Univest's Loan Growth Reaccelerates After a Slow First Quarter

The Tip Desk · July 23, 2026 · 3 min read

Net interest income rose 4.5% sequentially to $66.2 million as the tax-equivalent margin reached 3.49%.

Univest Financial Corporation (UVSP), the Souderton, Pa.-headquartered regional bank with about $8.2 billion in assets, reported net interest income of $66.2 million for the quarter ended June 30, 2026, up $2.9 million, or 4.5%, from the first quarter, after an $816 thousand, or 1.3%, sequential increase in that prior period.

The sequential step-up in net interest income was the quarter’s operating inflection. Higher average loan balances and yields, plus a modest reduction in the cost of funds, more than offset lower average interest-earning deposits with other banks. Net interest margin on a tax-equivalent basis expanded 16 bps sequentially to 3.49% from 3.33%. Excluding excess liquidity, which reduced the reported margin by about four basis points, the tax-equivalent margin would have been 3.53%. A year earlier the margin was 3.20%.

Gross loans and leases increased $101.7 million, or 1.5% (6.0% annualized), from March 31, 2026, after a $25.4 million, or 0.4% (1.6% annualized), increase from December 31, 2025. The second-quarter rise was driven by commercial, construction and commercial real estate loans and was partially offset by a decline in residential mortgage loans, consistent with a strategy to focus balance-sheet growth on full-relationship customers. Period-end loans and leases held for investment were $7.04 billion. Average gross loans and leases were $7.01 billion in the quarter.

Total deposits increased $119.2 million, or 1.8% (7.2% annualized), from March 31, 2026, reversing a $273.6 million, or 3.9% (15.6% annualized), sequential decline from December 31, 2025. The June increase was primarily due to commercial, consumer and brokered deposits, partially offset by a seasonal decrease in public funds. Total deposits were $6.93 billion at June 30. Noninterest-bearing deposits were $1.5 billion, or 21.1% of total deposits. Unprotected deposits rose to $1.7 billion, or 24.6% of total deposits. Cash and cash equivalents were $195.3 million.

Net income was $23.0 million, or $0.82 a share, compared with $20.0 million, or $0.69 a share, a year earlier. Results included a pre-tax charge of $5.2 million ($4.1 million after-tax), or $0.15 a share, on a valuation adjustment to an other real estate owned property, and $708 thousand of tax-free BOLI death benefit proceeds, or $0.03 a share. Noninterest income was $18.1 million, down $3.4 million, or 15.8%, from the year-earlier quarter, primarily because of a $5.2 million net loss on the sale and write-down of OREO. Investment advisory commission and fee income increased $583 thousand, or 10.7%, and net gain on mortgage banking activities increased $365 thousand, or 37.2%. Noninterest expense was $53.1 million.

Credit quality deteriorated on a single large commercial relationship. Nonperforming assets totaled $63.0 million at June 30, 2026, versus $41.2 million at March 31, 2026. During the quarter, a commercial loan relationship totaling $28.6 million was placed on nonaccrual with a specific reserve of $9.8 million. Nonaccrual loans and leases were $43.9 million. Net loan and lease charge-offs were $1.9 million for the three months ended June 30, 2026. The provision for credit losses was $2.7 million. The allowance for credit losses on loans and leases was 1.28% of loans held for investment.

On July 22, 2026, Univest declared a quarterly cash dividend of $0.23 a share, matching the $0.23 declared in April after a 4.5% increase. During the quarter, the company repurchased 425,539 shares at an average price of $38.71. Common equity tier 1 risk-based capital was 11.19% at June 30, 2026.