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

Exhibit 99.1

NEWS

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 FIRST QUARTER EARNINGS

SOUDERTON, Pa., April 27, 2011 — Univest Corporation of Pennsylvania(NASDAQ: UVSP), parent company of Univest National Bank and Trust Co., a full-service financial institution with 135 years of experience in delivering financial solutions including personal and business banking, online banking, residential mortgages, insurance products, investment and wealth advisory solutions, today announced financial results for the first quarter. Univest reported net income of $3.9 million or $0.23 diluted earnings per share for the quarter ended March 31, 2011, compared to $3.0 million or $0.18 diluted earnings per share for the comparable period in the prior year.

Deposits

Non-interest bearing deposits increased for the quarter by $9.2 million from December 31, 2010 as a result of successful campaigns to attract new consumer and business checking accounts. This increase was offset by a decline in NOW, money market and savings accounts of $23.2 million and time deposits of $7.0 million. At March 31, 2011, total non-time deposits increased $112.8 million or 9.88% over the comparable quarter ended March 31, 2010. The increase consisted of an increase of $33.4 million in non-interest bearing deposits and $79.4 million in NOW, money market and savings accounts. These increases were offset by a decline in time deposits of $20.2 million.

Loans

Gross loans and leases declined for the quarter by $29.0 million from December 31, 2010 primarily due to less credit demand and utilization of lines by both businesses and consumers responding to the current economic environment. Commercial loans and consumer loans declined $25.1 million and $1.9 million, respectively, during the quarter, while residential mortgage loans increased $2.9 million. Gross loans and leases increased slightly by $14.3 million compared to March 31, 2010.

Net Interest Income and Margin

Net interest income of $18.8 million increased $1.7 million, or 10.00%, in the first quarter of 2011 over the first quarter of 2010. The net interest margin on a tax-equivalent basis for the first quarter of 2011 increased 6 basis points to 4.24% from 4.18% for the fourth quarter ended December 31, 2010 and 25 basis points compared to 3.99% for the first quarter of 2010.

The increase in the net interest income and the net interest margin can be attributed to declines in the cost of interest-bearing liabilities, primarily time deposits as well as regular savings accounts and declines in the volume of Federal Home Loan Bank (FHLB) borrowings, exceeding the declines in yields on total interest-earning assets. The Corporation experienced core deposit growth in 2010 which allowed the Corporation to repay its maturing FHLB advances reducing FHLB advances from $64 million at March 31, 2010 to $5 million at December 31, 2010. FHLB advances at March 31, 2011 remained at $5 million.

Non-Interest Income

For the quarter ended March 31, 2011, Univest reported total non-interest income of $7.8 million compared to $8.2 million for the comparable period in the prior year. This 5.46% decrease is a result of the challenging economic climate and increased regulatory requirements. Service charges on deposit accounts declined by $446 thousand primarily due to the amendments to Regulation E which were implemented on August 15, 2010. Additionally, net gain on mortgage banking activities declined $485 thousand as a result of negative fair value adjustments on the mortgage pipeline as mortgage demand has softened due to a continued slow purchase market for housing. These unfavorable variances were partially offset by increases in trust fee income and investment and advisory commissions and fees due to a rebounding equity market and customers increasing willingness to invest. Additionally, the first quarter of 2010 was impacted by a net loss on the ineffective portion of a fair value swap of $310 thousand which was terminated in August 2010.

Non-Interest Expense

Non-interest expense for the first quarter of 2011 decreased $333 thousand or 1.95% compared to the first quarter of 2010 as a result of a decline in salaries and benefits expenses of $828 thousand. The decline is primarily a result of higher deferred loan origination costs, lower healthcare costs and reduced pension plan expenses. The Corporation implemented higher deferred loan origination costs commencing during the fourth quarter of 2010 based upon an in-depth study performed which incorporated management’s additional review time in connection with the loan approval process in the current economic environment. These decreases were partially offset by increases in premises and equipment expense, deposit insurance premiums and interchange expenses.

Asset Quality and Provision for Loan and Lease Losses

Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans, were $38.6 million at March 31, 2011 compared to $45.2 million at December 31, 2010 and $34.9 million at March 31, 2010. Accruing troubled debt restructured loans increased from $550 thousand at December 31, 2010 to $5.1 million at March 31, 2011 primarily due to the restructuring of two large real estate construction loan relationships. Nonperforming loans and leases as a percentage of total loans and leases equaled 3.07% at March 31, 2011 compared to 3.16% at December 31, 2010 and 2.58% at March 31, 2010. Other real estate owned increased from $2.4 million at December 31, 2010 to $6.1 million at March 31, 2011 and consists of five properties. Three of the five properties, which aggregate $3.0 million, are currently under agreements of sale. Net loan and lease charge-offs for the quarter were $3.2 million compared to $4.3 million for the previous three months.

The provision for loan and lease losses was $5.1 million for the first quarter of 2011 compared to $6.3 million for the quarter ended December 31, 2010 and $4.9 million for the quarter ended March 31, 2010. As a result of the provision exceeding net charge-offs combined with the decline in outstanding loans during the quarter, the allowance for loan and lease losses as a percentage of total loans and leases increased to 2.27% at March 31, 2011 from 2.10% at December 31, 2010 and 1.90% at March 31, 2010. The allowance for loan and lease losses to nonperforming loans and leases equaled 74.12% at March 31, 2011 which increased from 66.48% at December 31, 2010. The allowance for loan and lease losses to nonperforming loans and leases was 73.45% at March 31, 2010.

Capital

Univest continues to remain well-capitalized at March 31, 2011. Univest’s total risk-based capital at March 31, 2011 was 15.89%, well in excess of the regulatory minimum for well capitalized status of 10% for total risk-based capital.

Dividend

On April 1, 2011, Univest Corporation paid a quarterly cash dividend of $0.20 per share, which represented a 4.49% 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. 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
March 31, 2011

(Dollars in thousands)

Balance Sheet (Period End)	03/31/11		12/31/10		09/30/10		06/30/10		03/31/10
Assets	$	2,108,579	$	2,133,893	$	2,114,204	$	2,088,572	$	2,064,822
Securities		445,798		467,024		420,998		434,677		436,368
Loans held for sale		1,451		4,178		3,801		2,485		1,165
Loans and leases, gross		1,442,137		1,471,186		1,467,382		1,449,147		1,427,805
Allowance for loan and lease losses		32,804		30,898		28,883		29,109		27,065
Loans and leases, net		1,409,333		1,440,288		1,438,499		1,420,038		1,400,740
Total deposits		1,665,225		1,686,270		1,677,641		1,609,772		1,572,681
Non-interest bearing deposits		280,337		271,125		272,805		255,880		246,909
NOW, Money Market and Savings		974,158		997,395		969,254		924,242		894,799
Time deposits		410,730		417,750		435,582		429,650		430,973
Borrowings		125,545		143,865		128,905		171,824		187,637
Shareholders’ equity		268,673		266,224		270,773		269,524		267,850

	For the three months ended,
Balance Sheet (Average)	03/31/11		12/31/10		09/30/10		06/30/10		03/31/10
Assets	$	2,106,276	$	2,125,112	$	2,117,708	$	2,090,930	$	2,038,739
Securities		444,662		449,031		431,193		442,902		409,188
Loans and leases, gross		1,461,037		1,461,766		1,459,820		1,425,278		1,420,830
Deposits		1,670,062		1,689,701		1,642,613		1,606,621		1,537,676
Shareholders’ equity		268,343		271,945		271,045		269,902		269,030

Asset Quality Data (Period End)	03/31/11			12/31/10			09/30/10			06/30/10			03/31/10
Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases	$	38,631		$	45,232		$	33,043		$	29,541		$	34,856
Accruing loans and leases 90 days or more past due		516			696			899			1,276			303
Accruing troubled debt restructured loans and leases		5,111			550			813			1,499			1,691
Other real estate owned		6,135			2,438			1,557			1,827			2,453
Nonperforming assets		50,393			48,916			36,312			34,143			39,303
Allowance for loan and lease losses		32,804			30,898			28,883			29,109			27,065
Nonperforming loans and leases / Loans and leases		3.07	%		3.16	%		2.37	%		2.23	%		2.58	%
Allowance for loan and lease losses / Loans and leases		2.27	%		2.10	%		1.97	%		2.01	%		1.90	%
Allowance for loan and lease losses / Nonperforming loans		74.12	%		66.48	%		83.10	%		90.08	%		73.45	%

	For the three months ended,
	03/31/11			12/31/10			09/30/10			06/30/10			03/31/10
Net loan and lease charge-offs	$	3,228		$	4,261		$	5,755		$	2,821		$	2,628
Net loan and lease charge-offs (annualized)/Average loans and leases		0.90	%		1.16	%		1.56	%		0.79	%		0.75	%

Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
March 31, 2011

(Dollars in thousands, except per share data)

	For the three months ended,
For the period:	03/31/11			12/31/10			09/30/10			06/30/10			03/31/10
Interest income	$	21,706		$	22,580		$	23,060		$	22,878		$	22,485
Interest expense		2,897			3,380			4,107			4,602			5,380
Net interest income		18,809			19,200			18,953			18,276			17,105
Provision for loan and lease losses		5,134			6,276			5,529			4,865			4,895
Net interest income after provision		13,675			12,924			13,424			13,411			12,210
Noninterest income:
Trust fee income		1,625			1,630			1,450			1,500			1,500
Service charges on deposit accounts		1,336			1,466			1,633			1,812			1,782
Investment advisory commission and fee income		1,162			1,191			1,227			1,152			1,056
Insurance commissions and fee income		2,200			1,740			1,815			1,896			2,243
Bank owned life insurance income		344			410			326			202			332
Other-than-temporary impairment		(7	)		(3	)		(12	)		(42	)		(5	)
Net gain on sales of securities		—			6			339			38			49
Net (loss) gain on mortgage banking activities		(25	)		779			1,246			475			460
Net loss on interest rate swap		—			—			(246	)		(516	)		(310	)
Other income		1,124			2,049			1,106			1,542			1,100
Total noninterest income		7,759			9,268			8,884			8,059			8,207
Noninterest expense
Salaries and benefits		8,983			8,979			9,775			9,469			9,811
Premises and equipment		2,527			2,351			2,435			2,209			2,292
Deposit insurance premiums		713			712			698			663			597
Other expense		4,523			4,148			4,263			4,568			4,379
Total noninterest expense		16,746			16,190			17,171			16,909			17,079
Income before taxes		4,688			6,002			5,137			4,561			3,338
Applicable income taxes		826			1,093			990			831			368
Net income	$	3,862		$	4,909		$	4,147		$	3,730		$	2,970
Per Common Share Data:
Book value per share	$	16.04		$	15.99		$	16.29		$	16.25		$	16.17
Net income per share:
Basic	$	0.23		$	0.30		$	0.25		$	0.23		$	0.18
Diluted	$	0.23		$	0.30		$	0.25		$	0.23		$	0.18
Dividends per share	$	0.20		$	0.20		$	0.20		$	0.20		$	0.20
Weighted average shares outstanding		16,712,282			16,645,115			16,621,291			16,589,657			16,535,461
Period end shares outstanding		16,745,935			16,648,303			16,626,900			16,590,710			16,561,807

Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
March 31, 2011

	For the three months ended,
Profitability Ratios (annualized)	03/31/11			12/31/10			09/30/10			06/30/10			03/31/10
Return on average assets		0.74	%		0.92	%		0.78	%		0.72	%		0.59	%
Return on average shareholders’ equity		5.84	%		7.16	%		6.07	%		5.54	%		4.48	%
Net interest margin (FTE)		4.24	%		4.18	%		4.15	%		4.11	%		3.99	%
Efficiency ratio (1)		59.90	%		54.20	%		58.88	%		61.32	%		64.33	%
Capitalization Ratios
Dividends paid to net income		86.30	%		67.85	%		80.15	%		88.95	%		111.55	%
Shareholders’ equity to assets (Period End)		12.74	%		12.48	%		12.81	%		12.90	%		12.97	%
Tangible common equity to tangible assets		10.32	%		10.08	%		10.46	%		10.51	%		10.55	%
Regulatory Capital Ratios (Period End)
Tier 1 leverage ratio		11.72	%		11.54	%		11.51	%		11.57	%		11.82	%
Tier 1 risk-based capital ratio		14.59	%		14.17	%		14.14	%		14.25	%		14.44	%
Total risk-based capital ratio		15.89	%		15.47	%		15.45	%		15.58	%		15.78	%

(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 March 31,
	2011								2010
	Average			Income/		Average			Average			Income/		Average
Tax Equivalent Basis	Balance			Expense		Rate			Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	6,279		$	3		0.19	%	$	14,293		$	11		0.31	%
U.S. Government obligations		170,658			717		1.70			114,164			742		2.64
Obligations of state and political subdivisions		109,026			1,721		6.40			106,634			1,739		6.61
Other debt and equity securities		164,978			1,529		3.76			188,390			2,019		4.35
Total interest-earning deposits and investments		450,941			3,970		3.57			423,481			4,511		4.32
Commercial, financial, and agricultural loans		428,636			5,171		4.89			409,663			4,666		4.62
Real estate—commercial and construction loans		558,304			7,251		5.27			524,084			7,561		5.85
Real estate—residential loans		244,305			2,641		4.38			260,959			2,858		4.44
Loans to individuals		43,010			626		5.90			47,509			798		6.81
Municipal loans and leases		122,478			1,731		5.73			97,448			1,425		5.93
Lease financings		64,304			1,518		9.57			81,167			1,723		8.61
Gross loans and leases		1,461,037			18,938		5.26			1,420,830			19,031		5.43
Total interest-earning assets		1,911,978			22,908		4.86			1,844,311			23,542		5.18
Cash and due from banks		36,101								31,621
Reserve for loan and lease losses		(32,402	)							(26,579	)
Premises and equipment, net		34,624								34,859
Other assets		155,975								154,527
Total assets	$	2,106,276							$	2,038,739
Liabilities:
Interest-bearing checking deposits	$	192,676		$	64		0.13		$	171,978		$	57		0.13
Money market savings		308,797			201		0.26			279,912			317		0.46
Regular savings		481,404			463		0.39			415,934			781		0.76
Time deposits		411,030			1,738		1.71			434,166			3,065		2.86
Total time and interest-bearing deposits		1,393,907			2,466		0.72			1,301,990			4,220		1.31
Securities sold under agreements to repurchase		96,446			71		0.30			95,841			117		0.50
Other short-term borrowings		10,269			9		0.36			71,266			685		3.90
Long-term debt		5,000			47		3.81			5,746			47		3.32
Subordinated notes and capital securities		23,994			304		5.14			25,494			311		4.95
Total borrowings		135,709			431		1.29			198,347			1,160		2.37
Total interest-bearing liabilities		1,529,616			2,897		0.77			1,500,337			5,380		1.45
Demand deposits, non-interest bearing		276,155								235,686
Accrued expenses and other liabilities		32,162								33,686
Total liabilities		1,837,933								1,769,709
Shareholders’ Equity
Common stock		91,332								91,332
Additional paid-in capital		61,411								61,420
Retained earnings and other equity		115,600								116,278
Total shareholders’ equity		268,343								269,030
Total liabilities and shareholders’ equity	$	2,106,276							$	2,038,739
Net interest income				$	20,011							$	18,162
Net interest spread							4.09								3.73
Effect of net interest-free funding sources							0.15								0.26
Net interest margin							4.24	%							3.99	%
Ratio of average interest-earning assets to average interest-bearing liabilities		125.00	%							122.93	%

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 March 31, 2011 and 2010 have been calculated using the Corporation’s federal applicable rate of 35.0%.