S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — Q3 2024 Earnings Presentation
36 slides from S&t Bancorp's earnings presentation, Nov 6, 2024
Slide 1: Third Quarter 2024
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer Third Quarter 2024
Slide 2: Forward Looking Statements and Risk Factors
Forward Looking Statements and Risk Factors This information 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, result
Slide 3: Corporate Profile
3 • $9.6 billion in assets • $7.7 billion in deposits • $7.7 billion in loans • $1.6 billion market cap • Stock symbol: STBA Corporate Profile
Slide 4: Geographic Footprint
Geographic Footprint 4 Serving more than 225,000 customers in Pennsylvania and Ohio Footprint comprises 9.6 million people and 215,000 businesses 1,200 team members providing award- winning customer satisfaction at more than 70 locations Akron Columbus Philadelphia Harrisburg Pittsburgh Indiana
Slide 5: Awards
Awards Award-winning performance and employee engagement 5 Forbes America’s Best Midsize Employers S&T was honored as one of America’s Best Midsize Employers by Forbes and Statista in 2023 and 2024. This annual ranking is based on a survey of more that 170,000 U.S.-based workers at American companie
Slide 6: Strategic Path Forward: Our Shared Future
6 Strategic Path Forward “Our Shared Future” VALUES PURPOSE DRIVERS
Slide 7: Key Drivers of business performance
7 Delivering long-term, sustainable financial performance (measured by top quartile Price/TBV and Total Shareholder Return) Unwavering focus on key Drivers of business performance and profitable growth ASSET QUALITY DEPOSIT FRANCHISE Loans/Deposit Ratio, Cost of Deposits ◦ Treasury Management distri
Slide 8: Positioned for Growth
Positioned for Growth 8 We have been making meaningful and scalable investments in technology and people to prepare for future growth. ◦ Enhanced governance structure ◦ Integrated, Enterprise Risk Management Program ◦ Strengthened Credit Administration practices ◦ Advanced Consumer Compliance Infras
Slide 9: Third Quarter Overview
9 Third Quarter Overview RETURN METRICS EARNINGS Net Income $32.6 million *Refer to appendix for reconciliation of non-GAAP financial measures EPS $0.85 ROA 1.35% ROE 9.58% ROTE* 13.35% PPNR* 1.69% HIGHLIGHTS • Solid earnings and return metrics • Strong NIM at 3.82% • Customer deposit growth over $1
Slide 10: Performance
PPNR / AVERAGE ASSETS * 2020 2021 2022 2023 YTD 3Q24 0.0% 0.6% 1.2% 1.8% 2.4% RETURN ON AVERAGE TANGIBLE EQUITY * 2020 2021 2022 2023 YTD 3Q24 0.0% 5.0% 10.0% 15.0% 20.0% RETURN ON AVERAGE EQUITY 2020 2021 2022 2023 YTD 3Q24 0.0% 5.0% 10.0% 15.0% RETURN ON AVERAGE ASSETS 2020 2021 2022 2023 YTD 3Q24
Slide 11: Balance Sheet
Balance Sheet • Strong customer deposit growth of $100.5 million (5.42% annualized) • Brokered CDs declined $126.0 million • Reduction in borrowings of $25.0 million • Loans decreased $24.5 million due to lower level of originations and higher pay- offs Dollars in millions 11 3Q24 2Q24 Var $ 228 $ 2
Slide 12: Loan Mix
Loan Mix Our loan portfolio is well-diversified: Dollars in millions 12 Amount % of Total CRE $3,328 43% Consumer 2,426 32% C&I 1,548 20% Construction 387 5% Total $7,689 100%
Slide 13: CRE Maturities
CRE Maturities Dollars in millions 13 CRE MATURITIES BY SIZE: CRE MATURITIES BY INDUSTRY: Size Total # Loans Avg Size 10mm+ $163.8 11 $14.9 5mm-10mm 221.3 31 7.1 1mm-5mm 243.1 108 2.3 Under 1mm 50.3 221 0.2 Total $678.5 371 $1.8 in next 24 months CRE MATURITIES BY QUARTER: Only 20% of our CRE loans
Slide 14: Office CRE
Office CRE Dollars in millions 14 CBD 15% $72 OFFICE LOANS BY SIZE: Size Total # Loans Avg Size Avg LTV 10mm+ $58.4 5 $11.7 56 % 5mm-10mm 149.9 22 6.8 51 % 1mm-5mm 168.6 78 2.2 56 % Under 1mm 84.8 331 0.3 48 % Total $461.7 436 $1.1 53 % OFFICE LOAN MATURITIES BY YEAR: Avg LTV: 43% 59% 48% 59% 47% OF
Slide 15: Multifamily - CRE
Multifamily - CRE Dollars in millions 15 MULTIFAMILY LOANS BY SIZE: Size Total # Loans Avg Size Avg LTV 10mm+ $136.2 10 $13.6 68 % 5mm-10mm 147.4 21 7.0 53 % 1mm-5mm 165.2 81 2.0 53 % Under 1mm 137.5 476 0.3 58 % Total $586.3 588 $1.0 58 % MULTIFAMILY LOAN MATURITIES BY YEAR: Avg LTV: 63% 51% 58% 53
Slide 16: Asset Quality
Asset Quality ACL Trend: Dollars in millions 16 ASSET QUALITY TRENDS • ACL to total portfolio loans of 1.36% compared to 1.38% as of June 30, 2024 • Net loan charge-offs of $2.1 million, or 0.11% of average loans (annualized) • NPAs decreased 4 basis points to 0.41% of total portfolio loans plus ORE
Slide 17: Deposit Mix
Deposit Mix We have a strong, well-diversified deposit base of more than 200,000 customers: Dollars in millions 17 Amount % of Total DDA $2,158 28% MM 2,074 27% CDs 1,770 23% Savings 880 12% Int Bear DDA 773 10% Total $7,655 100% Amount % of Total Average Account Size (in $000) Average Age (in years
Slide 18: Funding Capacity
FUNDING SOURCES Funding Capacity • Strong liquidity position with well-diversified deposit base • Significant funding availability through FHLB and Federal Reserve • Insured and collateralized deposits comprise 70% of total deposits • Funding availability meets liquidity needs in both normal and str
Slide 19: Net Interest Income
• Net interest income increased $0.9 million • NIM remains strong at 3.82% down 3 basis points • Cost of funds increases have moderated as higher cost brokered deposits and borrowings are reduced Net Interest Income Dollars in millions; *Refer to appendix for reconciliation of non-GAAP financial mea
Slide 20: Noninterest Income
3Q24 3Q24 vs 2Q24 3Q24 vs 3Q23 Debit and Credit Card $4.7 $0.0 $— Service Charges 4.2 0.1 0.1 Wealth 3.1 0.1 0.1 Mortgage 0.3 — — Security Loss (2.2) 1.0 (2.2) Other 1.8 (2.6) 1.7 Noninterest Income $11.9 ($1.4) ($0.3) Noninterest Income 20Dollars in millions • Decrease in Other related primarily to
Slide 21: Noninterest Expense
3Q24 3Q24 vs 2Q24 3Q24 vs 3Q23 Salaries & Benefits $31.3 $0.9 $3.8 Data Processing 5.0 0.8 0.5 Occupancy 3.8 0.2 0.2 FF&E 3.4 — 0.3 Other Taxes 1.9 0.4 — Marketing 1.4 — (0.4) Professional Services 1.2 (0.2) (0.7) FDIC 1.1 — — Other 6.3 (0.4) (1.1) Noninterest Expense $55.4 $1.8 $2.6 Noninterest Exp
Slide 22: Securities
Securities 22 • Securities portfolio is only 11% of total assets • 100% of securities portfolio is classified as available for sale • Average duration of 3.6 years at 3Q24 • AOCI of $52.3 million related to securities portfolio, if realized, would decrease CET1 ratio by 70 basis points from 14.37% t
Slide 23: Capital
Capital Dollars in millions; *Refer to appendix for reconciliation of non-GAAP financial measures 23 TCE / TA* • We have strong capital levels and are well positioned for growth • TCE / TA higher due to solid earnings and improvement in AOCI which positively impacted TCE by 36 basis points 9.31% 9.8
Slide 24: Income Statement
Income Statement 3Q24 2023 2022 2021 2020 2020 Dollars in thousands, except for share data YTD Excludes Fraud (1) Net Interest Income $251,548 $349,410 $315,783 $276,112 $279,388 Noninterest Income 38,012 57,620 58,259 64,696 59,746 Total Revenue 289,560 407,030 374,042 340,808 339,134 Noninterest E
Slide 25: Financial Data: Balance Sheet
Financial Data 25 Balance Sheet 3Q24 2023 2022 2021 2020 Dollars in thousands Total Securities $1,011,312 $970,391 $1,002,778 $910,793 $773,693 Cash and Interest-Bearing Deposits 228,090 233,612 210,009 922,215 229,666 Total Net Loans 7,585,040 7,545,528 7,082,645 6,902,936 7,126,776 Other Assets 75
Slide 26: Net Interest Margin
Net Interest Margin 3Q24 2023 2022 2021 2020 Securities - FTE(1) 2.96% 2.61% 2.25% 2.18% 2.49% Loans - FTE(1) 6.28% 6.04% 4.50% 3.84% 4.09% Total Interest-earning Assets - FTE(1) 5.90% 5.64% 4.06% 3.37% 3.87% Interest-bearing Deposits 2.91% 1.92% 0.40% 0.20% 0.66% Borrowings 5.49% 5.59% 3.01% 1.49%
Slide 27: Financial Data: Loan Portfolio
Financial Data 27 Loan Portfolio 3Q24 2023 2022 2021 2020 Dollars in thousands Commercial Real Estate $3,327,895 $3,357,603 $3,128,187 $3,236,653 $3,244,974 Commercial and Industrial 1,548,172 1,642,106 1,718,976 1,728,969 1,954,453 Commercial Construction 386,509 363,284 399,371 440,962 474,280 Tot
Slide 28: Asset Quality
Asset Quality 3Q24 2023 2022 2021 2020 Dollars in thousands Total Nonaccrual Loans $31,889 $22,946 $19,052 $66,291 $146,774 Nonaccrual Loans/Total Loans 0.41% 0.30% 0.27% 0.95% 2.03% Nonperforming Assets/Total Loans + OREO 0.41% 0.30% 0.31% 1.13% 2.06% YTD Net Charge-offs/Average Loans(1) 0.15% 0.18
Slide 29: Capital
Capital 3Q24 2023 2022 2021 2020 Tier 1 Leverage 11.70% 11.21% 11.06% 9.74% 9.43% Common Equity Tier 1 – Risk-Based Capital 14.37% 13.37% 12.81% 12.03% 11.33% Tier 1 – Risk-Based Capital 14.70% 13.69% 13.21% 12.43% 11.74% Total – Risk-Based Capital 16.28% 15.27% 14.73% 13.79% 13.44% Tangible Common
Slide 30: Definitions of GAAP to Non-GAAP Financial Measures
3Q24 Return on Average Tangible Shareholders' Equity (ROTE) (non-GAAP) Net income (annualized) $129,652 Plus: amortization of intangibles (annualized), net of tax 893 Net income before amortization of intangibles (annualized) $130,545 Average total shareholders' equity $1,354,047 Less: average goodw
Slide 31: TCE/Tangible Assets and Efficiency Ratio Reconciliation
3Q24 2Q24 1Q24 4Q23 3Q23 Tangible Common Equity (TCE)/Tangible Assets (non-GAAP) Total shareholders' equity $1,375,754 $1,321,443 $1,295,074 $1,283,445 $1,223,532 Less: goodwill and other intangible assets, net of deferred tax liability (375,931) (376,154) (376,396) (376,631) (376,883) Tangible comm
Slide 32: 2020 Excludes Fraud Reconciliation
2020 Excludes Fraud Net Income Excluding Nonrecurring items Net income $21,040 Nonrecurring items 58,671 Tax effect of nonrecurring items (12,321) Adjusted net income (non-GAAP) $67,390 Diluted Earnings Per Share Adjusted net income (non-GAAP) $67,390 Average shares outstanding - diluted 39,073 Dilu
Slide 33: Return on Average Tangible Equity Reconciliation
3Q24 2023 2022 2021 2020 2020 YTD Excludes Fraud Return on Average Tangible Shareholders' Equity (ROTE) (non-GAAP) Net income(1) $131,172 $144,781 $135,520 $110,343 $21,040 $21,040 Nonrecurring items — — — — — 58,671 Tax effect of nonrecurring items — — — — — (12,321) Adjusted net income (non-GAAP)(
Slide 34: PPNR/Average Assets Reconciliation
3Q24 2023 2022 2021 2020 2020 YTD Excludes Fraud PPNR/Average Assets (Non-GAAP) Income before taxes $41,443 $178,804 $168,930 $135,668 $21,039 Plus: provision for credit losses (454) 17,892 8,366 16,215 131,424 Total adjusted income before taxes (non-GAAP) $40,989 $196,696 $177,296 $151,883 $152,463
Slide 35: Net Interest Margin Reconciliation
3Q24 2023 2022 2021 2020 YTD Interest and Dividend Income Interest-bearing deposits with banks $6,758 $7,344 $2,952 $973 $515 Securities 21,563 25,207 22,449 17,432 18,060 Loans 360,674 442,675 314,774 270,460 300,960 Other earning assets 1,043 2,675 576 397 929 Total Interest and Dividend Income $3
Slide 36: Third Quarter 2024
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer Third Quarter 2024