Univest Profit Falls on Commercial Charge-Offs

The Tip Desk · November 9, 2026 · 3 min read

Net income was $21.6 million, or $0.78 a share, after a $14.4 million charge-off lifted the credit-loss provision to $9.0 million.

Univest Financial Corporation (UVSP), the Souderton, Pa.-headquartered bank holding company with about $8.6 billion in assets, reported net income of $21.6 million, or $0.78 a share, for the quarter ended September 30, 2026, down from $25.6 million, or $0.89 a share, a year earlier. The company said the decline was primarily due to a higher provision for credit losses associated with elevated charge-offs.

Net loan and lease charge-offs were $17.6 million, or a 0.99% annualized rate, versus $1.9 million, or 0.11%, in the second quarter. An existing nonaccrual commercial loan relationship totaling $28.3 million incurred a $14.4 million charge-off; it had a $9.8 million specific reserve, and the remaining carrying value was supported by a letter of intent to sell the business. A separate $6.9 million commercial loan took a $2.7 million charge-off, with the rest paid in full in the third quarter. The provision for credit losses was $9.0 million, versus $2.7 million in the second quarter.

Gross loans and leases fell $27.5 million, or 0.4%, from June 30, after a $101.7 million, or 1.5%, sequential increase in the second quarter. The company attributed the third-quarter decline primarily to a $35.3 million payoff of a shared national credit relationship and the $14.4 million commercial charge-off. Versus December 31, 2025, gross loans were up $99.6 million, or 1.4%, on construction and commercial real estate growth, partly offset by a decline in residential mortgages that the company said is consistent with a strategy to focus balance-sheet growth on full-relationship customers.

Total deposits increased $421.5 million, or 6.1%, from June 30, after a $119.2 million, or 1.8%, sequential increase in the second quarter. The company said the growth was primarily due to seasonal increases in public funds and commercial deposits, partly offset by decreases in consumer and brokered deposits.

Net interest income was $67.8 million, up 2.3% sequentially after a 4.5% sequential increase in the second quarter. The company said the sequential rise was driven by higher average balances on loans and interest-earning deposits with other banks and modest yield gains on those assets, partly offset by a higher cost of funds and a larger average balance of interest-bearing liabilities. Reported tax-equivalent net interest margin compressed 7 bps to 3.42% from 3.49%. Excess liquidity reduced the margin by about 13 bps, versus about 4 bps in the second quarter; excluding that drag, NIM was 3.55%.

Noninterest income was $22.3 million, up 1.6% from the year-ago quarter. Investment advisory commission and fee income rose 13.4% on appreciation in assets under management and new customer relationships. Other service fee income rose 19.8%, including a $393 thousand increase in mortgage servicing fees. BOLI income fell 48.2% after $967 thousand of death-benefit proceeds a year earlier.

Noninterest expense was $54.0 million, up 6.6% from a year earlier. Salaries, benefits and commissions rose 8.2% on merit increases, staffing and medical claims. Marketing and advertising rose 143.3% after the company moved certain sponsorship activities into the line and entered a university sponsorship. The effective tax rate was 20.2%.

Nonperforming assets were $51.4 million at September 30, down from $63.0 million at June 30, after the $14.4 million charge-off. The allowance for credit losses on loans and leases was $81.0 million, or 1.15% of loans, versus $90.0 million, or 1.28%, at June 30.

The company repurchased 301,127 shares in the quarter at an average $42.50, or $42.96 including fees, leaving 1,193,133 shares available under its plan. It declared a quarterly cash dividend of $0.23 a share.