Univest Financial Q3 net income falls on higher credit loss provision

Overview

• U.S. regional bank's Q3 net income and EPS declined yr/yr due to higher credit loss provisions

• Q3 net interest income rose 10.5% yr/yr, driven by higher loan balances and lower funding costs

• Company repurchased 301,127 shares during Q3

Outlook

• Company did not provide specific guidance for future quarters or the full year

Result Drivers

• LOAN GROWTH & LOWER FUNDING COSTS - Higher average loan balances and reduced rates paid on interest-bearing liabilities drove net interest income increase

• COMMERCIAL LOAN PAYOFFS & CHARGE-OFFS - Decrease in gross loans and leases was mainly due to payoff of a shared national credit and a large commercial loan charge-off

• CREDIT LOSS PROVISION - Higher provision for credit losses primarily reflected increased net charge-offs during the quarter

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for Univest Financial Corp is $46.00, about 8.5% above its October 27 closing price of $42.40

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 12 three months ago

Reuters Recommended Reads

• Oct 27 - First Commonwealth misses Q3 profit estimates on higher costs, credit loss provisions

• Oct 27 - National Bank Holdings posts Q3 loss on credit provisions

• Oct 28 - Hope Bancorp Q3 net income rises 16% year over year

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)