S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — Q1 2023 Earnings Presentation
35 slides from S&t Bancorp's earnings presentation, May 16, 2023
Slide 1: First Quarter 2023
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer First 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 • $9.2 billion in assets • $7.2 billion in deposits • $7.3 billion in loans • $1.2 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: Award-Winning Customer Satisfaction
Award-Winning Customer Satisfaction 5 Forbes Best-In-State Banks S&T Bank was awarded on the Forbes list of Best-In-State Banks 2022. Consumers assessed banks regarding overall satisfaction, trust, terms & conditions, branch services, digital services, customer service, and financial advice.
Slide 6: Top Workplace Recognition
Top Workplace Recognition 6 Top Workplaces for Diversity, Equity and Inclusion (Devi) S&T Bank was named a Top Workplace for Diversity, Equity and Inclusion (DE&I). The national award recognizes top workplaces that promote a welcoming and inclusive culture as well as programs that are made available
Slide 7: Strategic Path Forward: Our Shared Future
7 Strategic Path Forward “Our Shared Future”
Slide 8: Strategic Drivers
8 ◦ 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 9: First Quarter Overview
9 First Quarter Overview RETURNS EARNINGS *Refer to appendix for reconciliation of non-GAAP financial measures EPS $1.02 Net Income $39.8 million ROA 1.77% ROE 13.38% ROTE* 19.61% PPNR* 2.23% HIGHLIGHTS • Solid return metrics • NIM relatively unchanged from prior quarter • Net recovery of $5.1 milli
Slide 10: Performance
PPNR / AVERAGE ASSETS * 2019 2020 2021 2022 YTD 1Q23 0.0% 0.4% 0.8% 1.2% 1.6% 2.0% 2.4% RETURN ON AVERAGE TANGIBLE EQUITY * 2019 2020 2021 2022 YTD 1Q23 0.0% 5.0% 10.0% 15.0% 20.0% RETURN ON AVERAGE EQUITY 2019 2020 2021 2022 YTD 1Q23 0.0% 5.0% 10.0% 15.0% RETURN ON AVERAGE ASSETS 2019 2020 2021 202
Slide 11: Balance Sheet
Balance Sheet • Loans increased $67.1 million, or 3.8% annualized, since December 31, 2022 • Consumer growth of $65.3 million, or 13.7% annualized • Deposits of $7.2 billion decreased $66.9 million since December 31, 2022; declines early in the quarter followed by stability Dollars in millions 11 1Q
Slide 12: Deposits
Deposits • Strong, well-diversified deposit base of 230,000 customers • Balance mix 59% personal and 41% business • Uninsured deposits include $323 million of collateralized municipal deposits • Deposits declined $66.9 million from 4Q22; January decline followed by stability in February and growth i
Slide 13: Net Interest Income
• Net interest income and NIM relatively unchanged to prior quarter • Deposit balance migration and exception pricing increased funding costs • $500 million notional receive-fixed swaps for rates down protection Net Interest Income Dollars in millions; *Refer to appendix for reconciliation of non-GA
Slide 14: Funding Costs
• 1Q23 interest-bearing deposit costs increased 37 basis points to 1.30% due to a change in mix of deposits • CD increase mostly due to migration; $88 million of net new money • $23 million of DDA decline is due to migration to IntraFi (NOW product) Funding Costs Dollars in millions 14 1Q23 DEPOSIT
Slide 15: 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 15 Capacity Used Available FHLB
Slide 16: Asset Quality
Asset Quality ACL 1Q23 VS 4Q22: Dollars in millions 16 ASSET QUALITY TRENDS • ACL increased mainly due to a $4.2 million specific reserve and higher qualitative reserve for macro environment • Net recovery of $5.1 million due to a $9.3 million recovery from a customer fraud in 2020 – Strategic note
Slide 17: Office CRE
Office CRE Dollars in millions 17 CRE comprises 43% of our total loans CRE 43% Consumer 27% Const 6% C&I 24% Office comprises 7% of our total loans TOTAL LOANS $7,251 CRE LOANS $3,145 OFFICE $479 83% of our office loans are non-CBD CBD 17% $84 Non-CBD 83% $395 OFFICE LOANS BY SIZE: Size Total # Loan
Slide 18: CRE Maturities
CRE Maturities Dollars in millions 18 CRE MATURITIES BY SIZE: CRE MATURITIES BY INDUSTRY: Only 15% of our CRE loans mature in the next 24 months Size Total # Loans Avg Size 10mm+ $81.6 6 $13.6 5mm-10mm 169.6 23 7.4 1mm-5mm 175.5 81 2.2 Under 1mm 54.5 173 0.3 Total $481.2 283 $1.7 CRE MATURITIES BY Q
Slide 19: Noninterest Income
1Q23 1Q23 vs 4Q22 1Q23 vs 1Q22 Debit and Credit Card $4.4 $0.0 ($0.7) Service Charges 4.1 (0.2) 0.1 Wealth 2.9 (0.1) (0.3) Mortgage 0.3 0.0 (0.7) Security Gain 0.0 0.0 0.0 Other 1.5 (2.1) (0.4) Noninterest Income $13.2 ($2.4) ($2.0) Noninterest Income 19Dollars in millions Decrease mainly related to
Slide 20: Noninterest Expense
1Q23 1Q23 vs 4Q22 1Q23 vs 1Q22 Salaries & Benefits $27.6 ($0.4) $3.9 Data Processing 4.3 0.1 (0.1) Occupancy 3.8 — (0.1) FF&E 2.9 (0.1) 0.1 Marketing 1.9 0.6 0.5 Professional Services 1.8 (0.3) (0.1) Other Taxes 1.8 — 0.3 FDIC 1.0 0.6 0.1 Other 6.6 — (0.2) Noninterest Expense $51.7 $0.5 $4.4 Noninte
Slide 21: Loan Mix
Loan Mix Our loan portfolio is well-diversified: Dollars in millions 21 Amount % of Total CRE $3,145 43% Consumer 2,003 27% C&I 1,709 24% Construction 394 6% Total $7,251 100%
Slide 22: Deposit Mix
Deposit Mix We have a solid core deposit profile: Dollars in millions 22 Amount % of Total DDA $2,469 35% MM 1,600 22% Savings 1,068 15% CDs 1,175 16% Int Bear DDA 841 12% Total $7,153 100% Amount % of Total Personal $4,206 59% Business 2,947 41% Total $7,153 100%
Slide 23: Securities
Securities 23 • Securities portfolio is only 11% 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 $69.4 million related to securities portfolio, if realized, would decrease CET1 ratio by
Slide 24: Capital
Capital Dollars in millions; *Refer to appendix for reconciliation of non-GAAP financial measures 24 TCE / TA* • Capital levels remain strong • TCE / TA has increased despite AOCI adjustments
Slide 25: 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 26: Financial Data: Balance Sheet
Financial Data 26 Balance Sheet 1Q23 2022 2021 2020 2019 Dollars in thousands Total Securities $998,708 $1,002,778 $910,793 $773,693 $784,283 Interest-Bearing Deposits 151,209 138,149 857,192 158,903 124,491 Total Net Loans 7,143,032 7,082,645 6,902,936 7,126,776 7,080,184 Other Assets 900,493 886,9
Slide 27: Net Interest Margin
Net Interest Margin YTD 1Q23 2022 2021 2020 2019 Securities - FTE 2.51% 2.25% 2.18% 2.49% 2.64% Loans - FTE 5.81% 4.50% 3.84% 4.09% 4.95% Total Interest-earning Assets - FTE 5.39% 4.06% 3.37% 3.87% 4.71% Interest-bearing Deposits 1.30% 0.40% 0.20% 0.66% 1.40% Borrowings 5.13% 3.01% 1.49% 1.56% 2.76%
Slide 28: Financial Data: Loan Portfolio
Financial Data 28 Loan Portfolio 1Q23 2022 2021 2020 2019 Dollars in thousands Commercial Real Estate $3,145,079 $3,128,187 $3,236,653 $3,244,974 $3,416,518 Commercial and Industrial 1,709,612 1,718,976 1,728,969 1,954,453 1,720,833 Commercial Construction 393,658 399,371 440,962 474,280 375,445 Tot
Slide 29: Financial Data: Asset Quality
Financial Data 29 Asset Quality 1Q23 2022 2021 2020 2019 Dollars in thousands Total Nonaccrual Loans $24,644 $19,052 $66,291 $146,774 $54,057 Nonaccrual Loans/Total Loans 0.34% 0.27% 0.95% 2.03% 0.76% Nonperforming Assets/Total Loans + OREO 0.38% 0.31% 1.13% 2.06% 0.81% YTD Net (Recoveries) Charge-o
Slide 30: Financial Data: Capital
Financial Data 30 Capital 1Q23 2022 2021 2020 2019 Tier 1 Leverage 11.15% 11.06% 9.74% 9.43% 10.29% Common Equity Tier 1 – Risk-Based Capital 13.10% 12.81% 12.03% 11.33% 11.43% Tier 1 – Risk-Based Capital 13.50% 13.21% 12.43% 11.74% 11.84% Total – Risk-Based Capital 15.09% 14.73% 13.79% 13.44% 13.22
Slide 31: TCE/Tangible Assets and Efficiency Ratio Reconciliation
1Q23 4Q22 3Q22 2Q22 1Q22 Tangible Common Equity (TCE)/Tangible Assets (non-GAAP) Total shareholders' equity $1,227,795 $1,184,659 $1,153,181 $1,178,358 $1,184,950 Less: goodwill and other intangible assets, net of deferred tax liability (377,405) (377,673) (377,961) (378,259) (378,557) Tangible comm
Slide 32: 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 33: ROTE Reconciliation
1Q23 2022 2021 2020 2020 2019 2019 YTD Excludes Fraud Excludes Merger Exp Return on Average Tangible Shareholders' Equity (ROTE) (non-GAAP) Net income (annualized) $161,407 $135,520 $110,343 $21,040 $21,040 $98,234 $98,234 Nonrecurring items — — — — 58,671 — 11,350 Tax effect of nonrecurring items —
Slide 34: PPNR/Average Assets Reconciliation
1Q23 2022 2021 2020 2020 2019 2019 YTD Excludes Fraud Excludes Merger Exp PPNR/Average Assets (Non-GAAP) Income before taxes $49,360 $168,930 $135,668,114 $21,039 $117,360 $117,360 Plus: merger related expenses — — — — — 11,350 Plus: provision for credit losses 922 8,366 16,215,300 131,424 14,873 14
Slide 35: Christopher J. McComish and Mark Kochvar
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer First Quarter 2023