Slide 1: Full Year 2014
Todd Brice President and Chief Executive Officer Mark Kochvar Chief Financial Officer Full Year 2014
Slide 2: Forward Looking Statement and Risk Factor
Forward Looking Statement and Risk Factor This presentation contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include, among others, statements regarding trend
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 equi
Slide 4: Corporate Profile
Corporate Profile Headquartered in Indiana, PA $5.0 billion in assets (as of 12.31.14) Institutional ownership: 44% Insider ownership:2% $888 million market cap. (as of 12.31.14) Stock price: $29.81 (as of 12.31.14) Bank holding company with 56 offices and 5 insurance locations Anticipate closing of
Slide 5: Performance Summary
Performance Summary 2014 2013 2012 2011 2010 Net Income Available to Common Shareholders $57,910 $50,539 $34,200 $39,653 $37,279 Diluted Earnings per Share $1.95 $1.70 $1.18 $1.41 $1.34 Dividends Declared per share $0.68 $0.61 $0.60 $0.60 $0.60 Return on Average Assets 1.22% 1.12% 0.79% 0.97% 0.90%
Slide 6: STBA Investment Thesis
STBA Investment Thesis Stable Western PA economy Long-term Marcellus Shale benefit Strategic & effective acquisitions/expansions Loan growth Excellent asset quality Demonstrated expense discipline and efficiency Historically high performer
Slide 7: Unemployment
Unemployment 10.5% 9.5% US 8.5% PA 7.5% 6.5% Pittsburgh MSA 5.5% 4.5% 3.5% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Bureau of Labor Statistics Seasonally adjusted
Slide 8: Housing Price Index
Housing Price Index Pittsburgh MSA PA 90 US 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Federal Housing Finance Agency All Transactions; Not seasonally adjusted Index 2005: Q1=100
Slide 9: Long-Term Marcellus Shale Benefit
Long-Term Marcellus Shale Benefit Ohio New York West Virginia
Slide 10: Strategic and Effective Acquisitions
Strategic and Effective Acquisitions Assets/Deposits Acquired 2015 – Integrity Bancshares* $ 844* —Gateway Bank of Pennsylvania 126 2012 —Mainline Bancorp 242 2008 —IBT Bancorp 827 2002 —Peoples Financial Corp 344 —Branch Purchase from Mellon 39 1997 —Peoples Bank of Unity 287 1991 —Atlantic Financi
Slide 11: Strategic and Effective Expansions
Strategic and Effective Expansions 2012 – Loan production office opened in northeast Ohio, August 2012 2014 – Loan production office opened in central Ohio, January 2014 2014 – Hired seven bankers in State College, PA and branch opened in June, 2015 – Hired banker in Rochester, NY, January 2015
Slide 12: Loan Growth
Loan Growth $ in millions $350 $150 $300 $100 $250 $50 Production $200 $0 Growth $150 -$50 Loan Loan Net $100 -$100 $50 -$150 $0 -$200 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012 2013 2014
Slide 13: Non Performing Loans / Total Loans
Non Performing Loans / Total Loans 4.0% 3.5% 3.0% 2.5% 2.0% Peer* 1.5% 1.0% 0.5% 0.0% 2010 2011 2012 2013 2014 * Bank Holding Companies $3-10 Billion of Assets
Slide 14: Net Charge Offs / Average Loans
Net Charge Offs / Average Loans 2.0% 1.5% 1.0% 0.5% Peer* 0.0% 2010 2011 2012 2013 2014
Slide 15: Non Interest Expense / Average Assets
Non Interest Expense / Average Assets 4.0% 3.5% Peer* 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2010 2011 2012 2013 2014 * Bank Holding Companies $3-10 Billion of Assets
Slide 16: Full Time Equivalent Employees
Full Time Equivalent Employees 1,050 Gateway 1,000 IBT Mainline 2008 2009 2010 2011 2012 2013 2014
Slide 17: Return on Average Assets
Return on Average Assets 1.5% 1.0% Peer* 0.5% 0.0% 2010 2011 2012 2013 2014 * Bank Holding Companies $3-10 Billion of Assets
Slide 18: Return on Average Equity
Return on Average Equity 12.5% 10.0% Peer* 7.5% 5.0% 2.5% 0.0% 2010 2011 2012 2013 2014 * Bank Holding Companies $3-10 Billion of Assets
Slide 19: Lines of Business
4 Lines of Business Commercial Banking Retail Banking Wealth Management Insurance
Slide 20: Commercial Banking
Commercial Banking 39 commercial bankers 16 business bankers Privately held companies with sales up to $150 million Northeast Ohio loan production office, August, 2012 Central Ohio loan production office, January, 2014 State College, PA branch, June 2014 Hired banker in Rochester, NY, January 2015
Slide 21: Retail Banking
Retail Banking Competitive, relationship driven Robust suite of deposit and loan products Over 110,000 households 56 branches; average size of $66.1 million Technology driven with over 87,000 online banking and over 29,000 mobile banking customers
Slide 22: Wealth Management
Wealth Management $2.0 billion AUM 3 divisions – S&T Trust – S&T Financial Services – RIA/Stewart Capital Annual revenue of $11.3 million Stewart Capital Mid-Cap Fund (SCMFX) with $95 million in assets; Top 14% performance in 2014
Slide 23: S&T-Evergreen Insurance
S&T-Evergreen Insurance Full service agency – Commercial P&C (75%) – Group life and health (13%) – Personal lines (12%) Annual revenue of $5.2 million Focus on increasing penetration of S&T customer base
Slide 24: Expansion into southcentral PA
Expansion into southcentral PA Provides branch presence in Lancaster, York, Dauphin, and Cumberland counties Land for two future branch sites in York County already owned Total population of markets served of approximately 1.5 million Source: SNL Financial
Slide 25: A Strategically Compelling Transaction
A Strategically Compelling Transaction An Opportunistic Partnership Attractive Financial Metrics High performing bank – 45 consecutive quarters of loan growth – MRQ ROACE of 21.4%; PA’s top performing community bank(1) Expansion into markets with favorable demographics Strong commercial lending plat
Slide 26: Strong Pro Forma Financial Metrics and Attractive Valuation
Strong Pro Forma Financial Metrics and Attractive Valuation ($ in millions) S&T Bancorp Integrity Bancshares (3Q 2014) (3Q 2014) Pro Forma (1) Total Assets $4,907 $860 $5,937 Total loans 3,801 766 4,716 Total Deposits 3,901 764 4,838 Branches 56 8 64 TCE/TA 9.05% 6.97% 8.35% NPAs/Loans + OREO 0.36%
Slide 27: Management Team Retention
Management Team Retention Integrity has built the top team of community bankers in south-central PA To maintain existing momentum, Integrity’s customer facing team will be retained and several key executives have executed employment agreements: Integrity Current Position Career Experience Management
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
Slide 29: Income Statement
Income Statement 2014 2013 2012 2011 2010 Net Interest Income $148,042 $139,193 $135,227 $137,346 $145,846 Noninterest Income 46,338 51,527 51,912 44,057 47,210 Total Revenue 194,380 190,720 187,139 181,403 $193,056 Noninterest Expense 117,240 117,392 122,863 103,908 105,633 Provision for Loan Losse
Slide 30: Balance Sheet
Balance Sheet 2014 2013 2012 2011 2010 Securities $640,273 $509,425 $452,266 $356,371 $286,887 Interest-bearing Balances 57,048 53,594 257,116 208,854 61,260 Loans, Net 3,823,805 3,522,080 3,322,637 3,083,768 3,312,540 Other 443,560 448,091 494,683 471,001 453,652 Total Assets $4,964,686 $4,533,190
Slide 31: Loan Portfolio
Loan Portfolio 2014 2013 2012 2011 2010 Commercial Commercial Real Estate $1,682,236 $1,607,756 $1,452,133 $1,415,333 $1,494,202 Commercial & Industrial 994,138 842,449 791,396 685,753 722,359 Construction 216,148 143,675 168,143 188,852 259,598 Total Commercial 2,892,522 2,593,880 2,411,672 2,289,9
Slide 32: Asset Quality
Asset Quality 2014 2013 2012 2011 2010 Total Nonperforming Loans $12,457 $22,454 $54,959 $56,115 $63,883 Nonperforming Loans/Total Loans 0.32% 0.63% 1.63% 1.79% 1.90% Nonperforming Assets/Total Loans Plus OREO 0.33% 0.64% 1.66% 1.92% 2.07% Net Charge-offs (Recoveries)/Average Loans 0.00% 0.25% 0.78%
Slide 33: Capital Ratios
Capital Ratios 2014 2013 2012 2011 2010 Leverage 9.80% 9.75% 9.31% 9.17% 11.07% Tier I – Risk-Based Capital 12.34% 12.37% 11.98% 11.63% 13.28% Total – Risk-Based Capital 14.27% 14.36% 15.39% 15.20% 16.68% Tangible Common Equity/Tangible Assets** 9.00% 9.03% 8.24% 8.14% 7.67% **Refer to appendix for
Slide 34: APPENDIX – Non-GAAP Measures
APPENDIX – Non-GAAP Measures 2014 2013 2012 2011 2010 Tangible Common Equity/Tangible Assets (Non-GAAP) Total Shareholders’ Equity $608,389 $571,306 $537,422 $490,526 $578,665 Less: Preferred Equity, Goodwill & Other Intangible Assets, net of deferred tax liability (177,530) (178,264) (179,210) (168
Slide 35: S&T Bancorp, Inc
S&T Bancorp, Inc