SOUDERTON, PA — Univest Financial Corporation (NASDAQ: UVSP), the parent company to Univest Bank and Trust Co. and several other subsidiaries, released its earnings for the first quarter of 2024. The corporation disclosed a net income of $20.3 million, equivalent to $0.69 per share in diluted earnings. This is slightly below the $21.0 million ($0.71 per share) posted for the same period of the previous year.
Interestingly, integrated in the Q1 financial outcome is a $3.4 million net gain, which is about $0.09 in diluted earnings per share. This was accrued from the sale of mortgage servicing rights associated with $591.1 million of the corporation’s serviced loans.
In the loans sector, there was an increase in gross loans and leases by $11.9 million, a 0.2% uptick from the figures at the end of 2023. Commercial and residential mortgage loans accounted for this growth, although the increase was slightly dampened by a dip in construction and commercial real estate loans. Comparing year-over-year figures, gross loans and leases surged by $339.3 million, a 5.4% increase. Here, the primary driver was a boost in commercial real estate, residential mortgage loans and lease financings.
On the other hand, total deposits grew by $29.6 million to reach a 0.5% increase from the standing at the end of 2023. Most of this growth was contributed by consumer and brokered deposits, despite decreases in commercial and seasonal public funds deposits. March 2024’s total deposits – at a 9.8% boost and $570.7 million more than March 2023 – were also predominantly influenced by consumer, public funds, and brokered deposits.
In contrast to the deposit growth, total borrowings declined by $61.4 million, equivalent to a 13.2% reduction from December 2023. The primary reason for this was the pay-downs of long-term FHLB advances of $60.0 million. These borrowings were supplanted with $110.2 million of lower-cost brokered deposits within the quarter.
By the end of Q1 2024, Univest and its subsidiaries had an impressive $3.4 billion in committed borrowing capacity, with $2.1 billion still available. This was complemented by uncommitted funding sources from correspondent banks amounting to $334.0 million.
Noninterest income for Q1 2024 rose by 30.1% – up by $5.9 million from the comparable period in 2023. Major contributing factors were the net gain from the sale of mortgage servicing rights and increases in insurance commissions and fee income, investment advisory commission, and fee income, and service charges on deposit accounts. Leaning the other way, Univest’s noninterest expense for the first quarter edged up 1.1% to $50.1 million from the same period of the prior year.
Univest also declared a quarterly cash dividend of $0.21 per share, to be disbursed on May 22, 2024, to shareholders of record as of May 8, 2024.
With this performance, Univest presents a mixed bag of financial results for Q1 2024. The slight dip in net income from last year’s first quarter seems offset by significant gains in noninterest income, especially from the sale of mortgage servicing rights. However, this signals a delicate balance in Univest’s operations, one warranting the watchful eye of investors and analysts alike.
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