Company: UVSP
Filing Date: 2025-10-24
Form Type: 10-Q
Source: 0000102212-25-000028
Chunk: 80

Company: UNIVEST FINANCIAL Corp
Filing Date: 2025-10-24
Form: 10-Q
Item: Item 1
Chunk 80
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Gross loans and leases held for investment decreased $41.1 million, or 0.6%, from December 31, 2024. The decrease in gross loans and leases held for investment was primarily due to decreases in commercial and residential mortgage loans and lease financings, partially offset by increases in construction, commercial real estate and home equity loans. For more information on the composition of the commercial loan portfolio, see "Table 4 - Loan Portfolio Overview."

57

Asset Quality

The Bank's strategy for credit risk management focuses on having well-defined credit policies and uniform underwriting criteria and providing prompt attention to potential problem loans and leases. Performance of the loan and lease portfolio is monitored on a regular basis by Bank management and lending officers.

Nonaccrual loans and leases are loans or leases for which it is probable that not all principal and interest payments due will be collectible in accordance with the original contractual terms. Factors considered by management in determining accrual status include payment status, borrower cash flows, collateral value and the probability of collecting scheduled principal and interest payments when due.

At September 30, 2025, nonaccrual loans and leases were $27.3 million and had a related allowance for credit losses on loans and leases of $3.1 million. At December 31, 2024, nonaccrual loans and leases were $12.7 million and had a related allowance for credit losses on loans and leases of $1.9 million. During the second quarter of 2025, a $23.7 million commercial loan relationship was placed on nonaccrual status due to, among other things, suspected fraud. Subsequent to the relationship being placed on nonaccrual status, a $7.3 million charge-off was recognized during the second quarter. During the third quarter of 2025, a $1.4 million residential property associated with this relationship was transferred to other real estate owned. At September 30, 2025, the carrying values of the $13.9 million of loans and $1.4 million other real estate owned asset comprising this relationship are supported by the appraised value of real estate collateral. Individual reserves have been established based on current facts and management's judgments about the ultimate outcome of these credits, including the most recent known data available on any related underlying collateral and the borrower's cash flows. The amount of individual reserve needed for these credits could change in future periods subject to changes in facts and judgments related to these credits.

Net loan and lease