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UNIVEST FINANCIAL Corp (UVSP)·Q3 2025 Earnings Summary

Executive Summary

  • UVSP delivered EPS of $0.89, up 41% YoY, and net income of $25.6M; revenue (net interest income after provision + noninterest income) was $82.73M. EPS and revenue were both above S&P Global consensus, driven by wider core NIM and lower credit costs versus Q2. Bold beat: EPS $0.89 vs $0.765*; revenue $82.73M vs $81.90M* . Values retrieved from S&P Global.
  • Net interest income rose 15% YoY and 3% QoQ; reported NIM 3.17% was modestly lower QoQ due to excess liquidity, while core NIM expanded to 3.33% (+9 bps QoQ). Management expects core NIM to be “relatively flat” in Q4 .
  • Deposits surged $635.5M QoQ (+9.7%) on seasonal public funds; management anticipates $75–$100M monthly outflows through Q4 as seasonality reverses, cutting excess liquidity in half by year‑end .
  • Asset quality remained elevated from a Q2 fraud-related nonaccrual, but credit costs normalized: net charge-offs fell to $0.48M from $7.81M in Q2; provision was $0.52M (vs $5.69M in Q2) .
  • Capital return remains active: 255,010 shares repurchased in Q3 at ~$30.49 average cost; $0.22 dividend declared; buybacks expected to continue opportunistically based on earnings and balance sheet growth .

What Went Well and What Went Wrong

What Went Well

  • Core margin expansion: core NIM reached 3.33% (excluding excess liquidity), up 9 bps QoQ; reported NIM 3.17% due to temporary excess liquidity from public funds inflows. Quote: “core NIM of 3.33%…expanded by nine basis points… We expect core NIM to be relatively flat in the fourth quarter.” .
  • Credit normalization: net charge-offs dropped to $0.48M (3 bps annualized) from $7.81M in Q2; provision fell to $0.52M, with ACL steady at 1.28% of loans .
  • Revenue mix strength: noninterest income rose 8.8% YoY, aided by higher BOLI, advisory, insurance, and service charges; efficiency ratio improved to 60.2% from 65.7% a year ago .

What Went Wrong

  • Elevated nonperforming assets: NPAs increased to $52.1M (vs $36.6M YoY), reflecting the Q2 fraud‑related commercial relationship; nonaccruals were $27.33M vs $11.13M in Q1 .
  • Loan contraction: gross loans declined sequentially by $15.7M QoQ and $41.1M YTD, with management emphasizing CRE construction focus and mortgage banking shift reducing on‑balance‑sheet residential volumes .
  • Higher operating costs: noninterest expense increased 4.4% YoY on compensation, tax, loan workout fees, and professional services related to data integration; marketing also stepped up sequentially in Q2 .

Financial Results

Income Statement and Profitability

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Net Interest Income ($MM)53.204 56.781 59.541 61.324
Provision for Credit Losses ($MM)1.414 2.311 5.694 0.517
Net Interest Income After Provision ($MM)51.790 54.470 53.847 60.807
Noninterest Income ($MM)20.150 22.415 21.501 21.923
Noninterest Expense ($MM)48.552 49.328 50.332 50.669
Net Income ($MM)18.578 22.395 19.978 25.639
Diluted EPS ($)0.63 0.77 0.69 0.89
NIM (FTE, %)2.82% 3.09% 3.20% 3.17%
Efficiency Ratio (%)65.7% 61.6% 61.6% 60.2%

Balance Sheet and Liquidity

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Total Assets ($MM)8,205.737 7,975.167 7,939.056 8,573.616
Cash & Equivalents ($MM)504.700 169.134 160.365 816.739
Loans & Leases HFI ($MM)6,730.734 6,833.037 6,801.185 6,785.482
Total Deposits ($MM)6,854.148 6,658.498 6,582.660 7,218.143
Noninterest-Bearing Deposits ($MM)1,323.953 1,433.995 1,461.189 1,390.565

Asset Quality

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Nonperforming Assets ($MM)36.623 33.960 50.585 52.125
Nonaccrual Loans ($MM)15.319 11.126 27.909 27.330
Net Charge-offs ($MM)0.820 1.686 7.807 0.480
ACL / Loans (%)1.28% 1.28% 1.28% 1.28%

Noninterest Income Breakdown (YoY)

CategoryQ3 2024 ($MM)Q3 2025 ($MM)
BOLI Income0.921 1.908
Investment Advisory Fees5.319 5.671
Insurance Commissions & Fees5.238 5.468
Service Charges on Deposit Accounts2.037 2.302
Other Service Fee Income1.815 2.416
Net Gain on Mortgage Banking1.296 0.848
Other Income1.396 1.080

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Loans vs FY24 ending balancesFY2025Not disclosed“Relatively flat when compared to December 31, 2024” New/maintained neutral
Net Interest Income growth vs 2024FY2025Not disclosed12%–14% New
Provision for Credit LossesFY2025Event-driven (implicit)$11M–$13M; event-driven New
Noninterest Income growth (ex one-time)FY2025Base $84.5M (2024)~1%–3% growth; risk if government shutdown impacts SBA sales New
Noninterest Expense growthFY2025Not disclosed~2%–3% New
Effective Tax RateFY202520%–20.5%20%–20.5% (unchanged) Maintained
NIM (core)Q4 2025Not disclosed“Core NIM…relatively flat” Qualitative

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
NIM trajectoryQ1: NIM 3.09%; core 3.12% . Q2: NIM 3.20%; core 3.24% .Reported NIM 3.17% due to excess liquidity; core NIM 3.33% (+9 bps QoQ); flat outlook for Q4 .Core improving; reported pressured by temporary liquidity.
Deposits seasonalityQ1: deposits fell $100.8M on seasonal public funds decline . Q2: deposits fell $75.8M; excluding seasonal/brokered, +$77.5M .Deposits rose $635.5M on seasonal public funds; expected $75–$100M monthly outflows in Q4 .Seasonal swing; liquidity to normalize.
Asset qualityQ1: NPAs $34.0M . Q2: NPAs $50.6M; $23.7M fraud-related nonaccrual; $7.3M charge-off .NPAs $52.1M; net charge-offs $0.48M; provision $0.52M .Elevated NPAs; lower ongoing losses.
Loan growth/pipelineQ1: loans +$6.5M QoQ . Q2: loans −$31.9M QoQ .Loans −$15.7M QoQ; pipeline healthy; expect some growth in Q4, governed by deposits; CRE focus on construction commitments and fee income .Gradual; deposit‑linked growth discipline.
BuybacksQ1: 221,760 shares repurchased . Q2: 172,757 shares .Q3: 255,010 shares; plans to continue and potentially increase if capital grows .Active; potentially higher.
M&A appetiteNot highlighted.“Not one of our top strategic priorities… focus on efficiency and digital; only if highly compelling” .Low appetite near term.
Deposit competitionQ2: competitive pricing pressure implied in NIM commentary .Competition “fierce” albeit lower absolute rates; credit unions extending CD terms; ~$200M+ CDs repricing quarterly .Intense competition persists.

Management Commentary

  • Prepared remarks emphasized margin dynamics and credit normalization: “reported NIM…3.17%… core NIM of 3.33%…expanded by nine basis points… We expect core NIM to be relatively flat in the fourth quarter… Net charge-offs…$480,000…three basis points annualized… Non-interest income increased $1.8 million or 8.8%… expenses were up 2% YTD” .
  • On deposits and liquidity seasonality: “We would expect…$75 million to $100 million of outflows of public funds per month in the fourth quarter… excess liquidity [to] start to diminish, potentially cut in half” .
  • Strategic focus: CRE construction commitments to recycle capital and generate fees; mortgage banking return to traditional model reducing on-balance-sheet residential volumes; toggle buybacks to deploy surplus capital; limited M&A priority to preserve focus on efficiency and digital .

Q&A Highlights

  • Deposits/public funds: Expect $75–$100M monthly public funds outflows in Q4 and continued normalization in Q1, reducing excess liquidity .
  • NIM and yields: Core NIM seen “relatively flat” in Q4; commercial new loan yields around ~7% trending slightly down with Fed cuts; scope to lower CD costs as maturities reprice .
  • Loan pipeline: Healthy, with anticipated Q4 growth subject to prepayments; CRE tilting to construction commitments to enhance fee income and capital efficiency .
  • Deposit competition/CDs: Competition remains “fierce”; ~$200M+ of CDs reprice each quarter; credit unions extending terms beyond bank appetite given margin discipline .
  • Capital deployment/M&A: Consistent buyback activity of $6–$7M per quarter with potential to increase; M&A not a top priority given internal efficiency/digital initiatives .

Estimates Context

  • EPS and revenue beats: EPS $0.89 vs $0.765*; revenue $82.73M vs $81.90M*; both beats reflect stronger core NIM and lower credit costs QoQ, partly offset by expense growth. Primary EPS estimates count: 2*; revenue estimates count: 2*. Target price consensus $32.50* (2 estimates) . Values retrieved from S&P Global.
  • Forward quarters (consensus): EPS Q4 2025 $0.76*; Q1 2026 $0.76*; Q2 2026 $0.735*. Revenue Q4 2025 $82.4M*; Q1 2026 $81.8M*; Q2 2026 $82.1M*. Values retrieved from S&P Global.

Q3 2025 Performance vs Consensus

MetricActualConsensus
Diluted EPS ($)0.89 0.765*
Revenue ($MM; NII after provision + noninterest income)82.73 81.90*
Primary EPS - # of Estimates—2*
Revenue - # of Estimates—2*
Target Price ($)—32.50*

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Positive surprise: EPS and revenue above consensus on core NIM expansion and normalized credit costs; watch for reported NIM optics as excess liquidity reverses in Q4 .
  • Margin setup: Core NIM up 9 bps QoQ; management guides flat Q4—stability rather than acceleration is baseline .
  • Liquidity swing: Seasonal public funds inflows will unwind $75–$100M/month; expect cash to decline and reported NIM to tick a couple bps as liquidity normalizes .
  • Asset quality risk contained: Fraud-related Q2 issue elevated NPAs, but Q3 losses minimal; monitor resolution progress on receiver‑controlled properties and OREO .
  • Loan growth disciplined: Modest Q4 growth expected, keyed to deposit trajectory; emphasis on CRE construction commitments supports fee generation without straining capital .
  • Capital return intact: Continued repurchases and dividend suggest ongoing shareholder yield; potential buyback increase if capital builds .
  • Estimate path: Near-term EPS/Revenue consensus implies stable run-rate; potential upward revisions if margin stability and credit normalization persist. Values retrieved from S&P Global.
Additional supporting data: 
- Q3 press release with detailed financials **[102212_4c881b91042845d7886eb07060455f11_0]** **[102212_4c881b91042845d7886eb07060455f11_1]** **[102212_4c881b91042845d7886eb07060455f11_9]** **[102212_4c881b91042845d7886eb07060455f11_10]** **[102212_4c881b91042845d7886eb07060455f11_11]**. 
- Form 8-K (Item 2.02) attaching Q3 earnings release **[102212_0000102212-25-000025_exhibit991earningsrelease0.htm:0]** **[102212_0000102212-25-000025_exhibit991earningsrelease0.htm:1]** **[102212_0000102212-25-000025_exhibit991earningsrelease0.htm:7]**. 
- Q2 press release for sequential context **[102212_8be61d78fb744306a74f40a29c57bfc6_0]** **[102212_8be61d78fb744306a74f40a29c57bfc6_1]** **[102212_8be61d78fb744306a74f40a29c57bfc6_8]** **[102212_8be61d78fb744306a74f40a29c57bfc6_9]** **[102212_8be61d78fb744306a74f40a29c57bfc6_11]**. 
- Q1 press release for YTD trends **[102212_7475900393234b1481bf67c52ec1e9d3_0]** **[102212_7475900393234b1481bf67c52ec1e9d3_9]** **[102212_7475900393234b1481bf67c52ec1e9d3_10]** **[102212_7475900393234b1481bf67c52ec1e9d3_8]**.