Company: UVSP
Filing Date: 2025-10-24
Form Type: 10-Q
Source: 0000102212-25-000028
Chunk: 190

Company: UNIVEST FINANCIAL Corp
Filing Date: 2025-10-24
Form: 10-Q
Item: Item 2
Chunk 190
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 the principal source of the Corporation’s revenue. Table 1 presents the Corporation’s average balances, tax-equivalent interest income, interest expense, tax-equivalent yields earned on average assets, cost of average liabilities, and shareholders' equity on a tax-equivalent basis for the three and nine months ended September 30, 2025 and 2024. The tax-equivalent net interest margin is tax-equivalent net interest income as a percentage of average interest-earning assets. The tax-equivalent net interest spread represents the weighted average tax-equivalent yield on interest-earning assets less the weighted average cost of interest-bearing liabilities. The effect of net interest-free funding sources represents the effect on the net interest margin of net funding provided by noninterest-earning assets, noninterest-bearing liabilities and shareholders' equity. Table 2 analyzes the changes in the tax-equivalent net interest income for the periods broken down by their rate and volume components. 

Three and nine months ended September 30, 2025 versus 2024

Net interest income on a tax-equivalent basis for the three months ended September 30, 2025 was $61.7 million, an increase of $8.2 million, or 15.4%, compared to $53.5 million for the three months ended September 30, 2024. Net interest income on a tax-equivalent basis for the nine months ended September 30, 2025 was $178.9 million, an increase of $22.3 million, or 14.2%, compared to $156.6 million for the nine months ended September 30, 2024. The increase in tax-equivalent net interest income for the three and nine months ended September 30, 2025 compared to the comparable periods in the prior year was primarily driven by higher average balances on loans and cash and cash equivalents and increased loan yields, as well as a reduction in our overall cost of funds.

The net interest margin, on a tax-equivalent basis, was 3.17% and 3.15% for the three and nine months ended September 30, 2025, respectively, compared to 2.82% and 2.85% for the three and nine months ended September 30, 2024, respectively. Excess liquidity reduced net interest margin by approximately 16 and eight basis points for the three and nine months ended September 30, 2025, respectively, and approximately nine and four basis points for the three and nine months ended