S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — Q2 2022 Earnings Presentation
29 slides from S&t Bancorp's earnings presentation, Sep 2, 2022
Slide 1: Second Quarter 2022
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer Second Quarter 2022
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
Corporate Profile 3 $9.1 billion in assets $7.6 billion in deposits $7.0 billion in loans $1.1 billion market cap Stock symbol: STBA 120th anniversary Serving over 230,000 customers in Pennsylvania, Ohio, and New York Market comprises 9.6 million people and 215,000 businesses 1,200 team members prov
Slide 4: Award-Winning Customer Satisfaction
Award-Winning Customer Satisfaction 4 J.D. Power Award S&T Bank ranked #1 in overall customer satisfaction in the Pennsylvania region, in the 2022 U.S. Retail Banking Satisfaction Study by J.D. Power. We ranked #1 in the following areas: account offerings, convenience banking, people, and trust. For
Slide 5: iHeartMedia Partnership
iHeartMedia Partnership 5 S&T Bank announced a partnership with iHeartMedia to become the first and exclusive regional presenting sponsor of the NFL Podcast Network, including all Pittsburgh NFL podcasts • Podcasts are one of the fastest growing communication channels in the country • iHeartRadio is
Slide 6: Drivers of Performance
Promote stakeholder engagement Advance strategic infrastructure and platform investments Ensure rigorous credit risk and enterprise governance practices Pursue profitable growth initiatives Drivers of Performance 6 For 120 years we have been building trusting relationships that deliver results for o
Slide 7: Leading the Way
Maintain stakeholder engagement Leading the Way 7 It has been one year since CEO Christopher J. McComish joined S&T and he has crafted a leadership team by elevating proven internal leaders and attracting talent from larger banks to position us well for growth: • Team members • Customers • Market/co
Slide 8: Second Quarter Overview
8 Second Quarter Overview RETURNS EARNINGS *Refer to appendix for reconciliation of non-GAAP financial measures EPS $0.74 Net Income $28.9 million ROA 1.25% ROE 9.83% ROTE* 14.63% PPNR* 1.71% HIGHLIGHTS • Higher PPNR driven by a $7.5 million, or 11%, increase in net interest income • Net interest ma
Slide 9: Performance
PPNR / AVERAGE ASSETS * 2018 2019 2020 2021 YTD 2Q22 0.0% 0.4% 0.8% 1.2% 1.6% 2.0% 2.4% RETURN ON AVERAGE TANGIBLE EQUITY * 2018 2019 2020 2021 YTD 2Q22 0.0% 5.0% 10.0% 15.0% 20.0% RETURN ON AVERAGE EQUITY 2018 2019 2020 2021 YTD 2Q22 0.0% 5.0% 10.0% 15.0% RETURN ON AVERAGE ASSETS 2018 2019 2020 202
Slide 10: 2Q22 vs 1Q22: Balance Sheet
2Q22 VS 1Q22: Balance Sheet • Loans, excluding PPP, increased $107 million, or 6.2% annualized • DDA deposits stable • Interest-bearing deposit decline was concentrated in few high balance, rate sensitive customers Dollars in millions 10 2Q22 1Q22 Variance $345 $824 ($479) $1,069 $1,028 $41 $7,029 $
Slide 11: Asset Quality
Asset Quality ACL 2Q22 VS 1Q22: Dollars in millions 11 ASSET QUALITY TRENDS • NPAs decreased 34.8% due to resolution of C&I relationship and loan payoffs • Net charge-offs of 17 bps • Qualitative reserve increased due to macro environment
Slide 12: Net Interest Income
• Net interest income increased $7.5 million, or 11%, due to higher rates • NIM expanded 40 bps to 3.56% • We are well-positioned to benefit from rising rates Net Interest Income Dollars in millions; *Refer to appendix for reconciliation of non-GAAP financial measures 12 Loan Rate Sensitivity Mix 52
Slide 13: Noninterest Income
2Q22 2Q22 vs 1Q22 2Q22 vs 2Q21 Debit and Credit Card $4.8 ($0.3) $0.0 Service Charges 4.2 0.2 0.6 Wealth 3.2 0.0 0.0 Mortgage 0.4 (0.6) (1.3) Other 0.0 (1.9) (2.1) Noninterest Income $12.6 ($2.6) ($2.8) Noninterest Income 13Dollars in millions • Unfavorable valuation in a nonqualified benefit plan •
Slide 14: Noninterest Expense
2Q22 2Q22 vs 1Q22 2Q22 vs 2Q21 Salaries & Benefits $24.8 $1.1 $0.3 Data Processing 4.1 (0.3) 0.3 Occupancy 3.6 (0.3) 0.2 FF&E 2.9 0.1 0.5 Professional Services 2.4 0.4 0.7 Other Taxes 1.7 0.2 (0.1) Marketing 1.5 0.1 0.5 FDIC 0.9 0.0 0.0 Other 6.5 (0.3) 0.2 Noninterest Expense $48.4 $1.0 $2.6 • Incre
Slide 15: Loan Mix
Loan Mix Our loan portfolio is well-diversified: Dollars in millions 15 Amount % of Total CRE $3,192 45% Consumer 1,744 25% C&I 1,695 24% Construction 410 6 % Total $7,041 100%
Slide 16: Deposit Mix
Deposit Mix We have a solid core deposit profile: Dollars in millions 16 Amount % of Total DDA $2,737 36% MM 1,889 25% Savings 1,125 15% CDs 981 12% Int Bear DDA 880 12% Total $7,612 100% Amount % of Total Personal $4,291 56% Business 3,321 44% Total $7,612 100%
Slide 17: Capital
Capital Dollars in millions; *Refer to appendix for reconciliation of non-GAAP financial measures 17 TOTAL CAPITAL • We have strong capital levels and are well-positioned for growth • $4.1 million of buybacks executed in 2Q22
Slide 18: 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 19: Financial Data: Balance Sheet
Financial Data 19 Balance Sheet 2Q22 2021 2020 2019 2018 Dollars in thousands Total Securities $1,068,576 $910,793 $773,693 $784,283 $684,872 Interest-Bearing Deposits 263,504 857,192 158,903 124,491 82,740 Total Net Loans 6,944,110 6,902,936 7,126,776 7,080,184 5,888,023 Other Assets 827,624 817,60
Slide 20: Financial Data: Net Interest Margin
Net Interest Margin YTD 2Q22 2021 2020 2019 2018 Securities - FTE 2.14% 2.18% 2.49% 2.64% 2.62% Loans - FTE 3.94% 3.84% 4.09% 4.95% 4.72% Total Interest-earning Assets - FTE 3.47% 3.37% 3.87% 4.71% 4.48% Interest-bearing Deposits 0.14% 0.20% 0.66% 1.40% 1.01% Borrowings 1.61% 1.49% 1.56% 2.76% 2.19%
Slide 21: Financial Data: Loan Portfolio
Financial Data 21 Loan Portfolio 2Q22 2021 2020 2019 2018 Dollars in thousands Commercial Real Estate $3,191,670 $3,236,653 $3,244,974 $3,416,518 $2,921,832 Commercial and Industrial 1,695,031 1,728,969 1,954,453 1,720,833 1,493,416 Commercial Construction 410,425 440,962 474,280 375,445 257,197 Tot
Slide 22: Financial Data: Asset Quality
Financial Data 22 Asset Quality 2Q22 2021 2020 2019 2018 Dollars in thousands Total Nonperforming Loans $31,775 $66,291 $146,774 $54,057 $46,073 Nonperforming Loans/Total Loans 0.45% 0.95% 2.03% 0.76% 0.77% Nonperforming Assets/Total Loans + OREO 0.55% 1.13% 2.06% 0.81% 0.83% YTD Net Charge-offs / A
Slide 23: Financial Data: Capital
Financial Data 23 Capital 2Q22 2021 2020 2019 2018 Tier 1 Leverage 10.25% 9.74% 9.43% 10.29% 10.05% Common Equity Tier 1 – Risk-Based Capital 12.34% 12.03% 11.33% 11.43% 11.38% Tier 1 – Risk-Based Capital 12.74% 12.43% 11.74% 11.84% 11.72% Total – Risk-Based Capital 14.23% 13.79% 13.44% 13.22% 13.21
Slide 24: 2Q22 Non-GAAP Reconciliations
2Q22 Return on Average Tangible Shareholders' Equity (non-GAAP) Net income (annualized) $115,750 Plus: amortization of intangibles (annualized), net of tax 1,197 Net income before amortization of intangibles (annualized) $116,947 Average total shareholders' equity $1,177,550 Less: average goodwill a
Slide 25: Efficiency Ratio and Net Interest Margin Reconciliation
2Q22 1Q22 4Q21 3Q21 2Q21 Efficiency Ratio (non-GAAP) Noninterest expense $48,424 $47,414 $50,189 $47,241 $45,829 Net interest income per consolidated statements of net income 75,194 67,733 68,438 68,712 68,304 Plus: taxable equivalent adjustment 506 493 510 557 585 Net interest income (FTE) (non-GAA
Slide 26: 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 27: Return on Average Tangible Equity Reconciliation
YTD 2Q22 2021 2020 2020 2019 2019 2018 Excludes Fraud Excludes Merger Exp Return on Average Tangible Equity (non-GAAP) Net income (annualized) $116,964 $110,343 $21,040 $21,040 $98,234 $98,234 $105,334 Nonrecurring items — — — 58,671 — 11,350 — Tax effect of nonrecurring items — — — (12,321) — (2,10
Slide 28: PPNR and Tangible Common Equity Reconciliation
YTD 2Q22 2021 2020 2020 2019 2019 2018 Excludes Fraud Excludes Merger Exp PPNR / Average Assets (Non-GAAP) Income before taxes $72,253 $135,668 $21,040 $117,360 $117,360 $123,179 Plus: merger related expenses — — — — 11,350 — Plus: provision for credit losses 2,692 16,215 131,424 14,873 14,873 14,99
Slide 29: Second Quarter 2022
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer Second Quarter 2022