UNIVEST FINANCIAL CorpUVSP
UNIVEST FINANCIAL Corp Income Taxes Disclosure
Income Taxes
Income taxes paid to federal and state jurisdictions consisted of the following:
| For the Years Ended December 31, | |||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Federal | $ | 19,200 | $ | 17,975 | $ | 19,300 | |||||||||||
| Foreign | — | — | — | ||||||||||||||
| State | 1,934 | 2,699 | 1,740 | ||||||||||||||
| Total | $ | 21,134 | $ | 20,674 | $ | 21,040 | |||||||||||
State income taxes paid, net of refunds, exceeded 5 percent of total income taxes paid, net of refunds, in the following jurisdiction:
| For the Years Ended December 31, | |||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| State: | |||||||||||||||||
| New Jersey | $ | 1,410 | $ | 1,929 | * | ||||||||||||
| *Jurisdiction below the threshold for the period presented. | |||||||||||||||||
The components of pre-tax income are related to domestic activities. The Corporation did not have any foreign operations. The provision income taxes from continuing operations included in the accompanying consolidated statements of income consists of the following:
| For the Years Ended December 31, | |||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 20,002 | $ | 18,535 | $ | 16,775 | |||||||||||
| State | 2,083 | 2,105 | 1,520 | ||||||||||||||
| Total current expense | $ | 22,085 | $ | 20,640 | $ | 18,295 | |||||||||||
| Deferred: | |||||||||||||||||
| Federal | 465 | (1,048) | (609) | ||||||||||||||
| State | 43 | (223) | (101) | ||||||||||||||
| Total deferred expense | $ | 508 | $ | (1,271) | $ | (710) | |||||||||||
| Total income tax expense from continuing operations | $ | 22,593 | $ | 19,369 | $ | 17,585 | |||||||||||
The Corporation did not have any income tax expense (benefit) in foreign jurisdictions for the years ended December 31, 2025, 2024 or 2023.
The provision for income taxes differs from the expected statutory provision as follows:
| For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||
| US Federal Statutory Tax Rate | $ | 23,804 | 21.0 | % | $ | 20,013 | 21.0 | % | $ | 18,625 | 21.0 | % | |||||||||||||||||||||||
| State and local income taxes, net of federal benefit* | 1,680 | 1.5 | 1,487 | 1.5 | 1,121 | 1.3 | |||||||||||||||||||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||||||||||||||||||||
| Tax-exempt interest income, net of disallowance | (2,034) | (1.8) | (1,741) | (1.8) | (1,648) | (1.9) | |||||||||||||||||||||||||||||
| Increase in value of bank owned life insurance assets | (1,224) | (1.1) | (810) | (0.8) | (669) | (0.8) | |||||||||||||||||||||||||||||
| Other | 518 | 0.5 | 391 | 0.4 | 349 | 0.4 | |||||||||||||||||||||||||||||
| Other adjustments | (151) | (0.2) | 29 | — | (193) | (0.2) | |||||||||||||||||||||||||||||
| Effective tax rate | $ | 22,593 | 19.9 | % | $ | 19,369 | 20.3 | % | $ | 17,585 | 19.8 | % | |||||||||||||||||||||||
| *State taxes in New Jersey made up the majority (greater than 50 percent) of the tax effect in this category. | |||||||||||||||||||||||||||||||||||
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law. The OBBBA enacts significant changes to U.S. federal income tax law, including both individual and business tax provisions. The OBBBA introduced new and enhanced business tax credits, modified the deduction for qualified business income, and made permanent the increased Section 179 expensing limits. The OBBBA also terminated or phased out a number of energy-related credits and deductions, and increased the reporting threshold for certain information returns. Most of the corporate tax provisions are effective for tax years beginning after December 31, 2025, unless otherwise specified. The Corporation has evaluated the impact of the OBBBA as of December 31, 2025, and determined that the new law did not have a material impact on the Corporation's income taxes for the year ended December 31, 2025. The Corporation will continue to monitor for further guidance and assess the impact of these changes on its financial statements in subsequent periods.
Retained earnings included $6.0 million at December 31, 2025, 2024 and 2023, which was originally generated by Fox Chase Bank (acquired in 2016), for which no provision for federal income tax has been made. This amount represents deductions for bad debt reserves for tax purposes, which were only allowed to savings institutions that met certain criteria prescribed by the Internal Revenue Code of 1986, as amended. The Small Business Job Protection Act of 1996 (the "Act") eliminated the special bad debt deduction granted solely to thrifts. Under the terms of the Small Business Job Protection Act, there would be no recapture of the pre-1988 (base year) reserves. However, these pre-1988 reserves would be subject to
recapture under the rules of the Internal Revenue Code if the Corporation pays a cash dividend in excess of cumulative retained earnings or liquidates.
At December 31, 2025 and 2024, the Corporation had no material unrecognized tax benefits or accrued interest and penalties recorded. Interest and penalties are recorded in noninterest expense in the year they are assessed. For tax purposes, interest is treated as a deductible expense and penalties are treated as a non-deductible expense.
The Corporation and its subsidiaries are subject to U.S. federal income tax, as well as income tax of the Commonwealth of Pennsylvania and various other state and local jurisdictions. The Corporation and its subsidiaries are generally no longer subject to examination by federal, state and local taxing authorities for years prior to December 31, 2022.
Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred state taxes are combined with federal deferred taxes (net of the impact of deferred state tax on the deferred federal tax) and are shown in the table below by major category.
The Corporation has a state net operating loss carry-forward of $126.0 million which will begin to expire in 2026 if not utilized. A valuation allowance of $4.5 million and $4.0 million at December 31, 2025 and 2024, respectively, was attributable to deferred tax assets generated in certain state jurisdictions for which management believes it is more likely than not that such deferred tax assets will not be realized. Other than the valuation allowance on certain state deferred tax assets, management has determined that no additional valuation allowance is necessary for deferred tax assets because it is more likely than not that these assets will be realized through future reversals of existing temporary differences and through future taxable income. The Corporation will continue to review the criteria related to the recognition of deferred tax assets on a regular basis.
The assets and liabilities giving rise to the Corporation's deferred tax assets and liabilities are as follows:
| At December 31, | |||||||||||
| (Dollars in thousands) | 2025 | 2024 | |||||||||
| Deferred tax assets: | |||||||||||
| Allowance for credit losses, loans and leases | $ | 19,661 | $ | 19,447 | |||||||
| Deferred compensation | 1,601 | 1,693 | |||||||||
| Actuarial adjustments on retirement benefits* | 892 | 1,715 | |||||||||
| State net operating losses | 4,968 | 4,285 | |||||||||
| Net unrealized holding losses on securities available-for-sale and swaps* | 5,883 | 9,984 | |||||||||
| Lease liability | 6,361 | 7,029 | |||||||||
| Other deferred tax assets | 2,902 | 2,775 | |||||||||
| Gross deferred tax assets | 42,268 | 46,928 | |||||||||
| Valuation allowance | (4,496) | (3,959) | |||||||||
| Total deferred tax assets, net of valuation allowance | 37,772 | 42,969 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Mortgage servicing rights | 1,206 | 1,350 | |||||||||
| Retirement plans | 4,907 | 4,768 | |||||||||
| Deferred loan fees and costs | 1,521 | 1,549 | |||||||||
| Acquisition-related fair value adjustments | 493 | 554 | |||||||||
| Intangible assets | 5,313 | 4,843 | |||||||||
| Depreciation | 1,200 | 1,123 | |||||||||
| Right of use asset | 5,751 | 6,369 | |||||||||
| Other deferred tax liabilities | 1,518 | 1,118 | |||||||||
| Total deferred tax liabilities | 21,909 | 21,674 | |||||||||
| Net deferred tax assets | $ | 15,863 | $ | 21,295 | |||||||
*Represents the amount of deferred taxes recorded in accumulated other comprehensive income.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 3, 2017 | |
| 2015 | Mar 4, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.