Company: UVSP
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000102212-25-000006
Chunk: 20

Company: UNIVEST FINANCIAL Corp
Filing Date: 2025-02-24
Form: 10-K
Item: Item 8
Chunk 20
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 the various scenarios to determine a reasonable and supportable scenario, or a combination of scenarios, to be utilized in the model. Forecast Reversion PeriodManagement uses forecasts to predict how economic factors will perform and uses a four-quarter forecast period as well as a four-quarter straight-line reversion period to historical averages (also commonly referred to as the mean reversion period).Expected Recoveries on Charged-off LoansManagement performs an analysis to estimate recoveries that could be reasonably expected based on historical experience in order to account for expected recoveries on loans that have already been fully charged-off and are not included in the ACL calculation.  Discount RateThe effective interest rate of the underlying loans and leases of the Corporation serves as the discount rate applied to the expected periodic cash flows. Management adjusts the effective interest rate used to discount expected cash flows to incorporate expected prepayments which can be reasonably estimated for each pool.Individual EvaluationManagement evaluates individual instruments for expected credit losses when those instruments do not share similar risk characteristics with instruments evaluated using a collective (pooled) basis. Instruments will not be included in both collective and individual analyses. Individual analysis will establish a specific reserve for instruments in scope. All loans on nonaccrual status are individually evaluated for a specific reserve. Management considers a financial asset as collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral, based on management's assessment as of the reporting date.Modifications to Borrowers Experiencing Financial DifficultyThe allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. The Corporation uses either a discounted cash flow model or the fair value of collateral method to determine the allowance for credit losses on modifications to borrowers experiencing financial difficulty, depending on the accrual status of the account after modification. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty are already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification but will get assessed and updated each quarter as necessary.

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Premises and EquipmentLand is stated at cost, and premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed on the straight-line method