Executive Summary

Q1 2025 delivered stronger profitability: diluted EPS was $0.77 (+11.6% y/y) aided by a $0.04 BOLI death benefit; normalized EPS ex-BOLI was $0.73, a clear beat vs S&P Global consensus of $0.64.33; net interest margin expanded 21 bps q/q to 3.09% on improved funding mix and reduced excess liquidity drag .
Total “revenue” on an S&P definition (net interest income after provision + noninterest income) was $76.9M, modestly below S&P consensus of $77.7M, driven by lapping a prior-year MSR sale and lower contingent insurance income; underlying NII after provision rose and NIM expanded .
Capital return accelerated: dividend raised 4.8% to $0.22 per share and 221,760 shares repurchased (~$6.5M at $29.54 incl. fees), signaling confidence and ongoing buyback activity .
Asset quality remained solid: NPAs/Assets 0.43% (vs 0.41% in Q4’24 and 0.52% in Q1’24); net charge-offs 10 bps annualized; allowance coverage stable at 1.28% of loans .
Management maintained 2025 guidance (ex-BOLI) and reiterated fee-income growth of 4–6% y/y; tone constructive but cautious on macro/tariffs; watch deposit seasonality and loan payoffs as near-term drivers of margin trajectory .

What Went Well and What Went Wrong

What Went Well

NIM expansion and efficiency: reported NIM rose to 3.09% (core 3.12% ex excess liquidity), up 21 bps q/q; efficiency ratio improved to 61.6% from 65.5% in Q4’24 as OpEx declined y/y .
Credit resilience: NPAs/Assets 0.43% and annualized net charge-offs 0.10%; allowance coverage of 1.28% of loans held for investment remained stable .
Shareholder returns: dividend increased to $0.22 per share and buybacks continued; CEO emphasized ongoing buyback activity: “we plan on continuing to be active with stock buybacks going forward” .

What Went Wrong

Noninterest income down y/y (-12.4%): lapping the $3.4M MSR sale in Q1’24, lower net servicing fees, and $0.7M lower contingent insurance income were headwinds despite growth in investment advisory and deposit service charges .
Deposit decline q/q (-$100.8M, -1.5%): seasonal public funds outflows weighed; brokered deposits increased to replace maturing FHLB advances .
Loan growth muted: net growth of $6.5M as solid originations were offset by larger payoffs; management highlighted customer caution amid tariff/interest rate uncertainty .

Financial Results

P&L and Margins vs prior periods (bank “revenue” = NII after provision + noninterest income)

Metric	Q3 2024	Q4 2024	Q1 2025
Net Interest Income ($M)	$53.204	$55.472	$56.781
Provision for Credit Losses ($M)	$1.414	$2.380	$2.311
Net Interest Income After Provision ($M)	$51.790	$53.092	$54.470
Total Noninterest Income ($M)	$20.150	$21.330	$22.415
S&P “Revenue” (NII after provision + Noninterest) ($M)	$71.940 (51.790 + 20.150 )	$74.422 (53.092 + 21.330 )	$76.885 (54.470 + 22.415 )
Diluted EPS (GAAP) ($)	$0.63	$0.65	$0.77
Net Interest Margin (FTE, %)	2.82%	2.88%	3.09%
Efficiency Ratio (%)	65.7%	65.5%	61.6%
ROA (annualized, %)	0.92%	0.92%	1.14%

Balance Sheet and Credit

Metric	Q3 2024	Q4 2024	Q1 2025
Loans & Leases HFI ($B)	$6.731	$6.827	$6.833
Total Deposits ($B)	$6.854	$6.759	$6.658
Loan-to-Deposit Ratio (%)	98.3% (6.731 /6.854 )	101.0% (6.827 /6.759 )	102.6% (6.833 /6.658 )
Cash & Equivalents ($M)	$504.7	$328.8	$169.1
Borrowings ($M) (LT debt)	$225.0	$225.0	$175.0
NPAs / Total Assets (%)	0.45%	0.41%	0.43%
Allowance / Loans (%)	1.28%	1.28%	1.28%
Net Charge-offs ($M)	$0.820	$0.767	$1.686
CET1 Ratio (%)	10.88%	10.85%	10.97%

Noninterest Income Components

Component ($M)	Q3 2024	Q4 2024	Q1 2025
Investment Advisory Fees	$5.319	$5.457	$5.613
Insurance Commissions & Fees	$5.238	$4.743	$6.889
Other Service Fee Income	$1.815	$3.473	$2.707
BOLI Income	$0.921	$1.012	$1.959
Mortgage Banking Gains	$1.296	$1.320	$0.647
Service Charges on Deposits	$2.037	$2.192	$2.194

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Fee income growth (y/y)	FY 2025	4–6% (as discussed previously)	4–6% (reaffirmed)	Maintained
2025 guidance (overall, ex-BOLI)	FY 2025	As provided on prior call	No changes; excluding $1.0M BOLI benefit	Maintained
Loan-to-Deposit Ratio target	Multi-year	95–100% target	95–100% target; methodical reduction over time	Maintained
Dividend	Quarterly	$0.21 (Q4’24)	$0.22 (Q1’25)	Raised

Note: Effective tax rate excluding discrete items reported for Q1’25 was 20.2% (Q1’24: 19.8%); management did not change tax guidance beyond stating no changes vs last quarter (ex-BOLI) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Net interest margin trajectory	NIM 2.82% in Q3’24; 2.88% in Q4’24; excess liquidity drag 9–14 bps	NIM 3.09%; core 3.12% ex excess liquidity; drag ~3 bps	Improving
Deposit mix & seasonality	Strong seasonal public funds inflows in Q3’24; q/q deposit decline in Q4’24; noninterest-bearing 20.9% at Q4’24	q/q deposit decline (-$100.8M) due to seasonal public funds; stabilization in noninterest-bearing (21.5%)	Seasonal normalization; stabilized mix
Credit quality	NPAs/Assets 0.45% (Q3); 0.41% (Q4); stable allowance 1.28%	NPAs/Assets 0.43%; net charge-offs 10 bps; allowance 1.28%	Stable
Capital return	Dividends maintained at $0.21; buybacks resumed/increased Q3–Q4	Dividend raised to $0.22; 221,760 shares repurchased; continued buyback activity	Acceleration
Fee income drivers	Q3–Q4 benefited from mortgage banking and advisory; MSR valuation reversal in Q4	Lapping prior-year MSR sale; lower contingent insurance income; advisory fees up	Mixed growth; headwinds from lapping

Management Commentary

CEO opening tone: “We’re off to a solid start to 2025… margin improve[d] to 3.09%… credit quality… net charge-offs remaining low at 10 basis points… dividend… and we plan on continuing to be active with stock buybacks” .
CFO on NIM and guidance: “reported NIM [rose] 21 bps to 3.09%… core NIM… 3.12%… noninterest income decreased… excluding [MSR gain] and the $1 million BOLI [benefit]… no changes to [2025] guidance when excluding the $1 million BOLI” .

Q&A Highlights

Fee income growth: Management reaffirmed 4–6% y/y for 2025, watching mortgage banking as a potential lift; contingent insurance income will create y/y noise in Q1 comps .
Loan-to-deposit ratio: Longer-term target 95–100%; cadence impacted by public funds seasonality—low point by June 30, rebuild in H2 .
Buybacks: Expect activity roughly in the range of Q1 levels, subject to earnings, loan growth, and regulatory capital outlook across the next 9–12 months .

Estimates Context

Q1 2025 EPS: normalized (Primary) actual $0.73 vs consensus $0.64.33 — beat; GAAP diluted EPS $0.77 includes $0.04 from BOLI .
Q1 2025 Revenue (S&P definition): actual $76.885M vs consensus $77.700M — slight miss, reflecting lower noninterest components vs lapping Q1’24 MSR sale .
Next quarter lens: consensus Q2 2025 EPS $0.685*, revenue $79.350M*; watch deposit/funding costs and mortgage banking volumes for variability.*

Metric	Consensus	Actual	Surprise
EPS (Primary, normalized) – Q1 2025 ($)	0.64333*	0.73*	+0.09*
EPS (Diluted, GAAP) – Q1 2025 ($)	n/a	0.77	—
Revenue (S&P definition) – Q1 2025 ($M)	77.700*	76.885*	-0.815*

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

Margin-driven earnings momentum: NIM expansion (+21 bps q/q) and better efficiency (61.6%) underpin EPS trajectory even with softer noninterest income comps .
Credit is benign and well-reserved: NPAs/Assets ~0.43%, allowance 1.28%, and low net charge-offs provide cushion against macro uncertainty .
Capital return is a catalyst: dividend hike and ongoing buybacks (221,760 shares in Q1) signal confidence; expect continued repurchase cadence subject to capital plans .
Watch deposit seasonality and funding mix: public funds likely trough by June 30 then rebuild in H2; disciplined loan pricing and funding costs remain key to sustaining NIM .
Noninterest income mix normalizing: lapping Q1’24 MSR sale and lower contingent insurance income pressured fees; investment advisory and treasury management fees are structural positives .
Guidance steady: fee-income growth 4–6% maintained; no changes to 2025 framework ex-BOLI—reduces guidance risk into Q2 .
Near-term trading setup: EPS beat (normalized) vs consensus and dividend hike are supportive; monitor Q2 deposit seasonality, mortgage banking volumes, and macro/tariff headlines cited by management as potential sources of volatility .

Citations: Q1 2025 8-K/press release ; Q1 2025 call transcript ; Q1 2025 press release ; Q4 2024 8-K ; Q3 2024 8-K .

UNIVEST FINANCIAL Corp (UVSP)·Q1 2025 Earnings Summary