Univest Financial Corporation

Thank you for standing by. My name is Jordan and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Univest Financial Corporation third quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. There will be a question and answer session at the end of today's meeting. If you'd like to ask a question, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. All lines have been placed on mute to prevent any background noise. I would now like to turn the conference over to Jeff Schweitzer, Chairman, President, and CEO. You may begin.

Thank you, Jordan, and good morning and thank you to all of our listeners for joining us. Joining me on the call this morning is Mike Keim, our Chief Operating Officer and President of Univest Bank and Trust, and Brian Richardson, our Chief Financial Officer. Before we begin, I would like to remind everyone of the forward-looking statements disclaimer. Please be advised that during the course of this conference call, management may make forward-looking statements that express management's intentions, beliefs, or expectations within the meaning of the federal securities laws. UNIVEST's actual results may differ materially from those contemplated by these forward-looking statements. I will refer you to the forward-looking cautionary statements in our earnings release and in our SEC filings. Hopefully everyone had a chance to review our earnings release from yesterday. If not, it can be found on our website at univest.net under the Investor Relations tab. We reported net income of $21.6 million or 78 cents per share for the third quarter. Our results for the quarter were negatively impacted by a $14.4 million charge-off associated with a commercial lending relationship, which had a specific reserve of $9.8 million at June 30th. The remaining balance related to this credit is supported by a letter of intent to sell the business. While the results for the quarter were impacted by this credit event, excluding this charge-off, our core operations and pipelines remain solid and our asset quality remains stable to improving, with our criticized classified loans expected to decline in the fourth quarter. While lending activity continues to be solid, loans declined just slightly during the quarter, primarily due to the planned payoff of a $35.3 million shared national credit and the previously noted charge-off. Total deposits for the quarter increased $421.5 million, or 6.1%, primarily due to the seasonal increase in public funds deposits, along with growth in commercial deposits. We continue to execute on our initiative to lower our loan-to-deposit ratio, which on average was 120 basis points lower year-to-date than through the first nine months of 2025. Our fee businesses and fee income continue to contribute to our overall operations. Excluding bully death benefits, fee income increased 6.3% compared to the third quarter of 2025, led by wealth management, which increased 10.3%. We continue to be active with respect to stock buybacks, buying back 301,127 shares of our stock during the quarter. Year to date, we have repurchased 1,077,804 shares, or 3.8% of outstanding shares as of the beginning of the year. Before I pass it over to Brian, I would like to thank the entire Univest family for the great work they do every day and for their continued efforts serving our customers, communities, and each other. I will now turn it over to Brian for further discussion on our results.

Thank you, Jeff, and thank you to everybody for joining us today. I would like to start by touching on four items from the earnings release. First, we saw continued strength in net interest income and expansion of our core net interest margin during the quarter. Net interest income increased 1.5 million, or 2.3%, compared to the second quarter, and increased 6.4 million, or 10.5%, compared to the third quarter of 2025. reported net interest margin was 3.42% compared to 3.49% in the second quarter. However, the decrease was driven by higher excess liquidity during the quarter from our seasonal public funds bill. Excluding the impact of excess liquidity, our core net interest margin increased two basis points to 3.55% from 3.53% in the second quarter.