S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — FY2016 Earnings Presentation
37 slides from S&t Bancorp's earnings presentation, Feb 8, 2017
Slide 1: Full Year 2016
SaBancorp.. Full Year 2016
Slide 2: Forward Looking Statement and Risk Factors
Forward Looking Statement and Risk Factors This presentation contains certain 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, outlo
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to the results of operations presented in accordance with Generally Accepted Accounting Principles (GAAP), S&T management uses and this presentation contains or references certain non- GAAP financial measures, such as net interest income on a fully taxable equ
Slide 4: Corporate Profile
Corporate Profile 4 • Headquartered in Indiana, PA • $6.9 billion in assets (as of 12.31.16) • $1.4 billion market cap (as of 12.31.16) • Bank holding company with 64 offices and 5 insurance locations • Stock symbol: STBA • Named Sandler O’Neill Sm-All Star in 2013, 2014, and 2015
Slide 5: Performance
Performance "We had our best year in our 115-year history.” - Todd Brice Pre ssident and Chief Executive Officer
Slide 6: Performance Summary
Performance Summary (1)Refer to appendix for reconciliation of Non-GAAP financial measures 6 2016 2015 2014 2013 2012 Net Income (in $ thousands) $71,392 $67,081 $57,910 $50,539 $34,200 Diluted Earnings per Share $2.05 $1.98 $1.95 $1.7 $1.18 Dividends Declared per Share $0.77 $0.73 $0.68 $0.61 $0.60
Slide 7: STBA Investment Thesis
STBA Investment Thesis • Above peer performance • Strategic and effective mergers and expansion • Demonstrated expense discipline and efficiency • Organic growth • Sound asset quality • Stable regional economies with long-term oil and gas benefit • Undervalued compared to peer 7
Slide 8: Performance: Return on Average Assets
Performance Saki Bancorp. Return on Average Assets 1.22% 12% 1.12% 1.13% 1.08% 0.8% 0.4% 0.2% 2013 2014 2015 2016
Slide 9: Performance: Return on Average Equity
Performance Saki Bancorp. Return on Average Equity 12.5% 10.0% ann 9.21% 2.94% me 0.0% 2013 2014 2015 2016 Bar
Slide 10: Performance: Return on Average Tangible Equity
Performance Saki Bancorp. Return on Average Tangible Equity 16.0% soot 14.39% oe 15.94% a% 12.0% 10.0% 2013 2014 2015 2016,
Slide 11: Mergers and expansion
Mergers and expansion SalBancorp.. 1 T TO Northeast Ohio Central Ohio LPO Western LPO S&T Bank branch Loan Production Office opened January 21,2014 ‘pened-March_opensin Akron, OH £686 opened August 27,2012 25,2035 December2i,2035 g.o45 SRT Bank branchopensin State College, PA 8.500 “une 18,2044 658
Slide 12: Expenses: Non Interest Expense / Average Assets
Expenses Sai Bancorp. Non Interest Expense / Average Assets 2.61% 2.46% 2.30% 27% 2.0% 2013, 2014 2015 2016
Slide 13: Expenses: Efficiency Ratio
Expenses Sai Bancorp. Efficiency Ratio 60.03% 58.67% 55.86% 55% 45% 2013 2014 2015 2016
Slide 14: Growth
Growth Saki Bancorp. 2013 2014 2015 2016 Line Utilization mm New Payments Payofts onNetGrowth
Slide 15: Market Opportunity
Market Opportunity MSA 2017 Population (in thousands) 2017-2022 % Change Median HH Income (in thousands) Locations Deposits (in millions) Deposit Market Share % Loans (in millions) Pittsburgh, PA 2,349 0.08 % $56 27 $1,955 1.6% $2,035 Indiana, PA1 86 (1.42)% $46 9 $1,345 58.0% $384 Jefferson-Clarion
Slide 16: Asset quality: Non Performing Loans / Total Loans
Asset quality Sai Bancorp. Non Performing Loans / Total Loans 2.0% 1.5% 1.0% 0.53% Peer!) 0.5% 032% 0.0% 2013 2014 2015 2016 ‘"IBHCPR Peer Group 2: Bank Holding Companies with $3-10 Billion of.
Slide 17: Asset quality: Net Charge Offs / Average Loans
Asset quality Sai Bancorp. Net Charge Offs / Average Loans 0.40% 0.30% 0.25% 0.25% 0.22% 0.20% 0.10% 0.00% 0.00% 2013 2014 2015 2016 'X)BHCPR Peer Group 2: Bank Holding Companies with $3-10 Bion of Assets (September YTD peer used for 20%
Slide 18: Asset quality: Loan Mix
Asset quality Sai Bancorp. Loan Mix As of 12.31.16 Total Portfolio Loans $5,611 Commercial ‘Consumer cau other $1,401 $66 CRE 32% 5% $2,498 sT% Construction non ‘$456 11%
Slide 19: Asset quality: Commercial Real Estate Diversification
Asset quality Office 15% 1 Multi-Family 13% 1 Strip Malls 119% tail 5% Recreational 2% Saki Bancorp. Commercial Real Estate Diversification As of 12.31.16 Total CRE $2,498 million ‘= Pennsylvania Ohio New York = West Virginia Other
Slide 20: Stable regional economies with long-term oil & gas benefit
Stable regional economies with long-term oil & gas benefit 20 Regional economy
Slide 21: Valuation
Valuation Saki Bancorp. Total shareholder return* for STBA was over 5.5% Market cap of Increase in cash dividends paid in 201: BILLION *includes reinvested dividends MEMBER FDIC
Slide 22: Undervalued compared to peer
22 Undervalued compared to peer(1) Valuation (1)KRX-Dow Jones KBW Regional Bank Index Members Stock prices as of 01.31.17; Performance for last twelve months reported Source: Bloomberg
Slide 23: Valuation: Stock Performance
Valuation Saki Bancorp. Stock Performance ‘Total Annualized Shareholder Return Includes reinvested dividends (Data as of 12.31.16) YR 3YR R 10YR STBA 30.40% 18.62% 18.09% 4.43% NASDAQ Bank 37.97% 16.34% 21.48% 3.59% KRX-Dow Jones KBW Regional Bank 39.12% 14.71% 20.18% 3.54% S&P 500 11.95% 8.85% 14.6
Slide 24: Rate Sensitivity
Saki Bancorp. Rate Sensitivity As of 12.31.16 Loans & Securities Floating Rate @ $2,422 38% ARM/Future Reset $1,629 25% Fixed Rate $2,377 37% Total $6,428 100% Deposits & Borrowings Floating Rate/Short Wholesale [oe Borrowings $1,008 ue Non-Maturity Variable Deposits $2,301 38% Non-Interest Bearing
Slide 25: Senior Management
Senior Management 25 Name Title Years in Banking Years with S&T Todd D. Brice President & CEO 31 31 Mark Kochvar Chief Financial Officer 30 24 David G. Antolik Chief Lending Officer 28 26 Ernest J. Draganza Chief Risk Officer 30 25 Patrick J. Haberfield Chief Credit Officer 29 6 David P. Ruddock Chi
Slide 26: Continuous Improvement
Continuous Improvement 26 Multi-Faceted Growth Profit Improvement Operational Effectiveness Culture Customer Experience Risk Management 3 mergers since 2012 LPO expansions to new markets Akron, OH office relocated in 2016 North Shore, Pittsburgh commercial banking office opened in 2016 McCandless, P
Slide 27: Lines of Business
Lines of Business Commercial Banking • 49 commercial bankers • 18 business bankers • C&I growth focused on privately held companies with sales up to $150 million • Regional team based approach to credit delivery • Dedicated small business (B2B) delivery channel • Dedicated treasury management team R
Slide 28: The Right Size
The Right Size • Big enough to: • Provide full complement of products and services • Access technology • Access capital markets • Attract talent • Expand – mergers and acquisitions/de novo • Small enough to: • Stay close to our customers • Understand our markets • Be responsive 28
Slide 29: Income Statement
Income Statement Dollars in thousands, except per share data 29 2016 2015 2014 2013 2012 Net Interest Income $203,259 $187,551 $148,042 $139,193 $135,227 Noninterest Income 54,635 51,033 46,338 51,527 51,912 Total Revenue 257,894 238,584 194,380 190,720 187,139 Noninterest Expense 143,232 136,717 11
Slide 30: Balance Sheet
Balance Sheet Dollars in thousands 30 2016 2015 2014 2013 2012 Securities $693,487 $660,963 $640,273 $509,425 $452,266 Interest-bearing Balances 87,201 41,639 57,048 53,594 257,116 Loans, Net 5,562,437 5,014,786 3,823,805 3,522,080 3,322,637 Other 599,928 600,966 443,560 448,091 494,683 Total Assets
Slide 31: Net Interest Margin
Net Interest Margin (1)Refer to appendix for reconciliation of Non-GAAP financial measures 31 2016 2015 2014 2013 2012 Securities/Other – FTE 2.37% 2.41% 2.28% 2.00% 1.86% Loans - FTE 4.08% 4.09% 4.06% 4.22% 4.59% Total Interest-earning Assets 3.87% 3.86% 3.78% 3.86% 4.10% Deposits 0.51% 0.37% 0.36%
Slide 32: Loan Portfolio
Loan Portfolio Dollars in thousands 32 2016 2015 2014 2013 2012 Commercial Commercial Real Estate $2,498,476 $2,166,603 $1,682,236 $1,607,756 $1,452,133 Commercial & Industrial 1,401,035 1,256,830 994,138 842,449 791,396 Construction 455,884 413,444 216,148 143,675 168,143 Total Commercial 4,355,395
Slide 33: Asset Quality
Asset Quality 33 Dollars in thousands 2016 2015 2014 2013 2012 Total Nonperforming Loans $42,635 $35,382 $12,457 $22,454 $54,959 Nonperforming Loans/Total Loans 0.76% 0.70% 0.32% 0.63% 1.63% Nonperforming Assets/Total Loans + OREO 0.77% 0.71% 0.33% 0.64% 1.66% Net Charge-offs (Recoveries)/Average Lo
Slide 34: Capital
Capital (1)Refer to appendix for reconciliation of Non-GAAP financial measures 34 2016 2015 2014 2013 2012 Leverage 8.98% 8.96% 9.80% 9.75% 9.31% Common Tier 1 – Risk-Based Capital 10.04% 9.77% 11.81% 11.79% 11.37% Tier 1 – Risk-Based Capital 10.39% 10.15% 12.34% 12.37% 11.98% Total – Risk-Based Cap
Slide 35: APPENDIX – Non-GAAP Measures
APPENDIX – Non-GAAP Measures 35 2016 2015 2014 2013 2012 Tangible Common Equity/Tangible Assets (Non-GAAP) Total Shareholders’ Equity $841,956 $792,237 $608,389 $571,306 $537,422 Less: Preferred Equity, Goodwill & Other Intangible Assets, net of deferred tax liability (294,862) (296,005) (177,530) (
Slide 36: APPENDIX – Non-GAAP Measures
APPENDIX – Non-GAAP Measures 36 2016 2015 2014 2013 2012 Net Interest Margin Rate (FTE) (Non-GAAP) Total Interest Income $227,774 $203,548 $160,523 $153,756 $156,251 Total Interest Expense (24,515) (15,997) (12,481) (14,563) (21,024) Net Interest Income per Consolidated Statements of Net Income 203,
Slide 37: Full Year 2016
SaBancorp.. Full Year 2016