Univest Financial Corporation

Univest reported net income of $23 million, or $0.82 per share, which management said was an 18.8% increase in EPS versus Q2 2025. Reported net interest margin was 3.49%, up 16 bps from Q1, and core NIM was 3.53%, up 9 bps. Net interest income was $2.9 million higher sequentially, up 4.5%, and $6.7 million higher year over year, up 11.3%. Non-interest income was $18.1 million, down $3.4 million from Q2 2025, mainly due to the $5.2 million REO valuation adjustment. Net charge-offs were $1.9 million, or 11 bps annualized, and the allowance for credit losses coverage ratio was 1.28% of total loans held for investment. For the full year 2026, management maintained loan growth guidance of approximately 2%-3%, non-interest income growth of approximately 6%-8% excluding BOLI death benefits and REO valuation adjustments, non-interest expense growth of 3%-5%, and provisioning of $11 million-$13 million. Full-year net interest income growth outlook was increased to 8%-10%, and the effective tax rate is expected to remain in the 20%-21% range.

Jeff Schweitzer characterized the quarter as solid and said Univest had a strong start to the year through the first six months. He highlighted continued loan and deposit growth, active share repurchases, and progress on reducing the loan-to-deposit ratio. He also said the company remains open to M&A conversations in banking, wealth, and insurance, but emphasized that deals require willing sellers and agreement on terms.

Brian Richardson focused on margin strength, credit, and the outlook. He said reported NIM expanded to 3.49% and core NIM to 3.53%, with net interest income up 11.3% year over year, driven by higher average loans, better asset yields, and lower funding costs. On credit, he noted the $5.2 million REO valuation adjustment, the $28.6 million non-accrual C&I relationship with a $9.8 million specific reserve, and stable ACL coverage at 1.28%; he also said provisioning remains event-driven. On guidance, he maintained the 2026 outlook for loan growth, fee income, expenses, and provisioning, while raising NII growth to 8%-10% and keeping the tax rate at 20%-21%.

Analysts pressed on loan growth, pricing competition, and the NIM trajectory. Management said competition is increasing across markets and spreads are narrowing, but it still sees room to hit growth targets and is shifting more toward construction-oriented financing for better margins and fees. On NIM, Brian Richardson said rate changes are modeled as roughly neutral and expects core NIM to stay around 3.50%, give or take a few basis points, with limited room to lower deposit costs because over $300 million of CDs mature in the third quarter at roughly current offered rates. Questions also covered the OREO property and the new non-accrual credit; management described the OREO as a Princeton-area lab-space office building and said the C&I borrower is a seasonal manufacturer/distributor with possible sale options under review.