Q2 2026 Univest Financial Corp Earnings Call

July 23, 2026

Speaker #2: Good morning, and welcome everyone to the UNIVEST FINANCIAL CORPORATION second quarter 2026 earnings call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise.

Operator: Good morning, welcome everyone to the Univest Financial Corporation Q2 2026 Earnings Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. At this time, I would like to turn the conference over to Jeff Schweitzer, Chairman, President, and CEO of Univest Financial Corporation. Please go ahead.

Operator: Good morning, welcome everyone to the Univest Financial Corporation Q2 2026 Earnings Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by one on your telephone keypad. If you would like to withdraw your question, press star one again. At this time, I would like to turn the conference over to Jeff Schweitzer, Chairman, President, and CEO of Univest Financial Corporation. Please go ahead.

Speaker #2: After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press the star key followed by the number 1 on your telephone keypad.

Speaker #2: If you would like to withdraw your question, press star 1 again. At this time, I would like to turn the conference over to Jeff Schweitzer, Chairman, President, and CEO of UNIVEST FINANCIAL CORPORATION.

Speaker #2: Please go ahead.

Speaker #3: Thank you, Audra, and good morning. Thank you to all of our listeners for joining us. Joining me on the call this morning is Mike Kime, our Chief Operating Officer and President of UNIVEST Bank and Trust, and Brian Richardson, our Chief Financial Officer.

Jeff Schweitzer: Thank you, Audra, 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: We had a solid second quarter, as we reported net income of $23 million, or $0.82 per share, which was an 18.8% increase compared to earnings per share in Q2 of 2025.

Jeff Schweitzer: We had a solid Q2 as we reported net income of $23 million, or $0.82 per share, which was an 18.8% increase compared to earnings per share in Q2 2025. Our results for the quarter were impacted by a $5.2 million valuation adjustment on an OREO property due to an updated appraisal, which impacted earnings per share for the quarter by $0.15. Excluding this adjustment, our core operating results for the quarter were strong. Loan growth for the quarter was solid as we grew loans by $101.7 million or 6% annualized. Total deposits for the quarter increased to $119.2 million or 7.2% annualized. We continue to execute on our initiative to lower our loan-to-deposit ratio, which on average was 180 basis points lower year to date than through H1 2025.

Speaker #3: Our results for the quarter were impacted by a 5.2 million dollar valuation adjustment on an Oreo property due to an updated appraisal, which impacted earnings per share for the quarter by 15 cents.

Speaker #3: Excluding this adjustment, our core operating results for the quarter were strong. Loan growth for the quarter was solid as we grew loans by $101.7 million, or 6% annualized.

Speaker #3: Total deposits for the quarter increased $119.2 million, or 7.2% annualized. We continued to execute on our initiative to lower our loan-to-deposit ratio, which, on average, was 180 basis points lower year to date than through the first six months of 2025.

Speaker #3: We also continued to be active with respect to stock buybacks, buying back 425,539 shares of our stock during the quarter, year to date we have repurchased 776,677 shares.

Jeff Schweitzer: We also continue to be active with respect to stock buybacks, buying back 425,539 shares of our stock during the quarter. Year to date, we have repurchased 776,677 shares. 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'll now turn it over to Brian for further discussion on our results.

Jeff Schweitzer: We also continue to be active with respect to stock buybacks, buying back 425,539 shares of our stock during the quarter. Year-to-date, we have repurchased 776,677 shares. 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'll now turn it over to Brian for further discussion on our results.

Speaker #3: For our 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.

Speaker #3: I'll now turn it over to Brian for further discussion on our results.

Speaker #4: Thank you, Jeff, and thanks. Thank you to everyone for joining us today. I would like to start by touching on 3 items from the earnings release.

Brian Richardson: Thank you, Jeff, and thank you to everyone for joining us today. I would like to start by touching on three items from the earnings release. First, we saw continued strength and stability in our net interest income and margin during the quarter. Reported net interest margin expanded 16 basis points from Q1 to 3.49%. In addition, core NIM, which excludes the impact of excess liquidity, increased 9 basis points to 3.53%. Net interest income increased $2.9 million or 4.5% compared to Q1 and increased $6.7 million or 11.3% compared to Q2 2025, driven by continued growth in average loan balances, improved asset yields, and a reduction in our overall cost of funds.

Speaker #4: First, we saw a continued strength and stability in our net interest income and margin during the quarter. Reported net interest margin expanded 16 basis points, from the first quarter to 3.49%.

Speaker #4: In addition, core NIM, which excludes the impact of excess liquidity, increased 9 basis points to 3.53%. Net interest income increased 2.9 million or 4.5% compared to the first quarter, and increased 6.7 million or 11.3% compared to the second quarter of 2025, driven by continued growth in average loan balances, improved asset yields, and a reduction in our overall cost of funds.

Speaker #4: Second, as it relates to credit, the quarter included 2 notable items. First, as Jeff mentioned, we recorded a 5.2 million dollar pre-tax valuation adjustment on an Oreo property based on an updated appraisal, reflecting the property's estimated fair value less cost to sell.

Brian Richardson: Second, as it relates to credit, the quarter included two notable items. First, as Jeff mentioned, we recorded a $5.2 million pre-tax valuation adjustment on an REO property based on an updated appraisal reflecting the property's estimated fair value less cost to sell. This reduced earnings by $4.1 million after tax, or $0.15 per diluted share. Second, during the quarter, a commercial loan relationship totaling $28.6 million was placed on non-accrual status and a specific reserve of $9.8 million was established. Net charge-offs for the quarter were $1.9 million or 11 basis points annualized, and our allowance for credit losses coverage ratio remains stable at a 1.28% of total loans held for investment. Third, non-interest income was $18.1 million for the quarter, a decrease of $3.4 million compared to Q2 2025, primarily due to the $5.2 million REO valuation adjustment.

Speaker #4: This reduced earnings by 4.1 million dollars after tax, or 15 cents per diluted share. Second, during the quarter, a commercial loan relationship totaling 28.6 million dollars was placed on non-accrual status, and a specific reserve of 9.8 million dollars was 1.9 million or 11 basis points annualized.

Speaker #4: And our allowance for credit losses remains coverage ratio remains stable at a 1.28% of total loans held for investment. Third, non-interest income was 18.1 million dollars for the quarter, a decrease of 3.4 million compared to the second quarter of 2025, primarily due to the 5.2 million dollar Oreo valuation adjustment.

Speaker #4: Excluding that item, underlying fee income trends remain solid as these businesses continue to perform well. Investment advisory commission and fee income increased 583,000 or 10.7% compared to the prior year.

Brian Richardson: Excluding that item, underlying fee income trends remain solid as these businesses continue to perform well. Investment advisory commission and fee income increased $583,000 or 10.7% compared to the prior year, driven by appreciation in assets under management and new customer relationships. Net gain on mortgage banking activities increased $365,000 or 37.2% compared to the prior year, primarily due to increased saleable volume and improved margins. We also recognized $708,000 of tax-free BOLI death benefit proceeds during the quarter. Turning briefly to our outlook for the remainder of 2026. Based on our performance during H1 of the year and our current assumptions, we are maintaining our outlook for loan growth of approximately 2% to 3%, non-interest income growth of approximately 6% to 8%, excluding BOLI death benefits and REO valuation adjustments. Non-interest expense growth of 3% to 5% and provisioning of $11 to $13 million.

Speaker #4: Driven by appreciation in assets under management and new customer relationships. Net gain on mortgage banking activities increased $365,000, or 37.2%, compared to the prior year, primarily due to increased saleable volume and improved margins.

Speaker #4: We also recognized 708,000 of tax-free Bowie Death Benefit proceeds during the quarter. Turning briefly to our outlook for the remainder of 2026, based on our performance during the first half of the year and our current assumptions, we are maintaining our outlook for loan growth of approximately 2 to 3%, non-interest income growth of approximately 6 to 8%, excluding Bowie Death Benefits and Oreo valuation adjustments.

Speaker #4: Non-interest expense growth of 3% to 5%, and provisioning of $11 million to $13 million. However, as I've said in the past, our provisioning is event-driven and may be impacted in the second half of the year depending on the final resolution of the $28.6 million loan that was placed on non-accrual during the second quarter, as well as other charge-off activity, loan growth, changes in economic conditions, and the resulting impact on our coverage ratio.

Brian Richardson: As I've said in the past, our provisioning is event-driven and may be impacted in H2, depending on the final resolution of the $28.6 million loan that was placed on non-accrual during Q2, as well as other charge-off activity, loan growth, changes in economic conditions, and the resulting impact on our coverage ratio. We are updating our full year net interest income growth outlook to a range of 8% to 10%, reflecting the strength of H1 and continued margin stability. Our effective tax rate is expected to remain in the 20% to 21% range. That concludes my prepared remarks. Audra, would you please begin the question and answer session?

Speaker #4: We are updating our full year net interest income growth outlook to a range of 8 to 10%, reflecting the strength of the first half of the year and continued margin stability.

Speaker #4: Our effective tax rate is expected to remain in the 20 to 21% range. That concludes my prepared remarks. Audra, would you please begin the question and answer session?

Speaker #1: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. We will take our first question from Tim Switzer at KBW.

Speaker #1: If you would like to withdraw your question, simply press star 1 again. We'll take our first question from Tim Schweitzer at KBW.

Tim Switzer: Hey, good morning. Thank you for taking my questions.

Speaker #3: Hey, good morning. Thank you for taking my questions. Morning, Tim.

Brian Richardson: Morning, Tim.

Speaker #4: Morning, Tim.

Michael S. Keim: Morning, Tim.

Mike Keim: Morning, Tim.

Tim Switzer: My first one is on the outlook for loan growth. You guys maintained the low single-digit guide here. Could you maybe talk about the competition you're seeing in your various markets and if you're seeing it intensifying in either a specific market or a loan category? More specifically on the loan yield. Seems like there's a lot of competition there.

Speaker #3: My first one is on the outlook for loan growth. You guys maintained the low single-digit guide here. Could you maybe talk about the competition you're seeing in your various markets and if you're seeing it intensifying in any either a specific market or a loan category, and then more specifically on the loan yield?

Speaker #3: It seems like there's a lot of competition there.

Michael S. Keim: Yeah, Tim, good morning. It's Mike Keim. I would agree with your question, quite frankly. We are seeing increased competition on the pricing side of the equation across the board in all of our markets. We still do believe there's room enough for us to get an adequate margin and participate to hit the loan growth numbers that Brian referenced a couple of minutes ago. Certainly it is increasing competition. Spreads are narrowing. I would just imagine everybody's looking to fight for asset growth. That's what's translating here. It's one of the reasons why we pivoted from more long-term CRE to more construction-oriented financing because we still believe that there's ability to get a little bit wider margin in fee income out of that product offering.

Mike Keim: Yeah, Tim, good morning. It's Mike Keim. I would agree with your question, quite frankly. We are seeing increased competition on the pricing side of the equation across the board in all of our markets. We still do believe there's room enough for us to get an adequate margin and participate to hit the loan growth numbers that Brian referenced a couple of minutes ago. Certainly it is increasing competition. Spreads are narrowing. I would just imagine everybody's looking to fight for asset growth. That's what's translating here. It's one of the reasons why we pivoted from more long-term CRE to more construction-oriented financing because we still believe that there's ability to get a little bit wider margin in fee income out of that product offering.

Speaker #4: Yeah, Tim, good morning. It's Mike Kline. So I would agree with your question, quite frankly. We are seeing increased competition on the pricing side of the equation.

Speaker #4: Across the board in all of our markets, we still do believe there's room enough for us to get an adequate margin and participate to hit the numbers that the loan growth numbers that Brian referenced a couple minutes ago.

Speaker #4: But certainly, it is increasing competition. Spreads are narrowing. I would just imagine everybody's looking to fight for asset growth, so that's what's translating here.

Speaker #4: It's one of the reasons why we pivoted from more long-term CRE to more construction-oriented financing, because we still believe that there's the ability to get a little bit wider margin in fee income out of that side of the or out of that product offering.

Speaker #3: Okay, that's helpful. And then can you discuss I guess what the NIM trajectory looks like for you going forward, especially what would be the impact of rate hikes previously you guys have talked about being pretty neutral, but obviously that was an environment we were looking more towards rate cuts.

Tim Switzer: Okay, that's helpful. Can you discuss what the NIM trajectory looks like for you going forward, especially what would be the impact of rate hikes? Previously, you guys have talked about being pretty neutral, obviously that was an environment where we're looking more towards rate cuts.

Speaker #4: Hi Dennis. Brian, yeah. So, from a rate change perspective, either up or down, really at this point we do model out fairly neutral. That said, I would think kind of for the next several quarters, assuming nothing drastic occurs, I'd expect NIM to hold in that current range, give or take a couple basis points.

Brian Richardson: Hi, Tim. This is Brian. Yeah. From a rate change perspective, either up or down really at this point, we do model out fairly neutral. That said, I would think for the next several quarters, assuming nothing drastic occurs, I'd expect NIM to hold in that current range, give or take a couple of basis points. In that 350 range, plus or minus call it five basis points either way is where I expect us to operate for the next several quarters.

Speaker #4: So in that 350 range, plus or minus qualified basis points, either way is where I expect us to kind of operate for the next several quarters.

Speaker #3: Okay, and that's even with that's even assuming any changes to the liquidity excess liquidity on the balance sheet?

Tim Switzer: Okay. That's even assuming any changes to the excess liquidity on the balance sheet?

Brian Richardson: Yeah. That's from a core NIM perspective. Of course, excess liquidity will have its impact on a reported NIM. From a core NIM perspective, I expect us to maintain in that 350 range, give or take.

Speaker #4: Yeah, so that's from a core NIM perspective. Of course, excess liquidity will have its impact on the reported NIM, but from a core NIM perspective, I expect us to maintain in kind of that 3.50 range, give or take.

Speaker #3: Okay. Very helpful. And then on the credit side of things, can you maybe remind us of this Oreo property? I know it was moved to Oreo.

Tim Switzer: Okay. Very helpful. On the credit side of things, can you maybe remind us of this REO property? I know it's moved to REO four years ago. Can you remind us maybe what market it's in or the loan category? Is this a CRE loan?

Speaker #3: Four years ago. Can you remind us? Maybe what market it's in or the loan category this CRE loan?

Speaker #4: Yeah, so it's a lab space built office building that is approximately 165,000 square feet and is located in the Princeton market. So there were significant repairs that were required on that building.

Brian Richardson: Yeah. It's a lab space built office building that is approximately 165,000 square feet, and it's located in the Princeton market. There were significant repairs that were required on that building. Those were completed Q1 into Q2 of last year. There was a time period where the property wasn't being marketed. We started marketing it Q2 last year, continued those efforts now, got an updated appraisal, and as a result of comps in the market, both from a sale perspective as well as a rental square foot perspective, there was pressure on both of those, which resulted in a decrease in value from an appraised perspective.

Speaker #4: Those were completed first quarter into second quarter of last year. So there was a time period where the property wasn't being marketed. We started marketing it second quarter last year.

Speaker #4: And then kind of continued those efforts now. Got an updated appraisal and as a result of kind of comps in the market, both from a sale perspective as well as a rental square foot perspective, there was pressure on both of those, which resulted in a decrease in value from an appraised perspective.

Speaker #3: Okay, and it sounds like this has now been on sale for about a year. Any timeline on when you think this can a buyer can be found in the deal close?

Tim Switzer: Okay. It sounds like this has now been on sale for about a year. Any timeline on when you think a buyer can be found and the deal closed?

Speaker #4: Not again, that's going to be kind of event-driven circumstance-driven. Hopefully, we'll continue to market it and we'll see how that kind of plays out here over the next couple quarters.

Brian Richardson: Not again. That's going to be event-driven, circumstance-driven. Hopefully, we'll continue to market it and we'll see how that plays out here over the next couple of quarters.

Speaker #3: Okay, okay. And then the last one on the other credit here that moved to non-accrual, any color you can provide on the industry it's in, maybe what's causing the issues and it sounds like the provision got to this year is dependent on the resolution.

Tim Switzer: Okay. The last one on the other credit here that moved to non-accrual. Any color you can provide on the industry it's in, maybe what's causing the issues? It sounds like the provision guidance this year is dependent on a resolution. Is this one that could be resolved this year?

Speaker #3: Is this one that could be resolved this year?

Michael S. Keim: Tim, it's Mike Keim again. First off, it is an operating business. It's a C&I credit. It's a seasonal business with more of a discretionary kind of items that They're both a manufacturer and distributor. The seasonality is really strongest late in Q3 into Q4. We'll continue to see how that evolves. The specific reserve that was put up was based upon there's some indications of interest on the company as a whole, and where we are from a financial perspective. We're going to get updated 6/30 financial statements and we're investigating. Are there opportunities with, do we have to look at a total sale of the company at some point in time, or could we sell it in parts? It will be what is the best answer for the collective situation here as we move forward.

Mike Keim: Tim, it's Mike Keim again. First off, it is an operating business. It's a C&I credit. It's a seasonal business with more of a discretionary kind of items that They're both a manufacturer and distributor. The seasonality is really strongest late in Q3 into Q4. We'll continue to see how that evolves. The specific reserve that was put up was based upon there's some indications of interest on the company as a whole, and where we are from a financial perspective. We're going to get updated 6/30 financial statements and we're investigating. Are there opportunities with, do we have to look at a total sale of the company at some point in time, or could we sell it in parts? It will be what is the best answer for the collective situation here as we move forward.

Speaker #4: Tim, it's Mike Kline again. So first off, it is an operating business. It's a CNI credit. It's a seasonal business with more of a discretionary kind of items that they they're both the manufacturer and distributor.

Speaker #4: So the seasonality is really strongest late in the third quarter into the fourth quarter. So we've continued to see how that evolves. The specific reserve that was put up was based upon—there's some indications of interest on the company as a whole.

Speaker #4: And kind of where we are from a financial perspective, we're going to get updated at 6:30 financial statements, and we're investigating. Can we are there opportunities with do we have to look at a total sale of the company at some point in time, or could we sell it in parts?

Speaker #4: It will be, what is the best answer for the collective situation here as we move forward? And, truth be told, we still need to learn a little bit more and update our analysis on that.

Michael S. Keim: Truth be told, we still need to learn a little bit more and update our analysis on that. Would I love to see it gone or disposed with in some positive fashion in the rest of the year? Yes. Can I guarantee? That might not be the best answer, quite frankly. We will just work through this and take the best answer for us.

Mike Keim: Truth be told, we still need to learn a little bit more and update our analysis on that. Would I love to see it gone or disposed with in some positive fashion in the rest of the year? Yes. Can I guarantee? That might not be the best answer, quite frankly. We will just work through this and take the best answer for us.

Speaker #4: So what I'd love to see it gone or disposed with in some positive fashion in the rest of the year, yes, can I guarantee that might not be the best answer, quite frankly.

Speaker #4: And we will just work through this and take the best answer for us.

Speaker #3: Cool. Yeah, totally understand. Appreciate it.

Tim Switzer: Cool. Totally understand. Appreciate it.

Speaker #1: We'll move to our next question from Jacob Morton at Stevens Inc.

Operator: We'll move to our next question from Jacob Morton at Stephens Inc.

Speaker #5: Hey, good morning. This is Jacob Morton on for Matt Brees. I wanted to start out—I'm curious: What was the spot cost of deposits and the spot NIM at the end of the quarter?

Jacob Morton: Good morning. This is Jacob Morton on for Matt Breese. I wanted to start out, I'm curious on what was the spot cost of deposits and the spot NIM at the end of the quarter. I'm just curious on how you feel about your ability to maintain or further lower deposit costs from here.

Speaker #5: I'm just curious about how you feel regarding your ability to maintain, or even further lower, deposit costs moving forward.

Speaker #4: Hi, Jacob. This is Brian. So really, spot deposit costs, of course, when you have bills and things like that occur, there'll be a little bit of noise there, but really tracks what we saw for the quarter.

Brian Richardson: Jacob, this is Brian. Really spot deposit cost, of course, when you have builds and things like that occur, there'll be a little bit of noise there, but really tracks what we saw for the quarter. As it relates to ability to reduce cost of deposits and cost of funds, where we're at right now, again, assuming a stable rate environment, I wouldn't expect much opportunity. We have just over $300 million of CDs that mature here in, call it the Q3. As we look at what we're offering, our current offering rates, they're at that level or slightly above. There's not much opportunity to reprice down there.

Speaker #4: As it relates to ability to reduce cost of deposits and cost of funds, kind of where we're at right now, again, assuming a stable rate environment, I wouldn't expect much opportunity.

Speaker #4: We have just over 300 million dollars of CDs that mature here in call it the third quarter. And as we look at what we're offering our current offering rates, they're at that level or slightly above.

Speaker #4: So, there's not much opportunity to reprice down there. That's why that NIM outlook and guide really is stable at this point in time. You see, I have a little bit of opportunity on the asset side, and a little flat to a little bit of pressure on the liability side.

Brian Richardson: That's why that NIM outlook and guide really is stable at this point in time because you have a little bit of opportunity on the asset side and a little flat to a little bit of pressure on the liability side, you kind of see that play out as a stable core NIM.

Speaker #4: And you kind of see that play out as a stable core NIM.

Speaker #5: Got it. Okay, thank you. I appreciate the color there. And then thinking about the NIM longer term, when you model it out, how much longer might we see fixed asset repricing benefits the NIM?

Jacob Morton: Got it. Okay. Thank you. I appreciate the color there. Then, thinking about the NIM longer term, when you model it out, how much longer might we see fixed asset repricing benefits to the NIM? I'm particularly focused on 2028, given five years prior in 2023, loan yields spiked for the industry. I'm generalizing, but thinking we start to roll some of those off is what I'm curious about and what the impacts are.

Speaker #5: And I'm particularly focused on 2028 given five years prior in 2023 loan yield spiked for the industry. And I'm generalizing, but thinking we start to roll some of those off, is what I'm curious about and what the impacts are.

Speaker #4: Yeah, so out of the '28 and all, I mean, really looking through next year, I expect relative stability with slight upside. '28, again, a lot's likely to change between now and then.

Brian Richardson: Yeah. Out to 2028, in all honesty, I mean, really looking through next year, I expect relative stability with slight upside. 2028, again, a lot's likely to change between now and then. I wouldn't necessarily try to put a pin in the ground on that.

Speaker #4: So I wouldn't necessarily try to put a pin in the ground on that.

Speaker #5: Got it. Okay, thank you. And last for me on deal appetite from here, I'm just curious your perspective on activity in the market. It's been sluggish from a deal perspective, but curious if conversations are similarly slow.

Jacob Morton: Got it. Okay. Thank you. Last from me on deal appetite from here. I'm just curious your perspective on activity in the market. It's been sluggish from a deal perspective, but curious if conversations are similarly slow.

Speaker #3: Yeah, this is Jeff. So we're definitely open to conversations on M&A. Both on the bank side and also on wealth or insurance organizations. And we're always out talking to people as we always say, it has to be for sale.

Jeff Schweitzer: Yeah, this is Jeff. We're definitely open to conversations on M&A, both on the bank side and also on wealth and insurance organizations. We're always out talking to people. As we always say, something has to be for sale. You can't just go and buy it whether you like it or not. It is something. There are conversations happening. I would say it did slow down for a little while there, but there are still conversations that are occurring in the market that we're participating on. I can't tell you that there's anything imminent or that it will result in anything in the near term because frankly, there has to be something that is actually for sale. Obviously, there has to be an agreement on what it looks like going forward. I'd say it's active, not as active, but there's still conversations occurring.

Speaker #3: You can't just go and buy it, whether you like it or not. So it is something there are conversations happening. I would say it did slow down for a little while there, but there are still conversations that are occurring in the market that we're participating on.

Speaker #3: But I can't tell you that there's anything imminent. Or that it will result in anything in the near term because frankly, it has to be something that is actually for sale.

Speaker #3: And obviously, there has to be an agreement on what it looks like going forward. So I would say it's active, not as active but there's still conversations occurring.

Speaker #3: And we are open to having them.

Jeff Schweitzer: We are open to having them.

Speaker #5: Got it. Okay, thank you. Thank you guys for taking my questions.

Jacob Morton: Got it. Okay. Thank you. Thank you guys for taking my questions.

Speaker #3: Yep.

Jeff Schweitzer: Yep. Thank you.

Speaker #4: Thank you.

Speaker #1: We'll go next to Manuel Navas at Piper Sandler. Mr. Navas, your line is open. You may be muted.

Operator: We'll go next to Manuel Navas at Piper Sandler. Mr. Navas, your line is open. You may be muted.

Eknoor Nijjar: Hey, do you guys hear me? Hello?

Speaker #6: Hey, do you guys hear me? Hello?

Speaker #1: Yes, we can hear you now.

Operator: Yes, we can hear you now.

Jeff Schweitzer: Yep, we can hear you now.

Speaker #3: We can hear you now.

Speaker #6: Hi, I'm Ecknor Najar. I'm in here for Manuel. I had a question about: what do your deposit pipelines look like, and also, on the talent side, what is sort of the new wave of talent hires going forward, and any color you could provide on that front?

Eknoor Nijjar: Hi, I'm Eknoor Nijjar. I'm in here for Manuel. I had a question about what do your deposit pipelines look like, and also on the talent side, what is sort of like the new wave of talent hires going forward? Any color you could provide on that front.

Speaker #3: Sure. Look, on the deposit pipelines, the first side of that equation, we continue to be active in that. We have a compelling Brian referenced a little bit in terms on the NIM question previously, but we have a compelling offer on the CD side and we have strong appetite that's coming on that.

Michael S. Keim: Sure. Look, on the deposit pipelines, the first side of that equation, we continue to be active in that. Brian referenced a little bit in terms on the NIM question previously, but we have a compelling offer on the CD side, and we have strong appetite that's coming on that. We've talked in previous calls about the number of initiatives. We have a union initiative where we pursue union deposits. Our public funds build will happen in the Q3. Pipelines are strong. Some of that is kind of the seasonal nature of our public fund business, so that'll build strongly. We have various offers that'll be in the marketplace, working with title companies, law firms, et cetera. All sources that will ultimately play to grow our deposit base over time. We're happy with that.

Mike Keim: Sure. Look, on the deposit pipelines, the first side of that equation, we continue to be active in that. Brian referenced a little bit in terms on the NIM question previously, but we have a compelling offer on the CD side, and we have strong appetite that's coming on that. We've talked in previous calls about the number of initiatives. We have a union initiative where we pursue union deposits. Our public funds build will happen in the Q3. Pipelines are strong. Some of that is kind of the seasonal nature of our public fund business, so that'll build strongly. We have various offers that'll be in the marketplace, working with title companies, law firms, et cetera. All sources that will ultimately play to grow our deposit base over time. We're happy with that.

Speaker #3: And then we've talked in previous calls about the number of initiatives we have at union initiative where we pursue union deposits. Our public funds build will happen in the third quarter.

Speaker #3: So, pipelines are strong. Some of that is due to the seasonal nature of our public fund business, so that'll build strongly. And we have various offers that will be in the marketplace.

Speaker #3: We're working with title companies, law firms, etc.—all sources that will ultimately help grow our deposit base over time. So we're happy with that.

Speaker #3: This is going to be the ramp-up time where we'll have some excess liquidity and see an increase in our public funds, as we traditionally do.

Michael S. Keim: This is going to be the ramp-up time where we'll have some excess liquidity and have an increase in our public funds as we traditionally see. Moving to the talent side. We've been active in the marketplace. We have hired a couple of new RMs in the recent time period here. This is one of those things that when talent becomes available, you need to take that opportunity and add that talent to your team, and we will continue to do that. There's not a ton of disruption in the marketplace, but when there is, that's when the talent seems to be available to us, and we're always in conversations. Similar to what Jeff referenced on an M&A side. We're always talking to people, and trying to see if we can get good quality talent to join our organization.

Mike Keim: This is going to be the ramp-up time where we'll have some excess liquidity and have an increase in our public funds as we traditionally see. Moving to the talent side. We've been active in the marketplace. We have hired a couple of new RMs in the recent time period here. This is one of those things that when talent becomes available, you need to take that opportunity and add that talent to your team, and we will continue to do that. There's not a ton of disruption in the marketplace, but when there is, that's when the talent seems to be available to us, and we're always in conversations. Similar to what Jeff referenced on an M&A side. We're always talking to people, and trying to see if we can get good quality talent to join our organization.

Speaker #3: Moving to the talent side, there are we've been active in the marketplace. We have hired a couple of new RMs in the recent time period here.

Speaker #3: This is one of those things that when talent becomes available, you need to take that opportunity and add that talent to your team. And we will continue to do that.

Speaker #3: There's not a ton of disruption in the marketplace. But when there is, that's when the talent seems to be available to us. And we're always in conversations.

Speaker #3: Similar to what Jeff referenced on an M&A side, we're always talking to people. And trying to see if we can get good quality talent to grow join our organization.

Speaker #6: Thank you. That's helpful. Also, I was looking at your buyback pace. You bought back about 1.5, about the same shares. Should we kind of expect the same pace to continue going forward?

Eknoor Nijjar: Thank you. That's helpful. Also, when I was looking at your buyback pace, you bought back about 1.5, about outstanding shares. Should we kind of expect the same pace to continue going forward?

Jeff Schweitzer: We intend to continue to be active on our buyback plan. We have a lot of shares still authorized. Obviously, there's been a run-up in our price, and we want to make sure that we are effectively using capital and balancing all of the other things we talked about from M&A opportunities and growing the balance sheet. We're balancing all of that, but we expect that we will continue to be active on the buyback front for the near term for sure.

Speaker #3: We intend to continue to be active in our buyback plan. We have a lot of shares still authorized. Obviously, there's been a run-up in our price and we want to make sure that we are effectively using capital and balancing all of the other things we talked about from M&A opportunities, and growing the balance sheet, we're balancing all of that, but we expect that we will continue to be active on the buyback front for the near term for sure.

Speaker #4: Yeah, and really, the kind of guide there is not looking to grow our capital ratios, really, from where we started the year.

Brian Richardson: Yeah, really the kind of guide there is not looking to grow our capital ratios really kind of from where we started the year. You'll see they grew in Q1, then they came back down here in Q2 as we did the buyback. We'll have to continue to kind of manage in that general range.

Speaker #4: You'll see they grew in the first quarter, then they came back down here in the second quarter as we did the buyback. So we'll look to continue to kind of manage in that general range.

Eknoor Nijjar: Okay. Thank you, guys. Thank you so much.

Speaker #6: Okay, thank you, guys. Thanks so much.

Jeff Schweitzer: Thank you.

Brian Richardson: Thank you.

Speaker #4: Thank you.

Jeff Schweitzer: Thank you.

Speaker #1: And that concludes our Q&A session. I will now turn the conference back over to Jeff Schweitzer for closing remarks.

Operator: That concludes our Q&A session. I will now turn the conference back over to Jeff Schweitzer for closing remarks.

Speaker #3: Thank you, Audra, and thank you for everyone participating this morning on our call. We've had a strong start to the year through the first six months, and we're excited about the next six months as we continue to execute on our strategic plans and continue to grow our organization for the long term.

Jeff Schweitzer: Thank you, Audra, thank you for everyone participating this morning on our call. We've had a strong start to the year through H1, and we're excited about H2 as we continue to execute on our strategic plans and continue to grow our organization for the long term. Look forward to talking to everybody at the end of next quarter. Have a great day.

Speaker #3: We look forward to talking to everybody at the end of next quarter. Have a great day.

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.

Q2 2026 Univest Financial Corp Earnings Call

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