Univest Corporation of Pennsylvania Q4 Earnings Call Highlights

Univest Corporation of Pennsylvania (NASDAQ:UVSP) discussed fourth-quarter 2025 results and provided its outlook for 2026, highlighting record annual earnings per share, improved asset quality metrics, and expectations for modest balance sheet growth and margin expansion in the coming year.

Fourth-quarter earnings and full-year performance

President, Chairman and CEO Jeff Schweitzer said the company delivered a “strong” fourth quarter, reporting net income of $22.7 million, or $0.79 per share. Schweitzer noted earnings per share increased 21.5% compared to the fourth quarter of 2024, and he called 2025 a record year with earnings per share of $3.13.

Loan production remained “solid throughout 2025,” Schweitzer said, though early payoffs and paydowns in the first three quarters weighed on growth. Those pressures eased in the fourth quarter, and total loans grew by $129.3 million during the period.

Loan growth, deposits, and net interest margin trends

Chief Financial Officer Brian Richardson said reported net interest margin (NIM) was 3.10% in the fourth quarter, down 7 basis points from 3.17% in the third quarter. He attributed the compression to increased excess liquidity tied to a seasonal build in public funds during the third quarter. On a core basis that excludes excess liquidity, Richardson said core NIM rose 4 basis points from the third quarter to 3.37%.

On balance sheet trends, Richardson reported:

• Quarterly loans: Up $129.3 million, or 7.6% annualized.
• Full-year 2025 loans: Up $88.2 million, or 1.3%.
• Quarterly deposits: Down $130.8 million, driven primarily by a $198.8 million decrease in public funds, partially offset by an $84 million increase in consumer balances.
• Full-year 2025 deposits: Up $328.1 million, or 4.9%.

In response to analyst questions about deposit seasonality, Richardson said the company expects $100 million to $150 million of public funds to flow out per quarter in the first and second quarters of 2026, alongside expected loan growth. He added that while excess liquidity may not be fully deployed by the end of the second quarter, a “significant portion” should be deployed over that period.

Asked about margin trajectory, Richardson said he expects NIM to be “relatively in line to slightly up” compared to the fourth quarter level when looking across 2026, while also noting that reported margin can show quarter-to-quarter volatility tied to excess liquidity and seasonality.

Management also addressed deposit pricing competition. The company said competition has persisted and, “in some regards, has increased slightly.” Executives said the bank aims to be within a competitive range without being the top-priced offering in the market, pointing to success retaining certificates of deposit (CDs) while also working to shift deposit mix toward operating accounts. Municipal deposits were described as more price sensitive, and the company said it is working to increase operating account balances to help lower the cost of funds over time.

Credit quality and provisioning

Schweitzer highlighted improved asset quality, noting that during the quarter, loans totaling $13.9 million tied to a non-accrual commercial loan relationship were paid off and a $449,000 recovery was recognized. That relationship had been placed on non-accrual in the second quarter of 2025. As of Dec. 31, 2025, a residential property related to the relationship remained in other real estate owned (OREO) with a carrying value of $1.4 million.

Following the payoff, Schweitzer said non-accrual loans to total loans declined 20 basis points to 0.2%, and non-performing assets to total assets fell 16 basis points to 0.45% during the quarter.

Richardson said the company recorded a provision for credit losses of $3.1 million in the fourth quarter. The allowance coverage ratio was 1.28% at Dec. 31, unchanged from Sept. 30. Net charge-offs totaled $1.1 million for the quarter, or 7 basis points annualized.

When asked about provisioning in 2026, Richardson said the company’s full-year guidance reflects a more normalized loss outlook, referencing an expectation for charge-offs in the “12–13 basis point range,” combined with loan growth assumptions.

Executives also addressed the company’s agricultural loan exposure, describing the portfolio as focused on smaller family farms rather than agribusiness lending. Management said loans are generally secured by real estate, with smaller average loan sizes, conservative underwriting, and a diversified base of underlying farm operations.

Expenses, buybacks, and 2026 guidance

Richardson said non-interest expense increased $2.1 million, or 4.1%, compared with the fourth quarter of 2024. For the full year, non-interest expense rose $5 million, or 2.5%, to $203 million.

On quarterly expense dynamics, Richardson said fourth-quarter expenses reflected higher variable compensation, with incentive accruals increasing about $1.3 million quarter over quarter. He said he would expect expenses to be “relatively down slightly” in the first quarter compared to the fourth quarter.

The company also emphasized capital return. Richardson said Univest repurchased about 400,000 shares in the fourth quarter at an average cost of $32.17 per share, including brokerage fees and excise taxes. For the full year, the company repurchased 1.1 million shares at an average cost of $30.75, representing 3.9% of shares outstanding as of Dec. 31, 2024.

On Dec. 10, 2025, the board approved an additional authorization to repurchase 2 million shares. Richardson said 2.3 million shares remained available under the plan as of Dec. 31, 2025, and the company is targeting repurchases of $10 million to $12 million per quarter in 2026. In Q&A, Richardson said buyback levels will be managed to avoid meaningful expansion in regulatory capital ratios, factoring in both earnings and balance sheet growth.

For 2026, Richardson outlined the company’s primary financial expectations:

• Net interest income: After $240.2 million in 2025, management expects loan growth of about 2% to 3% and modest NIM expansion, driving net interest income growth of about 4% to 6%. The outlook assumes two 25-basis-point rate cuts in 2026, though Richardson said the bank’s asset-liability management positioning is “overall ALM neutrality,” limiting the impact of modest Fed actions.
• Provision for credit losses: Expected in a range of $11 million to $13 million.
• Non-interest income: After $85.7 million in 2025 excluding $2.1 million of BOLI death benefits, management expects 2026 non-interest income growth of about 5% to 7% off the $85.7 million base.
• Non-interest expense: Expected growth of about 3% to 5% from the 2025 level of $203 million.
• Effective tax rate: Expected in the 20% to 21% range based on current statutory rates.

Closing the call, Schweitzer said the company was “excited” about 2025 results and the momentum heading into 2026.

About Univest Corporation of Pennsylvania (NASDAQ:UVSP)

Univest Corporation of Pennsylvania is a financial holding company headquartered in Souderton, Pennsylvania, operating through its primary subsidiary, Univest Bank and Trust Co The company offers a comprehensive range of banking services, including commercial and consumer lending, deposit products, mortgage banking, treasury and payment solutions, and wealth management services. Through its community banking model, Univest serves individuals, small to middle-market businesses, and nonprofit and public institutions.

Founded in 1893 as Souderton Industrial Savings Association, Univest has grown through a combination of organic expansion and targeted acquisitions.