(By Balaseshan) Univest Corporation of Pennsylvania (NASDAQ: UVSP), the parent bank holding company of Univest Bank and Trust Co., reported a 3% decline in quarterly earnings due to lower net interest income as well as an increase in non-interest expense.
Earnings for the fourth quarter were $5.08 million or $0.30 per share, down from $5.26 million or $0.31 per share last year.
Net interest income decreased 1% to $18.15 million. The net interest margin on a tax-equivalent basis for the latest quarter was 3.80%, down from 3.96% in the fourth quarter of 2011.
The company said the declines in net interest income and margin were primarily due to the re-investment of maturing and called investment securities into lower yielding investments as a result of the lower interest rate environment and lower rates on commercial loans due to re-pricing and competitive pressures.
Non-interest income grew 15.6% to $10.38 million. The increase was primarily attributable to an net gain on mortgage banking activities as refinance volume continues to be strong, on insurance commission and fee income mainly due to the Javers Group acquisition, and on trust fee income due to growth in trust assets and estate fees.
Provision for loan and lease losses for the quarter declined to $2.38 million from $3.14 million in the previous year quarter. Non-interest expense rose 12% due to an increase in salaries and benefits expense, higher equipment expenses and employment services used to identify top sales personnel.
Non-accrual loans and leases, including non-accrual troubled debt restructured loans, decreased to $32.1 million at December 31, 2012 from $38.2 million last year.
UVSP is trading down 0.17% at $17.23 on Wednesday. The stock has been trading between $14.69 and $18.68 for the past 52 weeks.