Univest Financial
Annual Report 2006

Plain-text annual report

2006 Annual Report 2006 | Over 130 Years of Making a Difference in Our Communities Table of Contents | UNIVEST 2006 Annual Report Ta b l e o f C o n t e n t s 3 | Our History 4-5 | Financial Performance and Highlights 6-7 | Letter to Shareholders 8-13 | Growth Highlights 2006 14-15 | Officers and Board of Directors 16-17 | Locations 18 | Shareholder Information “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 O u r H i s t o r y 130 Years of Service, Leadership and Growth 3 If they could only see us now! The founders of Union National Bank would be proud of what their one-room operation has become in 130 years. They would be astounded at our growth and the opportunities we’ve seized to diversify our portfolio of financial solutions. Certainly, the founders would also be pleased to know their core philosophy stood the test of time. Through generations of strong leadership, multiple acquisitions expanding our financial offerings and service area and a corporate repositioning effort to enhance our brand, our vision of a true community bank remains as alive today as it was back in 1876. Univest was born as Union National Bank on June 12, 1876. Founded to serve the post-Civil War financial needs of a growing community, Union National grew slowly and steadily. Over the years, other corporate names were introduced or incorporated — Souderton Building and Loan Association; Pennview Savings Bank; First County Bank; and Suburban Community Bank. The branch network grew from the first location at 24 Main Street, Souderton, to include locations throughout Bucks and Montgomery counties. In 1973, Univest Corporation of Pennsylvania was formed and began operating as the holding company for Union National Bank and Pennview Savings Bank. In 2003, both banking subsidiaries merged to become Univest National Bank and Trust Co. Deregulation of U.S. financial institutions at the turn of the century enabled Univest to expand its scope of services to include other business entities, specifically investments and insurance. In 1999, Univest acquired The Fin-Plan Group, a company offering financial planning, investment management and brokerage services. The corporation began its foray into the insurance market in 2000 with the acquisition of George Becker Associates, Inc. In the next six years, Univest added several insurance agencies including the Gum Agency, Donald K. Martin & Co., and, in 2006, B.G. Balmer & Company. With the two most recent acquisitions, Univest now serves the Chester County community. Today, Univest Corporation of Pennsylvania provides Financial Solutions For Life through an integrated platform of solutions and three subsidiaries — Univest National Bank and Trust Co., Univest Insurance, Inc. and Univest Investments, Inc. As we reflect on the past 130 years and the positive changes we have made to compete in today’s financial services industry, it is appropriate to ask, “Can a financial institution offering banking, insurance, investments, wealth management and trust services from 34 offices still be a community bank?” Many years ago, the American Banking Association’s Banking Journal sponsored a contest to define “community bank.” The winning entry read: "A community bank is the financial lifeline of the community, providing the resources through which consumer and commercial customers perform the financial transactions of the local economy. It renders these services personally, confidentially and economically, while striving for community improvement and achievement of the investment return expectations of its shareholders." As you read this report highlighting our financial and operational performance during 2006, we believe you’ll conclude that Univest remains a community bank, and in fact sets a high standard for financial achievement, excellent service and community improvement. This is Univest — 130 years young and going strong. O u r H i s t o r y Financial | Performance F i n a n c i a l shareholders equity Shareholders’ Equity (In Millions) dividends earnings per share dividends 1.96 1.93 1.84 1.80 1.63 1.45 0.78 0.72 0.67 0.53 0.49 0.44 1,340 1,236 1,161 1,050 815 788 1.96 1.93 1.84 1.80 1.63 1.45 Net Loans and Leases (In Millions)* earnings per share Net Loans Book Values Net Loans Book Values 1,340 1,236 1,161 1,050 815 788 14.25 13.37 12.47 11.37 10.47 9.34 14.25 13.37 12.47 11.37 10.47 9.34 2001 2002 2003 2004 2005 2006 2001 2002 2003 2004 2005 2006 2001 2002 2003 2004 2005 2006 earnings per share 2001 2002 2003 2004 2005 2006 Earnings Per Share (In Dollars)** Net Loans 2001 2002 2003 2004 2005 2006 2001 2002 2003 2004 2005 2006 2001 2002 2003 2004 2005 2006 Book Values 1.96 1.93 1.84 1.80 1.63 1.45 2006 1,340 1,236 1,161 1,050 815 788 2006 14.25 13.37 12.47 11.37 10.47 9.34 2006 Dividends Declared (Per Share)** 1,050 0.78 0.72 0.67 0.53 0.49 0.44 815 788 90 1,340 1,236 1,161 Net Loans 0 20 40 60 80 earnings per share 120 100 2001 2002 2003 2004 2005 2006 1.96 1.93 1.84 1.80 1.63 1.45 2006 90 70 Book Values 2001 2002 2003 2004 2005 2006 Net Loans 1,340 Book Value (Per Share)** 1,236 1,161 50 30 14.25 13.37 10 12.47 11.37 10.47 9.34 1,050 815 788 2000 2001 2002 2003 2004 2005 2006 2006 90 70 50 30 10 2001 2002 2003 2004 2005 2006 Book Values 14.25 13.37 12.47 11.37 10.47 9.34 2000 2001 2002 2003 2004 2005 2006 2001 2002 2003 2004 2005 2006 2001 2002 2003 2004 2005 2006 70 90 2001 2002 2003 2004 2005 2006 2001 2002 2003 2004 2005 2006 70 2001 2002 2003 2004 2005 2006 2006 50 30 10 90 0.78 0.72 0.67 0.53 0.49 0.44 185 173 160 146 134 122 shareholders equity 2001 2002 2003 2004 2005 2006 2001 2002 2003 2004 2005 2006 dividends 2001 2002 2003 2004 2005 2006 0.78 0.72 2006 0.67 shareholders equity 90 70 50 30 10 0.53 0.49 0.44 dividends shareholders equity earnings per share 0 20 40 60 80 100 120 90 70 50 30 10 shareholders equity 185 173 160 146 134 122 185 173 160 146 134 122 90 70 30 10 185 173 160 146 134 122 0.78 0.72 0.67 0.53 0.49 0.44 2006 90 70 50 30 10 90 70 50 30 10 185 173 160 146 134 122 2001 2002 2003 2004 2005 2006 1.96 1.93 1.84 1.80 1.63 1.45 2006 2001 2002 2003 2004 2005 2006 0 20 40 2001 2002 2003 2004 2005 2006 dividends 2001 2002 2003 2004 2005 2006 2001 2002 2003 2004 2005 2006 50 2001 2002 2003 2004 2005 2006 50 30 10 80 *The Corporation acquired First County Bank on May 17, 2003 and Suburban Community Bank on October 4, 2003. 60 ** 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 100 120 70 of record as of April 6, 2005, distributed on April 29, 2005. 2006 50 30 10 2006 0 20 40 60 80 100 120 0 20 40 60 80 100 120 2006 2000 2001 2002 2003 2004 2005 2006 90 70 50 30 10 90 70 50 30 10 90 70 50 30 10 90 70 50 30 10 2006 2000 2001 2002 2003 2004 2005 2006 2006 2000 2001 2002 2003 2004 2005 2006 90 70 50 30 10 2001 2002 2003 2004 2005 2006 2006 5 2006 Financial Highlights At December 31, (in Thousands) Cash, interest-earning deposits and fed funds sold Investment securities Net loans and leases Other assets Assets Deposits Borrowings Other liabilities Liabilities 2006 $70,355 382,400 1,340,398 136,348 1,929,501 1,488,545 225,066 30,505 1,744,116 2005 $59,439 343,259 1,236,289 130,322 1,769,309 1,366,715 196,761 32,753 1,596,229 Shareholders' equity Total liabilities and shareholders' equity 185,385 $1,929,501 173,080 $1,769,309 For the years ended December 31, (in Thousands, Except Share and Per Share Data) Interest income Interest expense Net interest income Provision for loan and lease losses Net interest income after provision for loan and lease 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 2006 $105,166 43,651 61,515 2,215 59,300 25,417 49,958 34,759 9,382 $25,377 $14.25 1.96 1.95 0.78 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 *Weighted Average Shares Outstanding *Period End Shares Outstanding 12,960,074 13,005,329 12,867,080 12,947,001 12,840,596 12,863,427 *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. P e r f o r m a n c e Letter | to Shareholders 2 0 0 6 Y e a r o f G r o w t h To our Family of Shareholders, Customers and Employees: Univest Corporation just completed a milestone year, celebrating the bank’s 130 years of business success and service to our customers, communities, employees and shareholders. We continued to grow the Corporation by providing financial solutions, delivering excellent customer service and building strong relationships in our communities. The financial services industry in 2006 continued to be adversely impacted by an unfavorable interest rate environment. This has been the longest period of such a challenge for the banking industry and will remain problematic until these economic conditions change. Univest’s ability to overcome these challenges and achieve moderate, organic growth is a tribute to our dedicated employees. We are proud of our 2006 financial performance, reporting net income of $25,377,000. This represents a 2.1% increase over the previous record year. Univest’s vision of being a fully-integrated financial solutions provider with a diverse revenue base contributed to our financial success in 2006. Our nontraditional businesses were areas of particular strength, helping us reduce reliance on net interest income. Univest Insurance’s solid performance resulted from both organic growth and growth through the acquisition of B.G. Balmer & Co., Inc., a full-service agency located in West Chester, Pennsylvania. Univest Investments surpassed the half-billion dollar mark with more than $577 million in assets under management, while the Wealth Management & Trust Group exceeded $1 billion of managed assets. In May, Univest expanded its platform of financial solutions and services with a new business venture. Vanguard Leasing, Inc., a subsidiary of Univest National Bank and Trust Co., is a nationwide small ticket leasing company headquartered in Bensalem, Bucks County. This business will further help diversify Univest’s revenue base and increase profits. Through Univest National Bank and Trust Co., we continued our commitment to providing Financial Solutions For Life. We continued the expansion of our financial service center network with the opening of our Vernfield Office in Montgomery County. We also launched an aggressive e-commerce strategy to complement our traditional retail sales channel. For the first time, customers can visit www.univest.net, open a checking account and bank with Univest online. Among community banks, we are one of the leaders in providing e-commerce solutions to attract new customers with a preference for online banking. Commercial banking has been the driving force of our business since 1876 and continues to be the corporation’s foundation today. To better serve the needs of our corporate customers, we announced a new organizational structure in September, naming three market presidents. Assuming the new positions are Ronald S. Price, Chester County; Kenneth L. Keller, Bucks County; and Philip C. Jackson, Montgomery County. This new structure clearly delineates our markets into three service areas with strong leadership to help us deliver personalized, local service to the community and support the continued growth of the Univest brand. 7 In addition to our business achievements, Univest continued the tradition of making a difference in and around our communities. In May, 15 employees formed a Helping Hands team and traveled to Bayou LaBatre, Alabama to assist with building and clean up efforts in an area that was devastated by Hurricane Katrina. Our 130th anniversary celebration was a shining example of Univest’s “Community” core value in action. Events and promotions throughout our anniversary week in June attracted incredible media coverage, raising Univest’s profile throughout our service area. The Univest Grand Prix also helped significantly increase visibility for Univest and our communities on live television and through extensive print and radio publicity. The ninth annual race welcomed our first field of professional cyclists, entertained thousands of spectators and showcased the Univest name and the beauty of Bucks and Montgomery counties. Throughout our 130-year history, Univest’s business and community practices have been guided by our mission, vision and core values; but in the end, it is the people of Univest — more than 500 employees — who make our long-term success possible. Our strong culture, built and nurtured by our associates, earned us recognition in 2006 as one of the Top 100 Best Places to Work in Pennsylvania. As part of our 130th anniversary celebration, we recognized the contributions of more than two dozen employees who had devoted 30 or more years of service to Univest. During this past year, two long-time associates retired from their positions with Univest. After 35 years of service, Diane R. Moyer retired in August from her position as Vice President, Property Management. In late December, Fern M. Zepp retired from her position as Vice President and Senior Trust Administrator after 40 years of service. We want to thank Diane and Fern for their contributions and many years of leadership. In 2006, Univest succeeded in growing the Corporation and providing a fair profit to our shareholders. This is evident in the story that unfolds in the following pages. Please take this opportunity to read our 2006 annual report and reflect on our 130 years of business success. We’re proud of our rich heritage and the positive changes we’ve made over the years to grow our business into a fully integrated financial solutions provider. We realize we could not have come so far without the support of the communities we serve, 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 January 31, 2007 Growth Highlights | 2006 F o u n d a t i o n t o Suc c e e d Continuing our Tradition of Steady and Stable Growth When our company was established in 1876, our founders started a community bank dedicated to serving the public and contributing to the quality of life in their communities. As we mark 130 years in business, we reflect upon the foundation of our early years and realize the strength this philosophy still brings to Univest today. The year 2006 was highlighted by many achievements — record performance, growth initiatives and successes made possible by the leadership and support of our people. We celebrated the past, commemorated 130 years of making a difference in our communities and built and strengthened relationships to ensure success for the future. The prolonged period of flat interest rates and the resulting flat yield curve impacted industry performance throughout the year. In the last six months of 2006, an inverted yield curve — in which short-term rates actually exceeded key long-term rates — made financial achievement even more challenging. Competition in our markets also continued apace, as de novo banks provided consumers with more choices, and acquisitions and growth from existing banks strengthened many competitors. Despite increased pressures from competition and a challenging economy for the third consecutive year, Univest provided strong dividends and grew net profit by 2.1% over the previous record year. Univest remains a well capitalized institution, and the quality of our assets is strong. Delivering Integrated Solutions to Build Strong, Vital Communities The growth of our nontraditional businesses, restructuring of our corporate business and expansion of our network of financial service centers were some of our 2006 highlights. These accomplishments are especially significant because they prepare Univest for future success. In July, we took an important step to strengthen our presence and gain visibility in Chester County when we acquired B.G. Balmer & Company, a full-service insurance agency located in West Chester, Chester County. The Balmer agency and Donald K. Martin & Co., our 2005 insurance agency acquisition, increase our brand awareness and competitively position Univest for future growth in this new market. The acquisition, coupled with organic growth through the delivery of nontraditional products and services in 2006, helped to significantly increase our non-interest income and better positioned Univest as a fully integrated financial solutions provider. The performance of these nontraditional businesses represents one of Univest’s strengths as we look to continue our long-term profitable growth. Highlights 9 Vanguard Leasing, Inc., a new business venture which Univest established in May, will continue to help us enhance the nontraditional side of the bank. Specializing in leasing small ticket items such as commercial and industrial equipment, machine tools and material handling and medical equipment, Vanguard delivers solutions to businesses in 50 states. The company operates as an independent, wholly owned subsidiary of Univest National Bank and Trust Co., and will significantly contribute to future revenue and profits. Changing customer needs and a growing market area led to a new organizational structure in Corporate Banking. In September, Univest National Bank and Trust Co. appointed three market presidents to deliver strong, responsive, localized service in our three-county market. By putting local decision makers in each region and flattening the corporate structure, Univest has made our top executives more accessible to customers and improved internal efficiencies. Our new market presidents are Kenneth L. Keller in Bucks County, Ronald S. Price in Chester County and Philip C. Jackson in Montgomery County. Also in September, we opened the Vernfield Financial Service Center in Montgomery County, providing new opportunities for organic growth. The 3,100-square-foot, full-service office is located in a new shopping center with Landis Family Supermarket and other retail stores. During the year, we also achieved several noteworthy financial milestones. Univest Investments surpassed the $500 million mark in assets under management. Our Wealth Management & Trust Group, which has provided trust solutions for 83 years, reached $1 billion in assets under management. The respect and credibility our professionals have earned is underscored by the fact they are highly sought after for their views on the economy by local, regional and national press such as CNBC, Bloomberg TV, BusinessWeek and The Wall Street Journal. S o l u t i o n s “Univest provided strong dividends and grew net profit by 2.1% over the previous record year.” Service Excellence | Univest F i n a n c i a l S o l u t i o n s F o r L i f e Providing Convenient Solutions For Every Stage of Life As Univest provides Financial Solutions For Life to communities throughout Bucks, Chester and Montgomery counties, we seek to acquire new customers through convenient, value-added solutions. Approximately 63 million Americans bank online, or about 43 percent of Internet users — a 20 percent increase over 2005. Consumers in their 30s and 40s are the most frequent online bankers, though people in their late teens, 20s, 50s and early 60s are not far behind. Univest was one of the first community banks in the region to make it possible for customers to open a checking account and bank online in 2006. Through our newly redesigned website, www.univest.net, Univest launched competitive solutions and provided a host of financial resources to accommodate this growing online customer base. The banking market is dynamic, and we are constantly investigating enhancements to remain competitive while tailoring our solutions to meet the needs of consumers and businesses who use this delivery channel. In the fourth quarter, we introduced another convenient service for businesses. Onsite CheckPass™ is a new check depositing product, enabling business customers to easily and securely process checks from the convenience of their offices. Univest was again one of the leaders in bringing this solution to our marketplace. Onsite CheckPass is a product to build and strengthen relationships in Bucks, Chester and Montgomery counties. As our market continues to grow — whether through geographic or electronic expansion — we are intentionally building on our solid foundation established 130 years ago. Our goal is to build on our record of achievement and success through planned growth and new directions, to develop long-lasting relationships with customers. Excellence 11 Making a Difference in Our Communities — Yesterday, Today and Tomorrow Although offering new products and services is important to Univest as we seek to penetrate our customer base and increase our market share, how we treat our customers is paramount. Over the last few years, we have made significant strides in improving our service to internal and external customers. Through our Service Excellence program, we have created positive experiences for customers. In 2007, we will begin promoting the Service Excellence program to develop our brand of outstanding service as a competitive advantage. Excellent service begins with more than 500 Univest associates. One of the surest signs of a healthy and profitable commercial enterprise is the job satisfaction of its employees. In 2006, we were proud to be named one of the “Best Places to Work in Pennsylvania.” Achieving this distinction has been one of our corporate-wide goals, so we are particularly pleased by this honor. The employees of Univest live up to our Mission Statement’s call to “maintain an active role in our communities” — and did so with pride and distinction this past year. We shined a light on our region and its people — and we answered many calls to help the less fortunate. B u i l d i n g Re l a t i o n s h i p s “The employees of Univest live up to our Mission Statement’s call to ‘maintain an active role in our communities’ — and did so with pride and distinction this past year.” Community | Highlights Un i v e s t G r a n d P r i x The Univest Grand Prix, our signature community event of the year, was an extraordinary success in 2006. For the first time in the history of the event, the Univest Grand Prix was broadcast on live television. We welcomed our first field of professional cyclists to compete in the two days of racing in Souderton, Montgomery County and in Doylestown, Bucks County. The Souderton race incorporated four new municipalities — Hatfield, Towamencin, Upper Gwynedd and Lansdale, with Lansdale hosting children’s sprints. A first-ever high school race was held in Souderton, and local businesses and nonprofit organizations were on hand to participate in the popular community festival. The Sunday race in Doylestown was again held in conjunction with the annual Doylestown Arts Festival, which attracted thousands of spectators. This year’s race had all the hallmarks of a world-class professional event: top riders, strong media and spectator appeal and an established television presence in the Philadelphia (Comcast SportsNet, WFMZ-TV) and national (OLN, The Outdoor Life Network, which is the official broadcaster of the Tour de France) markets. While the Univest Grand Prix continued to strengthen our brand in Bucks and Montgomery counties, our 130th anniversary also significantly raised awareness of Univest’s rich history. We celebrated this milestone throughout the year and held special events during our anniversary week in June. We sponsored the Univest Gas Sale, designed to provide some relief from the high cost of gasoline to residents of our Montgomery and Bucks County communities. The sale attracted long lines of motorists and garnered print and broadcast news coverage, including stories on four local television stations. The week-long celebration also included a community celebration at our corporate headquarters in Souderton. Four generations of Univest leaders were on hand to recognize dozens of employees who had been with Univest for more than 30 years. A highlight during the commemorative ceremony was the donation of a total of $130,000 to seven local nonprofit organizations. This significant contribution demonstrated Univest’s ongoing commitment to making a difference in our communities. The corporation’s community mindedness and philanthropic philosophy were highlighted in a lengthy article in the Philadelphia Inquirer. Throughout the year, Univest employees demonstrated their commitment to our communities by volunteering their time to nearly 500 organizations and helping others in need. In May, 15 employees, in cooperation with Mennonite Disaster Services, traveled south to assist residents of Bayou LaBatre, Alabama, whose town and homes had been devastated by Hurricane Katrina. Employees will be given another opportunity to volunteer time to the hurricane relief efforts in April 2007. On a corporate level, Univest continues to support worthy causes with financial commitments — and, in many cases, commitments of time — to Partners-in-Education, Central Bucks Chamber of Commerce’s Bucks Fever program, Indian Valley Arts Foundation’s Concert Sundaes in the Park, Artists in Action and various youth and community Community 13 orchestras and choirs. In 2006, Univest contributed more than $1 million to the communities we serve. Univest's social responsibility continues to benefit the individuals and nonprofit organizations throughout our communities, while raising brand awareness and building relationships throughout the region. transactions of the local economy and strives for community improvement. This is the responsibility of our people, and their hard work, dedication and daily efforts in 2006 strengthened our reputation as a community bank and positioned Univest as a leader in the markets we serve. Our Vital Work as a Community Bank Continues For Univest, our customers, communities, employees and shareholders, the question posed earlier as to whether we are a community bank is more than a rhetorical exercise. Being a community bank defines what we are and what we will always be. It shapes our relationships with all our audiences. It provides a roadmap for our success. And, it challenges us to be innovative in order to remain competitive in a dynamic and ever-changing marketplace. As our industry changes and competition continues to increase, our business philosophy as a community bank has not wavered in 130 years. Our customers and communities want and need a financial institution sensitive to their changing needs — one that performs the financial We’ve come a long way from the one-room operation in 1876. This annual report has highlighted the many ways Univest and our employees continue to grow the corporation through challenging economic times. What sets Univest apart in a competitive industry is our ability to keep up with rapid change, while continuing to honor the deeply held principles that have made us successful and will guide us toward a bright future. As we mark our 130th year of business success, the employees of Univest wish to thank you, the shareholders of our institution, for your continued support. Our vision is based on a corporate purpose that ensures a long and profitable future for Univest Corporation of Pennsylvania. We will keep you informed as our vision for the future translates into action, and we look forward to joining you in the continuing, vital work of a community bank. 1 3 0 t h An n i v e r s a r y “As our industry changes and competition continues to increase, our business philosophy as a community bank has not wavered in 130 years.” Officers | Univest S t r o n g L e a d e r s h i p Univest Corporation of Pennsylvania Univest National Bank and Trust Co. Executive Management Group Executive Management Group William S. Aichele, Chairman, President & William S. Aichele, Chairman and Chief Executive Officer Chief Executive Officer Wallace H. Bieler, Senior Executive Vice President, Chief Operation Officer, Chief Financial Officer and 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 K. Leon Moyer, President and Chief Operating Officer Wallace H. Bieler, Senior Executive Vice President, Chief Financial Officer and Corporate Secretary Philip C. Jackson, Market President, Montgomery County Kenneth L. Keller, Market President, Bucks County Ronald S. Price, Market President, Chester County Richard M. O'Donnell, Executive Vice President Duane J. Brobst, Executive Vice President, Chief Credit Officer Barry L. Stoltzfus, Executive Vice President Richard M. O'Donnell, Executive Vice President Richard R. Swartley, Executive Vice President Barry L. Stoltzfus, Executive Vice President Univest Investments, Inc. William S. Aichele, Chairman Kenneth D. Hochstetler, President Wallace H. Bieler, Secretary, Treasurer Univest Insurance, Inc. William S. Aichele, Chairman Kenneth D. Hochstetler, President Wallace H. Bieler, Secretary, Treasurer Richard R. Swartley, Executive Vice President Vanguard Leasing, Inc. (Subsidiary of Univest National Bank and Trust Co.) Hugh W. Connelly, President Wallace H. Bieler, Secretary, Treasurer Delview, Inc. (Subsidiary of Univest National Bank and Trust Co.) Other Principal Subsidiaries of Univest Corporation of Pennsylvania Univest Delaware, Inc. Univest Realty Corporation Univest Reinsurance Corporation Board of Directors 15 William S. Aichele *† Chairman, President & Chief Executive Officer, Univest Corporation of Pennsylvania; and Chairman, and Chief Executive Officer, Univest National Bank and Trust Co. William G. Morral, CPAo Financial Consultant; former CFO Moyer Packing Company Marvin A. Anders *† Retired Chairman, Univest Corporation of Pennsylvania; and Retired Chairman, Univest National Bank and Trust Co. K. Leon Moyer † President and Chief Operating Officer 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 D i r e c t o r s Thomas K. Leidy *† Retired President & CEO Leidy's, Inc. Merrill S. Moyer *† Retired Chairman, Univest Corporation of Pennsylvania; and 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 Bologna Co., Inc. Margaret K. Zook o Executive Director Souderton Mennonite Homes H. Ray Mininger * President H. Mininger & Son, Inc. * Director of Univest Corporation of Pennsylvania † Director of Univest National Bank and Trust Co. o Alternate Director of Univest Corporation of Pennsylvania Our Locations | Univest F i n a n c i a l S e r v i c e C e n t e r s Montgomery County Locations Blue Bell 610.279.3901 694 DeKalb Pike Blue Bell, PA 19422 Lansdale Area 215.362.8835 Rt. 63 & Forty Foot Road Lansdale, PA 19446 Royersford 484.931.2600 328 North Lewis Road Royersford, PA 19468 Telford 215.723.4515 50 Penn Avenue Telford, PA 18969 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 Kulpsville 215.368.1666 1715 Sumneytown Pike P.O. Box 226 Kulpsville, PA 19443 Bucks County Locations Bensalem 215.244.9200 3325 Street Road Suite 110 Bensalem, PA 19020 Buckingham 215.794.5916 Hunt Acres Center 5006 York Road P.O. Box 511 Holicong, PA 18928 Lansdale East 215.412.9750 Super Fresh 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 Schwenksville 610.287.7811 415 Main Street P.O. Box 8 Schwenksville, PA 19473 Telford Supermarket 215.721.0973 Landis Market 2685 County Line Road Telford, PA 18969 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 Trappe 610.454.0883 595 West Main Street Trappe, PA 19426 Vernfield 215.256.9413 Shelly Square Shopping Center Rt. 63 & Shelly Road Harleysville, PA 19438 Chalfont 215.996.1633 195 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 Super Fresh County Line Plaza Rt. 113 & County Line Road Souderton, PA 18964 Financial Service Centers in Bucks and Montgomery Counties 17 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 215.538.3407 GIANT Food Stores 1465-7 West Broad Street Quakertown, PA 18951 L oc a t i o n s Sellersville 215.257.8060 835 Lawn Avenue Sellersville, PA 18960 Solebury 215.862.3750 Logan Square Shopping Center 6542D York Road New Hope, PA 18938 Silverdale 215.257.9600 103 Baringer Avenue P.O. Box 207 Silverdale, PA 18962 Warminster 215.956.1611 601 Louis Drive Warminster, PA 18974 Univest National Bank and Trust Co. offers 12 retirement community financial service centers throughout Bucks and Montgomery counties. For a complete listing of our retirement community offices, please visit www.univest.net. Shareholder | Information S h a r e h o l d e r I n f o r m a t i o n Corporate Headquarters Univest Plaza 14 North Main Street P.O. Box 64197 Souderton, Pennsylvania 18964 Univest Insurance Locations Univest Insurance, Inc. — Lansdale Office 521 Main Street PO Box 391 Lansdale, Pennsylvania 19446 Univest Insurance — Chester County Divisions B.G. Balmer & Company Donald K. Martin & Co., Inc. Glenloch Corporate Campus 1473 Dunwoody Drive West Chester, Pennsylvania 19380-1478 Univest Investments Headquarters Univest Plaza 14 North Main Street P.O. Box 64197 Souderton, Pennsylvania 18964 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, PA 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. Citigroup Global Markets, Inc. Ferris, Baker Watts, Inc. Goldman, Sachs & Company Hill, Thompson, Magid & Co. Knight Equity Markets, L.P. Lehman Brothers, Inc. Sandler O'Neill & Partners Susquehanna Financial Group, LLP Shareholders' Meeting UBS Securities, LLC The Annual Shareholders' Meeting will take place at 10:45 a.m., Tuesday, April 10, 2007, in the Board Room at Univest Plaza, 14 North Main Street, Souderton, Pennsylvania. Our Mission 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. Core Values Tradition | Integrity | Excellence | Community | Spirituality Fortum scept cuemesto volupate lentranse nexor anelisti quillosti xelivi sequat est ad maxim il citius qui nodstrum zu elipse scept. O u r M i s s i o n Annual Report 2006 Univest Plaza | 14 North Main Street | P.O. Box 64197 | Souderton, PA 18964 1.800.660.4276 | www.univest.net 

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