S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — Q2 2023 Earnings Presentation
33 slides from S&t Bancorp's earnings presentation, Sep 11, 2023
Slide 1: Second Quarter 2023
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer Second Quarter 2023
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 • $9.3 billion in assets • $7.1 billion in deposits • $7.3 billion in loans • $1.0 billion market cap • Stock symbol: STBA Corporate Profile
Slide 4: Geographic Footprint
Geographic Footprint 4 Serving over 230,000 customers in Pennsylvania and Ohio Footprint comprises 9.6 million people and 215,000 businesses 1,200 team members providing award- winning customer satisfaction Akron Columbus Philadelphia Harrisburg Pittsburgh Indiana
Slide 5: Recent Awards
Recent Awards 5 Top Workplaces for Diversity, Equity and Inclusion (Devi) S&T Bank was named a Top Workplace for Diversity, Equity and Inclusion (DE&I). Top Workplaces in the Greater Pittsburgh Region S&T Bank was recognized as a top workplace in Pittsburgh by the Pittsburgh Post-Gazette. Top Workpl
Slide 6: Strategic Path Forward "Our Shared Future"
6 Strategic Path Forward “Our Shared Future”
Slide 7: Strategic drivers: deposit franchise, core profitability, asset quality, talent
7 ◦ NIM management ◦ Balance efficiency and infrastructure investments ◦ Data and analytics ◦ Credit risk management practices ◦ Process enhancements ◦ “Our Shared Future” culture and mindset ◦ Talent acquisition and retention ◦ Diversity, Equity & Inclusion ◦ Treasury Management ◦ Customer experien
Slide 8: Second Quarter Overview
8 Second Quarter Overview RETURNS EARNINGS *Refer to appendix for reconciliation of non-GAAP financial measures EPS $0.89 Net Income $34.5 million ROA 1.51% ROE 11.23% ROTE* 16.32% PPNR* 2.30% HIGHLIGHTS • Solid earnings and return metrics • PPNR increased by 7 basis points to 2.30% compared to 1Q23
Slide 9: Performance
PPNR / AVERAGE ASSETS * 2019 2020 2021 2022 YTD 2Q23 0.0% 0.4% 0.8% 1.2% 1.6% 2.0% 2.4% RETURN ON AVERAGE TANGIBLE EQUITY * 2019 2020 2021 2022 YTD 2Q23 0.0% 5.0% 10.0% 15.0% 20.0% RETURN ON AVERAGE EQUITY 2019 2020 2021 2022 YTD 2Q23 0.0% 5.0% 10.0% 15.0% RETURN ON AVERAGE ASSETS 2019 2020 2021 202
Slide 10: Balance Sheet
Balance Sheet • Loans increased $68.5 million, or 3.8% annualized, since March 31, 2023 • Consumer growth of $90.3 million, or 18.1% annualized • Deposits relatively unchanged from March 31, 2023; $100 million of brokered CDs Dollars in millions 10 2Q23 1Q23 Var $228 $244 ($16) 970 999 (29) 7,320 7,
Slide 11: Asset Quality
Asset Quality ACL 2Q23 vs 1Q23: Dollars in millions 11 ASSET QUALITY TRENDS • ACL down 5 basis points compared to 1Q23 due to a charge-off of a $4.2 million specific reserve • Net charge-offs of $11.0 million related to two C&I relationships • NPAs decreased $9.7 million to 0.25% of total loans plus
Slide 12: Deposits
Deposits • Strong, well-diversified deposit base of 230,000 customers • Balance mix 59% personal and 41% business • Uninsured deposits include $298 million of collateralized municipal deposits • Deposits declined $11.9 million from 1Q23 Dollars in millions 12 INSURED/UNINSURED DEPOSITS Business 33%
Slide 13: Net Interest Income
• NIM remains strong at 4.22%; a modest decline of 10 basis points from 1Q23 • NIM has expanded 110 basis points through this interest rate cycle • Quarterly net interest income has improved $19.7 million, or 28.8%, since the fourth quarter of 2021 Net Interest Income Dollars in millions; *Refer to
Slide 14: Funding Capacity
FUNDING SOURCES Funding Capacity • Strong liquidity position with well-diversified deposit base • Significant funding availability through FHLB and Federal Reserve • Funding availability meets liquidity needs in both normal and stress environments Dollars in millions 14 Capacity Used Available FHLB
Slide 15: Office CRE
Office CRE Dollars in millions 15 CRE comprises 45% of our total loans Office comprises 7% of our total loans TOTAL LOANS $7,320 CRE LOANS $3,224 OFFICE $516 83% of our office loans are non-CBD CBD 17% $88 Non-CBD 83% $428 OFFICE LOANS BY SIZE: Size Total # Loans Avg Size Orig LTV 10mm+ $70 6 $11.7
Slide 16: CRE Maturities
CRE Maturities Dollars in millions 16 CRE MATURITIES BY SIZE: CRE MATURITIES BY INDUSTRY: Size Total # Loans Avg Size 10mm+ $65 5 $13.0 5mm-10mm 199 27 7.4 1mm-5mm 163 77 2.1 Under 1mm 56 174 0.3 Total $483 283 $1.7 CRE MATURITIES BY QUARTER: in next 24 months Only 15% of our CRE loans mature in the
Slide 17: Noninterest Income
2Q23 2Q23 vs 1Q23 2Q23 vs 2Q22 Debit and Credit Card $4.7 $0.3 $0.0 Service Charges 3.9 (0.2) (0.3) Wealth 3.2 0.3 0.0 Mortgage 0.3 0.0 (0.2) Security Gain 0.0 0.0 0.0 Other 2.1 0.6 2.1 Noninterest Income $14.2 $1.0 $1.6 Noninterest Income 17Dollars in millions • Increase in other mainly related to
Slide 18: Noninterest Expense
2Q23 2Q23 vs 1Q23 2Q23 vs 2Q22 Salaries & Benefits $25.4 ($2.2) $0.6 Data Processing 4.2 (0.1) 0.1 Occupancy 3.7 (0.1) 0.1 FF&E 3.2 0.3 0.3 Marketing 1.5 (0.4) — Professional Services 2.1 0.3 (0.3) Other Taxes 1.3 (0.5) (0.4) FDIC 1.0 — 0.1 Other 7.2 0.7 0.7 Noninterest Expense $49.6 ($2.0) $1.2 Non
Slide 19: Loan Mix
Loan Mix Our loan portfolio is well-diversified: Dollars in millions 19 Amount % of Total CRE $3,224 45% Consumer 2,093 28% C&I 1,640 22% Construction 363 5% Total $7,320 100%
Slide 20: Deposit Mix
Deposit Mix We have a solid core deposit profile: Dollars in millions 20 Amount % of Total DDA $2,330 33% MM 1,584 22% Savings 1,019 14% CDs 1,333 19% Int Bear DDA 875 12% Total $7,141 100% Amount % of Total Personal $4,213 59% Business 2,928 41% Total $7,141 100%
Slide 21: Securities
Securities 21 • Securities portfolio is only 10% of total assets • 100% of securities portfolio is classified as available-for-sale • Average duration of 3.9 years at 1Q23 compared to 3.7 years at 4Q21 • AOCI of $102.5 million related to securities portfolio, if realized, would decrease CET1 ratio b
Slide 22: Capital
Capital Dollars in millions; *Refer to appendix for reconciliation of non-GAAP financial measures 22 TCE / TA* • Capital levels remain strong • Share repurchases of $20.0 million in 2Q23
Slide 23: Financial Data: Income Statement
Financial Data (1)These are non-GAAP numbers that adjusted for a pre-tax loss of $58.7 million resulting from customer fraud related to a check kiting scheme in Q2 2020. Refer to appendix for reconciliation of non-GAAP financial measures. (2)These are non-GAAP numbers that adjust for $11.4 million o
Slide 24: Financial Data: Balance Sheet
Financial Data 24 Balance Sheet 2Q23 2022 2021 2020 2019 Dollars in thousands Total Securities 970,372 $1,002,778 $910,793 $773,693 $784,283 Interest-Bearing Deposits 150,672 138,149 857,192 158,903 124,491 Total Net Loans 7,214,395 7,082,645 6,902,936 7,126,776 7,080,184 Other Assets 917,483 886,99
Slide 25: Net Interest Margin
Net Interest Margin YTD 2Q23 2022 2021 2020 2019 Securities - FTE 2.52% 2.25% 2.18% 2.49% 2.64% Loans - FTE 5.91% 4.50% 3.84% 4.09% 4.95% Total Interest-earning Assets - FTE 5.50% 4.06% 3.37% 3.87% 4.71% Interest-bearing Deposits 1.51% 0.40% 0.20% 0.66% 1.40% Borrowings 5.34% 3.01% 1.49% 1.56% 2.76%
Slide 26: Financial Data: Loan Portfolio
Financial Data 26 Loan Portfolio 2Q23 2022 2021 2020 2019 Dollars in thousands Commercial Real Estate $3,224,180 $3,128,187 $3,236,653 $3,244,974 $3,416,518 Commercial and Industrial 1,639,332 1,718,976 1,728,969 1,954,453 1,720,833 Commercial Construction 363,100 399,371 440,962 474,280 375,445 Tot
Slide 27: Financial Data: Asset Quality
Financial Data 27 Asset Quality 2Q23 2022 2021 2020 2019 Dollars in thousands Total Nonaccrual Loans $14,319 $19,052 $66,291 $146,774 $54,057 Nonaccrual Loans/Total Loans 0.20% 0.27% 0.95% 2.03% 0.76% Nonperforming Assets/Total Loans + OREO 0.25% 0.31% 1.13% 2.06% 0.81% YTD Net (Recoveries) Charge-o
Slide 28: Financial Data: Capital
Financial Data 28 Capital 2Q23 2022 2021 2020 2019 Tier 1 Leverage 11.12% 11.06% 9.74% 9.43% 10.29% Common Equity Tier 1 – Risk-Based Capital 13.07% 12.81% 12.03% 11.33% 11.43% Tier 1 – Risk-Based Capital 13.47% 13.21% 12.43% 11.74% 11.84% Total – Risk-Based Capital 15.06% 14.73% 13.79% 13.44% 13.22
Slide 29: TCE/Tangible Assets and Efficiency Ratio Reconciliation
2Q23 1Q23 4Q22 3Q22 2Q22 1Q22 4Q21 Tangible Common Equity (TCE)/Tangible Assets (non-GAAP) Total shareholders' equity $1,212,853 $1,227,795 $1,184,659 $1,153,181 $1,178,358 Less: goodwill and other intangible assets, net of deferred tax liability (377,144) (377,405) (377,673) (377,961) (378,259) Tan
Slide 30: Definitions of GAAP to Non-GAAP Financial Measures
2020 2019 Excludes Fraud Excludes Merger Exp Net Income Excluding Nonrecurring items Net income $21,040 $98,234 Nonrecurring items 58,671 11,350 Tax effect of nonrecurring items (12,321) (2,106) Adjusted net income (non-GAAP) $67,390 $107,478 Diluted Earnings Per Share Adjusted net income (non-GAAP)
Slide 31: ROTE Reconciliation
2Q23 2022 2021 2020 2020 2019 2019 YTD Excludes Fraud Excludes Merger Exp Return on Average Tangible Shareholders' Equity (ROTE) (non-GAAP) Net income (annualized) $149,763 $135,520 $110,343 $21,040 $21,040 $98,234 $98,234 Nonrecurring items — — — — 58,671 — 11,350 Tax effect of nonrecurring items —
Slide 32: PPNR/Average Assets Reconciliation
2Q23 2022 2021 2020 2020 2019 2019 YTD Excludes Fraud Excludes Merger Exp PPNR/Average Assets (Non-GAAP) Income before taxes $91,512 $168,930 $135,668,114 $21,039 $117,360 $117,360 Plus: merger related expenses — — — — — 11,350 Plus: provision for credit losses 11,451 8,366 16,215,300 131,424 14,873
Slide 33: Christopher J. McComish and Mark Kochvar
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer Second Quarter 2023