Univest Financial (UVSP) 8-K Univest Corporation of Pennsylvania — Univest National Bank and Trust Co. — Reports Second Quarter Earnings

Exhibit 99.1

CONTACT: Jeff Schweitzer
UNIVEST CORPORATION
OF PENNSYLVANIA
Chief Financial Officer
215-721-2458,
schweitzerj@univest.net

FOR IMMEDIATE RELEASE

UNIVEST CORPORATION OF PENNSYLVANIA — UNIVEST NATIONAL
BANK AND TRUST CO. — REPORTS SECOND QUARTER EARNINGS

SOUDERTON, Pa., July 28, 2010 — Univest Corporation of Pennsylvania (NASDAQ: UVSP), a locally-owned, full-service financial institution with 134 years of experience in delivering financial solutions including personal andbusiness banking, online banking, residential mortgages, insurance products, investment and wealth advisory solutions today announced financial results for the second quarter. Univest reported net income of $3.7 million or $0.23 diluted earnings per share for the quarter ended June 30, 2010, compared to $3.0 million or $0.18 diluted earnings per share in the previous quarter ended March 31, 2010 and $2.7 million or $0.21 diluted earnings per share for the comparable period in the prior year. Net income for the six months ended June 30, 2010 was $6.7 million or $0.40 diluted earnings per share, compared to $6.5 million or $0.50 diluted earnings per share for the comparable period in the prior year.

Deposits

Total non-time deposits increased $38.4 million during the quarter and have increased $66.4 million year to date. The increase during the second quarter consisted of increases of $9.0 million in non-interest bearing deposits and $29.4 million in NOW, money market and savings accounts. Time deposits remained relatively flat, declining slightly by $1.3 million during the second quarter.

Loans

Gross loans and leases increased by $21.3 million during the quarter. While overall loan demand remains light primarily due to less credit demand and utilization of lines by businesses responding to the current economic environment, there continues to be opportunities due to disruption in Univest’s local markets.

Net Interest Income and Margin

Net interest income increased $1.1 million or 6.42% to $18.3 million in the second quarter of 2010 compared to the second quarter of 2009. The net interest margin on a tax-equivalent basis for the second quarter of 2010 increased 12 basis points to 4.11% from 3.99% for the first quarter ended March 31, 2010, and 24 basis points compared to 3.87% for the second quarter of 2009.

Net interest income of $35.4 million increased $1.9 million or 5.56% compared to the six months ended June 30, 2009. The net interest margin on a tax-equivalent basis for the six months ended June 30, 2010 increased 23 basis points to 4.05% from 3.82% for the six months ended June 30, 2009.

The increase in the net interest income and the net interest margin for the quarter and year to date can be attributed to declines in the cost of interest-bearing liabilities, primarily time deposits and Federal Home Loan Bank (FHLB) borrowings, exceeding the declines in yields on total interest-earning assets. The Corporation has continued to experience core deposit growth which has allowed the Corporation to continue to repay its maturing FHLB advances reducing FHLB advances from $92 million at December 31, 2009 to $54 million at June 30, 2010. All but $5 million of the Corporation’s FHLB advances are scheduled to mature in 2010.

Non-Interest Income

Total non-interest income increased 2.98% for the quarter ended June 30, 2010 compared to the quarter ended June 30, 2009. For the quarter ended June 30, 2010, Univest reported total non-interest income of $8.1 million compared to $7.8 million for the comparable period in the prior year. Non-interest income during the quarter ended June 30, 2010 was negatively impacted by $516 thousand related to a fair value write-down on the ineffective portion of a fair value swap, due to the decline in interest rates during the quarter, compared to income of $285 thousand in the second quarter of 2009 related to the swap. Additionally, the second quarter of 2009 was impacted by $223 thousand of other than temporary impairments on the Corporation’s bank equity portfolio. For the quarter ended June 30, 2010, other than temporary impairments declined to $42 thousand. Excluding these non-cash items, total non-interest income increased 10.99% or $853 thousand compared to the second quarter ended June 30, 2009. This is attributed to increased trust fee income, service charges on deposits due to the growth in deposits and strong investment advisory commission and fee income.

Total non-interest income for the six months ended June 30, 2010 increased $2.3 million compared to the six months ended June 30, 2009, due to increased income from trust fees, service charges on deposit accounts, investment advisory commissions and fees and insurance commissions and fees offset by fair value write-downs on the ineffective portion of a fair value swap for the six months ended June 30, 2010 of $826 thousand compared to income related to this swap of $281 thousand recorded in the comparable period in the prior year. Additionally, the six months ended June 30, 2009 was impacted by $1.4 million of other than temporary impairments on bank equity securities compared to $47 thousand of other than temporary impairments recorded in the six months ended June 30, 2010. Excluding these non-cash write-downs and impairments, non-interest income increased $2.0 million or 13.36% for the six months ended June 30, 2010 compared to 2009.

Non-Interest Expense

Non-interest expense for the second quarter of 2010 increased slightly compared to the second quarter of 2009 by $119 thousand. The second quarter of 2009 was impacted by the FDIC special assessment which impacted all banks and cost Univest $947 thousand. Excluding this charge, non-interest expense increased $1.1 million or 6.73% compared to the second quarter in the prior year primarily due to increased FDIC insurance expense of $133 thousand and increased advertising and marketing expenses of $600 thousand to support a major brand campaign to position the Corporation to take advantage of the disruption in its local markets.

For the six months ended June 30, 2010, non-interest expenses increased $1.7 million or 5.25% compared to the same period in the prior year. Excluding the FDIC special assessment discussed previously, non-interest expenses for the six months ended June 30, 2010 increased $2.6 million or 8.43% primarily due to increased FDIC insurance expense of $147 thousand, increased advertising and marketing expenses of $1.1 million for the brand campaign discussed earlier, and increased salaries and benefits expenses of $431 thousand due to investments in personnel to grow the Corporation’s mortgage banking and commercial lending capabilities. Other increases occurred as a result of increased audit expense and legal fees for nonperforming loan activity.

Asset Quality and Provision for Loan and Lease Losses

Nonaccrual loans and leases decreased $5.3 million during the second quarter and were $29.5 million at June 30, 2010 compared to $34.9 million at March 31, 2010 and $5.8 million at June 30, 2009. Nonperforming loans and leases as a percentage of total loans and leases equaled 2.23% at June 30, 2010 down from 2.58% at March 31, 2010. The provision for loan and lease losses was $4.9 million for both the second and first quarters of 2010 compared to $5.4 million for the quarter ended June 30, 2009. The allowance for loan and lease losses as a percentage of total loans and leases increased to 2.01% at June 30, 2010 from 1.90% at March 31, 2010 as the provision for loan and lease losses exceeded net-charge-offs by $2.0 million. The allowance for loan and lease losses was 1.29% at June 30, 2009. The allowance for loan and lease losses to nonperforming loans and leases equaled 90.08% at June 30, 2010, which increased from 73.45% at March 31, 2010, due to the decrease in nonperforming loans and leases. The allowance for loan and lease losses to nonperforming loans and leases was 172.30% at June 30, 2009.

Capital

Univest continues to remain well-capitalized at June 30, 2010. Univest’s total risk-based capital at June 30, 2010 was 15.58%, well in excess of the regulatory minimum for well capitalized status of 10% for total risk-based capital.

Dividend

On July 1, 2010, Univest Corporation paid a quarterly cash dividend of $0.20 per share, which represented a 4.66% annualized yield based on the closing price of Univest’s stock on the date the dividend was paid.

About Univest Corporation

Headquartered in Souderton, Pa., Univest Corporation of Pennsylvania (www.univest.net) and its subsidiaries serve the financial needs of residents, businesses, and nonprofit organizations in Bucks, Chester, Montgomery and Lehigh counties. Univest National Bank and Trust Co., member FDIC and Equal Housing Lender, offers customers 32 financial service centers, 12 retirement financial services centers, and 39 ATM locations throughout the region, and is the parent company of Univest Capital, Inc., a small ticket commercial finance business; Univest Insurance, Inc., an independent insurance agency headquartered in Lansdale, Pa., which serves commercial and personal customers; and Univest Investments, Inc., Member FINRA and SIPC, a full-service broker-dealer and investment advisory firm. For more information on Univest Corporation of Pennsylvania and its subsidiaries, please visitwww.univest.net.

# # #

This press release of Univest Corporation and the reports Univest Corporation files with the Securities and Exchange Commission often contain “forward-looking statements” relating to present or future trends or factors affecting the banking industry and, specifically, the financial operations, markets and products of Univest Corporation. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Univest Corporation’s future results to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) a significant increase in competitive pressures among financial institutions; (2) changes in the interest rate environment that may reduce net interest margins; (3) changes in prepayment speeds, loan sale volumes, charge-offs and loan loss provisions; (4) general economic conditions; (5) legislative or regulatory changes that may adversely affect the businesses in which Univest Corporation is engaged; (6) technological issues which may adversely affect Univest Corporation’s financial operations or customers; (7) changes in the securities markets or (8) risk factors mentioned in the reports and registration statements Univest Corporation files with the Securities and Exchange Commission. Univest Corporation undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
June 30, 2010

(Dollars in thousands)

Balance Sheet (Period End)	06/30/10			03/31/10			12/31/09			09/30/09			06/30/09
Assets	$	2,088,572		$	2,064,822		$	2,085,421		$	2,117,849		$	2,086,821
Securities		434,677			436,368			420,045			472,491			425,774
Loans held for sale		2,485			1,165			1,693			1,439			1,119
Loans and leases, gross		1,449,147			1,427,805			1,425,980			1,451,128			1,464,886
Allowance for loan and lease losses		29,109			27,065			24,798			21,945			18,824
Loans and leases, net		1,420,038			1,400,740			1,401,182			1,429,183			1,446,062
Total deposits		1,609,772			1,572,681			1,564,257			1,536,903			1,565,076
Non-interest bearing deposits		255,880			246,909			242,691			226,395			222,877
NOW, Money Market and Savings		924,242			894,799			871,024			812,122			833,825
Time deposits		429,650			430,973			450,542			498,386			508,374
Borrowings		171,824			187,637			214,063			267,821			265,457
Shareholders’ equity		269,524			267,850			267,807			268,052			208,358
	For the three months ended,															For the six months ended,
Balance Sheet (Average)	06/30/10			03/31/10			12/31/09			09/30/09			06/30/09			06/30/10			06/30/09
Assets	$	2,090,930		$	2,038,739		$	2,096,945		$	2,098,964		$	2,077,565		$	2,064,970		$	2,068,700
Securities		442,902			409,188			454,096			447,925			413,142			426,138			416,550
Loans and leases, gross		1,425,278			1,420,830			1,438,880			1,456,446			1,471,243			1,423,066			1,458,768
Deposits		1,606,621			1,537,676			1,553,308			1,547,436			1,560,317			1,572,338			1,558,152
Shareholders’ equity		269,902			269,030			267,645			240,267			208,321			269,469			206,443
Asset Quality Data (Period End)	06/30/10			03/31/10			12/31/09			09/30/09			06/30/09
Nonaccrual loans and leases	$	29,541		$	34,856		$	33,498		$	33,116		$	5,762
Accruing loans and leases 90 days or more past due		1,276			303			726			644			1,839
Troubled debt restructured		1,499			1,691			3,611			3,216			3,324
Other real estate owned		1,827			2,453			3,428			3,330			2,812
Nonperforming assets		34,143			39,303			41,263			40,306			13,737
Allowance for loan and lease losses		29,109			27,065			24,798			21,945			18,824
Nonperforming loans and leases / Loans and leases		2.23	%		2.58	%		2.65	%		2.55	%		0.75	%
Allowance for loan and lease losses / Loans and leases		2.01	%		1.90	%		1.74	%		1.51	%		1.29	%
Allowance for loan and lease losses / Nonperforming loans		90.08	%		73.45	%		65.54	%		59.35	%		172.30	%
	For the three months ended,															For the six months ended,
	06/30/10			03/31/10			12/31/09			09/30/09			06/30/09			06/30/10			06/30/09
Net loan and lease charge-offs	$	2,821		$	2,628		$	4,595		$	2,807		$	1,249		$	5,449		$	1,802
Net loan and lease charge-offs (annualized)/Average loans and leases		0.79	%		0.75	%		1.27	%		0.76	%		0.34	%		0.77	%		0.25	%

Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
June 30, 2010

(Dollars in thousands, except per share data)

	For the three months ended,															For the six months ended,
For the period:	06/30/10			03/31/10			12/31/09			09/30/09			06/30/09			06/30/10			06/30/09
Interest income	$	22,878		$	22,485		$	23,184		$	24,244		$	24,529		$	45,363		$	48,931
Interest expense		4,602			5,380			6,409			6,901			7,356			9,982			15,413
Net interest income		18,276			17,105			16,775			17,343			17,173			35,381			33,518
Provision for loan and lease losses		4,865			4,895			7,449			5,928			5,353			9,760			7,509
Net interest income after provision		13,411			12,210			9,326			11,415			11,820			25,621			26,009
Noninterest income:
Trust fee income		1,500			1,500			1,461			1,325			1,325			3,000			2,750
Service charges on deposit accounts		1,812			1,782			1,986			1,745			1,692			3,594			3,305
Investment advisory commission and fee income		1,152			1,056			1,025			876			766			2,208			1,526
Insurance commissions and fee income		1,896			2,243			1,514			1,470			1,964			4,139			4,097
Bank owned life insurance income		202			332			351			405			408			534			565
Other-than-temporary impairment		(42	)		(5	)		(761	)		(47	)		(223	)		(47	)		(1,400	)
Net gain (loss) on sales of securities		38			49			1,023			112			(22	)		87			15
Gain on sales of loans held for sale		278			360			891			401			669			638			930
Other income		1,223			890			1,329			811			1,247			2,113			2,212
Total noninterest income		8,059			8,207			8,819			7,098			7,826			16,266			14,000
Noninterest expense
Salaries and benefits		9,469			9,811			9,755			8,818			9,417			19,280			18,849
Premises and equipment		2,209			2,292			2,138			2,216			2,125			4,501			4,358
Deposit insurance premiums		663			597			599			526			1,477			1,260			2,060
Other expense		4,568			4,379			4,976			4,003			3,771			8,947			7,026
Total noninterest expense		16,909			17,079			17,468			15,563			16,790			33,988			32,293
Income before taxes		4,561			3,338			677			2,950			2,856			7,899			7,716
Applicable income taxes		831			368			(845	)		197			187			1,199			1,211
Net income	$	3,730		$	2,970		$	1,522		$	2,753		$	2,669		$	6,700		$	6,505
Per Common Share Data:
Book value per share	$	16.25		$	16.17		$	16.27		$	16.30		$	16.00		$	16.25		$	16.00
Net income per share:
Basic	$	0.23		$	0.18		$	0.09		$	0.19		$	0.21		$	0.40		$	0.50
Diluted	$	0.23		$	0.18		$	0.09		$	0.19		$	0.21		$	0.40		$	0.50
Dividends per share	$	0.20		$	0.20		$	0.20		$	0.20		$	0.20		$	0.40		$	0.40
Weighted average shares outstanding		16,589,657			16,535,461			16,464,824			13,635,961			13,023,148			16,562,712			13,000,406
Period end shares outstanding		16,590,710			16,561,807			16,465,083			16,442,021			13,023,704			16,590,710			13,023,704

Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
June 30, 2010

	For the three months ended,															For the six months ended,
	06/30/10			03/31/10			12/31/09			09/30/09			06/30/09			06/30/10			06/30/09
Profitability Ratios (annualized)
Return on average assets		0.72	%		0.59	%		0.29	%		0.52	%		0.52	%		0.65	%		0.63	%
Return on average shareholders’ equity		5.54	%		4.48	%		2.26	%		4.55	%		5.14	%		5.01	%		6.35	%
Net interest margin (FTE)		4.11	%		3.99	%		3.69	%		3.82	%		3.87	%		4.05	%		3.82	%
Efficiency ratio (1)		61.32	%		64.33	%		65.36	%		60.58	%		63.96	%		62.80	%		64.78	%
Capitalization Ratios
Dividends paid to net income		88.95	%		111.55	%		216.43	%		119.47	%		97.60	%		98.97	%		80.00	%
Shareholders’ equity to assets (Period End)		12.90	%		12.97	%		12.84	%		12.66	%		9.98	%		12.90	%		9.98	%
Tangible common equity to tangible assets		10.51	%		10.55	%		10.44	%		10.28	%		7.49	%		10.51	%		7.49	%
Regulatory Capital Ratios (Period End)
Tier 1 leverage ratio		11.57	%		11.82	%		11.46	%		11.51	%		8.86	%		11.57	%		8.86	%
Tier 1 risk-based capital ratio		14.25	%		14.44	%		14.41	%		14.12	%		10.65	%		14.25	%		10.65	%
Total risk-based capital ratio		15.58	%		15.78	%		15.76	%		15.47	%		11.89	%		15.58	%		11.89	%

(1) Total operating expenses to net interest income before loan loss provision plus non-interest income adjusted for tax equivalent income.

Distribution of Assets, Liabilities and Shareholders’ Equity: Interest Rates and Interest Differential

	For the Three Months Ended June 30,
	2010								2009
	Average			Income/		Average			Average			Income/		Average
Tax Equivalent Basis	Balance			Expense		Rate			Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	26,700		$	19		0.29	%	$	3,399		$	2		0.24	%
U.S. Government obligations		158,505			922		2.33			98,532			782		3.18
Obligations of state and political subdivisions		108,820			1,804		6.65			104,606			1,760		6.75
Other debt and equity securities		175,577			1,932		4.41			210,004			2,640		5.04
Federal funds sold		—			—		—			—			—		—
Total interest-earning deposits, investments and federal funds sold		469,602			4,677		3.99			416,541			5,184		4.99
Commercial, financial, and agricultural loans		415,943			4,892		4.72			414,482			4,652		4.50
Real estate—commercial and construction loans		523,306			7,752		5.94			525,984			8,039		6.13
Real estate—residential loans		256,296			2,785		4.36			298,370			3,472		4.67
Loans to individuals		46,185			599		5.20			50,950			851		6.70
Municipal loans and leases		104,720			1,564		5.99			88,916			1,379		6.22
Lease financings		78,828			1,742		8.86			92,541			1,987		8.61
Gross loans and leases		1,425,278			19,334		5.44			1,471,243			20,380		5.56
Total interest-earning assets		1,894,880			24,011		5.08			1,887,784			25,564		5.43
Cash and due from banks		37,510								30,633
Reserve for loan losses		(28,864	)							(15,897	)
Premise and equipment, net		35,002								33,254
Other assets		152,402								141,791
Total assets	$	2,090,930							$	2,077,565
Liabilities:
Interest-bearing checking deposits	$	182,156		$	62		0.14		$	165,642		$	55		0.13
Money market savings		293,697			277		0.38			314,554			403		0.51
Regular savings		445,781			661		0.59			343,838			718		0.84
Time deposits		435,969			2,588		2.38			514,667			4,530		3.53
Total time and interest-bearing deposits		1,357,603			3,588		1.06			1,338,701			5,706		1.71
Securities sold under agreements to repurchase		98,802			111		0.45			85,919			143		0.67
Other short-term borrowings		51,936			542		4.19			99,968			681		2.73
Long-term debt		5,717			48		3.37			57,350			501		3.50
Subordinated notes and capital securities		25,119			313		5.00			26,619			325		4.90
Total borrowings		181,574			1,014		2.24			269,856			1,650		2.45
Total interest-bearing liabilities		1,539,177			4,602		1.20			1,608,557			7,356		1.83
Demand deposits, non-interest bearing		249,018								221,616
Accrued expenses and other liabilities		32,833								39,071
Total liabilities		1,821,028								1,869,244
Shareholders’ Equity
Common stock		91,332								74,370
Capital surplus		61,420								22,784
Retained earnings and other equity		117,150								111,167
Total shareholders’ equity		269,902								208,321
Total liabilities and shareholders’ equity	$	2,090,930							$	2,077,565
Net interest income				$	19,409							$	18,208
Net interest spread							3.88								3.60
Effect of net interest-free funding sources							0.23								0.27
Net interest margin							4.11	%							3.87	%
Ratio of average interest-earning assets to average interest-bearing liabilities equity		123.11	%							117.36	%

Notes:	For rate calculation purposes, average loan and lease categories include unearned discount.
	Nonaccrual loans and leases have been included in the average loan and lease balances.
	Loans held for sale have been included in the average loan balances.
	Tax-equivalent amounts for the three months ended June 30, 2010 and 2009 have been calculated using the Corporation’s federal applicable rate of 35.0%.

Distribution of Assets, Liabilities and Shareholders’ Equity: Interest Rates and Interest Differential

	For the Six Months Ended June 30,
	2010								2009
	Average			Income/		Average			Average			Income/		Average
Tax Equivalent Basis	Balance			Expense		Rate			Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	20,531		$	30		0.29	%	$	3,366		$	5		0.30	%
U.S. Government obligations		136,457			1,664		2.46			96,698			1,764		3.68
Obligations of state and political subdivisions		107,733			3,542		6.63			102,540			3,472		6.83
Other debt and equity securities		181,948			3,953		4.38			217,312			5,474		5.08
Federal funds sold		—			—		—			116			—		—
Total interest-earning deposits, investments and federal funds sold		446,669			9,189		4.15			420,032			10,715		5.14
Commercial, financial, and agricultural loans		412,820			9,557		4.67			405,355			9,219		4.59
Real estate—commercial and construction loans		523,693			15,313		5.90			514,113			15,317		6.01
Real estate—residential loans		258,615			5,643		4.40			304,613			7,190		4.76
Loans to individuals		46,843			1,397		6.01			52,106			1,792		6.94
Municipal loans and leases		101,104			2,990		5.96			87,416			2,693		6.21
Lease financings		79,991			3,465		8.74			95,165			4,031		8.54
Gross loans and leases		1,423,066			38,365		5.44			1,458,768			40,242		5.56
Total interest-earning assets		1,869,735			47,554		5.13			1,878,800			50,957		5.47
Cash and due from banks		34,582								30,907
Reserve for loan losses		(27,728	)							(14,789	)
Premise and equipment, net		34,931								32,877
Other assets		153,450								140,905
Total assets	$	2,064,970							$	2,068,700
Liabilities:
Interest-bearing checking deposits	$	177,095		$	119		0.14		$	160,424		$	142		0.18
Money market savings		286,843			593		0.42			321,129			1,047		0.66
Regular savings		430,940			1,442		0.67			331,734			1,497		0.91
Time deposits		435,072			5,654		2.62			528,156			9,432		3.60
Total time and interest-bearing deposits		1,329,950			7,808		1.18			1,341,443			12,118		1.82
Securities sold under agreements to repurchase		97,330			228		0.47			80,745			261		0.65
Other short-term borrowings		61,547			1,227		4.02			87,435			1,042		2.40
Long-term debt		5,732			94		3.31			70,585			1,339		3.83
Subordinated notes and capital securities		25,305			625		4.98			26,808			653		4.91
Total borrowings		189,914			2,174		2.31			265,573			3,295		2.50
Total interest-bearing liabilities		1,519,864			9,982		1.32			1,607,016			15,413		1.93
Demand deposits, non-interest bearing		242,388								216,709
Accrued expenses and other liabilities		33,249								38,532
Total liabilities		1,795,501								1,862,257
Shareholders’ Equity
Common stock		91,332								74,370
Capital surplus		61,420								22,789
Retained earnings and other equity		116,717								109,284
Total shareholders’ equity		269,469								206,443
Total liabilities and shareholders’ equity	$	2,064,970							$	2,068,700
Net interest income				$	37,572							$	35,544
Net interest spread							3.81								3.54
Effect of net interest-free funding sources							0.24								0.28
Net interest margin							4.05	%							3.82	%
Ratio of average interest-earning assets to average interest-bearing liabilities equity		123.02	%							116.91	%

Notes:	For rate calculation purposes, average loan and lease categories include unearned discount.
	Nonaccrual loans and leases have been included in the average loan and lease balances.
	Loans held for sale have been included in the average loan balances.
	Tax-equivalent amounts for the six months ended June 30, 2010 and 2009 have been calculated using the Corporation’s federal applicable rate of 35.0%.