION OF PENNSYLVANIA Chief Financial Officer 215-721-2458 Email Contact  

SOURCE: Univest Corporation of Pennsylvania

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