UVSP - Earnings call transcript Q1 2019 | Univest Financial Corporation

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Operator

Good morning and welcome to the Univest Financial Corporation First Quarter 2019 Earnings Conference Call [Operator instructions]. I would now like to turn the conference over to Jeffrey Schweitzer, President and CEO of Univest Financial Corporation. Please go ahead.

Jeffrey Schweitzer

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

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

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

or grew We results million the or annualized. million $XX.X loans annualized are X.X% our deposits as with $XXX.X XX.X% pleased quarter and grew for

quarter. experienced were we have as quarter with first strong The historically we second quarter into so a is and the head pleased us, slower the growth for we pipelines

assets In management non-banking of management downturn to includes fourth were by essentially market in market trust revenues, our business, with the year lines demand of impacted to continue local and disruption due as wealth prior We the the solid which flat was under quarter. our the business, loan strength our economy. see

quarter. the and commercial We the markets contingent rebound income life expect in X.X% and year-over-year due as to health quarter strong the in first recovered lines Insurance to this group revenues business during commission second growth premiums. line increased and of

during developers lift commercial Another market York the new Western to existing business X banking relationship and in development growth our exciting County. quarter of This continued was County about individuals the the excited team out brings opportunities including team managers into Lancaster Lancaster in and us complements a first five market. team the of the our expanded we're

team I growing we to expand in market Additionally, on Jersey, will the results. marketplace. as some to April we additional in throw Greater continue Philadelphia it now three-person our the discussion in presence hired a for over Philadelphia South our Roger

Roger Deacon

off return loan report assets a you, start like on a very Jeff. solid and discuss thank on fully and to I us of earnings couple today. to everyone release. I on translates tangible by third unusual We going quarter or reportable items. think we for the return of a I'd This growth. And the diluted of saying to equity also had quarter earnings no share average XX.X%. our return like I'm of would to with from X.XX%, non-recurring equity joining items consecutive for $X.XX Thank XX.X% of per

an share plan, capital represented X.XXx X.X% book and also book share share tangible current per to and per business price that prior closing per increase can by we X% our per increased year. to given year. Our we value $XX.XX from believe, has representing Yesterday's XX% increase tangible this the value

per which $X.XX quarter a an yield X.X%. pay dividend, to equates continue of to annualized we Additionally,

compared As fourth X.XX% to X quarter relates was to up interest XXXX. the net of margin, core X.XX%, margin points our in basis

less days with the quarter. is quarter point X associated basis our reduced this And due relatively quarter. liquidity. from the margin we includes quarter impact last reminder, negative point prior in X to basis flat Accordingly excess interest benefit a As core a included funding believe of net costs

pause in quarter, margin experienced years other as anticipate have Federal this will costs over rise that the the likely likely we expansion Given yields. than this would past rate net similar loan financial increases Reserve's quarter the to interest to institutions, asset we slightly faster X.X are sensitive end deposit

regulators on Second, credit National January of to quarter pass and and shared for $XX.X large not which was review impaired. loan million performed million impacted is downgrade. by shared cycle, of the loan, downgraded the during provision XXXX. loan as $X.X performing balance considered incremental which losses during recorded national provision The from one is negatively The this was we the substandard was Credit was loan by an

to As of $X.X continue guide rest to to provision per XXXX, we million the look approximately $X.X forward of will we quarter. for

expected, to quarter as ratio decline our year. Third, to compared efficiency prior this continued the

expense by charges, compared same revenue restructuring When declined discipline, restructuring charges ratio XXXX efficiency total the Excluding for period year. the approximately non-interest County numbers the from should in of X.X% to quarter this the our that previously and combining Jeff expense significant expense XX.X% mentioned. first non-interest our XX.X% quarter included increased $XXX,XXX noted expense prior excluding in growth in with of associated to It that Lancaster be XXXX. the hires also our

to it the begin for XXX and to the We'll remarks. would increase Q&A prior session? charges. questions. to XXXX, X% during rest by to press to range note X%, you this the please relates made I X.X% accordingly remaining non-interest to are of increase that As full-year lending is Operator, is expense the quarter. that's restructuring release the teams X.X% the our Please to against points happy investments we answer of any prepared be that particularly straightforward we my for basis account excluding to the believe XXXX guidance it incremental from income for going the items related in

Operator

question first Schiraldi from Our Sandler with Instructions] Frank O'Neill. [Operator comes

Justin Crowley

Justin for this It's on Crowley actually Frank morning.

is on size geography give the of the and/or And same in Where portfolio? stand color snick the So today? then first any does vein, are in able quarter, snick you secondly, downgraded on the industry? that the what to that

Roger Deacon

this that Yes, question. answer I'll Roger, is

Pennsylvania, it's million within And in So business it in we energy geographically outstanding. $XX total, locale, yes. is the credits and snicks about in then our have it's

Justin Crowley

And Okay. broader downgrade apart or other guess the are just the of in seeing million? from deterioration quarter, in then more are any you the $XX what you book there? I broadly, seeing kind

Roger Deacon

instances we're We credit we performance. take The well. did we'll Now happy there's downgrade overall both and believe those we losses snick very this this actually in with previous and loans. this on cases as had we quarter in don't believe isolated quarter

continue the on pleased very we move credit forward how to So we're with side.

Justin Crowley

And then secondly on expenses.

year expense team two then lift you had the and your So you increased the out. guidance for

continuing Do guys a the year anticipating you your you are So there? throughout other lift teams that thoughts what strategy? expect out any or

Michael Keim

can additional to talent, we if Generally on we continue speaking, do will bring that.

on mentioned calls it's we As not before, always several teams. easy these that get to

a opportunity will to Believe, want do we Roger? difficult on it's to very when And do the have forecast. we overall it. it, we So thing to speak expand,

Roger Deacon

that's I business Well, capital quarter good path just that part the totally a be I Mike down the strategy. intend going of, to the through fourth XXXX what for we in said agree the more with raised growing and you Yes. really remember, everyone of back with was the of to opportunistic lenders of hiring that and of have

that opportunities it. of You we and these happened took this can't advantage quarter pick the so just moments happened and it

Operator

next comes Michael with Our KBW. Perito question from

Unidentified Analyst

how for question Jeff overall type for a you just on our and actually is hire production expect recent Mike. think market you be? Thanks is little what in on detail could question. Lancaster? that This of big can provide taking My more first the Like you

Michael Keim

hires came RMs/BDs. The Well, that on, that was we continue that grow there Jeff referenced market. to five

year, there would place. tell in mean the Lancaster team that ramp-up you taken is period of speaking, should able but into there a there. we time to million is I $XX do from lot overlap of So existing $XX and that a an to consideration not was generally that go market be that in million get to I has to RM a

did. In business the do, Ags of they C&I like They CRE. group do of not there type the do is terms existing and

focus on the good County and the a part it's western they marketplace. complement So Lancaster more of

South a to banking a So think but a The on loan also size, Jersey, a is add. more we in have so smaller that's what team business we great addition in bit of think there it's little team, we good actually place.

Unidentified Analyst

Lehigh I in ask the are Valley Could growth? next for steps also what

Michael Keim

we Yes, at the look Lehigh Valley. continue to

Michael Keim

that, continue from have we years our look there. to Valley. market we we've going think about for to -- Yes, at We're obviously perspective, the market been a that's now. share underutilized a We Lehigh XX there

certainly people will one-off all if we other our like continue a of that. team, out do So hire lift do we a basis. can we on would otherwise, we But in to markets,

Unidentified Analyst

plans your there? And deployment, question, my are capital what last

Michael Keim

past, So of to redeem We do is, that to change to talked Longer in from we don't payout converts from converts really -- is about intend the five-year the to portion mark come our peer think it's plan. March a term buybacks. I get have a our next a ratios. not and plan What sub-debt that of what fixed we floating increase don't intend much its to rate. we really from overall level dividend a we've until the

relates the So of goal is first. that's our to number it capital as one redemption sub-debt the

Operator

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

Matthew Breese

South X that good RMs math back-of-the-envelope about that we it? If is a X million plus doing it kind Jersey. split difference so benefit, growth? the think Just down on kind $XXX loan the the hires, a and roughly folks to each, rough million in $XX of call way annual new Is the of the

Jeffrey Schweitzer

you in the to But to to you're Matt, that caution little I'm of yes. going trying year. overall, just apply if a bit, current terms

staffing sizes for would Now what had traditional at terms are were the period. more a levels, of folks said the you, in so but little folks to But and trade-offs of South ramp loan bit will XXXX up folks, are and tell to team, going business overall down factor hit in -- kind the they C&I, those banking and remember, I smaller, if up their Jersey a least those are of I some be CRE the we Lancaster method. was

Matthew Breese

Yes, it's completely But once just up, about agree. benefit. million fully let's by ramped they're $XXX XXXX a call

Jeffrey Schweitzer

to would that yes. -- million $XX million, $XXX

Matthew Breese

you Could did core it the end a the pause, of little is bit you be the of a on with note more what Fed that on if or Roger, it's then, think a potential expansion. NIM. stability quantify might And core basis quarterly downside NIM you in the

Roger Deacon

I'm I'm fund it. is here going thinking the X shorter of benefit, basis days So again of a got at if number X.XX%. back this just how And that quarter, say we really to about it think point you cost

X on reduction size I in that X we basis is pressure there the think points, no to could this and max on price decline quarter assumes deposits.

yet to Fed of in other have we been, pause, pressure little has market, a there see that. with our the pressure. of pricing I -- in reduction So know markets, bit price a

take do the not little after that, if markets -- get the that think could that. that's and a are forward. at But it's slow the when So still And very lay it going would challenge But that be catch don't a look if then significant. that that a and I have that's where maybe we pricing. after to I on in it next bit break over of you going don't it it's to reduction, going quarter, I

Matthew Breese

I hope questions have of I Cecil. a other couple you don't mind, on

Jeffrey Schweitzer

anticipating that. were ahead. Go We

Matthew Breese

that. could point the Go anticipating true-up Well, where idea reserve We you at do have were ahead. go? an What the this

Matthew Breese

have you true-up Well, could the idea be What at go? day do one? point could where this an impacts reserve the

Jeffrey Schweitzer

not. do We

Matthew Breese

a Let me ways different couple try it here. of

portion gone the methodology? us you world, forma in give and idea How be, what you've true-up by could of in an change pro of process a quality be? allowance Cecil the the you reserve quantitative expect through As determining what today driven is the could do much of the factors to

Jeffrey Schweitzer

XX% its XX%, your is don't the to rest question second quantitatively on quantitative, answer part is qualitative. have the yet. And today So of we an

Matthew Breese

Do you expect any quantitative? reason for heavily

Jeffrey Schweitzer

not just not that path. We haven't down yet and -- we're there we gotten know, far don't just Matt. honestly We're the

Matthew Breese

looking just look to of as to historical curious, you you And have losses, losses? how data set through of are process a far do going good historical at back I'm get the Okay.

Jeffrey Schweitzer

you Brian, that. answer can

Brian Richardson

at looking time We're an going data period extended ourselves. data of back years six for and on our own including peer

Matthew Breese

six or beyond own is and X additional sufficient? So is then timeframe an on years there years that your

Brian Richardson

that. period And beyond time additional

Matthew Breese

is what period? additional And that time

Brian Richardson

four to years. Three

Matthew Breese

will we So worst this. just accurate? is thinking curious have the implementation, rolling I'm crisis the about off historical At just basically the of look years the seen back, time of that

Brian Richardson

Yes.

Jeffrey Schweitzer

Yes, correct.

Matthew Breese

of looks mean And looking charge-offs. historical five, maybe then up, current like it's summing your six it it reserve, years just at I just

charge-offs As that already flat likely is could down, see that's down of historical you have going think about how whether you or not much up there? to given more reserves not or than in it you

Roger Deacon

from Roger. I any there don't all yet. sense say. would at And just we're not again make would just say, we're through understand missing actually a But don't is doesn't go how loss that This could not I Matt, It all model to an happening. model I that's I incurred gosh, maybe work you would and that decline. we'll see it, have don't it, understand a sense. how. projected and but make I loss

Operator

At any remarks. further turn questions. I'd Jeffrey Schweitzer over no to the conference instructions] this for time to [Operator there're back like closing

Jeffrey Schweitzer

today. Thanks, listening Brendon. Thank for you to in everybody

conference the us and us from just we're come and he him excited us he last nothing also. taking announced will since call. personally who of over I'm thank you excited his enters for best, wish those about three duties over everything three Fox Brian him phase Roger's as enters he done him be for of on and sure CFO career followed of next life June XX, for him do years all and next this to very and his years, X want last you last too. for his phase has the I retirement his the he of joined we're July as Chase He the For but is we

again. thank So you

the forward Have quarter. at great a quarter and We of again day. end look the to are excited everybody second about to talking the we

Operator

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

may disconnect. You now

Univest Financial (UVSP) 28 Apr 192019 Q1 Earnings call transcript