UVSP - Earnings call transcript Q3 2017 | Univest Financial Corporation

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Operator

Good morning, and welcome to the Univest Corporation of Pennsylvania Third Quarter 2017 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jeff Schweitzer, President and CEO of Univest Corporation of Pennsylvania. Please go ahead.

Jeff Schweitzer

good for thank joining and of to Chad, listeners our us you, morning, you and all Thank this morning.

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

remind release you make million begin, the of per Securities express Investor or found materially intentions, Relations forward-looking advised our statements at income we Hopefully, Please from earnings this conference not, the to expectations it SEC forward-looking on course in beliefs meaning of Federal during net univest.net that $XX.X chance I filings. Laws. under the third by share. statements Before results or everyone of our disclaimer. forward-looking the the of release had our and will within call, earnings be may to everyone those we from website yesterday. statements tab. that can these actual management cautionary $X.XX the the If statements. be may forward-looking reported Univest's refer management's differ quarter in a during We our review contemplated

quarter, we $X of program. $X.X leases million recorded charge-off million to referral the related The was under to vendor quarter during million. $X.X a software provision related the program During this

program future. XX, had material amount in $X.X established to any June written to these we this XXXX, an not to down of already do we as have this As receivables allowance downs to of related the million leases $XXX,XXX write anticipate the and related

XXXX. balance during The leases our leases related was quarter. XX, $X.XX not impact September to we have provision do Additionally, similar at these on any of the the sheet

million previous quarter. loan as downs and of growth of booked pay the are and pay quarter calls, XXX line was quarter. solid credit during on lower $XX quarter the new Loan Total and commitments us. continue expect solid third discussed loan quarters to loans due primarily during significant first declined during see as we to solid As quarters relatively we for historically activity the fourth offs we million the production a

a closer discussion year in compared previously XX of X% loan on the to results. during the in Roger discussed now additional coming growth to anticipate the to result However, our for to range throw as our loans I'll quarter, for XX%. it over decline some of we

Roger Deacon

Jeff. related other going And I'm you, couple to everyone would a to earnings joining Thank I to also us items like thank discuss our for release. today.

First, as earnings. relates it to

a loan the of per incremental be which share earnings the fully impact of normal $X.XX includes to our our of quarter, in related million include share, or purchase $X.X accretion. that's Earnings part not do rate. and the programs the of included view run provision to a negative accounting to for in gain quarter, of reported we purchase million per $X.XX $XXX,XXX mentioned, disposition credit resulted impaired X.X diluted for accounting Jeff benefit also we or the $X.XX and the As provision which related leasing

loans metrics year. classified XXX from XX reduced credit as at to internal have and Second our beginning million our as relates continued of the total approximately million have during to XX% criticized commercial to year credit, the improve the by been

excluding finally, the XXX,XXX only Additionally, releasing only was quarter. to loan our is balance purchased been million. losses, our credit million X.X for impaired for net the credit REO our only and related XXX,XXX provision loans provision reduced then losses to have X.X and And was program

go-forward per quarter I on basis. our a in improvements X.X these losses for provision credit am X quarterly million and Given estimating will between a metrics, range million

by driven guidance. a charge-offs, that from prior reduction will be growth but that and event always, As loan is

yield in received an interest portfolio totally The which purchase the was has to expense of margin, represents average income excludes on nine in was prepared interest as four compared our it quarter the deposits at the of loans year. press $XX.X our to $XX.X offset borrowings. of interest release compared interest income purchase basis million the is of funds and this The increase the months driven as increase in margin, in impact core net increase $X.X purchase of flat year of points by relates net of for income XXXX. adjustments net it it That's the of We accounting the increase and adjustments, $XX of fourth points This earnings quarter net would core accretion anticipate this and quarter. loan the the during on the X X basis almost and second to five our as margin decrease for a points relates as quarter disclosed believe XXX the impact the quarter XXX cost core as that again interest million to accounting increase remarks. be points relatively to only primarily averaged million basis by excluding net this the an basis to will in for and non-interest second was accordingly. XXXX. Finally of was X straightforward release, for I for pretty million we in accounting

We questions. any happy to answer will

Operator

Please will question first Perito Our ahead. go come Michael Instructions] KBW. with from [Operator you. Thank

Michael Perito

questions. Hi, good Thanks morning, for guys. taking my

Roger Deacon

Good morning, Mike.

Michael Perito

how there you to bit the overall some is loan I was high couple a portfolio initial quarter-to-quarter And are next grow? thoughts could I could you have the start stuff couple to as maybe the here if I a you imagine to XXXX? a of we in of months from on out probably newer on just year, seasonality I today. any growth, you I of are mean by pipeline loan the of have move telegraphed think thoughts into year, just turn level think little provide any I but we next but look going curious questions. be how more only as well starting start guys, want curious the am

Mike Keim

Mike, I and would you Mike morning. it's tell -- Keim, good

Michael Perito

Mike. Hey,

Mike Keim

are be growth perspective. in we of terms doing market to what to loan we bullish I continues be are would overall and a we strong. tell us The Lancaster from for strong continue

Jeff fell quarter. commitments in call, the referenced loan As on have third early the

We that to have think we are forward loan year. strong think XX% and next projecting to we see fourth growth -- carry loan and will we in next to range. as the are We year, in continue don't X are at in XX% into commitments We we'll XX looking pickup well. but a quarter that

good. But, well as exceptionally is are as to very market we it perform us. for we the ratcheting Teams So continue little down an market well which Lancaster bit. new feel a

Michael Perito

questions Thanks, helpful. like on to income. mortgage very ask activity seem couple non-interest a wanted also slowed Awesome, of Curious it's a bit. the Mike. I

can Just quarter curious thoughts fourth here? any if you into that the then pipeline has of on of stayed And there? the other kind production kind drive low

Mike Keim

production forward. has so Yes, relatively pipeline stayed stayed from -- second the off, quarter has consistent the first

really in we third That's the function didn't get serve. the of housing in that seasonal this pickup we supply markets typical So quarter. key a really

and officers. additional successful been loan have We recruiting

going continue a pipeline which is good going So here are into recruit. to very that's fourth to and quarter we we've And strong. sign actually maintained the us for actually the

feel implemented the that conversion through kind or kind any now During quarter, that system system of it. we've has the occurs any of in we new campus of impediments production with second a walk we with [ph]. And

business. adding now people So continuing of to recruiting that grow and and book

mix is The item and other thing production had portfolio, besides that the sale about year-over-year our look of you for down hurt we it, income core toward held in just gain our going if in XX% sale on an quarter, increase statement us business the mix from at the the portfolio. versus being

a of sale, term it annuity stream terms in benefit trade that short will as on versus we off move while So is us forward. gain

Michael Perito

on quarters that's it it's It's the of interesting, possible? something is the pent a something housing issue, typically make it. short from that I -- could little is peers heard that's you a could term year I guys some of the supply up stronger? Got supply phenomenon, there maybe couple some that have hit later market a is but this slower that more mean, your

Roger Deacon

as what been price the that seeing their home otherwise possible. in home certainly I is obviously tightens And have supply that's rotate And not sell might to people Look, think market therefore, that increase. you into are that.

focus So, solely to business getting it's our something and said, additional carefully. hiring refinance is bring we rely loan folks, environment. like But really I do will watch not on a can after that us. officers And

to the refinance that advantage banking mortgage benefits. need in need focused and we business to occurs, side, And be when on grow of us additional take to purchase. we our continue For the activity reap to successful

Michael Perito

look related some this non-interest at I if looks is on one are are at about? curious should non-interest then relatively there you like am of trust any be And Helpful. you my to business, the to in It just guys I income flat. are opportunities or to nice is the business just be as income tracking seeing which that year. growth we growth thinking that that trust second organic this inorganic looking horizon on point at be overall kind

Roger Deacon

wealth for our tell is area bit Trust in truth during a a and settlements little ebb overall it tracking quarter of It lowest the does would and said the growth management be things flow that on of is that year the kind budget nature. depending always we've it's typically year. the little the state And right on the but fourth stronger, platform. you

customers. there we some in nice see what specialty see opportunities even of versus but growth management areas after the a It's market. wealth which have. a us a go to growth gotten our We'll It's have we income, trust wealth slower grow, we RIA the trust as a functions to is For we trust. differentiator into trust from on really coming complement type niche

of trust business. X% to the itself business by a trust We overall powers, win business are RIA of that growth it's of but line more have trying new type a side as on

Michael Perito

Helpful. you I Thank appreciate the guys. color. all

Roger Deacon

Yes.

Operator

question next ahead. O'Neill. with from Schiraldi Sandler go be The will Please Frank

Frank Schiraldi

Good morning.

pressures, I guys thoughts here Just core NIM deposits on questions; to understood from first just the a betas get your accounting? from and of commentary on the aside color couple on, purchase pricing deposit

Roger Deacon

pretty Sure. what during seeing I think across industry. We see uptick did betas an Frank, we're Roger. it's consistent in quarter the that's with deposit the and

on public public for funds where growth magnified that points you were which our and on Our up our this little higher funds year deposits basis in of deposit about we would were space ago little XX beta quarter that seasonal folks pricing the the commercial exception dollars and say about today seeing public for is related pick a funds beta rates beta of spike bit in to bit a is than an because more tell and we a overall what retail but that funds. our interest our XX% will for so public is are rates there in in and the the uptick asking higher customers

I beta with think the when that's seen were I of our where beta increase, year but what last go the XX% I rate consistent across that relative back to with at of our it's each grown is fourth looked the we've industry. and quarter think last, we

it know the what's is going increase the this an just on margin, yields of As as we what we and a we're consistent bit how quarter, to slightly rate before borrowing get quarter, side. this our really, sensitive you said fourth side pricing so whereas little to it's relates in happen seeing with is the much to get don't we on loans, are our going don't in do loan if asset what an to in like we increase core I we on have re-price deposit uptick know

the see it's not margins little that this might we I we relatively core we of get of flat, think XX increase, think in So bit compression that's well. basis wash as significant rate points but if I and a probably where are quarter, to

Frank Schiraldi

little you just just activity driven expectations greater expansion that's then bit so Got Mike for rashing talk or that down maybe markets and just market it, by a whether and bit in legacy if is growth, mentioned less the you to next okay on competition Thanks. a year, expectation? more could or more so then loan

Jeff Schweitzer

the and grow Frank, so book well simply as gets stance. zero million, in we basically accelerated you as would pace, effectively business it grow Lancaster become say numbers is of in you at just game terms if what look from larger I now $XXX the book you're is business that we're Lancaster book, that slowing up overall getting then the it's and that of our of ratchet over

percentage to in market and better with basis. slowing So X% range impetus that coming for the on from legacy a is so still grow down lack incremental Lancaster continuing is term of

Roger Deacon

Okay.

changed of prior year-over-year has year to all the So you X% talking in the been Lancaster less we're is type this year to brings that percentage side be an impact about businesses, basis, this going along increase X% on the for XX%. to on

Frank Schiraldi

Okay.

big a change thinking I So really guess sheet? just in a not bigger balance

Roger Deacon

correct. Correct,

Frank Schiraldi

Okay, all right. you. Thank

Operator

next [Operator from be Matthew Breese Instructions] Please with Piper go Our ahead. will question Jaffray.

Matthew Breese

Good morning everybody.

Jeff Schweitzer

Good morning, Matt.

Roger Deacon

morning, Good Matt.

Matthew Breese

growth Just are what and a the on pushing couple your coming in how side, loan incremental now. and the yields C&I the right of does to side I'm CRE new side just rates loan average to quick hear, follow-ups, the curious that on compare that on

Jeff Schweitzer

Sure.

obviously that to below we're Matt, But lot in about new were the so, on versus been close the pretty our it's this to XXX depends where able a XXX average all of in fix our XX average yields yield of and is today So basis points was production were is to about quarter it XXX the past good variable on see mix are all today. to variable the XX that that. fixed probably fairly and in XXX and and

Matthew Breese

your how cost? Okay. what the incremental relative of is then do the deposit to funds current cost you And the -- question would side, on size same up

Jeff Schweitzer

of that, in terms production of you new In terms mean. I that tell

Matthew Breese

the the retail have or them deposit in typically in incremental give if door. comes the deposits the incremental commercial customer New get rate what's to you

Jeff Schweitzer

range the customer. type that's a wide on really based Yes, of

we and that's that commercial really If if money rate and to loan is low If the funds really guess is I our continue the get my commercial good we drive you and team operating and zero why exceptions wide looking consumer on a it's to might overnight more that with relationships commercial somebody which we our have so with changed important have loan just customers that from a it's not deposit I'm and the faster basis. keep range those lending with account really on come out C&I overall had relationship but the of have in cost pricing and the rate from so, you that customer, XXX you perspective.

the dollar and between to to target -- We XXX target basis points. On like it's we higher XX would a like customer. if

Matthew Breese

Got it.

Okay. $XXX on growth coming the should be would expense what about like right expecting thought side how are they the we look up for then in expense you size there. things we and million And year, at XXXX

Jeff Schweitzer

in say would aspects To that. X% e-commerce in be business. at growth. you little want think IT/technology We that because X.X% continued for let's a well there I type higher that number. I continue a normal next with would looking reinvest be the banking I so X.X% business banking any has that we changes. year just Sure, at platform to in really It continues. certain the to advantage to X, guide that want whole make bit of model our intent are we looking a We are right year next as say to so, mobile to do to invest as

Matthew Breese

ballpark. like million, that something a XXX good so is probably like XXX, Okay,

Jeff Schweitzer

that's Yes, fine. I think

Matthew Breese

rate. last my tax And is on really question Okay. the

I think get of we higher sense of what have come was is in the couple wanted quarter quarter than down and last level? us for this XXXX or seen to us kind that just back that

Jeff Schweitzer

No, we don't say.

it that we part because rate. a discreet this quarter. year try ignore to next to then XX% almost whole we I the that I'm rate tax of so, think go guess just we forward go run by dynamic of would as into going And effective your to XX guide around becomes lumpy

Matthew Breese

you Thank had. very I all that's much. Okay,

Jeff Schweitzer

Matt. Thanks,

Operator

any conference question our the concludes to closing to answer like would Schweitzer This remarks. I session. Instructions] for and back [Operator Jeff return

Jeff Schweitzer

a in talk forward year forward of look Have to thank everybody call the day. great good the look everybody Just and on you to participating for to end to fourth quarter today. like We a January.

Operator

is you conference today's now concluded. presentation. The Thank for attending

disconnect. now may You

Univest Financial (UVSP) 27 Oct 172017 Q3 Earnings call transcript