Company: UVSP
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001628280-25-036392
Chunk: 48

Company: UNIVEST FINANCIAL Corp
Filing Date: 2025-07-29
Form: 10-Q
Item: Item 1
Chunk 48
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 submit an inquiry to the current pricing service regarding the data used to determine the valuation of a particular security. If the Corporation determines there is market information that would support a different valuation than from the current pricing service’s evaluation, the Corporation may utilize and change the security's valuation. There were no material differences in valuations noted at June 30, 2025.Loans Held for SaleThe fair value of our mortgage loans held for sale is based on estimates using Level 2 inputs. These inputs are based on pricing information obtained from wholesale mortgage banks and brokers and applied to loans with similar interest rates and maturities.Derivative Financial InstrumentsThe fair values of derivative financial instruments are based upon the estimated amount the Corporation would receive or pay to terminate the contracts or agreements, taking into account current interest rates and, when appropriate, the current creditworthiness of the counterparties. Interest rate swaps and mortgage banking derivative financial instruments are classified within Level 2 of the valuation hierarchy. Credit derivatives are valued based on credit worthiness of the underlying borrower which is a significant unobservable input and therefore classified in Level 3 of the valuation hierarchy.Contingent Consideration LiabilityThe Corporation estimates the fair value of the contingent consideration liability by using a discounted cash flow model of future contingent payments based on projected revenue related to the acquired business. The estimated fair value of the contingent consideration liability is reviewed on a quarterly basis and any valuation adjustments resulting from a change of estimated future contingent payments based on projected revenue of the acquired business affecting the contingent consideration liability will be recorded through noninterest expense. Due to the significant unobservable input related to the projected revenue, the contingent consideration liability is classified within Level 3 of the valuation hierarchy. An increase in the projected revenue may result in a higher fair value of the contingent consideration liability. Alternatively, a decrease in the projected revenue may result in a lower estimated fair value of the contingent consideration liability.

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The following table presents the assets and liabilities measured at fair value on a recurring basis at June 30, 2025 and December 31, 2024, classified using the fair value hierarchy: At June 30, 2025(Dollars in thousands)Level 1Level 2Level 3Assets/Liabilities atFair ValueAssets:Available-for-sale securities:Residential mortgage-backed securities$— $291,158 $— $291,158 Collateralized mortgage obligations— 1,541 — 1,541 Corporate bonds— 73,722 — 73