SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994 Commission File number 0-7617
UNIVEST CORPORATION OF PENNSYLVANIA
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1886144
_______________________________ ____________________________
(State or other jurisdiction of (IRS Employer
incorporation of organization) Identification No.)
10 West Broad Street
Souderton, Pennsylvania 18964
________________________________________ ____________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 721-2400
SECURITIES REGISTERED PURSUANT TO SECTION 12(g)
OF THE ACT:
Common Stock, $5 par value 3,137,016
________________________________________ ____________________________
(Title of Class) (Number of shares
outstanding at 2/28/95)
The approximate aggregate market value of voting stock held by
nonaffiliates of the registrant is $83,052,130 as of February 28, 1995.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding twelve months (or for such
shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past ninety days.
YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. ( )
Part I and Part III incorporate information by reference from the
proxy statement for the annual meeting of shareholders on April 11, 1995.
Parts I, II and IV incorporate information by reference from the annual
report to shareholders for the year ended December 31, 1994.
PART I
Item 1. Business
General
Univest Corporation of Pennsylvania ("Univest") is a Pennsylvania
corporation organized in 1973 and registered as a bank holding company
pursuant to the Bank Holding Company Act of 1956. It owns all of the
capital stock of Union National Bank and Trust Company, Pennview Savings
Bank, Univest Realty Corporation, Univest Leasing Corporation, Univest
Mortgage Company, Univest Financial Planning Corporation, Univest Insurance
Company, and Univest Electronic Services Corporation.
Union National Bank is engaged in the general commercial banking
business and provides a full range of banking services and trust services
to its customers. Pennview Savings Bank is engaged in attracting deposits
from the general public and investing such deposits primarily in loans
secured by residential properties, consumer loans, and to a lesser extent,
loans secured by commercial real estate and in commercial business loans.
The Realty Corporation was established to obtain, hold and operate
properties for the holding company and its subsidiaries. Both the Leasing
Corporation and Univest Mortgage Company are inactive. Univest Insurance
Company offers credit-related reinsurance plans. Univest Electronic
Services Corporation was established to provide data processing services to
Union National Bank in Souderton and other subsidiaries of Univest
Corporation of Pennsylvania. Pennsylvania banking law allows a bank to
merge or add branch offices within the county in which its head office
located and in contiguous or co-contiguous counties.
Union National Bank and Trust Company, with its head office in
Souderton, Montgomery County, serves the area through sixteen (16) banking
offices, two off-premises automated teller machines and offices located in
ten retirement homes. Eleven banking offices are in Montgomery County and
five banking offices are in Bucks County. One off-premises automated
teller machine is located in Bucks County and the other is located in
Montgomery County.
Pennview Savings Bank conducts operations through five full-service
offices located in Souderton, Hatfield, Franconia, Silverdale and
Montgomeryville, Pennsylvania and offices located in two retirement homes.
As of January 31, 1995, Univest and its subsidiaries employed four
hundred and three (403) persons.
Competition
Univest Corporation's service areas are characterized by intense
competition for banking business among commercial banks, savings and loan
associations, mutual savings banks and other financial institutions. Each
of the Corporation's subsidiary banks actively compete with such banks and
financial institutions for local retail and commercial accounts. Union
National Bank and Pennview Savings Bank are also subject to competition
from other local banks and financial institutions in Bucks and Montgomery
Counties, as well as other financial institutions outside their primary
service area.
In competing with other banks, savings and loan associations, and other
financial institutions, Union National Bank and Pennview Savings Bank seek
to provide personalized services through management's knowledge and
awareness of their service area, customers and borrowers.
Management believes this knowledge and awareness provides a business
advantage in serving the retail depositors and the small and mid-sized
commercial borrowers that comprise Union National Bank's and Pennview
Savings Bank's customer base.
Other competitors, including credit unions, consumer finance companies,
insurance companies and mainly money market mutual fund compete with certain
lending and deposit gathering services offered by Union National Bank and
Pennview Savings Bank.
Supervision and Regulation
Union National Bank is subject to supervision and is regularly
examined by the Office of the Comptroller of the Currency. Also, Union
National Bank is subject to examination by the Federal Deposit Insurance
Corporation and by the Federal Reserve System. Pennview Savings Bank is
regulated by the Federal Deposit Insurance Corporation and by the
Pennsylvania Department of Banking.
Univest is subject to the provisions of the Bank Holding Company Act
of 1956, as amended, and is registered pursuant to its provisions. The Act
prohibits the acquisition by a bank holding company of a direct or indirect
ownership of more than five percent of the voting shares of any bank within
the United States without prior approval of the Board of Governors of the
Federal Reserve System, and also prohibits the granting of such approval in
respect to any bank within the United States located outside of the state
where the bank holding company's principal operations are conducted, unless
the acquisition is specifically authorized by the statutes of the state in
which the bank is located. With certain exceptions, a bank holding company
is prohibited from acquiring direct or indirect ownership or control of
more than five percent of the voting shares of any company which is not a
bank, and from engaging directly or indirectly in businesses unrelated to
the business of banking, or managing, or controlling banks. Under the Bank
Holding Company Act Amendments of 1970, which became effective on December
3, 1970, the Federal Reserve Board may approve the acquisition by bank
holding companies of nonbank subsidiaries to engage in activities that are
closely related to banking and are in the public interest. The amendments
include a provision which prohibits banks, bank holding companies and
subsidiaries from engaging in tie-in arrangements. Bank tie-ins involving
a loan, discount, deposit, or trust service are specifically exempted, and
the Federal Reserve Board is authorized to make exceptions by regulations.
As a bank holding company, Univest is subject to the reporting
requirements of the Board of Governors of the Federal Reserve System, and
Univest, together with its subsidiaries, is subject to examination by the
Board. The Federal Reserve Act limits the amount of credit which a member
bank may extend to its affiliates, and the amount of its funds which it may
invest in or lend on the collateral of the securities of its affiliates.
Under the Federal Deposit Insurance Act, insured banks are subject to the
same limitations.
FDICIA
In December 1991, FDICIA was enacted, which substantially revised the
bank regulatory and funding provisions of the Federal Deposit Insurance Act
and made revisions to several other federal banking statutes.
Among other things, FDICIA requires the federal banking agencies to
take "prompt corrective action" in respect of depository institutions that
do not meet minimum capital requirements in order to minimize losses to the
FDIC. FDICIA establishes five capital tiers: "well capitalized",
"adequately capitalized", "undercapitalized", "significantly
undercapitalized" and "critically undercapitalized" and imposes significant
restrictions on the operations of a bank that is not at least adequately
capitalized. A depository institution's capital tier will depend upon where
its capital levels are in relation to various relevant capital measures,
which will include a risk-based capital measure, a leverage ratio capital
measure and certain other factors.
Regulations promulgated under FDICIA also require that an institution
monitor its capital levels closely and notify its appropriate federal
banking regulators within 15 days of any material events that affect the
capital position of the institution.
FDICIA directs that each federal banking agency prescribe standards
for depository institutions and depository institution holding companies
relating to internal controls, information systems, internal audit systems,
loan documentation, credit underwriting, interest rate exposure, asset
growth, a maximum ratio of classified assets to capital, minimum earnings
sufficient to absorb losses, a minimum ratio of market value to book value
for publicly traded shares (if feasible) and such other standards as the
agency deems appropriate.
FDICIA also contains a variety of other provisions that affect the
operations of the Corporation, including new reporting requirements,
regulatory standards for real estate lending, "truth in savings"
provisions, certain restrictions on investments and activities of state-
chartered insured banks and their subsidiaries and limitations on credit
exposure between banks.
Finally, FDICIA limits the discretion of the FDIC with respect to
deposit insurance coverage by requiring that, except in very limited
circumstances, the FDIC's course of action in resolving a problem bank must
constitute the "least costly resolution" for the Bank Insurance Fund
("BIF") or the Savings Association Insurance Fund ("SAIF"), as the case may
be. The FDIC has interpreted this standard as requiring it not to protect
deposits exceeding the $100,000 insurance limit in more situations than was
previously the case. In addition, FDICIA prohibits payments by the FDIC on
uninsured deposits in foreign branches of U.S. banks and will severely
limit the "too big to fail" doctrine under which the FDIC formerly
protected deposits exceeding the $100,000 insurance limit in certain failed
banking institutions.
Implementation of FDICIA has not had a material impact on the business
or operations of the Corporation.
Credit and Monetary Policies
Union National Bank is affected by the fiscal and monetary policies of
the federal government and its agencies, including the Federal Reserve
System. An important function of the policies is to curb inflation and
control recessions through control of the supply of money and credit. The
Federal Reserve System uses its powers to regulate reserve requirements of
member banks, the discount rate on member-bank borrowings, interest rates
on time and savings deposits of member banks, and to conduct open-market
operations in United States Government securities to exercise control over
the supply of money and credit. The policies have a direct effect on the
amount of bank loans and deposits and on the interest rates charged on loans
and paid on deposits, with the result that the policies have a material
effect on bank earnings. Future policies of the Federal Reserve Bank
System and other authorities cannot be predicted, nor can their effect on
future bank earnings be predicted.
Pennview Savings Bank is a member of the Federal Home Loan Bank System
which consists of 12 regional Federal Home Loan Banks, with each subject to
supervision and regulation by the newly created Federal Housing Finance
Board. The Federal Home Loan Banks provide a central credit facility
primarily for member institutions. The Bank, as a member of the Federal
Home Loan Bank of Pittsburgh, is required to acquire and hold shares of
capital stock in that Federal Home Loan Bank in an amount equal to at least
1% of the aggregate principal amount of its unpaid residential mortgage
loans, home purchase contracts and similar obligations at the beginning of
each year, or 5% of its advances (borrowings) from the Federal Home Loan
Bank of Pittsburgh, whichever is greater.
Interstate Banking
Legislation was passed, and signed by President Clinton on September
29, 1994, which will eliminate many currently existing restrictions on
interstate banking. The legislation will authorize interstate acquisition
of banks by bank holding companies without geographic limitations one year
after enactment. Beginning June 1, 1997, the legislation will allow
interstate branching in states that have not passed legislation prohibiting
interstate branching, except that de novo branching or acquisition of a
branch in another state without acquisition of the entire bank will only be
permitted if expressly permitted by the law of the state in which such
branch would be located. Interstate branching prior to June 1, 1997 will
be possible in states that pass laws affirmatively authorizing such
interstate branching. The effect of this legislation on Univest cannot be
predicted at this time.
Statistical Disclosure
Univest was incorporated under Pennsylvania law in 1973 for the
purpose of acquiring the stock of Union National Bank and Trust Company
(Union National) and subsequently to engage in other business activities
permitted under the Bank Holding Company Act. On September 28, 1973,
pursuant to an exchange offer, Univest acquired the outstanding stock of
Union National. The following financial data appearing on pages 7 through
18 reflects consolidated information. Where averages are reported, daily
information has been used for all subsidiaries.
UNIVEST CORPORATION OF PENNSYLVANIA AND SUBSIDIARIES
(Thousands of Dollars)
TABLE I. DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY; INTEREST RATES AND INTEREST DIFFERENTIAL
1994 1994/1993 1993
------ --------- ------
Average Income/ Avg. Volume Rate Average Income/ Avg.
ASSETS: Balance Expense Rate Change Change Total Balance Expense Rate
------- -------------------------- ------------------------- --------------------------
Cash and due from banks $32,914 $33,927
Time deposits with other banks 1,955 $118 6.0 ($73) 11 (62) 3,146 $180 5.7
U.S. Government obligations 127,836 6,405 5.0 881 (98) 783 109,629 5,622 5.1
Oblig. of states & political sub. 2,091 95 4.5 (40) 10 (30) 2,964 125 4.2
Other securities 18,447 924 5.0 (1,087) (196) (1,283) 39,903 2,207 5.5
Federal Reserve Bank stock 742 45 6.1 6 0 6 649 39 6.0
Federal funds sold and other short-
term investments 15,293 661 4.3 75 179 254 13,528 407 3.0
--------- ------- -------- -----
Total investments 164,409 8,130 4.9 166,673 8,400 5.0
--------- ------- ----- -------- ----- ----
Bankers' acceptances and term
federal funds 0 0 0.0 0 - 0 0 0 0.0
--------- ------- ----- -------- ----- ----
Commercial loans 196,065 15,780 8.0 155 875 1,030 195,244 14,750 7.6
Mortgage loans 294,251 24,345 8.3 1,549 (898) 651 275,165 23,694 8.6
Installment loans 45,934 3,753 8.2 558 (130) 428 39,302 3,325 8.5
Home equity loans 20,105 1,916 9.5 (278) 214 (64) 22,958 1,980 8.6
Municipal loans 29,851 1,880 6.3 (129) (64) (193) 31,726 2,073 6.5
--------- ------- ----- -------- ------ ----
Gross loans 586,206 47,674 8.1 564,395 45,822 8.1
------- ----- ------ ----
Less: valuation reserve (8,660) (8,507)
---------- ---------
Net loans 577,546 555,888
---------- ---------
Property, net 13,346 12,150
Other assets 19,426 15,016
---------- ---------
Total assets $809,596 $786,800
========== =========
1994 1994/1993 1993
------ ----------- ------
LIABILITIES: Average Income/ Avg. Volume Rate Average Income/ Avg.
------------ Balance Expense Rate Change Change Total Balance Expense Rate
--------------------------- ------------------------ -----------------------
Demand deposit $97,750 $90,485
------- -------
Interest checking deposits 73,160 $1,326 1.8 $75 ($197) ($122) 68,444 $1,448 2.1
Money market savings 84,874 2,092 2.5 (422) (236) (658) 100,351 2,750 2.7
Regular savings 128,628 3,152 2.5 345 (285) 60 114,261 3,092 2.7
Unifund savings 46 1 2.2 (10) (5) (15) 499 16 3.2
Certificates of deposit 271,994 12,267 4.5 (432) (811) (1,243) 279,627 13,510 4.8
Time open & club accounts 15,988 575 3.6 153 83 236 11,864 339 2.9
------- ------- ------- -------
Total time, int., and inv.
checking deposits 574,690 19,413 3.4 575,046 21,155 3.7
------- ------- ----- --------- ------- ----
Total deposits 672,440 665,531
------- ---------
Federal funds purchased 690 25 3.6 10 1 11 427 14 3.3
Loans & securities sold under
agreement to repurchase 37,047 1,030 2.8 130 124 254 32,515 776 2.4
Other borrowings 5,654 267 4.7 35 6 41 4,898 226 4.6
Subordinated notes 5,229 538 10.3 (103) 43 (60) 6,235 598 9.6
------- -------- -------- -------
Total borrowings 48,620 1,860 3.8 44,075 1,614 3.7
------ -------- ----- -------- ------- ----
Accrued expenses & other liab. 12,072 7,877
------ --------
Total liabilities 733,132 717,483
------- --------
STOCKHOLDERS' EQUITY:
--------------------
Common stock 15,717 13,822
Capital surplus 8,090 8,090
Retained earnings 52,657 47,405
------ --------
Total stockholders' equity 76,464 69,317
------ --------
Total liabilities and stock-
holders' equity $809,596 $786,800
======== =========
Weighted avg. yield on interest-earning assets 7.5% 7.5%
Weighted avg. rate paid on interest-bearing liab. 3.4% 3.7%
Net yield 4.5% 4.3%
1993 1993/1992 1992
----- --------- -----
Average Income/ Avg. Volume Rate Average Income/ Avg.
ASSETS: Balance Expense Rate Change Change Total Balance Expense Rate
------- -------------------------- ------------------------ ----------------------
Cash and due from banks $33,927 $31,445
Time deposits with other banks 3,146 $180 5.7 $26 (27) (1) 2,686 $181 6.7
U.S. Government obligations 109,629 5,622 5.1 733 (1,258) (525) 96,743 6,147 6.4
Oblig. of states & political sub. 2,964 125 4.2 (14) (7) (21) 3,354 146 4.4
Other securities 39,903 2,207 5.5 (42) (904) (946) 41,070 3,153 7.7
Federal Reserve Bank stock 649 39 6.0 6 (1) 5 549 34 6.2
Federal funds sold and other
short-term investments 13,528 407 3.0 (225) (104) (329) 20,788 736 3.5
--------- ------- ------- ------ ----
Total investments 166,673 8,400 5.0 162,504 10,216 6.3
--------- ------ ---- ------- ------ ----
Bankers acceptances and term
federal funds 0 0 0.0 (65) - (65) 1,967 65 3.3
--------- ------- ---- ------- ------ ----
Commercial loans 195,244 14,750 7.6 (569) (807) (1,376) 201,849 16,126 8.0
Mortgage loans 275,165 23,694 8.6 1,928 (2,285) (357) 253,842 24,051 9.5
Installment loans 39,302 3,325 8.5 36 (310) (274) 38,731 3,599 9.3
Home equity loans 22,958 1,980 8.6 28 (68) (40) 22,681 2,020 8.9
Municipal loans 31,726 2,073 6.5 (53) (228) (281) 32,554 2,354 7.2
-------- ------- ---- ------- ------
Gross loans 564,395 45,822 8.1 549,657 48,150 8.8
------- ---- ------ ----
Less: valuation reserve (8,507) (7,168)
--------- -------
Net loans 555,888 542,489
--------- -------
Property, net 12,150 11,649
Other assets 15,016 17,428
--------- -------
Total assets $786,800 $770,168
========= =======
1993 1993/1992 1992
---- --------- ----
LIABILITIES: Average Income/ Avg. Volume Rate Average Income/ Avg.
------------ Balance Expense Rate Change Change Total Balance Expense Rate
------------------------- -------------------------- ----------------------
Demand Deposits $90,485 $83,503
------- -------
Interest checking deposits 68,444 $1,448 2.1 $240 ($471) ($231) 58,821 1,679 2.9
Money market savings 100,351 2,750 2.7 261 (1,010) (749) 91,800 3,499 3.8
Regular savings 114,261 3,092 2.7 636 (634) 2 90,525 3,090 3.4
Unifund savings 499 16 3.2 (34) (10) (44) 1,589 60 3.8
Certificates of deposit 279,627 13,510 4.8 (1,367) (3,111) (4,478) 311,115 17,988 5.8
Time open & club accounts 11,864 339 2.9 (248) (223) (471) 20,278 810 4.0
-------- ------- -------- -------
Total time, int., and inv.
checking deposits 575,046 21,155 3.7 574,128 27,126 4.7
-------- ------- ---- -------- ------- ----
Total deposits 665,531 657,631
-------- --------
Federal funds purchased 427 14 3.3 11 0 11 98 3 3.1
Loans & securities sold under
agreement to repurchase 32,515 776 2.4 125 (160) (35) 26,729 811 3.0
Other borrowings 4,898 226 4.6 167 8 175 1,289 51 4.0
Subordinated notes 6,235 598 9.6 (278) 91 (187) 9,079 785 8.6
-------- ------- -------- -------
Total borrowings 44,075 1,614 3.7 37,195 1,650 4.4
-------- ------- ---- -------- ------- ----
Accrued expenses & other liab. 7,877 12,129
-------- --------
Total liabilities 717,483 706,955
-------- --------
STOCKHOLDERS' EQUITY:
--------------------
Common stock 13,822 7,858
Capital surplus 8,090 8,090
Retained earnings 47,405 47,265
-------- --------
Total stockholders' equity 69,317 63,213
-------- --------
Total liabilities and stock-
holders' equity $786,800 $770,168
========= ========
Weighted avg. yield on interest-earning assets 7.5% 8.3%
Weighted avg. rate paid on interest-bearing liab. 3.7% 4.7%
Net yield 4.3% 4.2%
Note: (1) For rate calculation purposes, average loan categories
include unearned discount.
(2) Nonaccrual loans have been included in the average loan
balances.
(3) Certain amounts have been reclassified to conform with the
current-year presentation.
(4) Included in interest income is loan fees of $1,766,000 for
1994, $1,897,000 for 1993 and $1,715,000 for 1992.
*The change due to the volume/rate variance and average volume and percent
roundings have been allocated to volume.
UNIVEST CORPORATION OF PENNSYLVANIA AND SUBSIDIARIES
TABLE II. INVESTMENT PORTFOLIO (BOOK VALUE)
(Thousands of Dollars)
CARRYING AMOUNT OF INVESTMENT SECURITIES
December 31, December 31, December 31,
1994 1993 1992
------------ ------------ -------------
U.S. Treasury, government corporations and agencies $183,580 $108,551 $125,272
State and political subdivisions 2,530 1,505 4,418
Mortgage-backed securities 10,843 24,399 36,913
Other 5,108 4,872 4,119
----------- ----------- ------------
Total $202,061 $139,327 $170,722
=========== =========== ===========
MATURITY DISTRIBUTION AND WEIGHTED AVERAGE YIELD
December 31, December 31, December 31, December 31, December 31, December 31,
1994 1994 1993 1993 1992 1992
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
------------ ------------ ----------- ------------ ------------- ------------
1 YEAR OR LESS $49,098 4.52% $43,725 5.01% $57,547 5.67%
1 YEAR - 5 YEARS 141,732 6.28% 73,264 4.83% 79,279 5.57%
5 YEARS - 10 YEARS 3,833 6.42% 1,229 5.58% 2,235 8.12%
AFTER 10 YEARS 7,398 6.29% 21,109 5.59% 31,661 6.98%
------------ ------------ ---------- ------------ ------------- ------------
Total $202,061 5.85% $139,327 5.01% $170,722 5.90%
============ ============ ========== ============ ============= ============
Refer to Note 3 to the consolidated financial statements.
Weighted average yield is calculated by dividing income within each
maturity range by outstanding amount of the related investment, and has not
been tax equated on tax-exempt obligations.
UNIVEST CORPORATION OF PENNSYLVANIA AND SUBSIDIARIES
TABLE III, LOAN PORTFOLIO, PART A TYPES OF LOANS
(Thousands of Dollars)
December 31, December 31, December 31, December 31, December 31,
1994 1993 1992 1991 1990
------------ ------------ ------------ ------------ ------------
Real estate loans
Construction and land development $50,954 $60,437 $50,104 $46,753 $62,068
Secured by 1-4 family residential properties 221,098 200,018 165,313 159,387 107,361
Other real estate loans 160,234 164,304 174,333 166,656 166,737
Commercial and industrial loans 114,103 115,375 116,847 124,014 119,825
Loans to individuals 36,810 34,130 42,518 48,458 69,395
All other loans 5,639 4,402 2,918 6,087 3,627
---------- --------- ---------- ---------- ---------
Total loans $588,838 $578,666 $552,033 $551,355 $529,013
========== ========= =========== ========== =========
UNIVEST CORPORATION OF PENNSYLVANIA AND SUBSIDIARIES
TABLE III. LOAN PORTFOLIO, PART B.
MATURITIES AND SENSITIVITY TO CHANGES IN INTEREST RATE
(Thousands of Dollars)
The commercial mortgages and Industrial Development Authority
mortgages that are presently being written at both fixed and floating rates
of interest are written for a three (3) year term with a monthly payment
based on a fifteen (15) year amortization schedule. At each three-year
anniversary date of the mortgages, the interest rate is renegotiated and
the term of the loan is extended for an additional three years. At each
three-year anniversary date of the mortgages, the Bank also has the right
to require payment in full. These are included in the "Due in One to Five
Years" category on issue. The borrower has the right to prepay the loan at
any time.
The residential mortgages are presently being written on a one (1) or
three (3) year rollover basis. The monthly payment on these mortgages is
based on a thirty (30) year amortization schedule, unless the borrower
requests a shorter payout period. These are included in the "Due in One to
Five Years" category on issue. Fixed rate residential mortgages are also
being written for terms of 15 and 30 years and are included in the "Due in
Over Five Years" category.
Due in One Due in One Due in Over
As of December 31, 1994 Year or Less to Five Years Five Years Total
----------------------- ------------ ------------- ------------ -----
Real estate loans
Construction and land development $15,867 $24,827 $10,260 $50,954
Secured by 1-4 family residential properties 55,021 67,134 98,943 221,098
Other real estate loans 39,836 63,375 57,023 160,234
Commercial and industrial loans 69,893 37,698 6,512 114,103
Loans to individuals 19,246 7,289 10,275 36,810
All other loans 3,384 1,883 372 5,639
----------- ----------- ----------- ---------
Total loans $203,247 $202,206 $183,385 $588,838
=========== =========== =========== =========
Loans with a predetermined interest rate $63,506 $122,078 $138,709 $324,293
Loans with a floating interest rate 139,741 80,128 44,676 264,545
----------- ------------ ----------- ---------
$203,247 $202,206 $183,385 $588,838
=========== ============ =========== =========
UNIVEST CORPORATION OF PENNSYLVANIA AND SUBSIDIARIES
TABLE III. LOAN PORTFOLIO, PART C RISK ELEMENTS
(Thousands of Dollars)
Nonaccrual, Past-Due and Restructured Loans and Other Assets
------------------------------------------------------------
Performance of the entire loan portfolio is reviewed on a regular
basis by bank management and loan officers. A number of factors regarding
the borrower, such as overall financial strength, collateral values, and
repayment ability, are considered in deciding on what actions should be
taken when determining the collectibility of interest for accrual purposes.
Potential Problem Loans
When collectibility of interest and/or principal on a particular loan
is questionable, the loan is placed on nonaccrual status. If, at the time
a decision is made to cease accruing interest, it is determined that the
collection of previously accrued but unpaid interest is uncertain, a
stipulated amount is charged against current income. Conversely, if a loan
on nonaccrual status is paid in full, including interest, a credit is made
to current income. The $5,571 of nonaccruing and restructured loans in
1994 includes $994 which although nonaccruing is performing on current
contractual status. If nonaccrual loans had been performing in accordance
with their contractual terms, additional interest income of $575 would have
been recorded in 1994. Interest income of $164 was recognized on these
loans. The decrease in nonaccrual loans from 1993 to 1994 was mainly due
to economic conditions. It should be noted that loans classified as
substandard internally are, at this point, not known as a potential problem
but, if the economy continues to slow, could move into this problem loan
category. It is not possible to fairly estimate a dollar figure that would
be added to this problem loan category.
Loan Concentrations
At December 31, 1994, there were no concentrations of loans exceeding
10% of total loans other than disclosed in Table III, Part A.
Other Assets
At December 31, 1994, $1,786 in Other Real Estate Owned was classified
as nonperforming. This amount represents all the Other Real Estate Owned.
1994 1993 1992 1991 1990
-------- --------- --------- --------- ---------
Principal Principal Principal Principal Principal
Balance Balance Balance Balance Balance
--------- --------- --------- --------- ---------
Nonaccruing loans $5,149 $6,991 $14,969 $12,440 $5,370
====== ====== ======= ======= ======
Accruing loans 60 days or more past due:
----------------------------------------
Real estate loans
Construction and land development $0 $0 $0 $1,610 $3,336
Secured by 1-4 family dwellings 865 887 1,187 1,684 1,138
Other real estate 74 210 0 1,632 262
Commercial and industrial loans 82 62 1,341 319 1,456
Loans to individuals 142 196 396 646 921
All other loans 0 0 0 0 0
-------- ------- -------- -------- ---------
Total loans, 60 days or more past due $1,163 $1,355 $2,924 $5,891 $7,113
======== ======= ======== ======== =========
Restructured loans, not included above $422 $0 $0 $0 $0
======== ======= ======== ======= =======
UNIVEST CORPORATION OF PENNSYLVANIA AND SUBSIDIARIES
TABLE IV. SUMMARY OF LOAN LOSS EXPERIENCE
(Thousands of Dollars)
The loan loss reserve is established at a level which management
believes is adequate to absorb potential loan losses on the current
portfolio. Loans which are currently performing that may pose
collectibility problems in the future are considered in the determination
of the loan loss reserve as described in Table IV. For financial reporting
purposes, the provision for loan losses charged to operating expenses is
based upon several factors, including:
1. A continuing review by management and the Bank's Loan Review
Committee of the loan portfolio. Loans are reviewed on an
individual basis with special attention given to those loans which
are believed to possess the possibility of loss exposure, with
regard to either principal or interest.
2. The analysis of historical loan loss experience in relation to
various types of outstanding loans, particularly in the consumer
loan portfolio.
3. Requirements of the Federal Regulatory examinations, at which time
certain loans are required to be charged against reserve for loan
losses.
If, after applying these factors, it is management's opinion that
reserves must be increased, additional amounts are provided through a
charge to operating expenses.
As the accompanying table indicates, the amount of loan loss provision
charged to expense for 1994 was $1,950 compared to $2,480 in 1993 and
$2,852 in 1992.
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
Average amount of loans outstanding $585,644 $563,678 $550,649 $532,501 $453,044
----------------------------------- -------- -------- -------- -------- --------
Loan loss reserve at beginning of period $ 7,198 $ 8,240 $ 6,735 $ 6,353 $ 3,922
Charge-offs:
Real estate loans 701 1,367 624 198 5
Commercial and industrial loans 615 2,270 871 1,193 741
Loans to individuals 128 215 265 265 431
Home equity
Other 71
-------- -------- -------- -------- --------
Total charge-offs 1,444 3,852 1,831 1,656 1,177
-------- -------- -------- -------- --------
Recoveries:
Real estate loans 146 139 52 24
Commercial and industrial loans 816 9 298 40 249
Loans to individuals 170 114 75 62 79
Home equity
Other 39 68 59 17
-------- -------- -------- -------- --------
Total recoveries 1,171 330 484 143 328
-------- -------- -------- -------- --------
Net charge-offs 273 3,522 1,347 1,513 849
Additions to loan loss reserve 1,950 2,480 2,852 1,895 2,768
Acquired allowance of Pennview Savings 512
-------- -------- -------- -------- --------
Loan loss reserve at end of period 8,875 7,198 8,240 6,735 6,353
======== ======== ======== ======== ========
Loan Type Loan Type Loan Type Loan Type Loan Type
as % as % as % as % as %
Amount in reserve by category: of Loans of Loans of Loans of Loans of Loans
--------- ---------- --------- --------- ---------
Real estate loans 73.4 2,999 73.4 2,468 70.6 3,705 67.6 2,355 63.5 1,691
Commercial and industrial loans 19.4 2,495 19.9 2,384 21.2 3,408 22.4 2,807 22.7 3,225
Loans to individuals 6.3 490 5.9 402 7.7 548 8.8 885 13.1 1,058
All other loans 1.0 15 0.8 538 0.5 124 1.2 391 0.7
Unallocated portion 2,876 1,406 455 297 379
-------- ------- ------- ------ ------
Total 8,875 7,198 8,240 6,735 6,353
======== ======= ======= ====== ======
Ratio - Net charge-offs versus
average loans 0.0% 0.6% 0.2% 0.3% 0.2%
Total cash-basis and nonaccrual loans of $5,149,273 at December 31, 1994,
were generally comprised of $2,633,442 in residential real estate loans,
$456,367 in commercial and industrial loans, and $2,059,464 in commercial
real estate loans.
UNIVEST CORPORATION OF PENNSYLVANIA AND SUBSIDIARIES
TABLE V. DEPOSITS
(Thousands of Dollars)
1994 1993 1992
------- ------- --------
A. Average: Noninterest-bearing demand deposits $97,750 $90,485 $ 83,503
Interest checking 73,160 68,444 58,821
Money Market savings 84,874 100,351 91,800
Savings deposits 128,628 114,261 90,525
Time deposits 288,028 291,990 332,982
-------- -------- --------
Total $672,440 $665,531 $657,631
======== ======== ========
B. Year-end balance: ($100 or more) Due 3 months Due 3 - 6 Due 6-12 Due over
outstanding as of or less Months months 12 months
December 31, 1994 ------------- --------- --------- ---------
Certificates of deposit $5,006 $4,458 $1,455 $10,806
Other time deposits $16,872 $3,724 $ 950
Note: Univest and its subsidiaries do not have foreign offices or foreign
deposits.
TABLE VI. RETURN ON EQUITY AND ASSETS (RATIOS)
(Shown as percentages)
1994 1993 1992
---- ---- ----
Return on assets 1.3 1.1 1.1
Return on equity 13.2 13.3 13.3
Dividend payout ratio 23.2 23.3 23.3
Equity to assets ratio 9.4 8.2 8.2
UNIVEST CORPORATION OF PENNSYLVANIA AND SUBSIDIARIES
INTEREST RATE SENSITIVITY GAPS
(Millions of dollars)
Interest rate sensitivity varies with different types of interest-
earning assets and interest-bearing liabilities. Overnight federal funds
on which rates change daily and loans which are tied to the prime rate
differ considerably from long-term investment securities and fixed-rate
loans. Similarly, time deposits over $100,000 and money market
certificates are much more interest sensitive than passbook savings
accounts and long-term capital notes. The shorter term interest rate
sensitivities are key to measuring the interest sensitivity gap, or excess
interest-sensitive earnings assets over interest-bearing liabilities.
The following table shows the interest sensitivity gaps for five
different time intervals as of December 31, 1994. Univest, as a financial
institution, is made up of assets and liabilities that are primarily
monetary, which are thus affected by inflation as well as interest rate
changes. A positive gap continued during 0-30 day periods mainly as a
result of a large floating-rate portfolio held by the commercial bank
subsidiary. The floating loans are tied to prime, and fall into the one-
month gap category, causing a positive gap position on a dynamic or rolling
basis.
0-30 31-90 91-365 1-5 OVER
DAYS DAYS DAYS YEARS 5 YEARS
-------- ------- ------- ------- -------
Interest-earning assets $207.6 $42.9 $125.9 $263.9 $149.9
Interest-bearing liabilities 174.7 33.2 142.5 296.7 1.9
-------- ------- ------ ------ ------
Interest sensitivity gap $32.9 $9.7 ($16.6) ($32.8) $148.0
======== ======= ======= ======= ======
UNIVEST CORPORATION OF PENNSYLVANIA AND SUBSIDIARIES
TABLE VII. SHORT-TERM BORROWINGS
(Thousands of Dollars)
LOANS AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
1994 1993 1992
------- ------- ---------
Balance at December 31 $43,768 $28,124 $30,711
Weighted average interest rate at year end 3.3% 2.4% 2.5%
Maximum amount outstanding at any month's end $43,768 $39,055 $31,020
Average amount outstanding during the year $37,047 $32,515 $26,729
Weighted average interest rate during the year 2.8% 2.4% 3.0%
Item 2. Properties
Univest and its subsidiaries own and occupy twenty-one properties in
Montgomery and Bucks Counties in Pennsylvania, which are used principally
as banking offices. Note 6, appearing on page 21 of the Annual Report to
Shareholders (Exhibit 13), is hereby incorporated in this item.
Item 3. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders
Incorporated herein by reference from the registrant's definitive
proxy statement for the annual meeting of shareholders on April 11, 1995.
Executive Officers
The names and ages of all executive officers of Univest are as follows:
Principal Occupation
Officer Title during past 5 years Age
---------------- -------- ----------------------- ----
Merrill S. Moyer Chairman Chairman and President 61
of the Corporation and
Chairman of Union
National Bank
Norman L. Keller Executive Vice President of Pennview 57
President Savings Bank
Marvin A. Anders Vice Chairman Executive Vice President 55
and Senior Trust Officer
of Union National Bank
William S. Aichele Executive Vice Executive Vice President 44
President of the Corporation and
President and CEO of
Union National Bank
Wallace H. Bieler Senior Vice Senior Vice President 49
President and CFO of the Corporation
and Union National Bank
There is no family relationship among any of the executive officers of
Univest.
PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters
Incorporated by reference from the 1994 Annual Report to Shareholders
(Exhibit 13), pages 39-40. Dividend and other restrictions are
incorporated by reference from Note 15 of the 1994 Annual Report to
Shareholders (Exhibit 13), pages 27 and 28. The approximate number of
shareholders as of February 28, 1995, was 1,725.
Item 6. Selected Financial Data
Incorporated by reference from the 1994 Annual Report to Shareholders
(Exhibit 13), page 31.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Incorporated by reference from the 1994 Annual Report to Shareholders
(Exhibit 13), pages 32 through 38. Dividend and other restrictions are
incorporated by reference from Note 15 of the 1994 Annual Report to
Shareholders (Exhibit 13), pages 27 and 28.
Item 8. Financial Statements and Supplementary Data
Consolidated balance sheets of the registrant at December 31, 1994 and
1993, and consolidated statements of income, changes in shareholders'
equity and cash flows for the years ended December 31, 1994, 1993 and 1992,
and the independent auditors' report thereon are incorporated by reference
from the 1994 Annual Report to Shareholders (Exhibit 13), pages 13 through
31.
Item 9. Change in and Disagreements with Accountants on Accounting and
Financial Disclosures
Not Applicable
PART III
Item 10. Directors and Executive Officers of the Registrant
Incorporated herein by reference from the registrant's definitive
proxy statement for the annual meeting of shareholders on April 11, 1995.
The executive officers are listed in Part I of this Form 10-K.
Item 11. Executive Compensation
Incorporated herein by reference from the registrant's definitive
proxy statement for the annual meeting of shareholders on April 11, 1995.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Incorporated herein by reference from the registrant's definitive
proxy statement for the annual meeting of shareholders on April 11, 1995.
Item 13. Certain Relationships and Related Transactions
The law firm of Brunner, Conver and Conver, in which Neil L. Conver, a
director of Pennview Savings Bank, is a partner. performs legal services
for Pennview Savings Bank, in the ordinary course of business. For the year
ended December 31, 1994, fees received by Brunner, Conver, and Conver for
services performed for Pennview Savings Bank, amounted to less than 5% of
the firm's gross revenues.
PART IV
Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K
(a) 1. & 2. Financial Statements and Schedules
The financial statements listed in the accompanying index to
financial statements are filed as part of this annual report.
3. Listing of Exhibits
The exhibits listed on the accompanying index to exhibits are
filed as part of this annual report.
(b) There were no reports on Form 8-K filed in the fourth quarter of
1994.
(c) Exhibits - The response of this portion of item 14 is submitted
as a separate section.
(d) Financial Statement Schedules - none.
UNIVEST CORPORATION OF PENNSYLVANIA AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
[Item 14(a)]
Annual Report
to Shareholders*
Report of Independent Auditors 30
Consolidated balance sheets at 13
December 31, 1994 and 1993
Consolidated statements of income for each of the
three years in the period ended December 31, 1994 14
Consolidated statements of changes in shareholders' equity
for each of the three years in the period ended
December 31, 1994 15
Consolidated statements of cash flows for
each of the three years in the period ended
December 31, 1994 16
Notes to consolidated financial statements 17-29
Financial statement schedules are omitted since the required information is
not present or is not present in amounts sufficient to require submission
of the schedule, or because the information required is included in the
financial statements and notes thereto.
*Refers to page numbers in the Annual Report to Shareholders for 1994
(Exhibit 13) which is incorporated by reference.
UNIVEST CORPORATION OF PENNSYLVANIA
AND SUBSIDIARIES
INDEX TO EXHIBITS
[ITEM 14(a)]
Description
-----------
(3) Articles of Incorporation and By-Laws
Articles of Incorporation and Charter are incorporated herein by
reference to the 1973 Form 10-K.
(4) Instruments Defining the Rights of Security Holders, Including Debentures
Specimen Copy of Common Stock is incorporated herein by reference
to the 1973 Form 10-K.
(10) Material Contracts - Not Applicable.
(11) Statement Re Computation of Per Share Earnings - Not Applicable.
(12) Statements Re Computation of Ratios - Not Applicable.
(13) Annual Report to Shareholders
(18) Letter Re Change in Accounting Principles - Not Applicable.
(19) Previously Unfiled Documents - Not Applicable.
(21) Subsidiaries of the Registrant
(23) Consent of independent auditors
(24) Power of Attorney - Not Applicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Annual Report to
be signed on its behalf by the undersigned, thereunto duly authorized.
UNIVEST CORPORATION OF PENNSYLVANIA
Registrant
By: Robert H. Schong
Secretary, March 22, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
Merrill S. Moyer Paul Gregory Shelly
Chairman, President and Director, Director, March 22, 1995
March 22, 1995
Charles H. Hoeflich Thomas K. Leidy
Chairman Emeritus and Director, Director, March 22, 1995
March 22, 1995
Marvin A. Anders James L. Bergey
Vice Chairman, March 22, 1995 Director, March 22, 1995
William S. Aichele John U. Young
Executive Vice President, March 22, 1995 Director, March 22, 1995
Norman L. Keller Norman G. Good
Executive Vice President, March 22, 1995 Director, March 22, 1995
Wallace H. Bieler
SVP and Chief Financial Officer, March 22, 1995
Jules Pearlstine
Director, March 22, 1995
Harold M. Mininger
Director, March 22, 1995
Curtis F. Moyer
Director, March 22, 1995