SOURCE: Univest Corporation of Pennsylvania

Univest Corporation of Pennsylvania

January 26, 2011 15:35 ET

Univest Corporation of Pennsylvania -- Univest National Bank and Trust Co. -- Reports Fourth Quarter and Year End Earnings

SOUDERTON, PA--(Marketwire - January 26, 2011) - Univest Corporation of Pennsylvania (NASDAQ: UVSP), a full service financial institution with 135 years of experience in delivering financial solutions including personal and business banking, online banking, residential mortgages, insurance products, investments and wealth advisory solutions, today announced financial results for the fourth quarter and year ended December 31, 2010. Univest reported net income of $4.9 million or $0.30 diluted earnings per share for the quarter ended December 31, 2010, compared to net income of $1.5 million or $0.09 diluted earnings per share for the quarter ended December 31, 2009.

For the year ended December 31, 2010, Univest reported net income of $15.8 million or $0.95 diluted earnings per share compared to net income of $10.8 million or $0.75 diluted earnings per share reported for the year ended December 31, 2009.

Deposits

Total non-time deposits increased $26.5 million during the quarter and have increased $154.8 million year over year. These increases were offset by a decline in time deposits of $17.8 million for the three months ended December 31, 2010 and $32.8 million for the twelve months ended December 31, 2010.

Loans

Gross loans and leases increased $3.8 million during the quarter and $45.2 million for the twelve months ended December 31, 2010. While overall loan demand remains light primarily due to less credit demand and utilization of lines by businesses responding to the current economic environment, Univest continues to secure new loan opportunities due to the previously mentioned disruption in local markets and increased visibility as a result of a brand campaign designed to fuel loan growth.

Net Interest Income and Margin

Net interest income increased $2.4 million or 14.5% to $19.2 million in the fourth quarter of 2010 and increased year over year by $5.9 million or 8.7% to $73.5 million. The net interest margin on a tax-equivalent basis for the fourth quarter of 2010 increased 49 basis points to 4.18% compared to 3.69% for the fourth quarter of 2009. For the year ended December 31, 2010, net interest margin on a tax-equivalent basis increased 32 basis points to 4.11% compared to 3.79% for the prior year.

The increases in net interest income and net interest margin for the quarter and year can be attributed to declines in the cost of interest-bearing liabilities, primarily time deposits and Federal Home Loan Bank (FHLB) borrowings, exceeding the declines in yields on total interest-earnings assets. The Corporation has continued to experience core deposit growth which has allowed the Corporation to continue to repay its maturing FHLB advances which were $92 million at December 31, 2009 and $5 million at December 31, 2010.

Non-Interest Income

Total non-interest income increased by $449 thousand or 5.09% to $9.3 million for the quarter compared to $8.8 million for the quarter ended December 31, 2009. This increase was primarily due to increased trust fee income of $169 thousand; investment advisory commission and fee income of $166 thousand; insurance commission and fee income of $226 thousand; and other income of $1.1 million, primarily due to increases in interchange fee income and favorable valuation adjustments on mortgage servicing rights. During the quarter, the Corporation reversed $412 thousand of negative valuation adjustments on mortgage servicing rights recorded during the third quarter as interest rates increased during the quarter which in turn slowed down pre-payment speeds on mortgages serviced by the Corporation. Additionally, the fourth quarter of 2009 was impacted by $761 thousand of other-than-temporary impairment charges on certain bank equity securities and other long-lived assets compared to $3 thousand in the fourth quarter of 2010. These favorable variances were partially offset by a reduction in the net gain on sales of securities of $1.0 million and a $447 thousand net gain on the interest rate swap recorded during the fourth quarter of 2009.

Non-interest income was negatively impacted during the fourth quarter as a result of the challenging economic climate and increased regulatory requirements. The negative effects from the implementation of Regulation E on August 15, 2010, which requires customers to opt-in for overdraft protection on debit card and point of sale transactions, were realized for the first time for an entire quarter, significantly contributing to the decline of $520 thousand on Univest's service charges on deposit accounts compared to the fourth quarter of the prior year.

Total non-interest income for the year ended December 31, 2010 increased $4.5 million or 15.04% to $34.4 million compared to $29.9 million for the year ended December 31, 2009. This increase was due to increased trust fee income of $544 thousand; investment advisory commission and fee income of $1.2 million; insurance commissions and fee income of $613 thousand; net gain on mortgage banking activities of $582 thousand and other income of $2.2 million, primarily related to interchange fee income; a litigation settlement during the first quarter of 2010; mortgage servicing fee income; and gains on the sales of terminated leases. Additionally, the increase resulted from a decline by $2.1 million in other-than-temporary impairment charges.

These increases were offset by a decline in service charges on deposit accounts in part due to Regulation E of $343 thousand, a reduction in the net gain on sales of securities of $718 thousand and a loss of $1.1 million related to a fair value write-down on an interest rate swap for a commercial real estate loan due to the decline in interest rates during the year. The swap was terminated during August 2010 due to the forecasted low interest rate environment.

Non-Interest Expense

Non-interest expense for the fourth quarter of 2010 decreased $1.3 million or 7.32% to $16.2 million, primarily due to a decline of $776 thousand in salaries and benefits as a result of reduced pension plan expenses and a change in the valuation of the Corporation's non-qualified pension plans of $433 thousand. This was partially offset by additional staffing to support additional personnel to grow the commercial lending and mortgage banking businesses.

Non-interest expense increased $2.0 million, or 3.10% for the year ended December 31, 2010. Salaries and benefits increased $612 thousand as a result of additional personnel to grow the commercial lending and mortgage banking businesses and higher restricted stock expense partially offset by reduced pension plan expenses. Equipment expense increased $373 thousand and marketing and advertising expenses increased $478 thousand during the year primarily to support a major brand campaign to position the Corporation to take advantage of the disruption in the local markets. Other expenses increased primarily due to increased legal fees resulting from non-performing loan activity and increased audit and interchange expenses.

Asset Quality and Provision for Loan and Lease Losses

Non-accrual loans and leases were $45.2 million at December 31, 2010 compared to $33.0 million at September 30, 2010 and $33.5 million at December 31, 2009. Nonperforming loans and leases as a percentage of total loans and leases equaled 3.16% at December 31, 2010 compared to 2.37% at September 30, 2010 and 2.65% at December 31, 2009. The increase in non-accrual loans was primarily due to the migration of four relationships to non-accrual status. These relationships were not concentrated in any one industry and consisted of hotel/office space; investment commercial real estate; a construction company; and a manufacturing company.

Net loan and lease charge-offs for the quarter were $4.3 million compared to $5.8 million for the previous three months. For the year ended December 31, 2010, net loan and lease charge-offs were $15.5 million or 1.07% of average loans and leases compared to $9.2 million or 0.63% for the year ended December 31, 2009.

The provision for loan and lease losses was $6.3 million for the fourth quarter of 2010 compared to $5.5 million for the third quarter of 2010 and $7.4 million for the corresponding quarter in the prior year. For the year ended December 31, 2010, the provision for loan and lease losses was $21.6 million compared to $20.9 million for the prior year. The increase in the provision is due to the migration of loans to higher-risk ratings as a result of deterioration of underlying collateral and economic factors.

As a result of the increased provision, the allowance for loan and lease losses as a percentage of total loans and leases increased to 2.10% at December 31, 2010 from 1.97% at September 30, 2010 and 1.74% at December 31, 2009. The allowance for loan and lease losses to nonperforming loans and leases equaled 66.48% at December 31, 2010 which decreased from 83.10% at September 30, 2010. The allowance for loan and lease losses to nonperforming loans and leases was 65.54% at December 31, 2009.

Capital

Univest continues to remain well-capitalized at December 31, 2010. Univest's total risk-based capital at December 31, 2010 was 15.47%, well in excess of the regulatory minimum for well capitalized status of 10% for total risk-based capital.

Dividend

On January 3, 2011, Univest Corporation paid a quarterly cash dividend of $0.20 per share, which represented a 4.05% annualized yield based on the closing price of Univest's stock on the date the dividend was paid.

About Univest Corporation

Headquartered in Souderton, Pa., Univest Corporation of Pennsylvania (www.univest.net) and its subsidiaries serve the financial needs of residents, businesses, and nonprofit organizations in Bucks, Chester, Montgomery and Lehigh counties. For more information on Univest Corporation of Pennsylvania and its subsidiaries, please visit www.univest.net.

This press release of Univest Corporation and the reports Univest Corporation files with the Securities and Exchange Commission often contain "forward-looking statements" relating to present or future trends or factors affecting the banking industry and, specifically, the financial operations, markets and products of Univest Corporation. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Univest Corporation's future results to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) a significant increase in competitive pressures among financial institutions; (2) changes in the interest rate environment that may reduce net interest margins; (3) changes in prepayment speeds, loan sale volumes, charge-offs and loan loss provisions; (4) general economic conditions; (5) legislative or regulatory changes that may adversely affect the businesses in which Univest Corporation is engaged; (6) technological issues which may adversely affect Univest Corporation's financial operations or customers; (7) changes in the securities markets or (8) risk factors mentioned in the reports and registration statements Univest Corporation files with the Securities and Exchange Commission. Univest Corporation undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

                    Univest Corporation of Pennsylvania
                   Consolidated Selected Financial Data
                            December 31, 2010

(Dollars in
 thousands)

Balance Sheet
 (Period End)    12/31/10    09/30/10    06/30/10    03/31/10    12/31/09
                ----------- ----------- ----------- ----------- -----------
Assets          $ 2,133,893 $ 2,114,204 $ 2,088,572 $ 2,064,822 $ 2,085,421
Securities          467,024     420,998     434,677     436,368     420,045
Loans held for
 sale                 4,178       3,801       2,485       1,165       1,693
Loans and
 leases, gross    1,471,186   1,467,382   1,449,147   1,427,805   1,425,980
Allowance for
 loan and lease
 losses              30,898      28,883      29,109      27,065      24,798
Loans and
 leases, net      1,440,288   1,438,499   1,420,038   1,400,740   1,401,182
Total deposits    1,686,270   1,677,641   1,609,772   1,572,681   1,564,257
Non-interest
 bearing
 deposits           271,125     272,805     255,880     246,909     242,691
NOW, Money
 Market and
 Savings            997,395     969,254     924,242     894,799     871,024
Time deposits       417,750     435,582     429,650     430,973     450,542
Borrowings          143,865     128,905     171,824     187,637     214,063
Shareholders'
 equity             266,224     270,773     269,524     267,850     267,807


Balance Sheet
 (Average)                      For the three months ended,
                ----------------------------------------------------------- 
                 12/31/10    09/30/10    06/30/10    03/31/10    12/31/09
                ----------- ----------- ----------- ----------- -----------
Assets          $ 2,125,112 $ 2,117,708 $ 2,090,930 $ 2,038,739 $ 2,096,945
Securities          449,031     431,193     442,902     409,188     454,097
Loans and
 leases, gross    1,461,766   1,459,820   1,425,278   1,420,830   1,438,880
Deposits          1,689,701   1,642,613   1,606,621   1,537,676   1,553,308
Shareholders'
 equity             271,945     271,045     269,902     269,030     267,644



Balance Sheet   For the twelve months
 (Average)              ended,
                -----------------------
                 12/31/10    12/31/09
                ----------- -----------
Assets          $ 2,093,422 $ 2,083,447
Securities          433,182     433,980
Loans and
 leases, gross    1,442,085   1,453,174
Deposits          1,619,634   1,554,230
Shareholders'
 equity             270,490     230,395



Asset Quality Data
 (Period End)
                          12/31/10  09/30/10  06/30/10  03/31/10  12/31/09
                          --------  --------  --------  --------  --------
Nonaccrual loans and
 leases                   $ 45,232  $ 33,043  $ 29,541  $ 34,856  $ 33,498
Accruing loans and leases
 90 days or more past due      696       899     1,276       303       726
Troubled debt restructured     550       813     1,499     1,691     3,611
Other real estate owned      2,438     1,557     1,827     2,453     3,428
Nonperforming assets        48,916    36,312    34,143    39,303    41,263
Allowance for loan and
 lease losses               30,898    28,883    29,109    27,065    24,798
Nonperforming loans and
 leases / Loans and
 leases                       3.16%     2.37%     2.23%     2.58%     2.65%
Allowance for loan and
 lease losses / Loans and
 leases                       2.10%     1.97%     2.01%     1.90%     1.74%
Allowance for loan and
 lease losses /
 Nonperforming loans         66.48%    83.10%    90.08%    73.45%    65.54%



                                                           For the twelve
                    For the three months ended,            months ended,
            -------------------------------------------- -----------------
            12/31/10 09/30/10 06/30/10 03/31/10 12/31/09 12/31/10 12/31/09
            -------- -------- -------- -------- -------- -------- --------
Net loan
 and lease
 charge-
 offs       $  4,261 $  5,755 $  2,821 $  2,628 $  4,595 $ 15,465 $  9,206
Net loan
 and lease
 charge-offs
 (annualized)/
 Average loans
 and leases     1.16%    1.56%    0.79%    0.75%    1.27%    1.07%    0.63%



                    Univest Corporation of Pennsylvania
                   Consolidated Selected Financial Data
                            December 31, 2010

(Dollars in
 thousands,
 except per
 share data)
                                For the three months ended,
                ----------------------------------------------------------
For the period:  12/31/10    09/30/10    06/30/10    03/31/10    12/31/09
                ----------  ----------  ----------  ----------  ----------
Interest income $   22,580  $   23,060  $   22,878  $   22,485  $   23,184
Interest
 expense             3,380       4,107       4,602       5,380       6,409
                ----------  ----------  ----------  ----------  ----------
  Net interest
   income           19,200      18,953      18,276      17,105      16,775
Provision for
 loan and lease
 losses              6,276       5,529       4,865       4,895       7,449
                ----------  ----------  ----------  ----------  ----------
Net interest
 income after
 provision          12,924      13,424      13,411      12,210       9,326
Noninterest
 income:
  Trust fee
   income            1,630       1,450       1,500       1,500       1,461
  Service charges
   on deposit
   accounts          1,466       1,633       1,812       1,782       1,986
  Investment
   advisory
   commission
   and fee income    1,191       1,227       1,152       1,056       1,025
  Insurance
   commissions and
   fee income        1,740       1,815       1,896       2,243       1,514
  Bank owned life
   insurance income    410         326         202         332         351
  Other-than-
   temporary
   impairment           (3)        (12)        (42)         (5)       (761)
  Net gain (loss) on
   sales of
   securities            6         339          38          49       1,023
  Net gain on
   mortgage banking
   activities          779       1,246         475         460         847
  Net (loss) gain
   on interest
   rate swap             -        (246)       (516)       (310)        447
  Other income       2,049       1,106       1,542       1,100         926
                ----------  ----------  ----------  ----------  ----------
Total
 noninterest
 income              9,268       8,884       8,059       8,207       8,819
Noninterest
 expense
  Salaries and
   benefits          8,979       9,775       9,469       9,811       9,755
  Premises and
   equipment         2,351       2,435       2,209       2,292       2,138
  Deposit
   insurance
   premiums            712         698         663         597         599
  Other expense      4,148       4,263       4,568       4,379       4,976
                ----------  ----------  ----------  ----------  ----------
Total
 noninterest
 expense            16,190      17,171      16,909      17,079      17,468
                ----------  ----------  ----------  ----------  ----------
Income before
 taxes               6,002       5,137       4,561       3,338         677
Applicable
 income taxes        1,093         990         831         368        (845)
                ----------  ----------  ----------  ----------  ----------
Net income      $    4,909  $    4,147  $    3,730  $    2,970  $    1,522
                ==========  ==========  ==========  ==========  ==========

Per Common
 Share Data:
Book value per
 share          $    15.99  $    16.29  $    16.25  $    16.17  $    16.27
Net income per
 share:
  Basic         $     0.30  $     0.25  $     0.23  $     0.18  $     0.09
  Diluted       $     0.30  $     0.25  $     0.23  $     0.18  $     0.09
Dividends per
 share          $     0.20  $     0.20  $     0.20  $     0.20  $     0.20
Weighted
 average shares
 outstanding    16,645,115  16,621,291  16,589,657  16,535,461  16,464,824
Period end
 shares
 outstanding    16,648,303  16,626,900  16,590,710  16,561,807  16,465,083



(Dollars in
 thousands,
 except per
 share data)
                For the twelve months
                        ended,
                ----------------------
For the period:  12/31/10    12/31/09
                ----------  ----------
Interest income $   91,003  $   96,359
Interest
 expense            17,469      28,723
                ----------  ----------
  Net interest
   income           73,534      67,636
Provision for
 loan and lease
 losses             21,565      20,886
                ----------  ----------
Net interest
 income after
 provision          51,969      46,750
Noninterest
 income:
  Trust fee income   6,080       5,536
  Service charges
   on deposit
   accounts          6,693       7,036
  Investment
   advisory
   commission and
   fee income        4,626       3,427
  Insurance
   commissions and
   fee income        7,694       7,081
  Bank owned
   life insurance
   income            1,270       1,321
  Other-than-
   temporary
   impairment          (62)     (2,208)
  Net gain (loss) on
   sales of
   securities          432       1,150
  Net gain on
   Mortgage banking
   activities        2,960       2,378
  Net (loss) gain
   on interest
   rate swap        (1,072)        641
  Other income       5,797       3,555
                ----------  ----------
Total
 noninterest
 income             34,418      29,917
Noninterest
 expense
  Salaries and
   benefits         38,034      37,422
  Premises and
   equipment         9,287       8,712
  Deposit
   insurance
   premiums          2,670       3,185
  Other expense     17,358      16,005
                ----------  ----------
Total
 noninterest
 expense            67,349      65,324
                ----------  ----------
Income before
 taxes              19,038      11,343
Applicable
 income taxes        3,282         563
                ----------  ----------
Net income      $   15,756  $   10,780
                ==========  ==========

Per Common
 Share Data:
Book value per
 share          $    15.99  $    16.27
Net income per
 share:
  Basic         $     0.95  $     0.75
  Diluted       $     0.95  $     0.75
Dividends per
 share          $     0.80  $     0.80
Weighted
 average shares
 outstanding    16,598,284  14,347,104
Period end
 shares
 outstanding    16,648,303  16,465,083



                    Univest Corporation of Pennsylvania
                   Consolidated Selected Financial Data
                            December 31, 2010




                                  For the three months ended,
                     -----------------------------------------------------
Profitability Ratios
 (annualized)        12/31/10   09/30/10   06/30/10   03/31/10   12/31/09
                     ---------  ---------  ---------  ---------  ---------

Return on average
 assets                   0.92%      0.78%      0.72%      0.59%      0.29%
Return on average
 shareholders'
 equity                   7.16%      6.07%      5.54%      4.48%      2.26%
Net interest margin
 (FTE)                    4.18%      4.15%      4.11%      3.99%      3.69%
Efficiency ratio (1)     54.20%     58.88%     61.32%     64.33%     65.35%

Capitalization Ratios

Dividends paid to
 net income              67.85%     80.15%     88.95%    111.55%    216.43%
Shareholders' equity
 to assets (Period
 End)                    12.48%     12.81%     12.90%     12.97%     12.84%
Tangible common
 equity to tangible
 assets                  10.08%     10.46%     10.51%     10.55%     10.44%


Regulatory Capital
 Ratios  (Period
 End)
Tier 1 leverage
 ratio                   11.54%     11.51%     11.57%     11.82%     11.46%
Tier 1 risk-based
 capital ratio           14.17%     14.14%     14.25%     14.44%     14.41%
Total risk-based
 capital ratio           15.47%     15.45%     15.58%     15.78%     15.76%



                        For the twelve
                         months ended,
                     --------------------
Profitability Ratios
 (annualized)        12/31/10   12/31/09
                     ---------  ---------

Return on average
 assets                   0.75%      0.52%
Return on average
 shareholders'
 equity                   5.82%      4.68%
Net interest margin
 (FTE)                    4.11%      3.79%
Efficiency ratio (1)     59.52%     63.88%

Capitalization
 Ratios

Dividends paid to
 net income              84.31%    109.33%
Shareholders' equity
 to assets (Period
 End)                    12.48%     12.84%
Tangible common
 equity to tangible
 assets                  10.08%     10.44%


Regulatory Capital
 Ratios  (Period
 End)
Tier 1 leverage
 ratio                   11.54%     11.46%
Tier 1 risk-based
 capital ratio           14.17%     14.41%
Total risk-based
 capital ratio           15.47%     15.76%


(1) Total operating expenses to net interest income before loan loss
    provision plus non-interest income adjusted for tax equivalent income.




                          Distribution of Assets,
                              Liabilities and
                          Shareholders' Equity:
                            Interest Rates and
                          Interest Differential


                           For the Three Months Ended December 31,
                   --------------------------  ---------------------------
Tax Equivalent
 Basis                          2010                         2009
                   --------------------------  ---------------------------
                     Average   Income/ Average   Average   Income/  Average
                     Balance   Expense  Rate     Balance   Expense   Rate
                   ----------  ------- ------  ----------  -------  ------
Assets:
Interest-earning
 deposits with
 other banks       $   24,975  $    22   0.35% $   11,706  $     8    0.27%
U.S. Government
 obligations          176,910      829   1.86     126,261      864    2.71
Obligations of
 state and
 political
 subdivisions         109,902    1,718   6.20     107,722    1,684    6.20
Other debt and
 equity securities    162,219    1,576   3.85     220,114    2,400    4.33
                   ----------  -------         ----------  -------
  Total interest-
   earning deposits
   and investments    474,006    4,145   3.47     465,803    4,956    4.22
                   ----------  -------         ----------  -------

Commercial,
 financial, and
 agricultural
 loans                427,828    5,330   4.94     414,338    4,817    4.61
Real estate--
 commercial and
 construction
 loans                552,262    7,648   5.49     527,559    7,260    5.46
Real estate--
 residential loans    252,836    2,681   4.21     273,366    3,087    4.48
Loans to
 individuals           43,261      644   5.91      47,470      820    6.85
Municipal loans
 and leases           117,028    1,758   5.96      93,669    1,362    5.77
Lease financings       68,551    1,555   9.00      82,478    1,828    8.79
                   ----------  -------         ----------  -------
  Gross loans and
   leases           1,461,766   19,616   5.32   1,438,880   19,174    5.29
                   ----------  -------         ----------  -------
    Total interest-
     earning assets 1,935,772   23,761   4.87   1,904,683   24,130    5.03
                   ----------  -------         ----------  -------
Cash and due from
 banks                 34,326                      39,521
Reserve for loan
 and lease losses     (29,413)                    (23,663)
Premises and
 equipment, net        34,932                      33,643
Other assets          149,495                     142,761
                   ----------                  ----------
  Total assets     $2,125,112                  $2,096,945
                   ==========                  ==========

Liabilities:
Interest-bearing
 checking deposits $  181,357  $    62   0.14  $  166,778  $    58    0.14
Money market
 savings              336,161      228   0.27     282,040      337    0.47
Regular savings       466,162      535   0.46     382,980      744    0.77
Time deposits         428,720    2,061   1.91     486,326    3,768    3.07
                   ----------  -------         ----------  -------
  Total time and
   interest-bearing
   deposits         1,412,400    2,886   0.81   1,318,124    4,907    1.48
                   ----------  -------         ----------  -------

Securities sold
 under agreements
 to repurchase         96,143       72   0.30     101,140      129    0.51
Other short-term
 borrowings             5,698       62   4.32      98,803    1,068    4.29
Long-term debt          5,000       48   3.81      10,640      (14)  (0.52)
Subordinated notes
 and capital
 securities            24,365      312   5.08      25,865      320    4.91
                   ----------  -------         ----------  -------
  Total borrowings    131,206      494   1.49     236,448    1,503    2.52
                   ----------  -------         ----------  -------
  Total interest-
   bearing
   liabilities      1,543,606    3,380   0.87   1,554,572    6,410    1.64
                   ----------  -------         ----------  -------
Demand deposits,
 non-interest
 bearing              277,301                     235,184
Accrued expenses
 and other
 liabilities           32,260                      39,545
                   ----------                  ----------
  Total
   liabilities      1,853,167                   1,829,301
                   ----------                  ----------

Shareholders'
 Equity
Common stock           91,332                      91,332
Additional paid-in
 capital               61,420                      61,426
Retained earnings
 and other equity     119,193                     114,886
                   ----------                  ----------
  Total shareholders'
   equity             271,945                     267,644
                   ----------                  ----------
  Total liabilities
   and shareholders'
   equity          $2,125,112                  $2,096,945
                   ==========                  ==========
Net interest
 income                        $20,381                     $17,720
                               =======                     =======

Net interest
 spread                                  4.00                         3.39
Effect of net
 interest-free
 funding sources                         0.18                         0.30
                                       ------                       ------
Net interest
 margin                                  4.18%                        3.69%
                                       ======                       ======
Ratio of average
 interest-earning
 assets to average
 interest-bearing
 liabilities           125.41%                     122.52%
                   ==========                  ==========

Notes: For rate calculation purposes, average loan and lease categories
       include unearned discount.
         Nonaccrual loans and leases have been included in the average loan
          and lease balances.
         Loans held for sale have been included in the average loan
          balances.
         Tax-equivalent amounts for the three months ended December 31,
          2010 and 2009 have been calculated using the Corporation's
          federal applicable rate of 35.0% and 34.5%, respectively.





                          Distribution of Assets,
                              Liabilities and
                          Shareholders' Equity:
                            Interest Rates and
                          Interest Differential


                           For the Twelve Months Ended December 31,
Tax Equivalent      --------------------------  --------------------------
 Basis                           2010                        2009
                    --------------------------  --------------------------
                      Average   Income/ Average   Average   Income/ Average
                      Balance   Expense  Rate     Balance   Expense  Rate
                    ----------  ------- ------  ----------  ------- ------
Assets:
Interest-earning
 deposits with
 other banks        $   24,790  $    72   0.29% $    5,645  $    16   0.28%
U.S. Government
 obligations           151,725    3,160   2.08     110,781    3,608   3.26
Obligations of
 state and
 political
 subdivisions          108,694    7,006   6.45     104,481    6,890   6.59
Other debt and
 equity securities     172,763    7,217   4.18     218,660   10,406   4.76
Federal funds sold           -        -      -          58        -      -
                    ----------  -------         ----------  -------
  Total interest-
   earning deposits,
   investments and
   federal funds
   sold                457,972   17,455   3.81     439,625   20,920   4.76
                    ----------  -------         ----------  -------

Commercial,
 financial, and
 agricultural loans    422,401   20,315   4.81     410,729   18,838   4.59
Real estate--commercial
 and construction
 loans                 534,573   30,834   5.77     521,029   30,549   5.86
Real estate--
residential loans      256,427   11,124   4.34     291,229   13,520   4.64
Loans to
 individuals            45,287    2,698   5.96      49,930    3,440   6.89
Municipal loans and
 leases                107,524    6,409   5.96      90,065    5,444   6.04
Lease financings        75,873    6,690   8.82      90,192    7,655   8.49
                    ----------  -------         ----------  -------
  Gross loans and
   leases            1,442,085   78,070   5.41   1,453,174   79,446   5.47
                    ----------  -------         ----------  -------
    Total interest-
     earning assets  1,900,057   95,525   5.03   1,892,799  100,366   5.30
                    ----------  -------         ----------  -------
Cash and due from
 banks                  35,612                      33,514
Reserve for loan
 and lease losses      (28,688)                    (18,200)
Premises and
 equipment, net         34,914                      33,170
Other assets           151,527                     142,164
                    ----------                  ----------
  Total assets      $2,093,422                  $2,083,447
                    ==========                  ==========

Liabilities:
Interest-bearing
 checking deposits  $  178,679  $   242   0.14  $  162,615  $   257   0.16
Money market
 savings               303,012    1,060   0.35     305,113    1,724   0.57
Regular savings        445,721    2,555   0.57     353,748    2,955   0.84
Time deposits          432,919   10,054   2.32     508,337   17,371   3.42
                    ----------  -------         ----------  -------
  Total time and
   interest-bearing
   deposits          1,360,331   13,911   1.02   1,329,813   22,307   1.68
                    ----------  -------         ----------  -------

Securities sold
 under agreements
 to repurchase          97,667      390   0.40      91,390      544   0.60
Other short-term
 borrowings             42,109    1,726   4.10      92,209    2,937   3.19
Long-term debt           5,363      190   3.54      48,979    1,640   3.35
Subordinated notes
 and capital
 securities             24,927    1,252   5.02      26,427    1,295   4.90
                    ----------  -------         ----------  -------
     Total
      borrowings       170,066    3,558   2.09     259,005    6,416   2.48
                    ----------  -------         ----------  -------
     Total interest-
      bearing
      liabilities    1,530,397   17,469   1.14   1,588,818   28,723   1.81
                    ----------  -------         ----------  -------
Demand deposits,
 non-interest
 bearing               259,303                     224,417
Accrued expenses
 and other
 liabilities            33,232                      39,817
                    ----------                  ----------
     Total
      liabilities    1,822,932                   1,853,052
                    ----------                  ----------

Shareholders'
 Equity
Common stock            91,332                      80,969
Additional paid-in
 capital                61,420                      37,844
Retained earnings
 and other equity      117,738                     111,582
                    ----------                  ----------
  Total shareholders'
   equity           270,490                     230,395
                    ----------                  ----------
     Total
      liabilities and
      shareholders'
      equity        $2,093,422                  $2,083,447
                    ==========                  ==========
Net interest income             $78,056                     $71,643
                                =======                     =======

Net interest spread                       3.89                        3.49
Effect of net
 interest-free
 funding sources                          0.22                        0.30
                                        ------                      ------
Net interest margin                       4.11%                       3.79%
                                        ======                      ======
Ratio of average
 interest-earning
 assets to average
 interest-bearing
 liabilities            124.15%                     119.13%
                    ==========                  ==========

Notes: For rate calculation purposes, average loan and lease categories
       include unearned discount.
         Nonaccrual loans and leases have been included in the average loan
          and lease balances.
         Loans held for sale have been included in the average loan
          balances.
         Tax-equivalent amounts for the twelve months ended December 31,
          2010 and 2009 have been calculated using the Corporation's
          federal applicable rate of 35.0% and 34.5%, respectively.

Contact Information

  • CONTACT:
    Jeff Schweitzer
    UNIVEST CORPORATION OF PENNSYLVANIA
    Chief Financial Officer
    215-721-2458
    schweitzerj@univest.net