Univest Financial
Annual Report 2008

Plain-text annual report

2 0 0 8 A N N U A L R E P O R T Annual Report Guiding the Way 2 0 0 8 A N N U A L R E P O R T Annual Report Univest Vision Statement “To be the best integrated financial solutions provider in the market.” TABLE OF Contents Financial Performance 2 Financial Highlights 3 Letter to Shareholders 4-5 2008 Highlights 6-11 Locations 12-13 Officers and Board of Directors 14-15 Shareholder Information 16 1 2008 FINANCIAL Performance 2 1461601731852031,0501,1611,2361,3401,342.53.67.72.78.8011.3712.4713.3714.2515.49 Shareholders’Equity(in millions)NetLoansandLeases (in millions)DividendsDeclared (per share)BookValue (per share)20081992007200620052004200320071,437200820062005200420032007.8020082006200520042003200715.71200820062005200420032008 FINANCIAL Highlights At December 31, (in Thousands) 2008 2007 Cash, interest-earning deposits and federal funds sold . . . . . . . . . . . $40,066 Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443,026 $ 59,385 423,448 Net loans and leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,437,318 1,342,356 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164,387 147,316 Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,084,797 $ 1,972,505 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,527,328 $ 1,532,603 Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312,736 Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,526 208,729 32,447 Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,881,590 1,773,779 Shareholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203,207 198,726 Total liabilities and shareholders’ equity . . . . . . . . . . . . . . $2,084,797 $ 1,972,505 For the years ended December 31, (in Thousands, Except Share and Per Share Data) 2008 2007 2006 Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $108,366 $ 116,533 $ 105,166 Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,310 Net interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,056 Provision for loan and lease losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,769 Net interest income after provision for loan and lease losses . . . . . . . . . . 57,287 Noninterest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,306 Noninterest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,225 Net income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,368 Applicable income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,778 54,127 62,406 2,166 60,240 26,879 52,211 34,908 9,351 43,651 61,515 2,215 59,300 25,417 49,958 34,759 9,382 Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,590 $ 25,557 $ 25,377 Book value per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15.71 $ 15.49 $ 14.25 Net income per share: Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.60 Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.60 Dividends declared per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.80 1.98 1.98 0.80 1.96 1.95 0.78 Weighted average shares outstanding. . . . . . . . . . . . . . . . . . . . . 12,872,889 12,884,804 12,960,074 Period end shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . 12,938,514 12,830,609 13,005,329 3 LETTER TO Shareholders To our Family of Employees, Customers and Shareholders The year 2008 was a historic one in many ways for the financial industry. We experienced the impacts of decades of easy money and innovative, sometimes risky, financial products on an overleveraged society. Wall Street suffered, businesses collapsed, unemployment soared and the federal government intervened. By the end of the year, it was clear our nation was in a recession and facing an economic crisis greater than many of us had seen in our lifetimes. While Univest Corporation was not immune to the economic challenges in 2008, we weathered the financial storm favorably and ended the year with a strong performance compared to our peers. Our solid results are attributable to a focused and disciplined business approach, strong capital position and high-quality credit culture. As of December 31, 2008, we reported net income of $20,590,000. In a year when, nationally, 23 bank operations failed and many more were forced to take federal relief funds, our solid performance is a testament to the strength of our core operations. We achieved this growth organically, by working hard to develop profitable relationships and by integrating our array of financial solutions. The strength of our business was also visible in the community as we celebrated the opening of two new facilities in 2008. On June 25, we held the Grand Opening of our new Operations Center in Souderton, Montgomery County, followed by the opening celebration on August 1 of our relocated financial service center in Bensalem, Bucks County. Both 4 locations increase our presence in these communities, enhance the economic vitality of the towns, strengthen employee and customer experiences and improve operational efficiencies. Throughout the second half of the year the economic crisis escalated, causing fear and uncertainty among many Americans. As a socially responsible company committed to helping our employees, customers, shareholders and communities navigate these difficult times, we proactively reached out through various communication channels to provide information, guidance and leadership. When faced with the decision of whether to participate in the Capital Purchase Program of the U.S. Treasury’s Troubled Asset Relief Program (TARP), we declined, knowing we remain well capitalized, and we did not believe participation was in our shareholders’ best interests. We believe our current capital position is sufficient to support the communities we serve and to enhance shareholder value by growing our core business and our earnings capacity. We’ve stood the test of time for 132 years and we’re confident in our ability to remain a strong financial institution through our philosophy of conservative, disciplined management. Our confidence is demonstrated in our ability to continue operating with a “business as usual” philosophy. We remain committed to strengthening our local economy by investing in and supporting our local communities; and we will continue our pursuit of excellence through stable and steady growth for the long-term benefit of our corporation and shareholders. We believe our future is bright, and as a result took steps in the second half of the year to position the corporation for future growth. In late September, we announced our entry into the Lehigh Valley market, a region experiencing a commercial renaissance and ripe with opportunity for compass, keeping us on track to accomplish our goals while also reminding us there is more to banking than just money. In 2008, an extensive management succession plan was presented to the board of directors, and a new executive management team was identified to solidify our long-term strategic direction and guide the way into the future. As part of the strategic process, the executive management team established a new Vision Statement. We clearly accomplished the old Vision, to become an integrated financial solutions provider. Now, our new Vision provides focus and direction for our employees: “To be the best integrated financial solutions provider in the market.” We’re proud of our accomplishments and of our efforts to overcome the challenges facing our industry and our nation. We’ve remained a leader and we’ve acted the part, upholding our strong traditions and guiding our customers, employees and shareholders during these uncertain financial times. On behalf of the entire Univest family, we want to thank you for your continued support, confidence and investment. Sincerely, William S. Aichele Chairman, President and Chief Executive Officer January 31, 2009 our array of financial solutions. In November, we established a Mortgage Banking business and named Edward D. Hughes President of this new venture to expand our lending capabilities and provide existing homeowners secure financing. In December, we completed two strategic acquisitions – Liberty Benefits, Inc. and Trollinger Consulting Group – to diversify our nontraditional lines of business. We expect both acquisitions to contribute significantly to our financial performance in 2009 and beyond. Our strong record of achievement in 2008 reflects the value of our greatest asset – our employees. This past year, we challenged them to think like entrepreneurs and embrace a culture of excellence to help differentiate Univest in our competitive marketplace. It is clear our employees are building a stronger organization, and through their efforts we were recognized for the third consecutive year as one of the Top 100 Best Places to Work in Pennsylvania, improving our ranking among large companies since 2006 from 32 to 14 to number six. Two of Univest’s great leaders and admired community members passed away during this past year. Harold M. Mininger, Director Emeritus, devoted 53 years of service to our company. He served on the boards of Univest National Bank and Trust Co. and Univest Corporation. Wallace H. Bieler, retired Chief Operation Officer, Senior Executive Vice President and Corporate Secretary, dedicated 42 years to Univest, first as an employee and then as a Board Member. H. Paul Lewis, retired Executive Vice President of Univest National Bank and Trust. Co., was appointed as an Alternate Director to fill the vacant seat following Wally’s passing. We have been blessed with strong leadership and talented associates who embrace Univest’s Mission, Vision and Core Values. These key statements are our 5 5 2008 Highlights “To be a strong, influential leader in the markets we choose to serve.” This goal, set forth in Univest Corporation’s Mission Statement, certainly was put to the test in 2008. The economic trials our nation and world faced in the last half of the year would, in fact, test the mettle of every consumer, commercial enterprise and government entity. In the fall, the long-developing credit crunch became Wall Street’s biggest crisis since the Great Depression. Some of the world’s largest – and, presumably, strongest – investment banks went bankrupt, were acquired or reinvented themselves as commercial banks. The nation’s largest insurance company and largest savings and loan both were seized by the government. As hundreds of billions of dollars in mortgage-related investments went bad, stock markets world-wide crashed and entered a period of high volatility. Financial regulators throughout the world attempted to coordinate efforts to contain the crisis. While national and local media headlines proclaimed the coming effects of the crisis on financial markets, much less was being communicated – especially in the early days of the crisis – about what it all meant on the local level. Consumers and businesses wanted answers to critical questions: “Should I trust my financial institution with my money?” “Are my savings safe?” “Can I still borrow money to help strengthen my business?” “Where should I be investing my money?” The information void cried out for leadership and guidance. The marketplace looked to institutions demonstrating integrity and conducting business with an unwavering commitment to sound business practices. Guiding the Way Univest led the way by quickly acting to increase greater understanding of the financial crisis. By providing important background and context, we sought to answer important questions about the crisis, including changes in FDIC insurance coverage and an explanation of the federal government’s Emergency Economic Stabilization Act of 2008. As media attention surrounding the financial crisis grew, we deployed a financialSEN$E communications strategy designed to help our customers, communities, employees and shareholders navigate these challenging times. Through newspaper editorials, print advertisements and broadcast interviews; news releases offering financial planning tips; e-mail communications with customers, employees and shareholders; seminars for local businesses held in partnership with local chambers of commerce; and face-to-face discussions with customers and community members in our financial centers, we sought to calm the understandable concerns through information. Univest was roundly praised for our efforts by customers, employees, banking competitors and community representatives. Univest’s strength and foresight enabled us to make prudent decisions during this difficult time. We declined to accept money from the Troubled Assets Relief Program, or TARP. Led by the United States Treasury Department, TARP was established to restore liquidity and improve the capital position of the United States financial system. It was the largest component of the government's measures in 2008 to address the subprime mortgage crisis. Our refusal to seek TARP money demonstrated our confidence in Univest’s future and in our ability to manage through these tough 6 economic times without seeking government assistance. Our focused and disciplined approach is a testament to our 132-year history and our long-standing operating philosophy of prudence; solid, disciplined business practices; and long- term growth. Business Highlights Leadership Through Performance For 132 years, Univest has set a high standard among community banks for financial achievement, excellent service and community improvement. In 2008, despite the historic economic downturn, we continued to guide the way for customers, communities, employees and shareholders by delivering strong performance in comparison to our peer group, reporting net income of $20,590,000. Our disciplined approach to lending (the fact we didn’t participate in any subprime loans), our fully-integrated platform of financial solutions and our focus on experiential excellence helped us continue to grow the company organically in 2008. In addition to our solid earnings in a difficult economic environment, the strength of our financial position can be highlighted through a number of key indicators. Our return on assets of 1.02% and return on equity of 10.09% are superior to those of our local peer group and to those of seven of 10 peers with whom we compare ourselves on a regional basis. We have maintained a healthy and balanced dividend payout ratio. While many financial institutions have felt compelled to retain shareholder loyalty by paying out up to 90% of their earnings in dividends, our 2008 payout of approximately 50% to shareholders and 50% to capital for future growth is more sustainable. We finished 2008 in a strong capital position and with solid core operations. “The marketplace looked to institutions demonstrating integrity and conducting business with an unwavering commitment to sound business practices.” 7 The strength of our performance during one of the most challenging years our industry has seen is a result of Univest’s seasoned, steady leadership and our actions to make early adjustments to market conditions. In the summer, we took proactive steps to minimize the impact of the harsh economic conditions in the second half of the year by reviewing the credit quality of our loan portfolio and determining the risk level of every loan on a loan-by-loan basis. This enabled us to plan for the future, while also confirming the strength and solid credit quality of our lending practices. Unlike many financial institutions in 2008, Univest did not experience any charge offs in our residential loan portfolio. Growth in Challenging Times Several exciting developments helped to improve service to Univest National Bank and Trust Co. customers in 2008. In March, we opened a new service center to assist customers by phone with solutions relating to their financial needs. The primary objective of the center is to provide a quality service experience to customers through live, convenient, solutions-oriented interactions with experienced Univest representatives. In addition, the service center augments the reach of our traditional office locations through extended hours and ease of availability. In June, we held a ribbon cutting and community open house celebrating our new Operations Center at Harbor Place in Souderton. The state-of-the-art center, moved from the Hilltown location, houses the company’s computer systems and technology, mail processing and various key operational functions. Relocating the operation is tangible evidence of Univest’s commitment to Souderton’s revitalization initiative. A new, more visible and convenient Bensalem Financial Service Center was opened in August, bringing superior customer experiences and an array of integrated financial solutions to individuals, businesses and nonprofits in lower Bucks County. This southernmost location serves as an anchor for our Feasterville, Warminster and Newtown offices in this opportunity- rich county. Technology and the use of electronic deposit-gathering channels remain key to Univest’s strategy. In the spring, we launched an e-commerce campaign called UnivestOne®. The six-week campaign resulted in $17 million in new deposits. Our two-year-old Onsite CheckPass product and newly redesigned Merchant Services product remain highly competitive and bring valuable solutions to our business customers. Univest took the first step toward expanding into the Lehigh Valley, the region north of our core service area, with the appointment of David L. Kepler as executive vice president of corporate banking business development and relationship management in the region. The Lehigh Valley is one of the state’s healthiest economic regions and is flourishing with diverse business activity. Navigating and securing new opportunities will fuel future business growth. Providing Strong Integrated Solutions Our nontraditional businesses once again were areas of particular strength for Univest. The insurance industry continued to operate in a soft market. Stiff competition, lower premiums and catastrophic losses challenged the industry. Yet Univest continued to use our 2004 and 2006 acquisitions of Donald K. Martin & Company and B. G. Balmer & Co., Inc., respectively, to bolster this business. And in December, we announced the acquisition of Liberty Benefits, Inc., a full-service employee benefits brokerage and consulting firm specializing in comprehensive employee benefits packages for businesses with two to 500 employees. 8 The employee benefits field is one of the insurance industry’s fastest growing, and the Liberty Benefits acquisition marks an important milestone in our goal to provide more robust, integrated financial solutions for our customers. The plunging stock market negatively impacted Univest’s Wealth Management and Trust Group and Investments Group, which had experienced record years in 2007. But we set a course for improved performance and even greater success in 2009 through a second December acquisition: Allentown-based Trollinger Consulting Group, an independent actuarial, administrative, consulting/compliance and investment counseling firm exclusively serving municipal pension plan clients. This company not only expands our investments offerings into a new and profitable niche, but also complements our expansion into the Lehigh Valley with a location in the heart of Allentown. Vanguard Leasing, Inc., the equipment finance subsidiary of Univest National Bank and Trust Co., officially changed its name to Univest Capital, Inc. in January. The company continues to perform ahead of expectations, and the mutual integration of Univest’s full range of financial solutions and equipment financing creates a powerful financial resource for business customers. Guiding the Way in our Communities While the economic crisis of 2008 provided Univest the opportunity to demonstrate leadership, guiding the way for our publics wasn’t limited to explaining the complexities of the economic downturn. Through our financialSEN$E literacy program, we offer financial advice and tips on saving and investing throughout the year to build stronger futures for our communities. “The strength of our performance during one of the most challenging years our industry has seen is a result of Univest’s seasoned, steady leadership and our actions to make early adjustments to market conditions.” 9 During Community Banking Week in April, we continued with our financialSEN$E outreach by holding a “Dollar$ and $en$e” event for children with the curriculum support from the ABA Teach Children to Save program. These key initiatives educate children about the importance of saving, budgeting and spending. In addition, we hosted a “Preventing Identity Theft” seminar and three free sensitive document shredding events for the public. We also continued our sponsorship of NBC10’s “Money School” with a seminar on “Smart Money Choices for Women.” These community events and forums enhanced Univest’s visibility and our brand. Univest supports our communities by showcasing them through the annual running of the Univest Grand Prix – our largest community event of the year. This year’s Grand Prix was held in September, on a wet course, as the remnants of Tropical Storm Hanna blew through Montgomery County. Despite the poor weather, the attendance at the 11th running of this classic road race – as well as at the following day’s Univest Criterium of Doylestown – was excellent, attracting more than 25,000 spectators for a weekend of cycling excitement. Univest employees continued to set a high standard for community leadership and involvement in 2008. The total number of community organizations to which our employees volunteered their time and talent has reached an all-time high, and the total number of community volunteer positions held by Univest employees jumped by nearly 10% over 2006, the last year our community involvement survey was conducted. The number of employees who volunteer their time also increased about 10%, and more than half our employees actively serve their communities. Univest Employees Our Navigators Toward Success If Univest’s Mission, Vision and Core Values set the course towards success, our employees are the navigators. Of Univest’s three primary areas of focus – top line revenue growth, cultural excellence and entrepreneurial thinking – two are directly linked to the performance of our employees. Our service excellence initiative, which focuses on nurturing a culture of accountability, responsiveness and empowerment, enables employees to think entrepreneurially and take a stake in the success of the business. Building camaraderie and a culture of deep respect among our employees is the first step in delivering on our experience-based differentiation business priority. In 2008, we began to see organizational acceptance of this new standard. Our employees have a deeper appreciation for how customer loyalty is driven by quality experiences, and we have rewarded employees for their efforts in creating these experiences. The employee experience, too, is reaching new heights as evidenced by two important developments. First, we have reduced employee turnover, which was one of our top 10 priorities for 2008. Second, Univest was once again named among the Best Places to Work in Pennsylvania. In 2006, we were ranked as the state’s 32nd best company to work for in the large company category. In 2007, we moved up to #14. In 2008, we soared to the 6th best large company to work for in the state. This is an accomplishment of which we’re all extremely proud – and it’s made all the more significant by the fact that employee surveys comprised two-thirds of the ranking criteria. Ultimately, creating quality experiences will help Univest further solidify customer relationships, build shareholder equity, retain talented employees and build our brand in the communities we serve. 10 Guiding the Way for 132 Years The year 2008 will leave an indelible mark in our nation’s history. An economic tsunami swept away entire businesses and the jobs and savings of millions of Americans. Our nation experienced 12 months of a recession as a result of years of irresponsible lending and investment practices. The financial consequences will undoubtedly continue well into 2009 along with the crisis of confidence in our financial markets. At Univest, we continue to maneuver through these challenging times, and we have experienced a “flight to quality,” as consumers and businesses have rewarded us by entrusting us with their financial dreams. Over our 132-year history, Univest’s strength has been characterized by a focused and disciplined business philosophy. As many financial institutions foundered under the weight of unwise practices, Univest’s integrity and long-term focus buoyed our business in 2008. Not only did our corporation weather the financial and economic storm of the past year far better than many of our peers, we also stayed true to our Mission, Vision and Core Values by providing important guidance to our customers, communities, employees and shareholders. It is a true sign of leadership that when circumstances compel others to pursue self- preservation, leaders focus on the needs of those who depend upon them. In this sense, 2008 was not only a successful year for Univest, but a proud and gratifying one as well. The employees of Univest wish to thank you, the shareholders of our corporation, for your continued support and loyalty. We look forward to working together to serve you and the needs of our communities in 2009. “Of Univest’s three primary areas of focus – top line revenue growth, cultural excellence and entrepreneurial thinking – two are directly linked to the performance of our employees.” 11 UNIVEST NATIONAL BANK AND TRUST CO. Financial Service Centers MONTGOMERY COUNTY Perkasie 215.257.6607 545 Constitution Avenue Perkasie, PA 18944 Blue Bell 610.279.3901 694 DeKalb Pike Blue Bell, PA 19422 Royersford 484.931.2600 328 North Lewis Road Royersford, PA 19468 Plumsteadville 215.766.3701 5829 Easton Road Plumsteadville, PA 18949 East Greenville 215.679.7928 321 Main Street East Greenville, PA 18041 Schwenksville 610.287.7811 415 Main Street Schwenksville, PA 19473 Quakertown 215.538.3407 GIANT Food Stores 1465-7 W. Broad Street Quakertown, PA 18951 Sellersville 215.257.8060 835 Lawn Avenue Sellersville, PA 18960 Silverdale 215.257.9600 103 Baringer Avenue Silverdale, PA 18962 Solebury 215.862.3750 Logan Square Shopping Center - York Road New Hope, PA 18938 Telford Supermarket 215.721.0973 Landis Market 2685 County Line Road Telford, PA 18969 Warminster 215.956.1611 601 Louis Drive Warminster, PA 18974 Skippack 610.222.3923 Township Line Road & Route 113 Skippack, PA 19473 Souderton 215.721.2464 10 W. Broad Street Souderton, PA 18964 Telford 215.723.4515 50 Penn Avenue Telford, PA 18969 Trappe 610.454.0883 595 W. Main Street Trappe, PA 19426 Vernfield 215.256.9413 2870 Shelly Road Harleysville, PA 19438 Franconia 215.721.0707 Route 113 & Allentown Road Franconia, PA 18924 Green Lane 215.234.4511 101 Walnut Street Green Lane, PA 18054 Kulpsville 215.368.1666 1715 Sumneytown Pike Kulpsville, PA 19443 Lansdale Area 215.362.8835 Route 63 & Forty Foot Road Lansdale, PA 19446 Line Lexington 215.822.3314 Route 309 & Line Lexington Road Line Lexington, PA 18932 Montgomery 215.699.3525 Route 309 & Stump Road Montgomeryville, PA 18936 Univest National Bank and Trust Co. offers 12 retirement community financial service centers throughout Bucks and Montgomery counties. For a complete listing, please visit www.univest.net. BUCKS COUNTY Bensalem 215.244.9200 2645 Street Road Bensalem, PA 19020 Buckingham 215.794.5916 Hunt Acres Center 5006 York Road Holicong, PA 18928 Chalfont 215.996.1633 195 E. Butler Avenue Chalfont, PA 18914 Doylestown 215.348.7966 191 W. State Street Doylestown, PA 18901 Doylestown Cross Keys 215.348.8620 842 North Easton Road Doylestown, PA 18902 Feasterville 215.354.0330 40 E. Street Road Feasterville, PA 19053 Hilltown 215.721.2471 Routes 113 & 309 Souderton, PA 18964 Milford 215.536.4204 1950 John Fries Highway Milford Square, PA 18935 Newtown 215.504.2828 3 Friends Lane Newtown, PA 18940 12 OTHER NON-RETAIL LOCATIONS Bucks County 267.898.0520 1980 South Easton Road Suite 150 Doylestown, PA 18901 Chester County 610.722.5527 Glenloch Corporate Campus 1473 Dunwoody Drive West Chester, Pennsylvania 19380 Lehigh County 484.224.3029 1275 Glenlivet Drive Suite 100 Allentown, PA 18106 13 BucksCountyFinancialServiceCentersMontgomery County FinancialServiceCenters2008 Officers Univest Corporation of Pennsylvania EXECUTIVE MANAGEMENT TEAM William S. Aichele, Chairman, President & Chief Executive Officer K. Leon Moyer, Vice Chairman Kenneth D. Hochstetler, Senior Executive Vice President Jeffrey M. Schweitzer, Executive Vice President & Chief Financial Officer Duane J. Brobst, Executive Vice President & Chief Risk Officer Annette D. Szygiel, Executive Vice President & Chief Experience Officer OTHER WHOLLY-OWNED SUBSIDIARIES Univest Delaware, Inc. Univest Realty Corporation Univest Reinsurance Corporation TCG Investment Advisory, Inc. TC Group Securities Company, Inc. Allied Benefits Group, LLC Univest National Bank and Trust Co. EXECUTIVE MANAGEMENT TEAM William S. Aichele, Chairman DELVIEW, INC. (SUBSIDIARY OF UNIVEST NATIONAL BANK AND TRUST CO.) K. Leon Moyer, President & Chief Executive Officer UNIVEST INVESTMENTS, INC. Jeffrey M. Schweitzer, Executive Vice President & Chief Financial Officer Philip C. Jackson, Market President, Montgomery County Kenneth L. Keller, Market President, Bucks County Duane J. Brobst, Executive Vice President & Chief Risk Officer William S. Aichele, Chairman Kenneth D. Hochstetler, President Jeffrey M. Schweitzer, Secretary/Treasurer UNIVEST INSURANCE, INC. William S. Aichele, Chairman Kenneth D. Hochstetler, President Jeffrey M. Schweitzer, Secretary/Treasurer UNIVEST CAPITAL, INC. (SUBSIDIARY OF UNIVEST NATIONAL BANK AND TRUST CO.) Hugh W. Connelly, President Jeffrey M. Schweitzer, Secretary/Treasurer 14 Executive Management Team Seated (L-R) Annette D. Szygiel, Jeffrey M. Schweitzer, Kenneth D. Hochstetler Standing (L-R) Kenneth L. Keller, K. Leon Moyer, Philip C. Jackson, Duane J. Brobst, William S. Aichele 2008 Board of Directors Univest Corporation of Pennsylvania William S. Aichele *† Chairman, President & Chief Executive Officer, Univest Corporation of Pennsylvania and Chairman, Univest National Bank and Trust Co. William G. Morral, CPA* Financial Consultant Former CFO of Moyer Packing Company Marvin A. Anders *† Retired Chairman, Univest Corporation of Pennsylvania and Retired Chairman, Univest National Bank and Trust Co. K. Leon Moyer † Vice Chairman, Univest Corporation of Pennsylvania and President & Chief Executive Officer, Univest National Bank and Trust Co. R. Lee Delp * Principal, R.L. Delp & Company H. Ray Mininger * President, H. Mininger & Son, Inc. Merrill S. Moyer *† Retired Chairman, Univest Corporation of Pennsylvania and Retired Chairman, Univest National Bank and Trust Co. Charles H. Hoeflich *† Chairman Emeritus, Univest Corporation of Pennsylvania Mark A. Schlosser ° President Schlosser Steel, Inc. Norman L. Keller * Retired Executive Vice President Univest Corporation of Pennsylvania Paul Gregory Shelly *† President, Shelly Enterprises, Inc. Thomas K. Leidy *† Vice President, ALL Holdings Former President & CEO Leidy's, Inc. John U. Young * Retired President & CEO Alderfer Bologna Co., Inc. H. Paul Lewis ° Vice President / Sales Agent Bucks County Commercial Realty, Inc. Retired Executive Vice President, Univest National Bank and Trust Co. Margaret K. Zook ° Retired Executive Director Souderton Mennonite Homes * Director of Univest Corporation of Pennsylvania † Director of Univest National Bank and Trust Co. o Alternate Director of Univest Corporation of Pennsylvania 15 SHAREHOLDER Information Univest Corporate Headquarters Univest Plaza 14 North Main Street P.O. Box 64197 Shareholders' Meeting The Annual Shareholders' Meeting will take place at 10:45 a.m., Tuesday, April 21, 2009, in the Board Room at Univest Plaza, 14 North Main Street, Souderton, Pennsylvania 18964 Souderton, Pennsylvania Univest Insurance Locations Univest Insurance, Inc. - Lansdale Office 521 Main Street P.O. Box 391 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 Lansdale, Pennsylvania 19446 at 44 West Lancaster Avenue, Ardmore, PA 19003. You may also click on our investor relations link at Univest Insurance, Inc. - Chester County www.univest.net. Glenloch Corporate Campus 1473 Dunwoody Drive West Chester, Pennsylvania 19380 Univest Insurance, Inc. - Maryland 14757 Main Street, Suite 106 Upper Marlboro, MD 20772 Univest Investments Locations Univest Plaza 14 North Main Street P.O. Box 64197 Souderton, Pennsylvania 18964 Trollinger Consulting Group 1132 Hamilton Street, Suite 212 Allentown, PA 18101 Univest Capital Headquarters Univest Capital, Inc. 3325 Street Road, Suite 125 Bensalem, PA 19020 16 Univest Shareholder Information Hotline For more information on Univest Corporation of Pennsylvania, please call 877.723.5571 or 215.721.2434 Market Makers for Univest Corporation of Pennsylvania Common Stock Boenning & Scattergood, Inc. Keefe Bruyette & Woods, Inc. Knight Equity Markets, L.P. Morgan Stanley & Co., Inc. Timber Hill, Inc. UBS Securities, LLC “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 like eagles; they will run and not grow weary, they will walk and not faint.” – Isaiah 40:29, 31 2 0 0 8 A N N U A L R E P O R T Annual Report Univest 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 is provided for both the Corporation and our shareholders. Univest Core Values Tradition • Integrity • Excellence • Community • Spirituality 17 Univest Plaza 14 North Main Street P.O. Box 64197 Souderton, Pennsylvania 18964 1-800-660-4276 www.univest.net 

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