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Univest Corp. of Pennsylvania Reports Operating Results (10-Q)

August 06, 2010 | About:
10qk

10qk

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Univest Corp. of Pennsylvania (UVSP) filed Quarterly Report for the period ended 2010-06-30.

Univest Corp. Of Pennsylvania has a market cap of $282.9 million; its shares were traded at around $17.05 with a P/E ratio of 24.7 and P/S ratio of 2.3. The dividend yield of Univest Corp. Of Pennsylvania stocks is 4.8%.

Highlight of Business Operations:

The Corporation reported net income for the three months ended June 30, 2010 of $3.7 million or $0.23 diluted earnings per share compared to net income of $2.7 million or $0.21 diluted earnings per share for the three months ended June 30, 2009. Net income for the six months ended June 30, 2010 was $6.7 million or $0.40 diluted earnings per share compared to net income of $6.5 million or $0.50 diluted earnings per share for the same period in the prior year.

Net interest income on a tax equivalent basis for the three months ended June 30, 2010 was up $1.2 million, or 6.6% compared to the same period in 2009. The second quarter 2010 net interest margin was 4.11% compared to 3.99% for the first quarter of 2010 and 3.87% for the second quarter of 2009. Net interest income on a tax equivalent basis for the six months ended June 30, 2010 was up $2.0 million, or 5.7% compared to the same period in 2009. The tax-equivalent net interest margin for the first six months of 2010 was 4.05% compared to 3.82% for the first six months of 2009. The increase in net interest income and the net interest margin for the three and six months ended June 30, 2010 was mainly attributable to declines in the cost of interest-bearing liabilities, primarily time deposits and Federal Home Loan Bank of Pittsburgh (FHLB) borrowings, exceeding the declines in yields on total interest-earning assets. The Corporation has continued to experience core deposit growth which has allowed the Corporation to not replace or renew its maturing FHLB advances.

Non-interest income increased $233 thousand during the three months ended June 30, 2010 compared to the same period in 2009 and $2.3 million for the six months ended June 30, 2010 compared to the same period in the prior year primarily due to increased income from trust fees, service charges on deposit accounts, investment advisory commissions and fees and other service fees partially offset by lower gains on sales of loans held for sale related to mortgage banking activities and a net loss on derivative instruments. Additionally, the six months ended June 30, 2009 was impacted by $1.4 million of other-than- temporary impairments on equity securities compared to $47 thousand of other-than-temporary impairments recorded in the six months ended June 30, 2010.

Non-interest expense increased slightly by $119 thousand for the three months ended June 30, 2010 compared to the same period in 2009 and increased $1.7 million for the six months ended June 30, 2010 compared to the same period in 2009. The three-month period ended June 30, 2009 was impacted by the FDIC special assessment which affected all banks and resulted in an additional charge of $947 thousand to the Corporation. Marketing and advertising expenses increased during the three months ended June 30, 2010 over the same period in 2009 mainly to support a major brand campaign to position the Corporation to take advantage of the disruption in its markets. Non-interest expense for the six months ended June 30, 2010 was impacted by higher salary and benefit expenses to grow the commercial lending and mortgage banking businesses and higher restricted stock expense partially offset by: reduced pension plan expenses; increased marketing and advertising expenses; and other expenses related to fair value adjustments on directors deferred fees, legal fees resulting from non-performing loan activity and increased audit expenses.

Nonperforming loans and leases were $32.3 million at June 30, 2010 compared to $37.8 million at December 31, 2009 and $10.9 million at June 30, 2009. Nonperforming loans and leases as a percentage of total loans and leases were 2.23% at June 30, 2010 compared to 2.65% at December 31, 2009 and 0.75% at June 30, 2009. Net charge-offs for the three months ended June 30, 2010 were $2.8 million compared to $1.2 million for the three months ended June 30, 2009. Net charge-offs for the six months ended June 30, 2010 were $5.4 million compared to $1.8 million for the same period in the prior year.

Net interest income on a tax-equivalent basis for the three months ended June 30, 2010 increased $1.2 million, or 6.6% compared to the same period in 2009. The tax-equivalent net interest margin for the three months ended June 30, 2010 increased 24 basis points to 4.11% from 3.87% for the three-months ended June 30, 2009. Net interest income on a tax-equivalent basis increased $2.0 million, or 5.7% for the six months ended June 30, 2010 compared to the same period in 2009. The tax-equivalent net interest margin for the six months ended June 30, 2010 increased 23 basis points to 4.05% from 3.82% for the first six months of 2009. The increase in net interest income and the net interest margin for the three and six months ended June 30, 2010 was mainly attributable to declines in the cost of interest-bearing liabilities, primarily time deposits and FHLB borrowings, exceeding the declines in yields on total interest-earning assets. The Corporation has continued to experience core deposit growth which has allowed the Corporation to not replace or renew its maturing FHLB advances reducing FHLB advances from $92.0 million at December 31, 2009 to $54.0 million at June 30, 2010.

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