Company: UVSP
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000102212-25-000006
Chunk: 175

Company: UNIVEST FINANCIAL Corp
Filing Date: 2025-02-24
Form: 10-K
Item: Item 7
Chunk 175
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 2023 and a reduction in incentive compensation due to decreased profitability in the current year.

Deposit insurance premiums increased $1.8 million, or 56.9%, for the year ended December 31, 2023, primarily driven by an increased industry-wide assessment rate and an increase in our assessment base. Data processing expense increased $1.6 million, or 10.4%, for the year ended December 31, 2023, primarily due to continued investments in technology and general price increases. Restructuring charges increased $1.3 million, or 725.5%, for the year ended December 31, 2023, associated with the Corporation's financial service center optimization and expense management strategies deployed in response to macroeconomic headwinds. 

Other expense increased $3.6 million, or 14.4%, primarily driven by increases in retirement plan costs of $1.6 million as a result of the current interest rate environment. Other increases included $604 thousand of loan processing and workout fees, $286 thousand in insurance expense and $193 thousand in interchange expense. Federal Home Loan Bank letter of credit fees increased $389 thousand due to increased public funds deposits and related collateral costs. Bank Shares tax expense increased $206 thousand driven by year over year growth of the Bank's Shareholders' Equity.

Professional fees decreased $2.2 million, or 23.5%, for the year ended December 31, 2023. In 2022, the Corporation incurred $3.0 million of consulting fees in support of our digital transformation initiative. 

Tax Provision

The provision for income taxes was $19.4 million, $17.6 million and $19.1 million for the years ended December 31, 2024, 2023 and 2022, respectively, at effective rates of 20.3%, 19.8% and 19.6%, respectively. The effective tax rates reflected the benefits of tax-exempt income from investments in municipal securities and loans and leases. Excluding this impact, the effective tax rates were 22.1%, 21.7% and 21.3% for the years ended December 31, 2024, 2023 and 2022. The increase in the effective tax rate for 2024 compared to 2023 was primarily due to increases in state tax rates and the impact of stock-based compensation during the year. 

Financial Condition

ASSETS

The following table presents assets at the dates indicated:

At