Univest Financial Corporation · NASDAQ:UVSP

Univest Financial — Investor Presentation (December 2020)

48 slides from Univest Financial's investor presentation, Dec 2, 2020

  1. Slide 1: Investor Presentation December 2020

    Investor Presentation December 2020

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement Cautionary Note Regarding Forward-Looking Statements This presentation of Univest and the reports Univest files with the Securities and Exchange Commission often contain "forward-looking statements" relating to present or future trends or factors affecting the financial service

  3. Slide 3: Non-GAAP Financial Measures

    Non-GAAP Financial Measures This presentation contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management uses these “non-GAAP” measures in its analysis of the Corporation’s performan

  4. Slide 4: Univest Company Overview

    Univest Company Overview  Headquartered in Souderton, Pennsylvania (Montgomery County)  Bank founded in 1876, holding company formed in 1973  Engaged in financial services business, providing full range of banking, insurance and wealth management services  Comprehensive financial solutions deliv

  5. Slide 5: 2020 Strategy

    2020 Strategy Commercial Loan Organic Growth Opportunistic, but disciplined, approach to wealth & insurance acquisitions Continue to take advantage of market dislocation & focus on hiring commercial lenders, including potential team liftouts. - March 2019 – 8 hires, including 5 relationship managers

  6. Slide 6: Investment highlights

     Super-Community Bank located in attractive Southeastern Pennsylvania market  Diversified lines of business and revenue streams (targeting 28 – 30% of total revenue for 2020)  Ability to scale and obtain operating leverage  Strong year-to-date 2020 earnings performance:  Core ROAA of 1.15% (1)(

  7. Slide 7: COVID-19 Response

    COVID-19 Response  Financial centers operated as drive-through only with an option for customers to schedule appointments for in person service  Vestibule banking utilized at locations without a drive- through  Access to safe deposit boxes via appointment  Additional safety protocols in place –

  8. Slide 8: Summary Financial Highlights

    SUMMARY FINANCIAL HIGHLIGHTS

  9. Slide 9: Q3 2020 YTD Results

    Q3 2020 YTD Results Earnings Loans & Deposits  Reported Earnings: $21.0 million  $0.72 per share  Core Earnings(1): $48.5 million  $1.66 per share  Reported ROAA: 0.48%/Core ROAA(1)(3): 1.15%  Reported ROATE: 5.74%/Core ROATE(2): 13.22%  Annualized Loan Growth excl. PPP: 9.8%  Annualized Dep

  10. Slide 10: Core Diluted Earnings Per Share

    Core Diluted Earnings Per Share* *Calculated using "Core Net Income Allocated to Common Shares" which is a Non-GAAP measure. Refer to appendix for reconciliation. Note: Graph begins with March 2017, representing first quarter subsequent to Fox Chase Bank acquisition with no transaction related costs

  11. Slide 11: Pre-Tax Pre-Provision Income

    Pre-Tax Pre-Provision Income* * Non-GAAP Measure – refer to Appendix for reconciliation 225 bp Fed rate reduction 11

  12. Slide 12: Tangible Book Value Per Share

    Tangible Book Value Per Share* *Calculated using "Tangible Common Equity" which is a Non-GAAP measure. Refer to appendix for reconciliation. (1) Assumes no Wealth Management or Insurance acquisitions. Target 8-10% Annual Growth(1) Benefit of 12/2017 Capital Raise = $1.21 12

  13. Slide 13: Strong ROAA & ROTE

    Strong ROAA & ROTE *Calculated using "Core Net Income" and “Average Assets excluding PPP” which are Non-GAAP measures. Refer to appendix for reconciliation. **Calculated using "Core Net Income" and "Average Tangible Common Equity" which are Non-GAAP measures. Refer to appendix for reconciliation. Co

  14. Slide 14: Loan Growth by Segment

    Loan Growth by Segment *Includes Fox Chase Bank, which was acquired on July 1, 2016 Loan Detail - $ in thousands (excl. PPP) $3.1B $3.2B $3.3B $3.3B $3.5B $3.5B $3.6B $3.7B $3.8B $3.9B $4.0B $4.1B $4.2B $4.3B $4.4B $4.5B $4.5B 14 $4.7B

  15. Slide 15: Deposit Growth by Segment

    Deposit Growth by Segment *Includes Fox Chase Bank, which was acquired on July 1, 2016 Deposit Detail - $ in thousands $3.1B $3.2B $3.3B $3.4B $3.3B $3.5B $3.5B $3.5B $3.6B $3.8B $3.9B $4.0B $4.1B $4.3B $4.4B $4.4B $4.9B 15 $5.2B

  16. Slide 16: Net Interest Income (Asset Sensitive)

    Net Interest Income (Asset Sensitive) *Proforma tax equivalent margin calculation excludes purchase accounting accretion and is based upon a proforma 21% tax rate for all periods presented (1) Calculated using “Core Net Interest Income excluding PPP” which is a Non-GAAP measure. Refer to appendix fo

  17. Slide 17: Efficiency Ratios

    Efficiency Ratios UVSP pays a Bank Share Tax rather than Bank Income Tax to the Commonwealth of Pennsylvania as a result of our type of charter. This amount is included in noninterest expense and increases our efficiency ratio by approximately 170 bps compared to other banks that do not have this ta

  18. Slide 18: Revenue

    Revenue Revenue Revenue by Business Unit (year-to-date 9/30/20) *2020 is an annualized figure – (Q3YTD/3X4). Excludes PPP Loan impact Revenue = Net Interest Income + Noninterest Income 18

  19. Slide 19: Assets

    Assets Chart data as of December 31 except for 2020 (9/30). 2020 excluding PPP Loans = $5.9B $4.2B $4.6B $5.0B $5.4B $6.4B 19

  20. Slide 20: Liabilities and Deposits

    Liabilities and Deposits Chart data as of December 31 except for 2020 (9/30) Liabilities Deposits 20

  21. Slide 21: Stable Asset Quality

    Stable Asset Quality Nonperforming Assets Nonaccrual Loans and Leases Chart data as of December 31 except for 2020 (9/30) Note: 2020 includes a $2.7 million charge off related to a $8.1 million loan that was transferred to OREO during Q2 2020. Valuation based on an agreement of sale for the property

  22. Slide 22: Current Expected Credit Loss (CECL) Implementation

    Current Expected Credit Loss (CECL) Implementation  On January 1, 2020, the Corporation adopted Accounting Standard Update No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”). Upon adoption, the Corporation recognized:  $

  23. Slide 23: Liquidity and Capital

    LIQUIDITY AND CAPITAL *] UNIVEST

  24. Slide 24: Liquidity and Capital

    Liquidity and Capital Liabilities & Shareholders’ Equity Borrowing Sources – as of 9/30/20 Wholesale Term Funding Maturities* – as of 9/30/20 All data in millions, as of 9/30/20 24 Period Amount Q4 2020 25.0 2021 60.0 2022 35.0 2023 50.2 2024 60.0 Total 230.2$ *Includes Brokered Deposits Balance Rem

  25. Slide 25: Strong Capital Ratios Provide for Operating Flexibility

    Strong Capital Ratios Provide for Operating Flexibility Univest Financial Corporation (Parent) Univest Bank & Trust Co. (Bank) Cash Position of $165.1M at 9/30/20 25

  26. Slide 26: Largest Deposit Relationships

    Largest Deposit Relationships – As of 9/30/2020 26 Rank Type Balance (000s) Weighted Average Rate 1 Public Funds 188,374 0.25% 2 Bus/Corp 128,115 0.00% 3 Bus/Corp 78,333 0.00% 4 Public Funds 63,977 0.25% 5 Public Funds 51,752 0.27% 6 Public Funds 50,014 0.35% 7 Bus/Corp 30,689 1.31% 8 Public Funds 3

  27. Slide 27: Investments ($369 Million at 9/30/20)

    Aaa 1.0 MA 1.2 Aa3 0.5 Aa3 2.9 PA 12.8 Aa2 1.5 Aa2 1.7 TN 1.0 Aa1 1.0 A1 1.3 TX 0.0 A3 22.9 A2 1.8 Total 15.1 A2 49.3 N/A 6.3 A1 4.0 Total 15.1 Baa2 0.5 Baa1 1.0 N/A 10.0 AAA 1.0 GO 15.1 Total 90.7 AA 8.4 REV - AA- 0.8 Total 15.1 N/A 4.9 Total 15.1 Corporate Bonds (in millions) Moody's RatingMoody's

  28. Slide 28: Loan Portfolio Detail and Credit Overview

    LOAN PORTFOLIO DETAIL AND CREDIT OVERVIEW

  29. Slide 29: Loan & Lease Detail at 9/30/20 (excl PPP)

    Loan & Lease Detail at 9/30/20 (excl PPP) ($4.7 Billion at 9/30/20 excluding PPP) 29

  30. Slide 30: Largest Loan Exposures

    Largest Loan Exposures – As of 9/30/20 30 Rank Loan Type/Industry Risk Rating Exposure ('000s) Geography Rank Loan Type/Industry Risk Rating Exposure ('000s) Geography 1 Real Estate Development Pass 42,517$ Southeastern PA 1 Private Equity Investment Group Pass 39,250$ Southeastern PA 2 CRE - Office

  31. Slide 31: Loan Portfolio Overview

    Loan Portfolio Overview 31 (Dollars in thousands) As of November 27, 2020 Industry Description Total Outstanding Balance (excl PPP) % of Commercial Loan Portfolio PPP $ (1) $ Balance of Modified Loans (2) Modified Loans as a % of Portfolio (2) (3) CRE - Retail $ 295,654 7.6 % $ 239 $ 8,406 2.8 % Ani

  32. Slide 32: Credit Infrastructure

    Credit Infrastructure  Experienced credit team  Conservative credit culture  Centralized credit approval process  Low levels of authority in the field  Rigorous underwriting and disciplined committee approval required Approval Process Risk Management Process Owns Borrower Relationship Business/

  33. Slide 33: Credit approval and risk management practices

     Limited single signature lending authority. Joint signature up to $5.0 MM, then management level loan committee for the largest exposures.  Itemized report of all approvals to weekly Officer Loan Committee.  Robust independent loan review process. Quarterly review cycle.  Credit Officer involve

  34. Slide 34: Business Overview

    BUSINESS OVERVIEW *] UNIVEST

  35. Slide 35: Univest Primary Physical Service Area

    Univest Primary Physical Service Area Twelve counties in Southeastern and Central Pennsylvania and three counties in Southern New Jersey 35

  36. Slide 36: Univest Financial Center Locations

    Univest Financial Center Locations 36

  37. Slide 37: Market Opportunity

    Market Opportunity  With BB&T Corporation’s acquisitions of Susquehanna Bancshares and National Penn Bancshares, and WSFS Financial Corporation’s acquisition of Beneficial, Univest is one of the three largest community focused financial institutions remaining headquartered in the Philadelphia marke

  38. Slide 38: Executive Leadership Team

    Executive Leadership Team 38 Name Age Tenure (yrs.) with Univest Title Jeffrey M. Schweitzer 47 13 President and CEO, Univest Financial Corporation Michael S. Keim 53 11 President, Univest Bank and Trust Co. Brian J. Richardson 37 4 Executive Vice President, Chief Financial Officer (Former Fox Chase

  39. Slide 39: Commercial Banking

    Commercial Banking  92 lenders, relationship managers and portfolio managers operating in two divisions established by geography (serving clients primarily in Pennsylvania, New Jersey, Delaware and Maryland) • East Penn and New Jersey: Bucks, Montgomery, Chester, Delaware, Berks, Philadelphia, Lehi

  40. Slide 40: Consumer Banking

    Consumer Banking  39 financial service centers located in Bucks, Chester, Lancaster, Lehigh, Montgomery, Northampton and Philadelphia counties in PA and Ocean City, NJ; also operating 14 retirement centers in Bucks and Montgomery counties and 1 regional location in Berks county.  Proactively addre

  41. Slide 41: Mortgage Banking

    Mortgage Banking  37 Home Loan Consultants operating in Bank’s core footprint  Centralized processing, closing and underwriting  Primarily agency lender: FNMA, FHLMC, FHA, VA and USDA  FNMA and FHLMC eligible loans sold servicing retained  Received approval as a GNMA issuer in 2018  FHA, VA an

  42. Slide 42: Univest Capital, Inc.

    Univest Capital, Inc.  Equipment financing business with $160 million in lease receivables as of 9/30/20 − Average lease size $44,000, typically with four year term  Primary industries served: health care, education/office, automotive, golf/turf, technology and energy  Manage residual risk by pri

  43. Slide 43: Wealth Management

    Wealth Management  Comprehensive wealth management platform including broker / dealer, municipal pension services, registered investment advisor, retirement plan services and trust  Effective 1/1/19, the wealth management division was rebranded as Girard (i.e. Girard Advisory Services, LLC, Girard

  44. Slide 44: Insurance

    Insurance  Independent insurance agency with more than 60 carrier relationships  Full service agency providing commercial and personal lines, employee benefits and HR consulting solutions  Built via a series of eight acquisitions beginning in 2000. Last acquisition was Sterner Insurance in 2014,

  45. Slide 45: Appendix (Non-GAAP Reconciliations)

    APPENDIX (Non-GAAP Reconciliations)

  46. Slide 46: Non-GAAP reconciliation: Core Net Income

    $s in thousands Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 1. Core Net Income Allocated to Common Shares Net income allocated to common shares 10,743$ 11,657$ 11,100$ 10,182$ 12,752$ 4,325$ 14,878$ 18,272$ 16,012$ 16,408$ 1

  47. Slide 47: Non-GAAP reconciliation: Core Net Interest Income and Expense

    $s in thousands Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 5. Core Net Interest Income excluding PPP Net Interest Income 34,283$ 35,300$ 36,888$ 36,705$ 37,272$ 38,990$ 40,423$ 41,376$ 41,523$ 42,635$ 42,645$ 42,429$ 42,468

  48. Slide 48: Univest - univest.net

    VUNIVEST BANKING | INSURANCE | INVESTMENTS univest.net

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