Univest Financial
Annual Report 2005

Plain-text annual report

ANNUAL REPORT05 we excel together TABLE OF CONTENTS 3 | Mission Statement 4 | Letter to Shareholders 6 | 2005 Highlights–A Year in Review 16 | Officers and Directors 18 | Locations financial performance SHAREHOLDERS’ EQUITY (in millions) 5-year trends 2005 2004 2003 2002 2001 2000 2005 2004 2003 2002 2001 2000 2005 2004 2003 2002 2001 2000 173 160 146 134 122 116 NET LOANS (in millions)* 2005 2004 2003 2002 2001 2000 1,236 1,161 1,050 815 788 729 DIVIDENDS DECLARED PER SHARE (in dollars)** 0.72 0.67 0.53 0.49 0.44 0.39 2005 2004 2003 2002 2001 2000 BOOK VALUE PER SHARE (in dollars)** 13.37 12.47 11.37 10.47. 9.34 8.57 EARNINGS PER SHARE (in dollars)** 1.93 1.84 1.80 1.63 1.45 1.27 *The Corporation acquired First County Bank on May 17, 2003 and Suburban Community Bank on October 4, 2003. **Common Stock data has been restated to give effect to a three-for-two stock split in the form of a dividend declared on March 23, 2005 to shareholders of record as of April 6, 2005, distributed on April 29, 2005. 2005 financial highlights At December 31, (in Thousands) Cash, interest-earning deposits and fed funds sold Investment securities Net loans Other assets Assets Deposits Borrowings Other Liabilities Liabilities 2005 2004 $ 59,439 $ 37,745 $ $ 343,259 1,236,289 130,322 1,769,309 1,366,715 196,761 32,753 1,596,229 $ $ 343,502 1,161,081 124,629 1,666,957 1,270,884 212,360 23,320 1,506,564 Shareholders’ equity 173,080 160,393 Total liabilities and shareholders’ equity $ 1,769,309 $ 1,666,957 For the years ended December 31, (in Thousands, Except Share and Per Share Data) Interest income Interest expense Net interest income Provisions for loan losses Net interest income after provision for loan losses Noninterest income Noninterest expense Net income before income taxes Applicable income taxes Net income **Book value per share **Net income per share: Basic Diluted **Dividends declared per share $ $ $ 2005 85,502 26,264 59,238 2,109 57,129 22,444 45,796 33,777 8,910 24,867 13.37 1.93 1.91 0.72 $ $ $ 2004 74,789 18,948 55,841 1,622 54,219 22,603 44,920 31,902 8,311 23,591 12.47 1.84 1.80 0.67 $ $ $ 2003* 71,965 21,150 50,815 1,000 49,815 23,480 42,023 31,272 8,190 23,082 11.37 1.80 1.78 0.53 **Weighted Average Shares Outstanding 12,867,080 **Period End Shares Outstanding 12,947,001 12,840,596 12,863,427 12,811,233 12,819,627 *The Corporation acquired First County Bank on May 17, 2003 and Suburban Community Bank on October 4, 2003. **Common Stock data has been restated to give effect to a three-for-two stock split in the form of a dividend declared on March 23, 2005 to shareholders of record as of April 6, 2005, distributed on April 29, 2005. A Strong Leadership Team William S. Aichele, (center front) Chairman, President and Chief Executive Officer for Univest Corporation; Chairman and Chief Executive Officer for Univest National Bank and Trust Co.; Chairman of Univest Insurance, Inc. and Univest Investments, Inc. Wallace H. Bieler, (back left) Senior Executive Vice President, Chief Financial Officer, Chief Operation Officer, and Corporate Secretary for Univest Corporation and Univest National Bank and Trust Co. K. Leon Moyer, (back right) Senior Executive Vice President of Univest Corporation; President and Chief Operating Officer, Univest National Bank and Trust Co. univest, Corporate Profile Univest Corporation is a vital, growing company with deep ties to its local communities. We have a rich history, spanning more than 129 years, that is enhanced by our desire to remain close to our customers so we can deliver Financial Solutions For Life! Univest provides banking, insurance, investments, trust, wealth management and mortgage banking solutions. We have become one of the strongest locally based financial institutions in southeastern Pennsylvania because we believe in innovation and performance, using technology to improve the products we offer, but never forgetting the warm personal service so important to our customers. As we continue to be a leader in the markets we choose to serve, we will remain close to our customers, strengthening our existing relationships and building new ones. We take pride in being an organization that offers our customers an expanding scope of services while maintaining traditional beliefs and a determined commitment to the community. excelling together in 2005 Mission Statement Our purpose and philosophy is to be a strong, influential leader in the markets we choose to serve. We will provide financial solutions to individuals, businesses and nonprofit organizations; maintain an active role in our communities; and build loyal relationships with our customers and employees so that a fair profit will be provided for both the Corporation and our shareholders. 3 the year in review To Our Family of Shareholders, Customers and Employees We are pleased and grateful to report another year of our top-line revenue, delivering excellent service significant accomplishment and positive change for and making significant progress toward becoming a Univest Corporation of Pennsylvania. In 2005, we “Best Place to Work” in Pennsylvania. achieved many successes, attracting new customers and strengthening business relationships, while carefully balancing the challenge of a flattening yield curve. Managing this challenge will continue in the coming year, yet we are positioned for continued growth from the momentum gained in 2005. We are proud of our 2005 financial growth, reporting a net income of $24,867,000. This represents a 5.4% increase over the previous record year. Becoming a leader in new markets and delivering innovative services were highlights of 2005. We continued the expansion of our branch network with the opening of our Blue Bell office, the re-opening of our Kulpsville office, and the grand opening of our first regional financial service center in Royersford, Montgomery County. We introduced new products and services for both businesses and consumers to enhance our platform of financial solutions and expanded our We continued our tradition of sharing financial success online capabilities. The launch of OneOnOne™, our with our shareholders by delivering increased value. On largest small business program ever, will help us build March 23, 2005, our Board of Directors declared a three- relationships with small businesses in our service area. for-two stock split in the form of a 50 percent stock dividend, which was distributed on April 29, 2005. This significant split provided all shareholders with one additional share of stock for every two owned. In addition to the stock split, Univest Corporation also provided shareholders with a quarterly cash dividend of $.19 per share for the third and fourth quarters, which represents an 11.8% increase over the same period last year, adjusted for the three-for-two stock split. Univest is part of a rapidly changing industry, and we need to continue adapting to meet the needs of our customers and communities. What will set us apart in this time of change? Our dedicated, knowledgeable employees will differentiate Univest from the competition. To help them, we focused on developing employees’ skills and providing them with the tools they need to excel. We launched a company-wide initiative based on Ken Blanchard’s book, “Raving Fans” to develop a consistent program of service In August, Univest Corporation was recognized by U.S. excellence with the customer at the core. Employees Banker magazine as one of the top 100 mid-tier banks embraced this program and are working hard to generate in the nation. Based on a three-year average return “Univest Fans.” on equity, Univest was ranked 42nd. This recognition is testament to our ongoing effort to carry out our mission: “...that a fair profit will be provided for both the Corporation and its shareholders.” Univest’s Mission Statement, Vision Statement and Core Values clearly call on our employees to serve as leaders in business and in our communities. Employees have embraced this culture of leadership and continue to serve Throughout 2005, our integrated successes increased our community with purpose and distinction. In 2005, our as employees worked together to deliver Financial involvement in the community increased with employees Solutions For Lifeto our customers, shareholders and holding nearly 500 volunteer positions. Employees and the community. Our employees worked as a team, the Corporation also teamed up to provide monetary following our road map to help us achieve our business support to help the victims of the Tsunami in Asia as well goals and make continued progress toward increasing as Hurricane Katrina. 4 “He gives strength to the weary and increases the power of the weak...but those who hope in the Lord will renew their strength.They will soar on wings like eagles;they will run and not grow weary,they will walk and not faint.”—Isaiah 40:29,31 Our combined efforts in the community helped us increase brand awareness, especially in our newer markets. We celebrated the 8th annual Univest Grand Prix in Souderton, Montgomery County and Doylestown, Bucks County. Several community partnerships in 2005 also helped us elevate our brand, including sponsorships of “The Art of the Warner Brothers Cartoons” at the James A. Michener Art Museum and the Central Bucks Chamber of Commerce’s “Bucks Fever” program. Because of Univest’s support, such community outreach programs touched the lives of thousands of people. Univest’s commitment to community and passion for making a difference were recognized by four nonprofit organizations in 2005, three in Bucks County and one in Montgomery County. This recognition shows how quickly we are building our brand in our newer markets and differentiating Univest Corporation from other financial institutions. We obtained these notable honors as the direct result of our employees’ involvement on boards and committees. We are proud of our employees who work so hard to build a positive image for the Corporation— day in and day out. We have been blessed throughout our 129-year history with strong leadership and valuable associates. H. Paul Lewis, Executive Vice President, announced his retirement, effective January 31, 2006. Paul’s leadership and strong connections were instrumental in helping us understand the Lower Bucks County community and grow our presence in this newer market. During this past year, several other long-time associates retired from their positions with Univest. After 34 years of service, George D. Terry, Jr. retired in August from his position as Executive Vice President, Operations. Richard D. Juniper, Vice President and Auditor, retired in February after 37 years. In June, Linda C. Cahill, Vice President and Controller, retired after 29 years. We want to thank Paul, George, Dick and Linda for their many years of leadership and loyalty. We are looking forward to the year ahead with great anticipation as we celebrate 130 years of service. In 2006, we will seek to increase our leadership in our communities by growing the Corporation both organically and through acquisition. Challenges are inevitable as the economy and market continue to fluctuate and competition intensifies. However, we are confident the united efforts of our employees, shareholders, customers and communities will help us achieve another year of solid performance. We are proud of our 2005 achievements and realize we could not have come so far without the support of our customers, our employees and you, our valued shareholders. On behalf of the entire Univest family, thank you for your support, confidence and investment. Sincerely, William S. Aichele Chairman, President and Chief Executive Officer 5 Growing Stronger Together As Univest celebrates its 129th year of business, we are proud of our strong values that continue to guide us in our daily interactions with fellow employees, shareholders, customers, and the community. Univest Employees Serve Our Communities From left to right William F. Marks, Univest Corporate Banking; Deanna Mindler, Upper Bucks Chamber of Commerce; M. Theresa Schwartzer, Univest Human Resources; Suzanne M. Fleischmann, Univest Retail Lending; Trish Kriger, Habitat for Humanity of Bucks County; Audrey Tucker, Family Services Association of Bucks County; Romonie L. Matlock, Univest Newtown; Sharon Mininger, Indian Valley Chamber of Commerce; Timothy V. Swartley, Univest Foundation; Katherine R. Nichter, Univest Marketing; Eugene Smith, Central Bucks YMCA; Kenneth L. Keller, Univest Corporate Banking. working together, We excelled in 2005 by driving company performance and growing the business together. Employees focused on delivering excellent service to both internal and external customers, increasing integrated efforts to assist customers with solutions across all lines of business, and supporting and volunteering time to important community initiatives. Our united efforts helped us accomplish our ambitious strategic plan for the year, continuing our mission of providing a fair profit for both the corporation and our shareholders. Shareholder support grew in 2005 as we reported strong financial performance throughout the year and continued to share our success with regular dividends and a significant stock split. In addition to shareholders, our customers’ trust in Univest continued to grow through core account acquisition. We strengthened relationships by offering attractive rates, special promotions and new products. 6 We contributed nearly $1 million to almost 1,000 In June of 2006, we will reach our thirteenth decade charitable organizations in Montgomery and Bucks of service. Univest’s history has been defined by our Counties in 2005 and were recognized by community traditions, and we have become a rock of dependability organizations for our many philanthropic efforts. Our in our communities. Our brand identity has evolved to employees’ volunteer involvement, our corporate financial a strong position that will define us for years to come. support and unique outreach programs contributed to Univest being presented with the following awards: Yet change is constant, and just as life itself is transformed by new ideas and new technologies, • Economic Development Award from the so too, has the financial services industry undergone Lower Bucks County Chamber of Commerce changes in recent years. As has been our custom, • Pillar Award from the Indian Valley Chamber of Commerce • Community Service Award from the Upper Bucks Chamber of Commerce • Corporate Citizen of the Year Award from Family Service Association of Bucks County Univest has kept aware of the trends and sought opportunities to strengthen our competitive posture in this ever-changing industry. We invite you to read the pages ahead as we share our 2005 achievements and relate how these changes helped us grow the Corporation. Our success was a direct result of how we worked in concert with our employees, Our focus on community and our partnerships with shareholders, customers and community. In 2005, chambers of commerce and nonprofit organizations we excelled together. continue to increase Univest’s brand awareness and enabled our employees to publicly demonstrate our mission, vision and core values. growing our business together 7 Service Excellence: What Sets Univest Apart Univest’s Mission Statement and the vision of our people have guided the corporation’s remarkable growth and business success throughout our history. In 2005, we emphasized our core values—tradition, integrity, excellence, community, spirituality— as key beliefs that are at the heart of Univest’s business essence. Significantly, we began to consistently promote what makes Univest stand out from every other financial institution: service excellence. In 2005, a renewed commitment and focus has built a foundation of knowledge and skills for our employees to deliver excellence in all interactions with customers, internally and externally. In 2005, we launched a company-wide Service Excellence initiative, with each employee exploring the importance of service to our business. Employees crafted their own Personal Service Philosophy and read and discussed Ken Blanchard’s book, “Raving Fans.” Employees proudly display these personal statements of their commitment to service excellence in their offices or work areas, and they work together to create our own “Univest Fans.” Our new monthly newsletter, UniVoice, is a popular vehicle for sharing company and employee news and highlighting Service Excellence stories from internal and external “raving fans.” The newsletter has helped us improve our communication with employees as well as reinforce our mission, vision, and core values. Employeeideas@univest.net was launched, providing employees a vehicle to contribute ideas to enhance overall excellence of the organization. univest takes Royersford Grand Opening The official ribbon-cutting ceremony launched the day’s events. Pictured from left to right are William S. Aichele, Chairman and Chief Executive Officer of Univest National Bank and Trust Co.; John Rafferty, State Senator of the 44th District; Monsignor Joseph McGeown, St. Clare’s Roman Catholic Church; Marc T. Ernest, Royersford Business Banking Manager, Univest National Bank and Trust Co.; Tom Quigley, State Representative of the 146th District; and K. Leon Moyer, President and Chief Operating Officer of Univest National Bank and Trust Co. 8 Enhanced technology plays an ongoing role in the delivery of service excellence. We upgraded our ATMs, making them easier to use while providing greater security for customers. Beginning in January 2005, clients of Univest Investments also gained on-line reporting and trading capabilities for securities and funds in their brokerage accounts. To provide the right tools for our employees to deliver service excellence, we updated our main computer system, upgraded our front-line sales team’s laptop computers and enhanced our online access for use in our financial service centers. These improvements have enabled us to assist customers in a more efficient manner and provide better service to our Anytime Banking online customers. We built and enhanced office locations, providing convenience and visibility in our marketplace. In 2005, we reopened a new Kulpsville financial service Kulpsville Grand Re-opening center and held grand openings for new offices in Blue Bell and Royersford. The Kulpsville Grand Re-opening was a tremendous success, celebrating our new state-of-the art facility in the heart of a thriving community. The day’s events included a carnival celebration attracting hundreds of business and community representatives. Our Royersford office is our first regional financial service center housing Univest experts who provide a full range of integrated services. service excellence to new heights Our senior executive leadership team, led by William S. Aichele, K. Leon Moyer and Wallace H. Bieler, is nurturing a culture of accountability, responsiveness, and empowerment, encouraging every employee to take responsibility for making Univest a better business and a better corporate citizen. This philosophy, demonstrated in a “lead-by-example” approach, has trickled down throughout the organization to all employees. “Fans” are reaping the benefits and raving about the excellent service they are receiving. Service excellence also is building camaraderie and a culture of deep respect among our employees. Yes—Univest took major strides in consistently demonstrating our service position, a clear differentiator that will set us apart from our competition in the coming years. The results have created positive momentum to carry us into the future. 9 Portfolio of Financial Solutions Expands Throughout 2005, Univest invested in its employees in order to give us a competitive edge in serving the financial needs of our customers. Our goal is to have the most talented, dedicated and motivated employees of any financial institution in our service area. A competitive line-up of products provides our employees with solutions to offer customers the ability to realize their financial dreams. Univest continues to introduce new products and programs, anticipating the needs of our marketplace while keeping pace with the needs of our customers. In January, we launched our new OneOnOne™ program designed to build relationships with small businesses. To support this new program, we realigned our team and redefined the role of our branch managers, increasing their focus on small businesses. We established a mentor program between the Corporate Banking and Retail Banking teams to provide leadership and lending support to our managers. We also enhanced our product line featuring a new series of business checking accounts. These products are very competitive and were well received by business customers. The new accounts further exposed small businesses to experience the consistent, expert personnel of Univest and gain access to capital. In 2005, we introduced a Business Debit Card and our first Univest Platinum Visa Credit Card for businesses and consumers. The new credit cards enhance Univest’s product line and allow us to deepen customer relationships cementing greater loyalty. expanding relationships The depth of our insurance platform increased as we individual transfers cash or property to a charitable organization integrated the experience and capabilities of Donald K. in exchange for the charity’s promise to make fixed annuity Martin & Company in West Chester, Pa. While we acquired payments to one or two life annuitants, typically the donors. the agency in December 2004, 2005 was the year the For people planning their estates, this is an attractive option for acquisition proved to be a valuable asset for Univest making a significant charitable contribution while maintaining Insurance. In addition to expanding our reach into Chester future financial security. County, the agency also enhances our insurance solutions to businesses and consumers in Bucks and Montgomery Counties and beyond. The company specializes in ensuring nonprofit organizations, religious institutions and senior adult and life care communities. The employee benefits solutions offered by Univest Insurance continued to be in high demand. We experienced growth throughout our service area because of the diverse platform of products including group health, group life, flexible spending and voluntary benefits offerings. These services One of the most significant product developments came in will continue to be in demand as healthcare costs rise and July, 2005 with the launch of the Honestly Free Checking™ employers evaluate their employee benefits programs. account for consumers. This move helps us compete with the free checking accounts offered by many of our competitors. In a tough economic climate against increasing competition, Univest is succeeding through its people The Wealth Management & Trust group introduced a charitable and through an impressive array of new products. gift annuity in 2005. This annuity is a transaction in which an 10 Teamwork Highlights Business Successes In a year highlighted by the Corporation’s record earnings, each of our businesses contributed to our overall success. Innovative ideas and well executed plans by our dedicated employees helped us achieve this milestone. Wealth Management & Trust exceeded many of its performance goals. This was due in part to its increased platform of services to serve the diverse needs of the people in our market. We also doubled our sales team during the last year, enhancing our expertise—which helped grow the business to nearly $1 billion in assets under management. Several of our advisors hold the highest professional designation for the industry: Certified Financial Planners® (CFP®). Wealth Management & Trust experienced greater visibility, too, as its professionals continue to be sought out by local and national media—including Fox News, Bloomberg TV and CNBC—for their financial insights. Leveraging national media exposure at a regional level has brought increased visibility and credibility to our team of professionals. Univest Investments had a record year, growing its assets under management to $495 million. Univest’s financial advisors increased their accessibility to clients by meeting at convenient locations and times, whether in our financial service centers or in a customer’s home. The professionalism and credibility of the investment team grew as three of the organization’s five consultants now hold the CFP® or ChFC (Chartered Financial Consultant) advanced designations. The other advisors currently are working toward their CFP® status. through deepened satisfaction and loyalty Univest’s Corporate Banking and Private Banking teams portfolio. Our growth has been a direct result of our continued to achieve strong loan growth in 2005. Our employees developing new relationships with automobile loan success extended to our small business portfolio dealers throughout our marketplace, coupled with the where we were again ranked among the top 15 SBA strong integration efforts from our Corporate Banking lenders and the number one locally-based provider of team. Three years ago, Univest had business relationships SBA 7(a) loans. Our consistent ranking among the top with 15 automobile dealerships. Today, we work with 60. SBA lenders in the area is testament to our historic and strong commitment to small businesses, the lifeblood of our communities. We have built solid relationships over the years and have earned the respect and trust of our clients. For example, in our Corporate Banking, Insurance, Investment, Trust During Small Business Month in May, we presented and Wealth Management areas, we have helped Lowry Electric, Inc. with the fourth Univest Small multiple generations of individual families reach Business Achievement Award. In 2006, we are looking financial success and stability. This is a result of our forward to expanding this initiative by recognizing two integrity, expertise and service. business customers in our Bucks and Montgomery service area. For the second consecutive year, our Retail Lending area experienced tremendous success with its indirect lending Teamwork, dedication, innovation and hard work: Univest’s formula for success in 2005. 11 Integrated Solutions Spark New Relationships Through teambuilding and cross-functional efforts, we continue to drive our integrated cross-sell strategy. We excel at integrating our services and expanding customer relationships by offering solutions to help them achieve their financial objectives. Competitors may claim to offer the breadth of services that Univest offers. The difference is we consistently deliver on our promise. Development of our sales culture has focused on integration. This culture was supported by skills training and communications throughout 2005. We conducted a first-time integrated sales training program and all our business lines benefited. Through ongoing coaching and monthly meetings in which integrated teams of employees shared ideas for increasing referrals and generating new business, we have educated employees on the opportunities that integration provides for improved service delivery. The results have been impressive: more Univest customers than ever are enjoying the benefits of multiple financial solutions provided by Univest professionals and new bonds were formed strengthening our internal team structure. together, Customers and Employees Working Together Gary E. Brown, Univest Wealth Management; Donald K. Martin, Univest Insurance; Mary B. Kern, Univest Computer Room; Lee A. Hunsicker, Univest Property Management; Charla Holt, Gloria Dei Communities; Dennis S. Slook, Univest Tech Support; Stuart H. Fine, Grand View Hospital; Richard W. Slabinksi, Univest Private Banking; Sandra J. Miller, Univest Finance & Accounting; Christopher Phifer, The Endoscopy Center; Stephen D. Robinson, Univest Small Business; David E. Lustig, retired; Linda K. Homa, Merrymead Farm, Inc.; James H. Jacobson, Univest Investments; Lisa M. Hunt, Univest Blue Bell Office 12 Corporate Banking and Retail Banking’s integrated accomplishments were significant. Together, they sold a new business checking account and, in the process, acquired new retail relationships. The result: increased deposits and greater top-line revenue. Wealth Management & Trust also had an excellent year, referring more insurance customers than ever before. Overall integration efforts have become a significant business builder for Univest Insurance and Univest Investments. In 2005, 45 percent of our new insurance business came from Univest National Bank and Trust Co. customers, compared to 33 percent in 2004. At Univest Investments, 70 percent of the business’ total new assets came from other Univest business lines. The majority of this new business came from deepening relationships with existing retail and corporate banking clients. we’re excelling and achieving results Less visible, but of critical importance to the corporation and our integration efforts, is the work of our support areas. Compliance, in particular, is ever mindful of our constantly changing regulatory environment. They continue to be instrumental in helping departments across the corporation carry out integrated initiatives within regulatory guidelines. All lines of business and support personnel were called upon to help Univest continue to meet the regulatory requirements of the Sarbanes-Oxley Act of 2002, which has now been fully implemented. The Marketing team launched a consumer segmentation program to target cross-sell opportunities featuring our integrated platform. This approach was the focus of the campaign, which began in the first quarter and drove new business referrals throughout the year. Our vision is to become a fully integrated financial solutions provider. Together, with our customers and employees, we’re excelling and achieving results. In a year highlighted by the Corporation’s record earnings,each of our businesses contributed to our overall success. 13 making a difference Building Community—The Univest Way Few organizations can match Univest’s connectedness to its communities. Our Mission Statement challenges us to “be a strong, influential leader” and to “maintain an active role” in our communities. Being a good corporate citizen is, of course, good for our communities—but it’s good business, too. We believe it’s important to give back to the residents, businesses and organizations that have contributed to our success. Healthy communities are the kind in which Univest will thrive. Our employees have always fully embraced the concept of community—one of our core values. They responded with incredible generosity in 2005 to two of the most destructive natural disasters of recent years by joining the Corporation in contributing $30,000 to the combined Asia Tsunami and Hurricane Katrina relief funds. Our support of these efforts is not over. In 2006, employees will travel to the region devastated by Hurricane Katrina to lend their helping hands to the ongoing rebuilding efforts. Local community support also was strong in 2005, and a number of high-profile sponsorships helped elevate our image throughout Bucks and Montgomery Counties. In the spring, Univest was the sole sponsor of “The Art of Warner Bros. Cartoons” at the James A. Michener Art Museum in Doylestown. The exhibit, the museum’s largest ever, featured more than 160 drawings, paintings and cels used in making Warner’s classic cartoons. Thousands of museum visitors saw this renowned exhibit and enjoyed a special family day at the museum. “Comment Please” by Univest (left) WNPV’s “Comment Please” is the longest running call-in radio talk show in the Delaware Valley. In 2005, Univest entered into an exclusive sponsorship with 26 live broadcasts taking place at Univest financial service centers from July 2005 to July 2006. Supporting the Arts (center) Univest sponsored one of the most successful exhibitions the Michener Art Museum had last year—“The Art of the Warner Bros. Cartoons.” During the exhibition, the museum’s attendance exceeded 25,000 visitors. Over 1,000 people attended the family day also sponsored by Univest. 8th Annual Univest Grand Prix (right) Another successful year. Wallace H. Bieler, K. Leon Moyer and William S. Aichele all congratulate the winners. 1st place—Melito Heredia of the Dominican Republic/Toga Bike team; 2nd place—Alvaro Targuedila (UPMC-ACT) of Uruguay; and 3rd Place—Rhode Island’s Amos Brumble (CCB/Volkswagon/Time). 14 in our communities together Univest is a long-time supporter of chambers of levels of participation and attendance at the two-day bike commerce and is an active member in 15 locally. In race, grew our international field and attracted strong 2005, we served as the major benefactor of the Central competition with the spirit and support of the community. Bucks Chamber’s “Bucks Fever” program for the third consecutive year. Through this major sponsorship, we helped the chamber present more than 200 visual and performing arts events in the spring, summer and fall. Univest’s support of education in our region is best exemplified by our employee involvement and corporate sponsorships. In 2005, employees visited schools to teach children about the importance of maintaining good In July, Univest kicked off its exclusive sponsorship of credit and saving money; senior centers to talk about WNPV’s “Comment Please” talk show, the longest topics including ethical wills and identity theft; and other running call-in radio talk show in the Delaware Valley. nonprofit and community groups to highlight a variety of The program serves as a platform for the region’s financial and community topics. Since identity theft is residents and public officials to discuss the area’s one of the fastest growing crimes in our society today, important issues. Between July 2005 and July 2006, we launched an informational campaign to the general Univest financial service centers will host 26 live public to highlight fraud schemes and provide remote broadcasts of the talk show. information on how individuals can protect themselves Our showcase event, the Univest Grand Prix, is an annual from becoming victims. highlight in Montgomery County and, for the second year, The difference we are making in our communities in downtown Doylestown. In its eighth year, the Grand brings us great satisfaction. Doing well by doing good. Prix continues as one of the most exciting, colorful and That’s the Univest way! anticipated events in the region. This year, we set new 15 Officers as of January 1, 2006 Univest Corporation of Pennsylvania Executive Management Group William S. Aichele, Chairman, President & Chief Executive Officer Wallace H. Bieler, Chief Operation Officer, Senior Executive Vice President, Chief Financial Officer & Corporate Secretary K. Leon Moyer, Senior Executive Vice President Duane J. Brobst, Executive Vice President, Chief Credit Officer Kenneth D. Hochstetler, Executive Vice President Diane L. Koehler, Executive Vice President, Chief Risk Officer Richard M. O'Donnell, Executive Vice President Ronald S. Price, Executive Vice President Barry L. Stoltzfus, Executive Vice President Richard R. Swartley, Executive Vice President Senior Vice Presidents Richard L. Boaman G. Brian Cooper G. Jay Francis Keith B. Paich M. Theresa Schwartzer Annette D. Szygiel Vice Presidents John R. Benner Patricia S. Coleman Barbara J. Cornell Kimberly J. Detwiler Suzanne M. Fleischmann Stephen D. Girone Garry R. Kuhnle Mary Beth Liddle Mary L. Marger William B. Meyer Diane R. Moyer Lori L. Shelly Karen E. Tejkl Keith C. Thomas officers Univest National Bank and Trust Co. Executive Management Group William S. Aichele, Chairman & Chief Executive Officer K. Leon Moyer, President & Chief Operating Officer Wallace H. Bieler, Senior Executive Vice President, Chief Financial Officer & Corporate Secretary Duane J. Brobst, Executive Vice President, Chief Credit Officer Richard M. O'Donnell, Executive Vice President Ronald S. Price, Executive Vice President Barry L. Stoltzfus, Executive Vice President Richard R. Swartley, Executive Vice President Senior Vice Presidents Gary E. Brown G. Brian Cooper John W. Duerksen J. Matthew Holliday Kenneth L. Keller John T. Landes Rose A. Radcliff Stephen D. Robinson Richard W. Slablinski, Jr. Vice Presidents Stephanie A. Bowers John J. Buczek Thomas C. Cassidy, III Vernon L. Clemmer Anthony D. DaCosta Gregory J. D’Angelo John C. Dooley David A. Emery Carmella A. Faust James E. Fisher Darlene E. Grafton Philip C. Jackson Darren G. Johnson Phillip K. Katulka John C. Kazary Patricia J. Kratz Cynthia D. Lauterbach Mary Beth Liddle William D. Maeglin William F. Marks Teresa A. Mason Timothy E. Mininger James M. Spindler Raymon M. Staley Timothy V. Swartley Harry A. Wenzel Gary S. Wolfer Fern M. Zepp 16 Other Principal Subsidiaries Univest Corporation of Pennsylvania Univest Investments, Inc. William S. Aichele, Chairman Kenneth D. Hochstetler, President Darren G. Johnson, Vice President William F. VanSant, III, Vice President Univest Insurance, Inc. William S. Aichele, Chairman Kenneth D. Hochstetler, President George Becker, Jr., Senior Vice President Donald K. Martin, Senior Vice President William R. Erickson, Vice President Christine D. Lightfoot, Vice President Brad C. Ramer, Vice President Robert W. Register, Vice President Hervey W. Schofield, Vice President Gail M. Strohmeyer, Vice President Richard Theis, Vice President Univest Delaware, Inc. Univest Realty Corporation Univest Reinsurance Corporation Delview, Inc. (Subsidiary of Univest National Bank and Trust Co.) and directors Directors as of January 1, 2006 William S. Aichele *† Chairman, President & Chief Executive Officer, Univest Corporation of Pennsylvania; Chairman & Chief Executive Officer, Univest National Bank and Trust Co. Marvin A. Anders *† Retired Chairman, Univest Corporation of Pennsylvania; Retired Chairman, Univest National Bank and Trust Co. James L. Bergey *† President & Sales Manager, Abram W. Bergey & Sons, Inc. R. Lee Delp * Principal, R.L. Delp & Company Charles H. Hoeflich *† Chairman Emeritus, Univest Corporation of Pennsylvania Norman L. Keller * Retired Executive Vice President, Univest Corporation of Pennsylvania Thomas K. Leidy *† Retired President & CEO, Leidy's, Inc. H. Ray Mininger * President, H. Mininger & Son, Inc. William G. Morral o Executive Director, North Penn United Way K. Leon Moyer † President & Chief Operating Officer, Univest National Bank and Trust Co. Merrill S. Moyer *† Retired Chairman, Univest Corporation of Pennsylvania; Retired Chairman, Univest National Bank and Trust Co. Mark A. Schlosser o President, Schlosser Steel, Inc. Paul Gregory Shelly *† President, Shelly Enterprises, Inc. John U. Young * Consultant &Director, Alderfer, Inc. Margaret K. Zook o Executive Director, Souderton Mennonite Homes Key * Director of Univest Corporation of Pennsylvania † Director of Univest National Bank and Trust Co. o Alternate Director of Univest Corporation of Pennsylvania 17 Univest Investments, Inc. 215.721.2112 14 North Main Street P.O. Box 64197 Souderton, PA 18964 Univest Insurance, Inc. 800.220.3077 521 West Main Street Lansdale, PA 19446 Univest Insurance, Inc. 800.875.0227 27 South Church Street West Chester, PA 19382 18 Montgomery County Locations Blue Bell 610.279.3901 694 DeKalb Pike Blue Bell, PA 19422 East Greenville 215.679.7928 321 Main Street East Greenville, PA 18041 Franconia 215.721.0707 Rt. 113 & Allentown Road Franconia, PA 18924 Green Lane 215.234.4511 101 Walnut Street P.O. Box 69 Green Lane, PA 18054 Harleysville 215.256.8048 Clemens Market 611 Main Street Harleysville, PA 19438 Kulpsville 215.368.1666 1715 Sumneytown Pike P.O. Box 226 Kulpsville, PA 19443 Skippack 610.222.3923 Township Line Road & Bridge Street (Rt. 113) Skippack, PA 19474 Souderton 215.721.2464 10 West Broad Street P.O. Box 64197 Souderton, PA 18964 Telford 215.723.4515 50 Penn Avenue Telford, PA 18969 Trappe 610.454.0883 595 West Main Street Trappe, PA 19426 Vernfield Rt. 63 & Shelly Road Harleysville, PA 19438 Opening Late 2006 Lansdale Area 215.362.8835 Rt. 63 & Forty Foot Road Lansdale, PA 19446 Lansdale East 215.412.9750 Clemens Market Hillcrest Shopping Center 620 East Main Street Lansdale, PA 19446 Line Lexington 215.822.3314 Rt. 309 & Line Lexington Road P.O. Box 7 Line Lexington, PA 18932 Montgomery 215.699.3525 Rt. 309 & Stump Road Montgomeryville, PA 18936 Royersford 484.931.2600 328 North Lewis Road Royersford, PA 19468 Schwenksville 610.287.7811 415 Main Street P.O. Box 8 Schwenksville, PA 19473 Bucks County Locations Bensalem 215.244.9200 3325 Street Road Suite 110 4 Greenwood Square Bensalem, PA 19020 Buckingham 215.794.5916 Hunt Acres Center 5006 York Road P.O. Box 511 Holicong, PA 18928 Chalfont 215.996.1633 195 East Butler Avenue Chalfont, PA 18914 Cross Keys 215.348.8620 842 North Easton Road Doylestown, PA 18901 Doylestown 215.348.7966 191 West State Street Doylestown, PA 18901 Feasterville 215.354.0330 40 East Street Road Feasterville, PA 19053 Hilltown 215.721.2471 Routes 113 & 309 Souderton, PA 18964 Hilltown Supermarket 215.721.9863 Clemens Market County Line Plaza Rt. 113 & County Line Road Souderton, PA 18964 Locations in Bucks and Montgomery Counties Coming Soon Vernfield Milford 215.536.4204 1950 John Fries Highway P.O. Box 170 Milford Square, PA 18935 Newtown 215.504.2828 3 Friends Lane Newtown, PA 18940 Perkasie 215.257.6607 545 Constitution Avenue Perkasie, PA 18944 Plumsteadville 215.766.3701 5829 Easton Road P.O. Box 446 Plumsteadville, PA 18949 Quakertown Solebury 215.538.3407 Clemens Market 1465-7 West Broad Street Quakertown, PA 18951 215.862.3750 Logan Square Shopping Center 6542D York Road New Hope, PA 18938 Sellersville 215.257.8060 835 Lawn Avenue Sellersville, PA 18960 Silverdale 215.257.9600 103 Baringer Avenue P.O. Box 207 Silverdale, PA 18962 Telford Supermarket 215.721.0973 Landis Market 2685 County Line Road Telford, PA 18969 Warminster 215.956.1611 601 Louis Drive Warminster, PA 18974 We Excel Together Dedicated employees are always ready to serve our customers, shareholders and community. Pictured from left to right are Richard M. O’Donnell (Retail Banking), Anita F. Schwenk (Retail Lending), Stephanie Radcliff (Human Resources), Janet E. Mackey (Administration), Gary S. Wolfer (Trust Investment), James M. Spindler (Wealth Management), Raymon M. Staley (Private Banking), Diane R. Moyer (Property Management), Irene M. Grove (Trust/Shareholder Services), Amy C. McConnell (Systems & Programming), Barbara J. Cornell (Operations), Tracy A. Fretz (Compliance). Ready to Face the Future Together We have accomplished great things over the past year. With our mission, vision and core values as our guides, we improved employee satisfaction and delivered excellent customer service; enhanced our integrated accomplishments and teamwork; and grew the business. As we look to the year ahead, we welcome the challenges and successes that will come. The year 2006 marks our 130th year of business. Our leadership team and our employees are proud that throughout our long history, we have remained true to our roots. We have built a strong foundation and we look to the future with confidence. All Univest employees wish to thank you, the shareholders of our enterprise, for your continued support. We excel together…and look forward to the opportunities in the future to serve you, our customers and the needs of our communities. Shareholder Information Corporate Headquarters Univest Plaza 14 North Main Street P.O. Box 64197 Souderton, Pennsylvania 18964 Shareholders’ Meeting The Annual Shareholders’ Meeting will take place at 10:45 a.m., Tuesday, April 11, 2006, in the Board Room at Univest Plaza, 14 North Main Street, Souderton, Pennsylvania. Univest Stock Transfer Agent For more information on Univest Corporation of Pennsylvania common stock, please call StockTrans, Inc. at 610.649.7300 or contact them at 44 West Lancaster Avenue, Ardmore, Pennsylvania 19003. You may also click on our investor relations link at www.univest.net. Univest Shareholder Information Hotline For more information on Univest Corporation of Pennsylvania, please call 800.660.4276 or 215.721.2434. Market Makers for Univest Corporation of Pennsylvania Common Stock Boenning & Scattergood, Inc. BNY Brokerage, Inc. Citigroup Global Markets, Inc., Credit Suisse Securities, USA Deutsche Banc Alex Brown Ferris, Baker Watts, Inc. Goldman, Sachs & Company Janney Montgomery Scott LLC Knight Equity Markets, L.P. Legg Mason Wood Walker Lehman Brothers, Inc. Tradition Asiel Securities UBS Securities, LLC Univest Corporation of Pennsylvania Univest Plaza 14 North Main Street P.O. Box 64197 Souderton, PA 18964 800.660.4276 www.univest.net 

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