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Jul 30, 2020

S&T Bancorp, Inc. Announces Second Quarter 2020 Results and Declares Second Quarter Dividend

INDIANA, Pa., July 30, 2020 /PRNewswire/ -- S&T Bancorp, Inc. (S&T) (NASDAQ: STBA), the holding company for S&T Bank, with operations in five markets including Western Pennsylvania, Eastern Pennsylvania, Northeast Ohio, Central Ohio, and Upstate New York, announced a net loss of ($33.1) million, or ($0.85) per diluted share, for the second quarter of 2020 compared to net income of $13.2 million, or $0.34 per diluted share, for the first quarter of 2020, and $26.1 million, or $0.76 per diluted share, for the second quarter of 2019.

A loss of  $58.7 million was recognized during the second quarter of 2020 related to a previously disclosed customer fraud resulting from a check kiting scheme. This fraud loss reduced net income by $46.3 million, or $1.19 per diluted share, resulting in a net loss for the second quarter of 2020. S&T continues to pursue all available sources of recovery to mitigate the loss.

"While we are very disappointed in the loss that we experienced this quarter related to the fraudulent activities of a single business customer, we are a resilient company with 118 years of history overcoming all manner of challenges. I am confident we will emerge from this situation as strong, if not stronger, than before," said Todd Brice, Chief Executive Officer. "The personalized assistance given to our customers who are experiencing financial hardships as a result of COVID-19 is a direct reflection of the integral role we play in the communities where we operate. As we move forward, we will continue to be a source of strength for our customers and our employees."

Impact and Response to the COVID-19 Pandemic:

As we navigate through these uncertain times, our focus remains on the health and safety of our employees and the customers and communities that we serve. We continue to support our customers through the potential financial hardships that have arisen through this crisis, including:

  • Providing consumer and homeowner needs-based loan assistance with payment deferrals for 1,071 loans totaling $123.0 million
  • Providing commercial and business needs-based loan assistance with payment deferrals for 1,289 loans totaling $1.3 billion
  • Originating SBA Paycheck Protection Program (PPP) loans of $547.6 million

Second Quarter of 2020 Highlights:

  • Return on average assets (ROA) was (1.41%), return on average equity (ROE) was (11.17%) and return on average tangible equity (ROTE) (non-GAAP) was (16.19%). Excluding the loss from the customer fraud ROA (non-GAAP) was 0.57%, ROE (non-GAAP) was 4.48% and ROTE (non-GAAP) was 6.86%.
  • Portfolio loans increased $301.8 million compared to the first quarter of 2020. Excluding the PPP portfolio, loans decreased $245.8 million.
  • With an influx of funds from PPP loans and stimulus payments, along with the heightened liquidity concerns of customers, deposits increased $810.0 million to $7.9 billion at June 30, 2020 compared to $7.1 billion at March 31, 2020.
  • Net interest margin (FTE) (non-GAAP) was 3.31% compared to 3.53% for the first quarter of 2020.
  • The allowance for credit losses to total portfolio loans was 1.52% at June 30, 2020 compared to 1.34% at March 31, 2020. Excluding the PPP loans, the allowance for credit losses to total portfolio loans was 1.64% at June 30, 2020.
  • S&T's Board of Directors declared a $0.28 per share dividend. This is an increase of 3.7% compared to a dividend of $0.27 per share declared in the same period in the prior year.

"While we faced many challenges during the quarter given the uncertain environment, I couldn't be prouder of the incredible work that our employees have done for our customers," said Todd Brice. "A testament to our employees was the recent announcement that S&T Bank was ranked #1 in customer satisfaction with retail banking in the Mid-Atlantic, including best in communication and advice,  by J.D. Power which is a reflection of the confidence and trust our customers have in our great employees at S&T Bank."

Net Interest Income

Net interest income was $70.1 million for the second quarter of 2020 compared to $70.0 million for the first quarter of 2020. Average loans increased $474.2 million mainly due to loans from the PPP of $449.3 million compared to the first quarter of 2020. Net interest margin on a fully taxable equivalent basis (FTE) (non-GAAP) declined 22 basis points to 3.31% for the second quarter of 2020 from 3.53% in the first quarter of 2020 primarily due to decreases in short-term rates. Loan rates decreased 64 basis points to 4.00% and total interest-bearing deposit costs decreased 48 basis points to 0.67%.

Asset Quality

The customer fraud that resulted in a $58.7 million loss to the bank had a significant impact on asset quality during the second quarter of 2020. The customer also had a $15.1 million lending relationship which was charged down by $4.2 million leaving a new nonperforming loan of $10.9 million in the second quarter of 2020. Net loan charge-offs were $68.1 million for the second quarter of 2020 compared to $11.2 million in the first quarter of 2020. Excluding the fraud, net loan charge-offs were $9.4 million for the second quarter of 2020. The provision for credit losses increased $66.7 million to $86.8 million in the second quarter of 2020 compared to $20.1 million in the first quarter of 2020. Total nonperforming loans increased $16.3 million to $90.1 million, or 1.19% of total loans, at June 30, 2020 compared to $73.8 million, or 1.02% of total loans at March 31, 2020. The uncertainty around the economic environment due to the COVID-19 pandemic contributed to the higher allowance for credit losses of 1.52% of total portfolio loans as of June 30, 2020 compared to 1.34% at March 31, 2020. Excluding the PPP loans, the allowance for credit losses to total portfolio loans was 1.64%.

Noninterest Income and Expense

Noninterest income increased $2.8 million to $15.2 million in the second quarter of 2020 compared to $12.4 million in the first quarter of 2020. Other noninterest income increased by $3.7 million primarily due to the increase in the fair value of the assets in a nonqualified benefit plan of $2.1 million and an increase in the fair value of equity securities of $1.9 million. Mortgage banking income improved during the quarter by $1.4 million due to increased refinancing activity. These increases were offset by a decrease in service charges on deposit accounts of $1.2 million and commercial loan swap income of $1.5 million due to lower activity as a result of the COVID-19 pandemic. 

Noninterest expense decreased $2.9 million to $43.5 million for the second quarter of 2020 compared to $46.4 million in the first quarter of 2020. The decrease in noninterest expense was mainly due to  merger expenses of $2.3 million in the first quarter of 2020.  Other expense decreased $1.6 million related to historic tax credits of $1.2 million in the first quarter of 2020. Professional services and legal increased $0.9 million mainly due to higher legal expense compared to the first quarter of 2020.

Financial Condition

Total assets increased $468.8 million to $9.5 billion at June 30, 2020 compared to $9.0 billion at March 31, 2020. Portfolio loans increased $301.8 million, which included $547.6 million of loans from the PPP, compared to March 31, 2020. Excluding the PPP portfolio, loans decreased $245.8 million due to decreased activity related to the COVID-19 pandemic. Deposits increased $810.0 million to $7.9 billion at June 30, 2020 compared to $7.1 billion at March 31, 2020. The increase in deposits relates largely to customer PPP loans and stimulus payments along with customers conservatively holding cash deposits in these uncertain times.

All regulatory risk-based capital ratios declined at June 30, 2020 compared to March 31, 2020, except for total capital, due to a decrease in retained earnings offset in part by a reduction in risk weighted assets. S&T continues to maintain a strong capital position with all capital ratios above the well-capitalized thresholds of federal bank regulatory agencies.

Dividend

The Board of Directors of S&T declared a $0.28 per share cash dividend on July 27, 2020. This is an increase of 3.7% compared to a dividend of $0.27 per share declared in the same period in the prior year. The dividend is payable August 27, 2020 to shareholders of record on August 13, 2020.

Conference Call

S&T will host its second quarter 2020 earnings conference call live over the Internet at 1:00 p.m. ET on Thursday, July 30, 2020. To access the webcast, go to S&T's webpage at www.stbancorp.com and click on "Events & Presentations." Select "2nd Quarter 2020 Earnings Conference Call" and follow the instructions. After the live presentation, the webcast will be archived on this website for at least 90 days. A replay of the call will also be available until August 6, 2020, by dialing 1.877.481.4010; the Conference ID is 35499.

About S&T Bancorp, Inc. and S&T Bank

S&T Bancorp, Inc. is a $9.5 billion bank holding company that is headquartered in Indiana, Pennsylvania and trades on the NASDAQ Global Select Market under the symbol STBA. Its principal subsidiary, S&T Bank, was recently ranked #1 in customer satisfaction with retail banking in the Mid-Atlantic including best in communication and advice by J.D. Power. Established in 1902, S&T Bank operates in five markets including Western Pennsylvania, Eastern Pennsylvania, Northeast Ohio, Central Ohio, and Upstate New York. For more information visit stbancorp.com or stbank.com. Follow us on Facebook, Instagram, and LinkedIn.

This quarterly report on Form 10-Q contains or incorporates statements that we believe are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to our financial condition, results of operations, plans, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, financial position, and other matters regarding or affecting S&T and its future business and operations. Forward-looking statements are typically identified by words or phrases such as "will likely result", "expect", "anticipate", "estimate", "forecast", "project", "intend", " believe", "assume", "strategy", "trend", "plan", "outlook", "outcome", "continue", "remain", "potential", "opportunity", "believe", "comfortable", "current", "position", "maintain", "sustain", "seek", "achieve" and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. The matters discussed in these forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward-looking statements depending on a variety of uncertainties or other factors including, but not limited to: credit losses and the credit risk of our commercial and consumer loan products; changes in the level of charge-offs and changes in estimates of the adequacy of the allowance for credit losses; cyber-security concerns; rapid technological developments and changes; operational risks or risk management failures by us or critical third parties, including fraud risk; our ability to manage our reputational risks; sensitivity to the interest rate environment including a prolonged period of low interest rates, a rapid increase in interest rates or a change in the shape of the yield curve; a change in spreads on interest-earning assets and interest-bearing liabilities; regulatory supervision and oversight, including changes in regulatory capital requirements and our ability to address those requirements; unanticipated changes in our liquidity position; changes in accounting policies, practices, or guidance, for example, our adoption of CECL; legislation affecting the financial services industry as a whole, and S&T, in particular; the outcome of pending and future litigation and governmental proceedings; increasing price and product/service competition; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; managing our internal growth and acquisitions; the possibility that the anticipated benefits from acquisitions, including DNB, cannot be fully realized in a timely manner or at all, or that integrating the acquired operations will be more difficult, disruptive or costly than anticipated; containing costs and expenses; reliance on significant customer relationships; an interruption or cessation of an important service by a third-party provider; our ability to attract and retain talented executives and employees; general economic or business conditions, including the strength of regional economic conditions in our market area; the duration and severity of the coronavirus ("COVID-19") pandemic, both in our principal area of operations and nationally, including the ultimate impact of the pandemic on the economy generally and on our operations; deterioration of the housing market and reduced demand for mortgages; deterioration in the overall macroeconomic conditions or the state of the banking industry that could warrant further analysis of the carrying value of goodwill and could result in an adjustment to its carrying value resulting in a non-cash charge to net income; the stability of our core deposit base and access to contingency funding; re-emergence of turbulence in significant portions of the global financial and real estate markets that could impact our performance, both directly, by affecting our revenues and the value of our assets and liabilities, and indirectly, by affecting the economy generally and access to capital in the amounts, at the times and on the terms required to support our future businesses.

Many of these factors, as well as other factors, are described in our Annual Report on Form 10-K for the year ended December 31, 2019, including Part I, Item 1A-"Risk Factors" and any of our subsequent filings with the SEC. Forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. We caution you not to unduly rely on forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.

 

S&T Bancorp, Inc.

     

Consolidated Selected Financial Data

   

Unaudited

     
 

2020

 

2020

 

2019

 
 

Second

 

First

 

Second

 

(dollars in thousands, except per share data)

Quarter

 

Quarter

 

Quarter

 

INTEREST AND DIVIDEND INCOME

           

Loans, including fees

$75,498

   

$82,051

   

$74,728

 

Investment securities:

           

Taxable

3,791

   

4,282

   

3,647

 

Tax-exempt

959

   

803

   

834

 

Dividends

231

   

453

   

415

 

Total Interest and Dividend Income

80,479

   

87,589

   

79,624

 
             

INTEREST EXPENSE

           

Deposits

9,227

   

15,338

   

16,055

 

Borrowings and junior subordinated debt securities

1,104

   

2,215

   

2,742

 

Total Interest Expense

10,331

   

17,553

   

18,797

 
             

NET INTEREST INCOME

70,148

   

70,036

   

60,827

 

Provision for credit losses

86,759

   

20,050

   

2,205

 

Net Interest (Loss)  Income After Provision for Credit Losses

(16,611)

   

49,986

   

58,622

 
             

NONINTEREST INCOME

           

Net gain on sale of securities

142

   

   

 

Debit and credit card

3,612

   

3,482

   

3,501

 

Mortgage banking

2,623

   

1,236

   

637

 

Wealth management

2,586

   

2,362

   

2,062

 

Service charges on deposit accounts

2,342

   

3,558

   

3,212

 

Commercial loan swap income

945

   

2,484

   

1,102

 

Other

2,974

   

(719)

   

2,387

 

Total Noninterest Income

15,224

   

12,403

   

12,901

 
             

NONINTEREST EXPENSE

           

Salaries and employee benefits

21,419

   

21,335

   

20,290

 

Data processing and information technology

3,585

   

3,868

   

3,414

 

Net occupancy

3,437

   

3,765

   

2,949

 

Furniture, equipment and software

3,006

   

2,519

   

2,301

 

Professional services and legal

1,932

   

1,048

   

1,145

 

Other taxes

1,604

   

1,600

   

1,456

 

FDIC insurance

1,048

   

770

   

695

 

Marketing

979

   

1,111

   

1,310

 

Merger related expense

   

2,342

   

618

 

Other

6,468

   

8,033

   

6,174

 

Total Noninterest Expense

43,478

   

46,391

   

40,352

 

(Loss) Income Before Taxes

(44,865)

   

15,998

   

31,171

 

Income tax (benefit) expense

(11,793)

   

2,767

   

5,070

 

Net (Loss) Income

($33,072)

   

$13,231

   

$26,101

 
             

Per Share Data

           

Shares outstanding at end of period

39,263,460

   

39,125,425

   

34,330,338

 

Average shares outstanding - diluted

39,013,161

   

39,325,938

   

34,201,448

 

Diluted (loss) earnings per share

($0.85)

   

$0.34

   

$0.76

 

Dividends declared per share

$0.28

   

$0.28

   

$0.27

 

Dividend yield (annualized)

4.78%

   

4.10%

   

2.88%

 

Dividends paid to net income

NM

   

83.52%

   

35.41%

 

Book value

$28.93

   

$30.06

   

$28.11

 

Tangible book value (1)

$19.22

   

$20.29

   

$19.68

 

Market value

$23.45

   

$27.32

   

$37.48

 

Profitability Ratios (Annualized)

           

Return on average assets

(1.41%)

   

0.61%

   

1.44%

 

Return on average shareholders' equity

(11.17%)

   

4.47%

   

11.00%

 

Return on average tangible shareholders' equity (2)

(16.19%)

   

6.82%

   

15.89%

 

Efficiency ratio (FTE) (3)

50.51%

   

52.89%

   

54.03%

 

NM - Not Meaningful

           

 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

 

Six Months Ended June 30,

 

(dollars in thousands, except per share data)

2020

 

2019

 

INTEREST INCOME

       

Loans, including fees

$157,549

   

$148,120

   

Investment securities:

       

Taxable

8,074

   

7,437

   

Tax-exempt

1,762

   

1,679

   

Dividends

684

   

978

   

Total Interest and Dividend Income

168,069

   

158,214

   
         

INTEREST EXPENSE

       

Deposits

24,565

   

31,036

   

Borrowings and junior subordinated debt securities

3,320

   

5,995

   

Total Interest Expense

27,885

   

37,031

   
         

NET INTEREST INCOME

140,184

   

121,183

   

Provision for credit  losses

106,809

   

7,854

   

Net Interest Income After Provision for Credit Losses

33,375

   

113,329

   
         

NONINTEREST INCOME

       

Net gain on sale of securities

142

   

   

Debit and credit card

7,093

   

6,476

   

Mortgage banking

3,859

   

1,131

   

Wealth management

4,949

   

4,109

   

Service charges on deposit accounts

5,900

   

6,365

   

Commercial swap fee income

3,429

   

1,683

   

Other

2,255

   

4,499

   

Total Noninterest Income

27,627

   

24,263

   
         

NONINTEREST EXPENSE

       

Salaries and employee benefits

42,754

   

41,199

   

Data processing and information technology

7,453

   

6,646

   

Net occupancy

7,202

   

5,986

   

Furniture, equipment and software

5,525

   

4,531

   

Professional services and legal

2,980

   

2,329

   

Other taxes

3,205

   

2,641

   

FDIC insurance

1,818

   

1,211

   

Marketing

2,090

   

2,452

   

Merger related expense

2,342

   

618

   

Other

14,501

   

11,658

   

Total Noninterest Expense

89,869

   

79,271

   
         

(Loss) Income Before Taxes

(28,867)

   

58,321

   

Income tax (benefit) expense

(9,026)

   

9,292

   
         

Net (Loss) Income

($19,841)

   

$49,029

   
         

Per Share Data

       

Average shares outstanding - diluted

39,142,351

   

34,369,756

   

Diluted (loss) earnings per share

($0.51)

   

$1.43

   

Dividends declared per share

$0.56

   

$0.54

   

Dividends paid to net income

NM

   

37.85%

   
         

Profitability Ratios (annualized)

       

Return on average assets

(0.44%)

   

1.37%

   

Return on average shareholders' equity

(3.35%)

   

10.43%

   

Return on average tangible shareholders' equity (6)

(4.68%)

   

15.09%

   

Efficiency ratio (FTE) (7)

51.68%

   

53.37%

   

NM - Not Meaningful

       

 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

 

2020

 

2020

 

2019

 
 

Second

 

First

 

Second

 

(dollars in thousands)

Quarter

 

Quarter

 

Quarter

 

ASSETS

           

Cash and due from banks, including interest-bearing deposits

$351,365

   

$187,684

   

$122,876

   

Securities, at fair value

804,366

   

799,532

   

668,588

   

Loans held for sale

14,259

   

7,309

   

8,135

   

Commercial loans:

           

Commercial real estate

3,345,513

   

3,442,495

   

2,906,895

   

Commercial and industrial

2,140,355

   

1,781,402

   

1,559,727

   

Commercial construction

459,264

   

396,518

   

267,203

   

Total Commercial Loans

5,945,132

   

5,620,415

   

4,733,825

   

Consumer loans:

           

Residential mortgage

971,023

   

988,816

   

751,355

   

Home equity

539,519

   

544,405

   

464,195

   

Installment and other consumer

79,816

   

79,887

   

72,041

   

Consumer construction

13,068

   

13,222

   

11,784

   

Total Consumer Loans

1,603,426

   

1,626,330

   

1,299,375

   

Total Portfolio Loans

7,548,558

   

7,246,745

   

6,033,200

   

Allowance for credit losses

(114,609)

   

(96,850)

   

(61,479)

   

Total Portfolio Loans, Net

7,433,949

   

7,149,895

   

5,971,721

   

Federal Home Loan Bank and other restricted stock, at cost

15,151

   

28,253

   

22,491

   

Goodwill

373,289

   

374,270

   

287,446

   

Other assets

481,917

   

458,553

   

253,348

   

Total Assets

$9,474,296

   

$9,005,496

   

$7,334,605

   
             

LIABILITIES

           

Deposits:

           

Noninterest-bearing demand

$2,250,958

   

$1,702,960

   

$1,462,386

   

Interest-bearing demand

1,055,261

   

962,937

   

549,663

   

Money market

2,121,588

   

1,967,692

   

1,742,334

   

Savings

916,268

   

836,237

   

754,062

   

Certificates of deposit

1,523,841

   

1,588,053

   

1,348,255

   

Total Deposits

7,867,916

   

7,057,879

   

5,856,700

   
             

Borrowings:

           

Securities sold under repurchase agreements

92,159

   

69,644

   

14,154

   

Short-term borrowings

84,541

   

410,240

   

295,000

   

Long-term borrowings

49,489

   

50,180

   

69,791

   

Junior subordinated debt securities

64,053

   

64,038

   

45,619

   

Total Borrowings

290,242

   

594,102

   

424,564

   

Other liabilities

180,361

   

177,264

   

88,388

   

Total Liabilities

8,338,519

   

7,829,245

   

6,369,652

   
             

SHAREHOLDERS' EQUITY

           

Total Shareholders' Equity

1,135,777

   

1,176,251

   

964,953

   

Total Liabilities and Shareholders' Equity

$9,474,296

   

$9,005,496

   

$7,334,605

   
             

Capitalization Ratios

           

Shareholders' equity / assets

11.99%

   

13.06%

   

13.16%

   

Tangible common equity / tangible assets (4)

8.30%

   

9.21%

   

9.59%

   

Tier 1 leverage ratio

8.89%

   

10.03%

   

10.12%

   

Common equity tier 1 capital

10.70%

   

10.93%

   

11.35%

   

Risk-based capital - tier 1

11.10%

   

11.32%

   

11.68%

   

Risk-based capital - total

12.74%

   

12.73%

   

13.15%

   

 

S&T Bancorp, Inc.

 

Consolidated Selected Financial Data

 

Unaudited

 
 

2020

 

2020

 

2019

   
 

Second

 

First

 

Second

   

(dollars in thousands)

Quarter

 

Quarter

 

Quarter

   

Net Interest Margin (FTE) (QTD Averages)

             

ASSETS

             

Interest-bearing deposits with banks

$163,019

0.08%

$99,646

1.42%

$49,949

2.19%

 

Securities, at fair value

785,229

2.56%

786,858

2.54%

673,117

2.66%

 

Loans held for sale

9,931

3.08%

1,867

3.76%

1,452

4.44%

 

Commercial real estate

3,389,616

4.23%

3,408,684

4.73%

2,895,146

5.01%

 

Commercial and industrial

2,200,148

3.61%

1,751,678

4.53%

1,559,222

5.17%

 

Commercial construction

430,912

3.75%

386,363

4.68%

242,192

5.37%

 

Total Commercial Loans

6,020,676

3.97%

5,546,725

4.66%

4,696,560

5.08%

 

Residential mortgage

976,916

4.20%

990,866

4.18%

734,372

4.50%

 

Home equity

543,770

3.69%

540,193

4.84%

463,480

5.42%

 

Installment and other consumer

79,944

6.34%

79,680

7.01%

71,319

7.23%

 

Consumer construction

12,758

4.58%

10,508

4.61%

11,014

5.41%

 

Total Consumer Loans

1,613,388

4.14%

1,621,247

4.54%

1,280,185

4.99%

 

Total Portfolio Loans

7,634,064

4.00%

7,167,972

4.64%

5,976,745

5.06%

 

Total Loans

7,643,995

4.00%

7,169,839

4.64%

5,978,197

5.06%

 

Federal Home Loan Bank and other restricted stock

19,709

3.75%

23,601

6.90%

21,141

6.97%

 

Total Interest-earning Assets

8,611,952

3.80%

8,079,944

4.40%

6,722,404

4.81%

 

Noninterest-earning assets

817,767

 

687,382

 

523,636

   

Total Assets

$9,429,719

 

$8,767,326

 

$7,246,040

   
               

LIABILITIES AND SHAREHOLDERS' EQUITY

             

Interest-bearing demand

$1,033,905

0.24%

$942,030

0.59%

$550,200

0.46%

 

Money market

2,076,483

0.50%

1,993,764

1.27%

1,695,349

1.93%

 

Savings

887,357

0.07%

830,985

0.23%

760,743

0.26%

 

Certificates of deposit

1,560,885

1.51%

1,601,324

1.80%

1,389,968

1.95%

 

Total Interest-bearing Deposits

5,558,630

0.67%

5,368,103

1.15%

4,396,260

1.46%

 

Securities sold under repurchase agreements

85,302

0.25%

30,790

0.56%

16,337

0.69%

 

Short-term borrowings

178,273

0.38%

286,365

1.61%

242,759

2.71%

 

Long-term borrowings

49,774

2.53%

51,845

2.52%

70,049

2.86%

 

Junior subordinated debt securities

64,044

3.58%

64,195

4.40%

45,619

5.03%

 

Total Borrowings

377,393

1.18%

433,195

2.06%

374,764

2.94%

 

Total Interest-bearing Liabilities

5,936,023

0.70%

5,801,298

1.22%

4,771,024

1.58%

 

Noninterest-bearing liabilities

2,302,676

 

1,776,453

 

1,523,676

   

Shareholders' equity

1,191,020

 

1,189,575

 

951,340

   

Total Liabilities and Shareholders' Equity

$9,429,719

 

$8,767,326

 

$7,246,040

   
               

Net Interest Margin (5)

 

3.31%

 

3.53%

 

3.68%

 

 

S&T Bancorp, Inc.

 

Consolidated Selected Financial Data

 

Unaudited

 
 

Six Months Ended June 30,

   

(dollars in thousands)

2020

 

2019

   

Net Interest Margin (FTE) (YTD Averages)

         

ASSETS

         

Interest-bearing deposits with banks

$131,332

0.59%

$51,758

2.42%

 

Securities, at fair value

786,043

2.55%

676,797

2.67%

 

Loans held for sale

5,899

3.19%

1,175

4.29%

 

Commercial real estate

3,399,150

4.48%

2,900,181

5.01%

 

Commercial and industrial

1,975,913

4.02%

1,534,080

5.18%

 

Commercial construction

408,638

4.19%

246,073

5.37%

 

Total Commercial Loans

5,783,701

4.30%

4,680,334

5.09%

 

Residential mortgage

983,891

4.19%

728,495

4.44%

 

Home equity

541,981

4.26%

465,598

5.43%

 

Installment and other consumer

79,812

6.67%

70,215

7.20%

 

Consumer construction

11,633

4.59%

10,244

5.77%

 

Total Consumer Loans

1,617,317

4.34%

1,274,552

4.96%

 

Total Portfolio Loans

7,401,018

4.31%

5,954,886

5.06%

 

Total Loans

7,406,917

4.31%

5,956,061

5.06%

 

Federal Home Loan Bank and other restricted stock

21,655

5.47%

22,797

7.79%

 

Total Interest-earning Assets

8,345,947

4.09%

6,707,413

4.81%

 

Noninterest-earning assets

752,576

 

521,082

   

Total Assets

$9,098,523

 

$7,228,495

   
           

LIABILITIES AND SHAREHOLDERS' EQUITY

         

Interest-bearing demand

$987,968

0.41%

$547,960

0.44%

 

Money market

2,035,124

0.88%

1,632,234

1.91%

 

Savings

859,171

0.15%

765,638

0.25%

 

Certificates of deposit

1,581,104

1.66%

1,412,117

1.92%

 

Total Interest-bearing deposits

5,463,367

0.90%

4,357,949

1.44%

 

Securities sold under repurchase agreements

58,046

0.33%

19,735

0.59%

 

Short-term borrowings

232,319

1.14%

280,862

2.72%

 

Long-term borrowings

50,809

2.53%

70,122

2.85%

 

Junior subordinated debt securities

64,120

3.99%

45,619

5.12%

 

Total Borrowings

405,294

1.65%

416,338

2.90%

 

Total Interest-bearing Liabilities

5,868,661

0.96%

4,774,287

1.56%

 

Noninterest-bearing liabilities

2,039,565

 

1,505,964

   

Shareholders' equity

1,190,297

 

948,244

   

Total Liabilities and Shareholders' Equity

$9,098,523

 

$7,228,495

   
           

Net Interest Margin (8)

 

3.42%

 

3.70%

 

 

S&T Bancorp, Inc.

 

Consolidated Selected Financial Data

 

Unaudited

 
 

2020

 

2020

 

2019

   
 

Second

 

First

 

Second

   

(dollars in thousands)

Quarter

 

Quarter

 

Quarter

   

Nonperforming Loans (NPL)

             

Commercial loans:

 

% NPL

 

% NPL

 

% NPL

 

Commercial real estate

$61,643

 

1.84%

$50,508

 

1.47%

$28,783

 

0.99%

 

Commercial and industrial

8,484

 

0.40%

9,081

 

0.51%

4,130

 

0.26%

 

Commercial construction

1,504

 

0.33%

571

 

0.14%

1,226

 

0.46%

 

Total Nonperforming Commercial Loans

71,631

 

1.20%

60,160

 

1.07%

34,139

 

0.72%

 

Consumer loans:

             

Residential mortgage

14,649

 

1.51%

10,582

 

1.07%

6,782

 

0.90%

 

Home equity

3,814

 

0.71%

2,797

 

0.51%

4,081

 

0.88%

 

Installment and other consumer

19

 

0.02%

258

 

0.32%

25

 

0.03%

 

Total Nonperforming Consumer Loans

18,482

 

1.14%

13,637

 

0.83%

10,888

 

0.83%

 

Total Nonperforming Loans

$90,113

 

1.19%

$73,797

 

1.02%

$45,027

 

0.75%

 
   
 

2020

 

2020

 

2019

   
 

Second

 

First

 

Second

   

(dollars in thousands)

Quarter

 

Quarter

 

Quarter

   

Loan Charge-offs (Recoveries)

             

Charge-offs

$68,304

   

$11,445

   

$2,667

     

Recoveries

(231)

   

(289)

   

(532)

     

Net Loan Charge-offs (Recoveries)

$68,072

   

$11,156

   

$2,135

     
               

Net Loan Charge-offs (Recoveries)

             

Commercial loans:

             

Customer fraud

$58,671

   

$—

   

$—

     

Commercial real estate

5,588

   

428

   

522

     

Commercial and industrial

3,060

   

10,265

   

1,344

     

Commercial construction

(19)

   

(2)

   

(2)

     

Total Commercial Loan Charge-offs (Recoveries)

67,300

   

10,691

   

1,864

     

Consumer loans:

             

Residential mortgage

74

   

19

   

(154)

     

Home equity

16

   

80

   

57

     

Installment and other consumer

682

   

366

   

368

     

Total Consumer Loan Charge-offs

772

   

465

   

271

     

Total Net Loan Charge-offs (Recoveries)

$68,072

   

$11,156

   

$2,135

     
   
     

Six Months Ended June 30,

   

(dollars in thousands)

   

2020

 

2019

   

Loan Charge-offs (Recoveries)

             

Charge-offs

   

$79,749

   

$8,691

     

Recoveries

   

(520)

   

(1,320)

     

Net Loan Charge-offs (Recoveries)

   

$79,229

   

$7,371

     
               

Net Loan Charge-offs (Recoveries)

             

Commercial loans:

             

Customer fraud

   

$58,671

   

$—

     

Commercial real estate

   

6,016

   

401

     

Commercial and industrial

   

13,325

   

6,403

     

Commercial construction

   

(21)

   

(3)

     

Total Commercial Loan Charge-offs/(Recoveries)

   

77,991

   

6,801

     

Consumer loans:

             

Residential mortgage

   

93

   

(38)

     

Home equity

   

97

   

39

     

Installment and other consumer

   

1,048

   

651

     

Consumer construction

   

   

(82)

     

Total Consumer Loan Charge-offs

   

1,238

   

570

     

Total Net Loan Charge-offs (Recoveries)

   

$79,229

   

$7,371

     

 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

 
 

2020

 

2020

 

2019

 
 

Second

 

First

 

Second

 

(dollars in thousands)

Quarter

 

Quarter

 

Quarter

 

Asset Quality Data

           

Nonperforming loans

$90,113

   

$73,797

   

$45,027

   

OREO

2,740

   

3,389

   

1,495

   

Nonperforming assets

92,853

   

77,186

   

46,522

   

Troubled debt restructurings (nonaccruing)

31,755

   

36,054

   

9,943

   

Troubled debt restructurings (accruing)

15,536

   

15,189

   

20,690

   

Total troubled debt restructurings

47,291

   

51,243

   

30,633

   

Nonperforming loans / loans

1.19%

   

1.02%

   

0.75%

   

Nonperforming assets / loans plus OREO

1.23%

   

1.06%

   

0.77%

   

Allowance for credit losses / total portfolio loans

1.52%

   

1.34%

   

1.02%

   

Allowance for credit losses / nonperforming loans

127%

   

131%

   

137%

   

Net loan charge-offs (recoveries)

$68,072

   

$11,156

   

$2,135

   

Net loan charge-offs (recoveries)(annualized) / average loans

3.58%

   

0.63%

   

0.14%

   
   
     

Six Months Ended June 30,

 

(dollars in thousands)

   

2020

 

2019

 

Asset Quality Data

           

Net loan charge-offs (recoveries)

   

$79,229

   

$7,371

   

Net loan charge-offs (recoveries)(annualized) / average loans

   

2.15%

   

0.25%

   

 

S&T Bancorp, Inc.

 

Consolidated Selected Financial Data

 

Unaudited

 
   

Definitions and Reconciliation of GAAP to Non-GAAP Financial Measures:

 
   
 

2020

 

2020

 

2019

 
 

Second

 

First

 

Second

 
 

Quarter

 

Quarter

 

Quarter

 
             

(1) Tangible Book Value (non-GAAP)

           

 Total shareholders' equity

$1,135,777

   

$1,176,251

   

$964,953

   

      Less: goodwill and other intangible assets

(383,032)

   

(384,557)

   

(289,701)

   

     Tax effect of other intangible assets

2,046

   

2,160

   

474

   

 Tangible common equity (non-GAAP)

$754,791

   

$793,854

   

$675,726

   

 Common shares outstanding

39,263

   

39,125

   

34,330

   

 Tangible book value (non-GAAP)

$19.22

   

$20.29

   

$19.68

   
             

(2) Return on Average Tangible Shareholders' Equity (non-GAAP)

           

  Net (loss) income (annualized)

($133,016)

   

$53,216

   

$104,689

   

       Plus: amortization of intangibles (annualized)

2,623

   

2,542

   

654

   

       Tax effect of amortization of intangibles (annualized)

(551)

   

(534)

   

(137)

   

  Net (loss)  income before amortization of intangibles (annualized)

($130,944)

   

$55,224

   

$105,206

   
             

  Average total shareholders' equity

$1,191,020

   

$1,189,575

   

$951,340

   

       Less: average goodwill and other intangible assets

(384,197)

   

(382,025)

   

(289,784)

   

       Tax effect of average goodwill and other intangible assets

2,116

   

2,235

   

491

   

  Average tangible equity (non-GAAP)

$808,939

   

$809,785

   

$662,047

   

  Return on average tangible shareholders' equity (non-GAAP)

(16.19%)

   

6.82%

   

15.89%

   
             

(3) Efficiency Ratio (non-GAAP)

           

Noninterest expense

$43,478

   

$46,391

   

$40,352

   

Less: merger related expenses

   

(2,342)

   

618

   

Noninterest expense excluding nonrecurring items

$43,478

   

$44,049

   

$40,352

   
             

Net interest income per consolidated statements of net income

$70,148

   

$70,036

   

$60,827

   

     Less: net (gains) losses on sale of securities

(142)

   

   

   

     Plus: taxable equivalent adjustment

847

   

849

   

958

   

Net interest income (FTE) (non-GAAP)

$70,853

   

$70,885

   

$61,785

   

Noninterest income

15,224

   

12,403

   

12,901

   

Net interest income (FTE) (non-GAAP) plus noninterest income

$86,077

   

$83,288

   

$74,686

   

Efficiency ratio (non-GAAP)

50.51%

   

52.89%

   

54.03%

   
             

(4) Tangible Common Equity / Tangible Assets (non-GAAP)

           

 Total shareholders' equity

$1,135,777

   

$1,176,251

   

$964,953

   

      Less: goodwill and other intangible assets

(383,032)

   

(384,557)

   

(289,701)

   

      Tax effect of goodwill and other intangible assets

2,046

   

2,160

   

474

   

 Tangible common equity (non-GAAP)

$754,791

   

$793,854

   

$675,726

   
             

 Total assets

$9,474,296

   

$9,005,496

   

$7,334,605

   

      Less: goodwill and other intangible assets

(383,032)

   

(384,557)

   

(289,701)

   

      Tax effect of goodwill and other intangible assets

2,046

   

2,160

   

474

   

 Tangible assets (non-GAAP)

$9,093,310

   

$8,623,099

   

$7,045,378

   

 Tangible common equity to tangible assets (non-GAAP)

8.30%

   

9.21%

   

9.59%

   
             

(5) Net Interest Margin Rate (FTE) (non-GAAP)

           

 Interest income

$80,479

   

$87,589

   

$79,624

   

      Less: interest expense

10,331

   

17,553

   

18,797

   

 Net interest income per consolidated statements of net income

$70,148

   

$70,036

   

$60,827

   

      Plus: taxable equivalent adjustment

847

   

849

   

958

   

 Net interest income (FTE) (non-GAAP)

$70,995

   

$70,885

   

$61,785

   

 Net interest income (FTE) (annualized)

$285,540

   

$285,098

   

$247,819

   

 Average earning assets

$8,611,952

   

$8,079,944

   

$6,722,404

   

 Net interest margin - (FTE) (non-GAAP)

3.31%

   

3.53%

   

3.68%

   

 

S&T Bancorp, Inc.

 

Consolidated Selected Financial Data

 

Unaudited

 
   

Definitions and Reconciliation of GAAP to Non-GAAP Financial Measures - continued:

 
   
 

Six Months Ended June 30,

 
 

2020

 

2019

 
         

(6) Return on Average Tangible Shareholders' Equity (non-GAAP)

       

  Net (loss) income (annualized)

($39,900)

   

$98,870

   

  Plus: amortization of intangibles (annualized)

2,582

   

697

   

  Tax effect of amortization of intangibles (annualized)

(542)

   

(146)

   

  Net (loss)  income before amortization of intangibles (annualized)

($37,860)

   

$99,421

   
         

  Average total shareholders' equity

$1,190,297

   

$948,244

   

  Less: average goodwill and other intangible assets

(383,111)

   

(289,869)

   

  Tax effect of average goodwill and other intangible assets

2,176

   

509

   

  Average tangible equity (non-GAAP)

$809,362

   

$658,884

   

  Return on average tangible equity (non-GAAP)

(4.68%)

   

15.09%

   
         

(7) Efficiency Ratio (non-GAAP)

       

Noninterest expense

$89,869

   

$79,271

   

Less: merger related expenses

(2,342)

   

(618)

   

Noninterest expense excluding nonrecurring items

$87,527

   

$78,653

   
         

Net interest income per consolidated statements of net income

$140,184

   

$121,183

   

Less: net (gains) losses on sale of securities

(142)

   

   

Plus: taxable equivalent adjustment

1,697

   

1,919

   

Net interest income (FTE) (non-GAAP)

$141,739

   

$123,102

   

Noninterest income

27,627

   

24,263

   

Net interest income (FTE) (non-GAAP) plus noninterest income

$169,366

   

$147,365

   

Efficiency ratio (non-GAAP)

51.68%

   

53.37%

   
         

(8) Net Interest Margin Rate (FTE) (non-GAAP)

       

 Interest income

$168,069

   

$158,214

   

 Less: interest expense

27,885

   

37,031

   

 Net interest income per consolidated statements of net income

140,184

   

121,183

   

 Plus: taxable equivalent adjustment

1,697

   

1,919

   

 Net interest income (FTE) (non-GAAP)

$141,881

   

$123,102

   

 Net interest income (FTE) (annualized)

$285,321

   

$248,244

   

 Average earning assets

$8,345,947

   

$6,707,413

   

 Net interest margin - (FTE) (non-GAAP)

3.42%

   

3.70%

   

 

S&T Bancorp, Inc.

 

Consolidated Selected Financial Data

 

Unaudited

 
   

The following profitability metrics for the three and six months ended June 30, 2020 are adjusted to exclude a $58.7 million loss related to a customer fraud.

 
 

2020

 

2020

 
 

Second

 

Six Months

 
 

Quarter

 

Ended June 30,

         

Return on Average Tangible Shareholders' Equity (non-GAAP)

       

Net loss

($33,072)

   

($19,841)

   

Provision for credit losses

58,671

   

58,671

   

Tax effect

(12,321)

   

(12,321)

   

Net income excluding fraud

$13,278

   

$26,509

   
         

Net income excluding fraud (annualized)

$53,404

   

$53,309

   

Plus: amortization of intangibles (annualized)

2,623

   

2,582

   

Tax effect of amortization of intangibles (annualized)

(551)

   

(542)

   

Net income before amortization of intangibles (annualized)

$55,476

   

$55,349

   
         

Average total shareholders' equity

$1,191,020

   

$1,190,297

   

Less: average goodwill and other intangible assets

(384,197)

   

(383,111)

   

Tax effect of average goodwill and other intangible assets

2,116

   

2,176

   

Average tangible equity (non-GAAP)

$808,939

   

$809,362

   

Return on average tangible shareholders' equity (non-GAAP)

6.86%

   

6.84%

   
         

Return on Average Assets (non-GAAP)

       

Net income excluding fraud (annualized)

$53,404

   

$53,309

   

Average total assets

9,429,719

   

9,098,523

   

Return on average assets (non-GAAP)

0.57%

   

0.59%

   
         

Return on Average Equity (non-GAAP)

       

Net income excluding fraud (annualized)

$53,404

   

$53,309

   

Average total shareholders' equity

1,191,020

   

1,190,297

   

Return on average assets (non-GAAP)

4.48%

   

4.48%

   
 

 

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/st-bancorp-inc-announces-second-quarter-2020-results-and-declares-second-quarter-dividend-301102762.html

SOURCE S&T Bancorp, Inc.

Mark Kochvar, Chief Financial Officer, 724.465.4826, mark.kochvar@stbank.com