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Univest Financial Corporation Reports Fourth Quarter 2025 Results

globenewswire.com
UVSP The company reported strong year-over-year growth in net income and diluted EPS for Q4 2025. Loan growth was positive, and net interest income increased significantly. Despite a slight decrease in total deposits from the previous quarter, year-over-year deposits increased. The company also increased its share repurchase program and declared a dividend.

SOUDERTON, Pa., Jan. 28, 2026 (GLOBE NEWSWIRE) -- Univest Financial Corporation (“Univest” or the "Corporation") (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. (the "Bank") and its insurance, investments and equipment financing subsidiaries, announced net income for the quarter ended December 31, 2025 of $22.7 million, or $0.79 diluted earnings per share, compared to net income of $18.9 million, or $0.65 diluted earnings per share, for the quarter ended December 31, 2024. For the year ended December 31, 2025, net income totaled $90.8 million, or $3.13 diluted earnings per share, compared to net income of $75.9 million, or $2.58 diluted earnings per share, for the year ended December 31, 2024.

Loans

Gross loans and leases increased $129.3 million, or 1.9% (7.6% annualized), from September 30, 2025, primarily due to increases in commercial and commercial real estate loans, partially offset by a decrease in residential mortgage loans. Gross loans and leases increased $88.2 million, or 1.3%, from December 31, 2024, primarily due to increases in construction, commercial real estate and home equity loans, partially offset by decreases in commercial and residential mortgage loans and lease financings.

Deposits and Liquidity

Total deposits decreased $130.8 million, or 1.8% (7.2% annualized), from September 30, 2025, primarily due to decreases in public funds and commercial deposits, partially offset by increases in consumer and brokered deposits. Total deposits increased $328.1 million, or 4.9%, from December 31, 2024, primarily due to increases in commercial, brokered and public funds deposits, partially offset by a decrease in consumer deposits.

Noninterest-bearing deposits totaled $1.4 billion and represented 20.2% of total deposits at December 31, 2025, compared to $1.4 billion representing 19.3% of total deposits at September 30, 2025. Unprotected deposits, which excludes insured, internal, and collateralized deposit accounts, totaled $1.6 billion at December 31, 2025 and September 30, 2025. This represented 23.2% of total deposits at December 31, 2025, compared to 22.0% at September 30, 2025.

As of December 31, 2025, the Corporation and its subsidiaries held cash and cash equivalents totaling $553.7 million. The Corporation and its subsidiaries had committed borrowing capacity of $3.8 billion, of which $2.3 billion was available. The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $457.0 million at December 31, 2025. Future availability under these uncommitted funding sources is subject to the prerogatives of the granting banks and may be withdrawn at will.

Net Interest Income and Margin

Net interest income of $62.5 million for the fourth quarter of 2025 increased $7.1 million, or 12.8%, from the fourth quarter of 2024 and $1.2 million, or 2.0%, from the third quarter of 2025. The increase in net interest income for the fourth quarter of 2025 compared to the fourth quarter of 2024 was driven by higher average balances of loans and cash and cash equivalents and increased loan yields, as well as a reduction in our cost of funds, offset by decreases in the yield on cash and cash equivalents and an increase in deposits. The increase in net interest income for the fourth quarter of 2025 compared to the third quarter of 2025 was primarily driven by the increased average balance of cash and cash equivalents and a reduction in our cost of funds, offset by decreases in the yield on cash and cash equivalents and an increase in deposits.

Net interest margin, on a tax-equivalent basis, was 3.10% for the fourth quarter of 2025, compared to 3.17% for the third quarter of 2025 and 2.88% for the fourth quarter of 2024. Excess liquidity reduced net interest margin by approximately 27 basis points for the quarter ended December 31, 2025 compared to approximately 16 basis points for the quarter ended September 30, 2025 and approximately 14 basis points for the quarter ended December 31, 2024. Excluding the impact of excess liquidity, the net interest margin, on a tax-equivalent basis, would have been 3.37% for the quarter ended December 31, 2025 compared to 3.33% for the third quarter of 2025 and 3.02% for the fourth quarter of 2024.

Noninterest Income

Noninterest income for the quarter ended December 31, 2025 was $22.0 million, an increase of $692 thousand, or 3.2%, from the comparable period in the prior year.

Investment advisory commission and fee income increased $598 thousand, or 11.0%, for the quarter ended December 31, 2025 compared to the comparable period in the prior year, primarily due to the appreciation of assets under management and supervision and new customer relationships.

Other income increased $1.2 million, or 137.9%, for the quarter ended December 31, 2025 compared to the comparable period in the prior year. Fees on risk participation agreements for interest rate swaps increased $480 thousand due to increased demand. Additionally, income on other real estate owned increased $837 thousand for the quarter ended December 31, 2025 compared to the comparable period in the prior year due to leasing-related activities in the respective periods.

Other service fee income decreased $805 thousand, or 23.2%, for the quarter ended December 31, 2025 compared to the comparable period in the prior year. The three months ended December 31, 2024 included a reversal of a $785 thousand valuation allowance on mortgage servicing rights that was initially recorded in the third quarter of 2024. The reversal was driven by a decrease in prepayment speed assumptions as a result of the increase in interest rates during the fourth quarter of 2024.

Net gain on mortgage banking activities decreased $434 thousand, or 32.9%, for the quarter ended December 31, 2025 compared to the comparable period in the prior year, primarily due to decreased salable volume.

Noninterest Expense

Noninterest expense for the quarter ended December 31, 2025 was $52.7 million, an increase of $2.1 million, or 4.1%, from the comparable period in the prior year.

Salaries, benefits and commissions increased $1.5 million, or 4.7%, for the quarter ended December 31, 2025 compared to the comparable period in the prior year, primarily due to annual merit increases and an increase in incentive compensation due to increased profitability, partially offset by an increase in capitalized compensation driven by higher loan production.

Professional fees increased $278 thousand, or 16.7%, for the quarter ended December 31, 2025 compared to the comparable period in the prior year driven by an increase in consultant fees for data integration resources and legal fees.

Data processing increased $244 thousand, or 5.9%, for the quarter ended December 31, 2025 compared to the comparable period in the prior year due to increased costs on long-term service contracts.

Tax Provision

The effective income tax rate was 20.8% for the quarter ended December 31, 2025, compared to an effective tax rate of 20.3% for the quarter ended December 31, 2024.

Asset Quality and Provision for Credit Losses

Nonperforming assets totaled $37.8 million at December 31, 2025, $52.1 million at September 30, 2025, and $33.2 million at December 31, 2024. During the fourth quarter, loans totaling $13.9 million related to a nonaccrual commercial loan relationship were paid off and a $449 thousand recovery was recognized. This relationship was placed on nonaccrual during the second quarter of 2025. As of December 31, 2025, a residential property related to this relationship remains in other real estate owned with a carrying value of $1.4 million.

Net loan and lease charge-offs were $1.1 million for the three months ended December 31, 2025 compared to $480 thousand and $767 thousand for the three months ended September 30, 2025 and December 31, 2024, respectively.

The provision for credit losses was $3.1 million for the three months ended December 31, 2025 compared to $517 thousand and $2.4 million for the three months ended September 30, 2025 and December 31, 2024, respectively. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.28% at December 31, 2025, September 30, 2025, and December 31, 2024.

Dividend and Share Repurchases

On January 28, 2026, Univest declared a quarterly cash dividend of $0.22 per share to be paid on February 25, 2026 to shareholders of record as of February 11, 2026. On December 10, 2025, the Board of Directors of the Corporation approved an increase of 2,000,000 shares available for repurchase under the Corporation's share repurchase program, or approximately 7.1% of the Corporation's common stock outstanding as of November 30, 2025. During the quarter ended December 31, 2025, the Corporation repurchased 479,690 shares of common stock at an average price of $31.82 per share. Including brokerage fees and excise tax, the average cost per share was $32.17. As of December 31, 2025, 2,270,937 shares are available for repurchase under the Share Repurchase Plan.

Conference Call

Univest will host a conference call to discuss fourth quarter 2025 results on Thursday, January 29, 2026 at 9:00 a.m. EDT. Participants may preregister at https://www.netroadshow.com/events/login/LE9zwo3ifeosEEag73U8miOA26AU31t8QCP. The general public can access the call by dialing 1-833-470-1428; using Access Code 927698. A replay of the conference call will be available through February 5, 2026 by dialing 1-866-813-9403; using Access Code 393949.

About Univest Financial Corporation

Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $8.4 billion in assets and $5.9 billion in assets under management and supervision through its Wealth Management lines of business at December 31, 2025. 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 and online at www.univest.net.

This press release 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, business, prospects and strategies 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 financial condition, results of operations, business, prospects or strategies to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to: (1) competition and demand for financial services in our market area; (2) inflation and/or changes in interest rates, which may adversely impact our margins and yields, reduce the fair value of our financial instruments, reduce our loan originations and/or lead to higher operating costs and higher costs we pay to retain and attract deposits; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and/or credit loss provisions; (4) fluctuations in real estate values and both residential and commercial real estate market conditions; (5) changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio; (6) our ability to access cost-effective funding; (7) changes in economic conditions nationally and in our market, including potential recessionary conditions and the levels of unemployment in our market area; (8) changes in the economic assumptions or methodology used to calculate our allowance for credit losses; (9) legislative, regulatory, accounting or tax changes; (10) monetary and fiscal policies of the U.S. government, including the policies of the Board of Governors of the Federal Reserve System; (11) the imposition of tariffs or other domestic or international governmental policies and retaliatory responses; (12) the impact of a potential government shutdown; (13) the failure to maintain current technologies and to successfully implement future information technology enhancements; (14) technological issues that may adversely affect our operations or those of our customers; (15) a failure or breach in our operational or security systems or infrastructure, including cyberattacks; (16) changes in the securities markets; (17) the current or anticipated impact of military conflict, terrorism or other geopolitical events; (18) our ability to enter into new markets successfully and capitalize on growth opportunities; (19) changes in investor sentiment or consumer spending or savings behavior; and/or (20) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission.

(UVSP - ER)