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Alleged fraud by borrower could lead to $13M charge for Univest Bank and Trust

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Alleged fraud by borrower could lead to $13M charge for Univest Bank and Trust

Souderton, Pa.-based Univest Bank and Trust Co., which owns a participating interest of $13.0 million in an approximately $80.0 million commercial lending facility, has said that it is aware of the alleged fraudulent activities believed to be perpetrated by one or more employees of the borrower and its related entities.

The bank expects that its holding company, Univest Corp. of Pennsylvania, will have its second-quarter net income per share adversely affected by provision for loan and leases losses, and professional fees arising from this commercial lending relationship.

Univest Corp. of Pennsylvania's provision for the loan could amount to the entire $13.0 million of the bank's participating interest, or about 35 cents per share, net of tax.

Both Univest Corp. of Pennsylvania and Univest Bank and Trust are expected to remain well-capitalized subsequent to recording the potential provision for loan and leases losses and professional fees associated with this commercial lending relationship, according to a May 31 Form 8-K.