Univest Corporation of Pennsylvania (NASDAQ:UVSP) Q2 2020 Earnings Conference Call - Final Transcript
Jul 23, 2020 • 09:00 am ET
Good day and welcome to the Univest Financial Corporation Second Quarter 2020 Earnings Conference Call. [Operator Instructions]
I would now like to turn the conference over to Jeff Schweitzer, President and CEO of Univest Financial Corporation. Please go ahead.
Jeffrey M. Schweitzer
Thank you, Sabrina. Good morning and thank you to all of our listeners for joining us. Joining me on the call this morning is Mike Keim, President of Univest Bank and Trust; and Brian Richardson, our Chief Financial Officer.
Before we begin, I would like to start by saying I hope everyone listening is staying safe and you and your families are healthy. I also need to remind everyone of the forward-looking statements disclaimer. Please be advised that during the course of this conference call, management may make forward-looking statements that express management's intentions, beliefs or expectations within the meaning of the federal securities laws. Univest's actual results may differ materially from those contemplated by these forward-looking statements. I will refer you to the forward-looking cautionary statements in our earnings release and in our SEC filings.
Hopefully, everyone had a chance to review our earnings release from yesterday. If not, it could be found on our website at univest.net under the Investor Relations tab. We reported net income of $2.1 million during the second quarter, or $0.07 per share. Earnings for the quarter were significantly impacted by $19.9 million, or $0.54 per share of expense related to COVID-19, which was the result of changes in economic assumptions within our CECL model. As the economy continues to reopen, combined with spikes in cases in certain parts of the country, there continues to be great uncertainty surrounding the pace of the economic recovery in our markets. This uncertainty isn't reflected in our CECL provisioning during the quarter.
In spite of the current economic environment, we continue to be pleased with the performance of our core business as our pretax pre-provision income during the quarter increased $3.3 million or 15.1% compared to the second quarter of the prior year, with our pretax pre-provision return on average assets for the quarter being 1.71%. Our diversified business model continues to perform well in spite of the uncertain economic environment.
In accordance with the orders from the governors of Pennsylvania and New Jersey, we continue to encourage our employees to work from home to the extent that they can. We reopened all of our branch lobbies on June 29, and our customers have adapted to the safety protocols in our branches and our employees continue to provide the great service Univest customers have been accustomed to.
While loans were relatively flat during the quarter, excluding PPP loans, this is net of a decrease of $94.5 million in commercial line utilization during the quarter. We continue to see lending opportunities as the economy has reopened and customers and prospects have become more open to meetings across all of our lines of business, whether virtually or in person with masks and social distancing in place.
Before I throw it over