UNIVEST FINANCIAL Corp

Previous wording

•General economic conditions, either nationally or in our market areas, that are worse than expected included as a result of employment levels and labor shortages, and the effect of inflation, a potential recession or slowed economic growth caused by supply chain disruptions or otherwise;

Current wording

•General economic conditions, either nationally or in our market areas, that are worse than expected, including as a result of employment levels and labor shortages, and the effect of inflation, a potential recession or slowed economic growth caused by supply chain disruptions or otherwise;

Previous wording

•Inflation or volatility in interest rates that reduce our margins and yields, the fair value of financial instruments or our level of loan originations or prepayments on loans we have made and make or the sale of loans or other assets;

Current wording

•Inflation or volatility in interest rates that reduce our margins and yields, the fair value of financial instruments or our level of loan originations or prepayments on loans we have made and make or the sale of loans or other assets and/or lead to higher operating costs and higher costs to retain or attract deposits;

Previous wording

The Corporation reported net income of $20.3 million, or $0.69 diluted earnings per share, for the three months ended March 31, 2024, compared to $21.0 million, or $0.71 diluted earnings per share, for the three months ended March 31, 2023. The financial results for the three months ended March 31, 2024 included a $3.4 million net gain ($2.7 million after-tax), or

Current wording

The Corporation reported net income of $18.1 million, or $0.62 diluted earnings per share, for the three months ended June 30, 2024, compared to $16.8 million, or $0.57 diluted earnings per share, for the three months ended June 30, 2023. The Corporation reported net of $38.4 million, or $1.30 diluted earnings per share, for the six months ended June 30, 2024, compared to $37.8 million, or $1.28 diluted earnings per share, for the six months ended June 30, 2023. The financial results for the three months ended June 30, 2024 included tax-free bank owned life insurance ("BOLI") death benefit claims of $171 thousand, which represented $0.01 diluted earnings per share for the quarter. The financial results for the six months ended June 30, 2024 included a $3.4 million net gain ($2.7 million after-tax), or $0.09 diluted earnings per share, generated from the sale of mortgage servicing rights associated with $591.1 million of serviced loans in the first quarter of 2024. Additionally, the financial results for the second quarter of 2023 included a $1.3 million ($1.1 million after-tax), of $0.04 diluted earnings per share, restructuring change associated with expense management strategies deployed in response to macroeconomic headwinds.

Previous wording

Net interest income is the difference between interest earned primarily on loans, leases and investment securities and interest paid on deposits, borrowings, long-term debt and subordinated notes. Net interest income is the principal source of the Corporation’s revenue. Table 1 presents the Corporation’s average balances, tax-equivalent interest income, interest expense, tax-equivalent yields earned on average assets, cost of average liabilities, and shareholders' equity on a tax-equivalent basis for the three months ended March 31, 2024 and 2023. The tax-equivalent net interest margin is tax-equivalent net interest income as a percentage of average interest-earning assets. The tax-equivalent net interest spread represents the weighted average tax-equivalent yield on interest-earning assets less the weighted average cost of interest-bearing liabilities. The effect of net interest-free funding sources represents the effect on the net interest margin of net funding provided by noninterest-earning assets, noninterest-bearing liabilities and shareholders' equity. Table 2 analyzes the changes in the tax-equivalent net interest income for the periods broken down by their rate and volume components.

Current wording

Net interest income is the difference between interest earned primarily on loans, leases and investment securities and interest paid on deposits, borrowings, long-term debt and subordinated notes. Net interest income is the principal source of the Corporation’s revenue. Table 1 presents the Corporation’s average balances, tax-equivalent interest income, interest expense, tax-equivalent yields earned on average assets, cost of average liabilities, and shareholders' equity on a tax-equivalent basis for the three and six months ended June 30, 2024 and 2023. The tax-equivalent net interest margin is tax-equivalent net interest income as a percentage of average interest-earning assets. The tax-equivalent net interest spread represents the weighted average tax-equivalent yield on interest-earning assets less the weighted average cost of interest-bearing liabilities. The effect of net interest-free funding sources represents the effect on the net interest margin of net funding provided by noninterest-earning assets, noninterest-bearing liabilities and shareholders' equity. Table 2 analyzes the changes in the tax-equivalent net interest income for the periods broken down by their rate and volume components.

Previous wording

Net interest income on a tax-equivalent basis for the three months ended March 31, 2024 was $51.8 million, a decrease of $7.9 million, or 13.3%, compared to $59.7 million for the three months ended March 31, 2023. The decrease in tax-equivalent net interest income for the three months ended March 31, 2024 compared to the comparable period in the prior year was due to an increase in the cost of funds and the average balance of interest-bearing liabilities, partially offset by an increase in the asset yields and the average balance of interest-earning assets. The increase in the yield on interest-earning assets and the cost of funds was primarily driven by the increase in market interest rates.

Current wording

Net interest income on a tax-equivalent basis for the three months ended June 30, 2024 was $51.3 million, a decrease of $3.3 million, or 6.1%, compared to $54.6 million for the three months ended June 30, 2023. Net interest income on a tax-equivalent basis for the six months ended June 30, 2024 was $103.1 million, a decrease of $11.3 million, or 9.8%, compared to $114.3 million for the six months ended June 30, 2023. The decreases in tax-equivalent net interest income for the three and six months ended June 30, 2024 compared to the comparable periods in the prior year reflects the continued pressure on the cost of deposits due to the shift of balances from lower to higher cost deposit products which has exceeded the increase in interest income from asset yield expansion and the increase in average interest-earning assets. However, we continue to see indicators of stabilization in the cost of funds and funding mix.

Previous wording

The net interest margin, on a tax-equivalent basis, was 2.88% for the three months ended March 31, 2024 compared to 3.58% for the three months ended March 31, 2023. Excess liquidity reduced net interest margin by approximately three basis points for the three months ended March 31, 2024. Excess liquidity had no impact on net interest margin for the three months ended March 31, 2023.

Current wording

The net interest margin, on a tax-equivalent basis, was 2.84% and 2.86% for the three and six months ended June 30, 2024, respectively, compared to 3.14% and 3.35% for the three and six months ended June 30, 2023, respectively. Excess liquidity reduced net interest margin by approximately two basis points for the three and six months ended June 30, 2024. Excess liquidity had no impact on net interest margin for the three and six months ended June 30, 2023.

Previous wording

Net interest income includes net deferred costs amortization of $453 thousand and $465 thousand for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Net interest income includes net deferred costs amortization of $698 thousand and $668 thousand for the three months ended June 30, 2024 and 2023, respectively.

Previous wording

The provision for credit losses for the three months ended March 31, 2024 and 2023 was $1.4 million and $3.4 million, respectively. The following table details information pertaining to the Corporation’s allowance for credit losses on loans and leases as a percentage of loans and leases held for investment at the dates indicated.

Current wording

The provision for credit losses for the three months ended June 30, 2024 and 2023 was $707 thousand and $3.4 million, respectively. The provision for credit losses for the six months ended June 30, 2024 and 2023 was $2.1 million and $6.8 million, respectively. The following table details information pertaining to the Corporation’s allowance for credit losses on loans and leases as a percentage of loans and leases held for investment at the dates indicated.

Previous wording

The following table presents noninterest income for the three months ended March 31, 2024 and 2023:

Current wording

The following table presents noninterest income for the three and six months ended June 30, 2024 and 2023:

Previous wording

Net gain on mortgage banking activities increased $314 thousand, or 50.2%, for the three months ended March 31, 2024 from the comparable period in the prior year, primarily due to increased salable volume.

Current wording

Net gain on mortgage banking activities increased $671 thousand, or 64.6%, for the three months ended June 30, 2024 and $985 thousand, or 59.2%, for the six months ended June 30, 2024 from the comparable periods in the prior year, primarily due to increased salable volume.

Previous wording

Investment advisory commission and fee income increased $442 thousand, or 9.3%, for the three months ended March 31, 2024 from the comparable period in the prior year, primarily due to new customer relationships and appreciation of assets under management, as a majority of investment advisory fees are billed based on the prior quarter-end assets under management balance.

Current wording

Investment advisory commission and fee income increased $530 thousand, or 11.3%, for the three months ended June 30, 2024 and $972 thousand, or 10.3%, for the six months ended June 30, 2024 from the comparable periods in the prior year, primarily due to increased assets under management driven by market appreciation and new customer relationships.

Previous wording

Service charges on deposit accounts increased $324 thousand, or 20.9%, for the three months ended March 31, 2024 from the comparable period in the prior year, primarily due to increased treasury management income.

Current wording

Service charges on deposit accounts increased $257 thousand, or 14.9%, for the three months ended June 30, 2024 and $581 thousand, or 17.8%, for the six months ended June 30, 2024 from the comparable periods in the prior year, primarily due to increased treasury management income.

Previous wording

Insurance commission and fee income increased $714 thousand, or 11.0%, for the three months ended March 31, 2024 from the comparable period in the prior year, primarily due to increases in premiums for group life and health and commercial lines and an increase in contingent commission income of $484 thousand, which were $2.3 million and $1.8 million for the three months ended March 31, 2024 and 2023, respectively. Contingent income is largely recognized in the first quarter of the year.

Current wording

Insurance commission and fee income increased $773 thousand, or 6.7%, for the six months ended June 30, 2024 from the comparable period in the prior year, primarily due to increases in premiums and an increase in contingent commission income of $476 thousand, which was $2.3 million and $1.8 million for the six months ended June 30, 2024 and 2023, respectively. Contingent income is largely recognized in the first quarter of the year.

Previous wording

Other service fee income increased $3.3 million, or 108.6%, for the three months ended March 31, 2024 from the comparable period in the prior year, primarily due to the net gain generated from the sale of mortgage servicing rights associated with $591.1 million of serviced loans.

Current wording

Other service fee income decreased $274 thousand, or 8.3%, for the three months ended June 30, 2024 and increased $3.1 million, or 47.9%, for the six months ended June 30, 2024 from the comparable periods in the prior year. The decrease for the three months ended June 30, 2024 was primarily due to reduced servicing fees resulting from the sale of mortgage servicing rights associated with $591.1 million of serviced loans in the first quarter. The increase for the six months ended June 30, 2024 was primarily due to the net gain of $3.4 million generated from the sale of mortgage servicing rights associated with these serviced loans.

Previous wording

Other income increased $554 thousand, or 117.6%, for the three months ended March 31, 2024 from the comparable period in the prior year. Gains on the sale of Small Business Administration loans increased $239 thousand due to increased sale volume. Fees on risk participation agreements for interest rate swaps increased $141 thousand.

Current wording

Other income decreased $477 thousand, or 39.0%, for the three months ended June 30, 2024 from the comparable period in the prior year. Fees on risk participation agreements for interest rate swaps decreased $710 thousand due to reduced customer demand. Additionally, the second quarter of 2023 included a loss of $250 thousand on the sale of an interest in a shared national credit.

Previous wording

The following table presents noninterest expense for the three months ended March 31, 2024 and 2023:

Current wording

The following table presents noninterest expense for the three and six months ended June 30, 2024 and 2023:

Previous wording

Professional fees decreased $253 thousand, or 13.0%, for the three months ended March 31, 2024 from the comparable period in the prior year, primarily due to consultant fees incurred in the first quarter of 2023 related to our digital transformation initiative.

Current wording

Professional fees decreased $203 thousand, or 12.2%, for the three months ended June 30, 2024 and $456 thousand, or 12.6%, for the six months ended June 30, 2024 from the comparable periods in the prior year, primarily due to consultant fees incurred in the first half of 2023 due to investments in our end-to-end loan origination solutions.

Previous wording

Salaries, benefits and commissions increased $324 thousand, or 1.0%, for the three months ended March 31, 2024 from the comparable period in the prior year, primarily driven by decreased capitalized compensation, resulting from lower loan production in the current period, and increased medical claims expense. These increases were partially offset by decreased salary expense primarily due to staff reductions over the last twelve months.

Current wording

Salaries, benefits and commissions increased $312 thousand, or 1.0%, for the three months ended June 30, 2024 and $636 thousand, or 1.0%, from the comparable periods in the prior year, primarily due to decreased capitalized compensation driven by lower loan production, partially offset by decreased salary expense due to staff reductions over the last twelve months.

Previous wording

Data processing increased $466 thousand, or 11.6%, for the three months ended March 31, 2024 from the comparable period in the prior year, primarily due to our investments in technology in recent years, including the launch of our online small business loan and deposit products, and general price increases incurred in the second half of 2023.

Current wording

Data processing increased $490 thousand, or 6.0%, for the six months ended June 30, 2024 from the comparable period in the prior year, primarily due to our investments in technology in recent years, including the launch of our online small business loan and deposit products.

Previous wording

The Corporation recognized a tax expense of $5.3 million and $5.0 million for the three months ended March 31, 2024 and 2023, respectively, resulting in effective rates of 20.5% and 19.4% for the respective periods. The discrete tax effect of vested equity compensation awards unfavorably impacted the three months ended March 31, 2024 by 74 basis points and favorably impacted the three months ended March 31, 2023 by 76 basis points. Additionally, the effective tax rates for the three months ended March 31, 2024 and 2023 reflected the benefits of tax-exempt income from investments in municipal securities and loans and leases.

Current wording

2023, respectively, resulting in effective rates of 19.9% and 19.8% for the respective periods. The Corporation recognized a tax expense of $9.7 million and $9.2 million for the six months ended June 30, 2024 and 2023, respectively, resulting in effective tax rates of 20.2% and 19.5% for the respective periods. The effective tax rates for the three and six months ended June 30, 2024 and 2023 reflects the benefits of tax-exempt income from investments in municipal securities and loans and leases. Additionally, the effective income tax rates for the three and six months ended June 30, 2024 were favorably impacted by proceeds from BOLI death benefits.

Previous wording

Cash and interest-earning deposits decreased $48.2 million, or 19.3%, from December 31, 2023, primarily due to a decrease in interest earning deposits at the Federal Reserve Bank of $28.2 million and a decrease of $19.5 million in cash letters.

Current wording

Cash and interest-earning deposits decreased $58.9 million, or 23.6%, from December 31, 2023, primarily due to a decrease in interest earning deposits at the Federal Reserve Bank of $53.9 million and a decrease of $7.1 million in cash letters as excess cash was used to pay-down long-term debt and fund loan growth.

Previous wording

Total investment securities at March 31, 2024 decreased $3.0 million, or 0.6%, from December 31, 2023. Maturities and pay-downs of $11.9 million, sales of $616 thousand, net amortization of purchased premiums and discounts of $271 thousand, a provision for credit losses of $86 thousand and decreases in the fair value of available-for-sale investment securities of $2.9 million were partially offset by purchases of $12.9 million, which were primarily residential mortgage-backed securities.

Current wording

Total investment securities at June 30, 2024 decreased $14.7 million, or 2.9%, from December 31, 2023. Maturities and pay-downs of $39.5 million, decreases in the fair value of available-for-sale investment securities of $2.8 million, sales of $2.1 million, net amortization of purchased premiums and discounts of $538 thousand and a provision for credit losses of $50 thousand were partially offset by purchases of $30.3 million, which were primarily residential mortgage-backed securities.

Previous wording

Gross loans and leases held for investment increased $11.9 million, or 0.2%, from December 31, 2023. The growth in gross loans and leases held for investment was primarily due to increases in commercial loans and residential mortgage loans, partially offset by decreases in construction and commercial real estate loans. For more information on the composition of the commercial loan portfolio, see "Table 4 - Loan Portfolio Overview."

Current wording

Gross loans and leases held for investment increased $117.6 million, or 1.8%, from December 31, 2023. The growth in gross loans and leases held for investment was primarily due to increases in commercial, commercial real estate and residential mortgage loans, partially offset by a decrease in construction loans. For more information on the composition of the commercial loan portfolio, see "Table 4 - Loan Portfolio Overview."

Previous wording

At March 31, 2024, nonaccrual loans and leases were $20.4 million and had a related allowance for credit losses on loans and leases of $2.0 million. At December 31, 2023, nonaccrual loans and leases were $20.5 million and had a related allowance for credit losses on loans and leases of $1.8 million. Individual reserves have been established based on current facts and management's judgements about the ultimate outcome of these credits, including the most recent known data available on any related underlying collateral and the borrower's cash flows. The amount of individual reserve needed for these credits could change in future periods subject to changes in facts and judgements related to these credits.

Current wording

At June 30, 2024, nonaccrual loans and leases were $16.2 million and had a related allowance for credit losses on loans and leases of $456 thousand. At December 31, 2023, nonaccrual loans and leases were $20.5 million and had a related allowance for credit losses on loans and leases of $1.8 million. During the quarter, pay-downs totaling $2.2 million were received on two nonaccrual construction loans to one borrower. Individual reserves have been established based on current facts and management's judgements about the ultimate outcome of these credits, including the most recent known data available on any related underlying collateral and the borrower's cash flows. The amount of individual reserve needed for these credits could change in future periods subject to changes in facts and judgements related to these credits.

Previous wording

Net loan and lease charge-offs for the three months ended March 31, 2024 were $1.4 million compared to $2.8 million for the same period in the prior year. The decrease in charge-offs for the three months ended March 31, 2024 was primarily due to $2.4 million of charge-offs related to one borrower in the first quarter of 2023.

Current wording

Net loan and lease charge-offs for the three months ended June 30, 2024 were $809 thousand compared to $512 thousand for the same period in the prior year. Net loan and lease charge-offs for the six months ended June 30, 2024 were $2.2 million compared to $3.4 million for the same period in the prior year. The decrease in charge-offs for the six months ended June 30, 2024 was primarily due to $2.4 million of charge-offs related to one borrower in the first quarter of 2023.

Previous wording

Other real estate owned ("OREO") was $19.2 million at March 31, 2024, compared to $19.0 million at December 31, 2023. Repossessed assets were $167 thousand at March 31, 2024. The Corporation had no repossessed assets at December 31, 2023.

Current wording

Other real estate owned ("OREO") was $20.0 million at June 30, 2024, compared to $19.0 million at December 31, 2023, primarily due to capitalized improvements on an existing OREO property and the transfer of a commercial real estate property with a carrying value of $252 thousand. Repossessed assets were $149 thousand at June 30, 2024. The Corporation had no repossessed assets at December 31, 2023.

Previous wording

Table 3—Nonaccrual and Past Due Loans and Leases; Repossessed Assets; Other Real Estate Owned; and Related Ratios

Current wording

Table 3—Nonaccrual and Past Due Loans and Leases; Other Real Estate Owned; Repossessed Assets; and Related Ratios

Previous wording

Goodwill and other intangible assets have been recorded on the books of the Corporation in connection with acquisitions. The Corporation has core deposit and customer-related intangibles, which are not deemed to have an indefinite life and therefore will continue to be amortized over their useful life using the present value of projected cash flows. The amortization of core deposit and customer-related intangibles was $175 thousand and $229 thousand for the three months ended March 31, 2024 and 2023, respectively. See Note 5 to the Condensed Unaudited Consolidated Financial Statements, "Goodwill and Other Intangible Assets," for a summary of intangible assets at March 31, 2024 and December 31, 2023.

Current wording

Goodwill and other intangible assets have been recorded on the books of the Corporation in connection with acquisitions. The Corporation has core deposit and customer-related intangibles, which are not deemed to have an indefinite life and therefore will continue to be amortized over their useful life using the present value of projected cash flows. The amortization of core deposit and customer-related intangibles was $175 thousand and $229 thousand for the three months ended June 30, 2024 and 2023, respectively. The amortization of core deposit and customer-related intangible was $350 thousand and $458 thousand for the six months ended June 30, 2024 and 2023, respectively. See Note 5 to the Condensed Unaudited Consolidated Financial Statements, "Goodwill and Other Intangible Assets," for a summary of intangible assets at June 30, 2024 and December 31, 2023.

Previous wording

The Corporation also has goodwill with a net carrying value of $175.5 million at March 31, 2024 and December 31, 2023, which is deemed to be an indefinite intangible asset and is not amortized. The Corporation completes a goodwill impairment analysis on an annual basis, or more often if events and circumstances indicate that there may be impairment. The Corporation also completes an impairment test for other identifiable intangible assets on an annual basis or more often if events and circumstances indicate there may be impairment. There was no impairment of goodwill or identifiable intangibles during the three months ended March 31, 2024 or 2023. There can be no assurance that future impairment assessments or tests will not result in a charge to earnings.

Current wording

The Corporation also has goodwill with a net carrying value of $175.5 million at June 30, 2024 and December 31, 2023, which is deemed to be an indefinite intangible asset and is not amortized. The Corporation completes a goodwill impairment analysis on an annual basis, or more often if events and circumstances indicate that there may be impairment. The Corporation also completes an impairment test for other identifiable intangible assets on an annual basis or more often if events and circumstances indicate there may be impairment. There was no impairment of goodwill or identifiable intangibles during the six months ended June 30, 2024 or 2023. There can be no assurance that future impairment assessments or tests will not result in a charge to earnings.

Previous wording

The Bank purchases bank owned life insurance to protect itself against the loss of key employees due to death and to offset or finance the Corporation's future costs and obligations to employees under its benefits plans. Bank owned life insurance increased $6.6 million, or 5.0%, from December 31, 2023, primarily due to $5.7 million of policies purchased during the first quarter of 2024.

Current wording

The Bank purchases bank owned life insurance to protect itself against the loss of key employees due to death and to offset or finance the Corporation's future costs and obligations to employees under its benefits plans. Bank owned life insurance increased $6.5 million, or 4.9%, from December 31, 2023, primarily due to $5.7 million of policies purchased during the first quarter of 2024.

Previous wording

Total deposits increased $29.6 million, or 0.5%, from December 31, 2023, primarily due to increases in consumer and brokered deposits, partially offset by decreases in commercial and seasonal public funds deposits. At March 31, 2024, noninterest bearing deposits represented 21.9% of total deposits, down from 23.0% at December 31, 2023. At March 31, 2024, unprotected deposits, which excludes insured, internal, and collateralized deposit accounts, represented 22.3% of total deposits, down from 23.3% at December 31, 2023.

Current wording

Total deposits increased $119.5 million, or 1.9%, from December 31, 2023, primarily due to increases in commercial, consumer and brokered deposits, partially offset by a seasonal decrease in public funds deposits. At June 30, 2024, noninterest bearing deposits represented 21.5% of total deposits, down from 23.0% at December 31, 2023. At June 30, 2024, unprotected deposits, which excludes insured, internal, and collateralized deposit accounts, represented 22.1% of total deposits, down from 23.3% at December 31, 2023.

Previous wording

Total borrowings decreased $61.4 million, or 13.2%, from December 31, 2023, primarily due to pay-downs of long-term FHLB advances of $60.0 million. These borrowings were replaced with $110.2 million of lower cost brokered deposits during the quarter.

Current wording

Total borrowings decreased $54.3 million, or 11.7%, from December 31, 2023, primarily due to pay-downs of long-term FHLB advances of $60.0 million, partially offset by an increase of $5.5 million in customer repurchase agreements. These borrowings were replaced with $74.8 million of lower cost brokered deposits during the first half of 2024.

Previous wording

Total shareholders' equity increased $4.5 million, or 0.5%, from December 31, 2023. Retained earnings at March 31, 2024 increased by $14.1 million primarily due to net income of $20.3 million offset by $6.2 million in cash dividends paid during the three months ended March 31, 2024. Accumulated other comprehensive loss increased by $4.1 million, primarily attributable to decreases in the fair value of available-for-sale investment securities of $2.3 million, net of tax and a decrease in the fair value of derivatives of $1.9 million, net of tax. Treasury stock increased $3.4 million from December 31, 2023, primarily related to repurchases of $6.5 million of stock offset by $3.1 million of stock issued under the dividend reinvestment and employee stock purchase plans and stock-based incentive plan activity.

Current wording

Total shareholders' equity increased $14.9 million, or 1.8%, from December 31, 2023. Retained earnings at June 30, 2024 increased by $25.8 million primarily due to net income of $38.4 million offset by $12.3 million in cash dividends paid during the six months ended June 30, 2024. Accumulated other comprehensive loss increased by $3.5 million, attributable to decreases in the fair value of available-for-sale investment securities of $2.2 million, net of tax and a decrease in the fair value of derivatives of $1.5 million, net of tax. Treasury stock increased $6.5 million from December 31, 2023, related to repurchases of $10.5 million of stock offset by $4.0 million of stock issued under the dividend reinvestment and employee stock purchase plans and stock-based incentive plan activity.

Previous wording

The Banking segment reported pre-tax income of $25.0 million and $24.7 million for the three months ended March 31, 2024 and 2023, respectively. See the section of this Management's Discussion & Analysis under the headings "Results of Operations" and "Financial Condition" for a discussion of key items impacting the Banking Segment.

Current wording

The Banking segment reported pre-tax income of $23.6 million and $20.6 million for the three months ended June 30, 2024 and 2023, respectively, and pre-tax income of $48.6 million and $45.3 million for the six months ended June 30, 2024 and 2023, respectively. See the section of this Management's Discussion & Analysis under the headings "Results of Operations" and "Financial Condition" for a discussion of key items impacting the Banking Segment.

Previous wording

The Wealth Management segment reported noninterest income of $7.4 million and $6.8 million for the three months ended March 31, 2024 and 2023, respectively. Noninterest expense was $5.5 million and $4.9 million for the three months ended March 31, 2024 and 2023, respectively. The increase in noninterest income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was due to new customer relationships and appreciation of assets under management and supervision as a majority of investment advisory fees are billed based on the prior quarter-end assets under management and supervision balance. The increase in noninterest expense for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was due to an increase in salary expense as we continue to invest in revenue producing positions. Assets under management and supervision were $5.0 billion as of March 31, 2024, $4.7 billion as of December 31, 2023, $4.3 billion as of March 31, 2023 and $4.2 billion as of December 31, 2022.

Current wording

The Wealth Management segment reported noninterest income of $7.3 million and $6.7 million for the three months ended June 30, 2024 and 2023, respectively, and $14.7 million and $13.4 million for the six months ended June 30, 2024 and 2023, respectively. Noninterest expense was $5.5 million and $4.8 million for the three months ended June 30, 2024 and 2023, respectively, and $11.0 million and $9.7 million for the six months ended June 30, 2024 and 2023, respectively. The increase in noninterest income for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 was due to new customer relationships and appreciation of assets under management and supervision as a majority of investment advisory fees are billed based on the prior quarter-end assets under management and supervision balance. The increase in noninterest expense for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 was due to increase in salary and benefits expense as we continue to invest in revenue producing positions. Assets under management and supervision were $5.0 billion as of June 30, 2024 and March 31, 2024, $4.5 billion as of June 30, 2023 and $4.3 billion as of March 31, 2023.

Previous wording

The Insurance segment reported noninterest income of $7.3 million and $6.7 million for the three months ended March 31, 2024 and 2023, respectively. Noninterest expense was $4.1 million and $3.9 million for the three months ended March 31, 2024 and 2023, respectively. The increase in noninterest income for the three months ended March 31, 2024 was primarily due to increases in premiums for group life and health and commercial lines. In addition, the increase for the three months ended March 31, 2024 included an increase in contingent commission income of $484 thousand, which was $2.3 million and $1.8 million for the three months ended March 31, 2024 and 2023, respectively. Contingent income is largely recognized in the first quarter of the year.

Current wording

The Insurance segment reported noninterest income of $5.2 million for the three months ended June 30, 2024 and 2023, and $12.5 million and $11.9 million for the six months ended June 30, 2024 and 2023, respectively. Noninterest expense was $4.0 million for the three months ended June 30, 2024 and 2023, and $8.0 million and $7.9 million for the six months ended June 30, 2024 and 2023, respectively. The increase for the six months ended June 30, 2024 included an increase in contingent commission income of $476 thousand, which was $2.3 million and $1.8 million for the six months ended June 30, 2024 and 2023, respectively. Contingent income is largely recognized in the first quarter of the year.

Previous wording

The Corporation and its subsidiaries maintain ample ability to meet the liquidity needs of its customers. Our most liquid asset, unencumbered cash and cash equivalents, were $192.6 million at March 31, 2024. Unencumbered securities classified as available-for-sale, which provide additional sources of liquidity, totaled $26.8 million at March 31, 2024. Further, the Corporation and its subsidiaries had committed borrowing capacity from the Federal Home Loan Bank and Federal Reserve Bank of $3.4 billion at March 31, 2024, of which $2.1 billion was available. The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $334.0 million at March 31, 2024. Future availability under these uncommitted funding sources is subject to the prerogatives of the granting banks and may be withdrawn at will.

Current wording

The Corporation and its subsidiaries maintain ample ability to meet the liquidity needs of its customers. Our most liquid asset, unencumbered cash and cash equivalents, were $182.3 million and $241.5 million at June 30, 2024 and December 31, 2023, respectively. Unencumbered securities classified as available-for-sale, which provide additional sources of liquidity, totaled $22.1 million and $23.3 million at June 30, 2024 and December 31, 2023, respectively. Further, the Corporation and its subsidiaries had committed borrowing capacity from the Federal Home Loan Bank and Federal Reserve Bank of $3.6 billion and $3.4 billion at June 30, 2024 and December 31, 2023, respectively, of which $2.3 billion and $1.9 billion was available as of June 30, 2024 and December 31, 2023, respectively. The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $459.0 million at June 30, 2024 and $369.0 million at December 31, 2023. Future availability under these uncommitted funding sources is subject to the prerogatives of the granting banks and may be withdrawn at will.

Previous wording

Core deposits continue to be the largest significant funding source for the Corporation. These deposits are primarily generated from individuals, businesses, municipalities and non-profit customers located in our primary service areas. The Corporation faces increased competition for these deposits from a large array of financial market participants, including banks, credit unions, savings institutions, mutual funds, security dealers and others.

Current wording

Core deposits continue to be the largest significant funding source for the Corporation. These deposits are primarily generated from individuals, businesses, public funds and non-profit customers located in our primary service areas. The Corporation faces increased competition for these deposits from a large array of financial market participants, including banks, credit unions, savings institutions, mutual funds, security dealers and others.