Univest Financial Corp (UVSP) 2015 Q4 法說會逐字稿

Good morning and welcome to the fourth-quarter and year-end 2015 earnings conference call.

All participants will be in listen-only mode.

(Operator Instructions).

Please note this event is being recorded.

I would now like to turn the conference over to Jeff Schweitzer, President and CEO of Univest Corporation of Pennsylvania.

Please go ahead.

Thank you, Zelda.

Good morning and thank you to all of our listeners for joining us.

Joining me on the call this morning is Mike Keim, President of Univest Bank and Trust, and our Chief Financial Officer.

Before we begin, we remind everyone of the forward-looking statements disclaimer.

Please be advised that during the course of this conference call, management may make forward-looking statements that express management's intentions, beliefs, or expectations within the meaning of the federal securities laws.

Univest's actual results may differ materially from those contemplated by these forward-looking statements.

I will refer you to the forward-looking cautionary statements in our earnings release and in our SEC filings.

Hopefully everyone had a chance to review our earnings release from yesterday.

If not, it can be found on our website at Univest.net under the investor relations tab.

We are pleased to have reported net income of $7.2 million during the fourth quarter, which included $540,000 of merger charges related to our entering into a definitive agreement to acquire Fox Chase Bancorp.

Excluding these charges, net income would have been $7.7 million as a significant amount of these charges were not tax-deductible.

Excluding these charges, our return on average assets and return on average tangible equity were a solid 1.06% and 12.92%, respectively.

In addition to the announced acquisition of Fox Chase, a highlight of the quarter was our loan growth of $81.2 million, which on an annualized basis represents growth of 15%.

The second and fourth quarters are historically our strongest quarters for loan growth and once again that proved true in 2015.

For the year, our organic loan growth was a very solid 11%.

While we did experience margin compression during the quarter, our net interest margin continues to be strong while compared to peer as our margin for the quarter was 3.8% and for the year was 3.96%.

While our margin for the quarter was down 9 basis points from the third quarter, 3 basis points of this decline was related to excess cash as we grew deposits in anticipation of our loan growth, which occurred late in the fourth quarter.

While there continues to be a lot of competition for good deals, we have remained disciplined making sure we're appropriately compensated while continuing to manage our cost of funds.

Noninterest income grew 10% compared to the fourth quarter of 2014 as we continue to grow our nonbanking lines of business diversifying our revenue and earnings streams.

We continue to see momentum in our wealth management, insurance and mortgage banking businesses as a result of our prior acquisitions combined with solid organic growth.

With respect to asset quality, our nonaccrual loans decreased $6.7 million with our ratio of nonperforming loans to total loans declining 33 basis points to 0.91%.

This represents our lowest ratio of nonperforming loans since the financial crisis began.

During the quarter, we resolved one significant nonaccrual loan as we sold the note for its recorded balance of $4 million.

Our net charge offs for the quarter and year were 0.36% and 0.33%, respectively.

Obviously a big event during the quarter was the announcement that we entered into a definitive agreement to acquire Fox Chase.

We continue to be very excited about the combination, and the acquisition has been received well by the Fox Chase team and their customers.

Mike and I have been spending time with the lending team and have been out meeting customers and the reception has been very positive.

We continue to target an early third-quarter close pending regulatory and shareholder approvals.

As I said when we started the call, we are pleased with our operating results for the quarter and also for 2015 as a whole.

After excluding merger charges and branch closure costs, we generated $30.1 million or $1.54 per share in net income and an ROA of 1.09% and a return on tangible equity of 12.86%.

We have good momentum heading into the new year and with the pending acquisition of Fox Chase, we are very optimistic about 2016.

Now we will open it up for questions anybody might have.

Thank you.

We will now begin the question-and-answer session.

(Operator Instructions).

Nobody joined the queue, Mr. Schweitzer, so I would like to turn the conference back over to you for any closing remarks.

All right.

I appreciate it, Zelda.

And thank you to everyone for listening today.

We appreciate you participating and look forward to our next quarterly call after the end of the first quarter.

Have a great day.

The conference has now concluded.

Thank you for attending today's presentation.

You may now disconnect.