S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — Q3 2023 Earnings Presentation
35 slides from S&t Bancorp's earnings presentation, Nov 22, 2023
Slide 1: Third Quarter 2023
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer Third 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 • $9.5 billion in assets • $7.2 billion in deposits • $7.5 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 at 72 locations 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 named by Forbes as a 2023 Best-In-State Bank for the second consecutive year. Consumers assessed banks regarding overall satisfaction, trust, terms & conditions, branch services, digital services, customer service and fina
Slide 6: Top Workplace Recognition
Top Workplace Recognition 6 Top Workplaces for Diversity, Equity and Inclusion S&T Bank was named a Top Workplace for Diversity, Equity and Inclusion (DE&I) issued by Energage. Top Workplaces USA S&T Bank has earned the 2023 Top Workplaces USA award issued by Energage. Top Workplaces Culture Excelle
Slide 7: Strategic Path Forward: Our Shared Future
7 Strategic Path Forward “Our Shared Future” VALUES PURPOSE DRIVERS
Slide 8: Drivers
8 ◦ NIM management ◦ Balance efficiency and infrastructure investments ◦ Data and analytics ◦ Credit risk management practices ◦ Process and technology enhancements ◦ Disciplined growth ◦ “Our Shared Future” culture and mindset ◦ Talent acquisition and retention ◦ Diversity, Equity & Inclusion ◦ Tre
Slide 9: Positioned for Growth
Positioned for Growth 9 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 10: Third Quarter Overview
10 Third Quarter Overview RETURNS EARNINGS *Refer to appendix for reconciliation of non-GAAP financial measures EPS $0.87 Net Income $33.5 million ROA 1.42% ROE 10.84% ROTE* 15.78% PPNR* 1.99% HIGHLIGHTS • Strong earnings and solid return metrics • NIM remains strong at 4.09%; a decline of 13 basis
Slide 11: Performance
PPNR / AVERAGE ASSETS * 2019 2020 2021 2022 YTD 3Q23 0.0% 0.4% 0.8% 1.2% 1.6% 2.0% 2.4% RETURN ON AVERAGE TANGIBLE EQUITY * 2019 2020 2021 2022 YTD 3Q23 0.0% 5.0% 10.0% 15.0% 20.0% RETURN ON AVERAGE EQUITY 2019 2020 2021 2022 YTD 3Q23 0.0% 5.0% 10.0% 15.0% RETURN ON AVERAGE ASSETS 2019 2020 2021 202
Slide 12: Balance Sheet
Balance Sheet • Loans increased $196.3 million, or 10.6% annualized, since June 30, 2023 • Deposits stable with mix shifts moderating • Added $75 million of brokered CDs Dollars in millions 12 3Q23 2Q23 Var $238 $228 $10 955 970 (15) 7,516 7,320 196 7,223 7,141 82 Cash & Int Bear Bal Securities Loan
Slide 13: Loan Mix
Loan Mix Our loan portfolio is well-diversified: Dollars in millions 13 Amount % of Total CRE $3,286 44% Consumer 2,206 29% C&I 1,635 22% Construction 389 5% Total $7,516 100%
Slide 14: Office CRE
Office CRE Dollars in millions 14 CRE comprises 44% of our total loans Office comprises 6% of our total loans TOTAL LOANS $7,516 CRE LOANS $3,286 OFFICE $483 86% of our office loans are non-CBD CBD 14% $69 OFFICE LOANS BY SIZE: Size Total # Loans Avg Size Avg LTV 10mm+ $47.9 4 $12.0 53 % 5mm-10mm 17
Slide 15: CRE Maturities
CRE Maturities Dollars in millions 15 CRE MATURITIES BY SIZE: CRE MATURITIES BY INDUSTRY: Size Total # Loans Avg Size 10mm+ $85.1 6 $14.2 5mm-10mm 204.7 28 7.3 1mm-5mm 158.3 74 2.1 Under 1mm 52.9 173 0.3 Total $501.0 281 $1.8 in next 24 months CRE MATURITIES BY QUARTER: Only 15% of our CRE loans mat
Slide 16: Asset Quality
Asset Quality ACL Trend: Dollars in millions 16 ASSET QUALITY TRENDS • ACL stable at 1.44% • Net charge-offs of $3.7 million, or 0.20% of average loans (annualized) • NPAs decreased $1.6 million to 0.22% of total loans plus OREO
Slide 17: Deposit Mix
Deposit Mix We have a strong, well-diversified deposit base of 230,000 customers: Dollars in millions 17 Amount % of Total DDA $2,276 32% MM 1,615 22% CDs 1,488 21% Savings 975 13% Int Bear DDA 869 12% Total $7,223 100% Amount % of Total Average Account Size Average Age (in years) Personal $4,143 58
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 73% of total deposits • Funding availability meets liquidity needs in both normal and str
Slide 19: Net Interest Income
• NIM remains strong at 4.09%; a decline of 13 basis points from 2Q23 • Significant NIM outperformance compared to peer in this rate cycle • NIM has increased 97 basis points through this interest rate cycle • Quarterly net interest income has improved $19.0 million, or 27.8%, since the fourth quart
Slide 20: Noninterest Income
3Q23 3Q23 vs 2Q23 3Q23 vs 3Q22 Debit and Credit Card $4.7 $0.0 ($0.1) Service Charges 4.1 0.2 (0.3) Wealth 3.0 (0.2) (0.2) Mortgage 0.3 0.0 (0.1) Security Gain 0.0 0.0 (0.2) Other 0.1 (2.0) (1.7) Noninterest Income $12.2 ($2.0) ($2.6) Noninterest Income 20Dollars in millions • Decrease in other main
Slide 21: Noninterest Expense
3Q23 3Q23 vs 2Q23 3Q23 vs 3Q22 Salaries & Benefits $27.5 $2.1 $0.8 Data Processing 4.5 0.3 0.3 Occupancy 3.7 — 0.2 FF&E 3.1 (0.1) 0.2 Professional Services 2.0 (0.1) 0.1 Other Taxes 1.8 0.5 0.3 Marketing 1.7 0.3 0.4 FDIC 1.0 — 0.4 Other 7.5 0.2 0.5 Noninterest Expense $52.8 $3.2 $3.2 Noninterest Exp
Slide 22: Securities
Securities 22 • Securities portfolio is only 10% of total assets • 100% of securities portfolio is classified as available-for-sale • Average duration of 3.8 years at 3Q23 compared to 3.7 years at 4Q21 • AOCI of $115.4 million related to securities portfolio, if realized, would decrease CET1 ratio b
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 is relatively stable despite AOCI adjustments
Slide 24: 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 25: Financial Data: Balance Sheet
Financial Data 25 Balance Sheet 3Q23 2022 2021 2020 2019 Dollars in thousands Total Securities 955,262 $1,002,778 $910,793 $773,693 $784,283 Interest-Bearing Deposits 163,117 138,149 857,192 158,903 124,491 Total Net Loans 7,407,969 7,082,645 6,902,936 7,126,776 7,080,184 Other Assets 939,729 886,99
Slide 26: Net Interest Margin
Net Interest Margin YTD 3Q23 2022 2021 2020 2019 Securities - FTE 2.56% 2.25% 2.18% 2.49% 2.64% Loans - FTE 5.99% 4.50% 3.84% 4.09% 4.95% Total Interest-earning Assets - FTE 5.58% 4.06% 3.37% 3.87% 4.71% Interest-bearing Deposits 1.69% 0.40% 0.20% 0.66% 1.40% Borrowings 5.50% 3.01% 1.49% 1.56% 2.76%
Slide 27: Financial Data: Loan Portfolio
Financial Data 27 Loan Portfolio 3Q23 2022 2021 2020 2019 Dollars in thousands Commercial Real Estate $3,286,272 $3,128,187 $3,236,653 $3,244,974 $3,416,518 Commercial and Industrial 1,635,354 1,718,976 1,728,969 1,954,453 1,720,833 Commercial Construction 388,470 399,371 440,962 474,280 375,445 Tot
Slide 28: Financial Data: Asset Quality
Financial Data 28 Asset Quality 3Q23 2022 2021 2020 2019 Dollars in thousands Total Nonaccrual Loans $12,677 $19,052 $66,291 $146,774 $54,057 Nonaccrual Loans/Total Loans 0.17% 0.27% 0.95% 2.03% 0.76% Nonperforming Assets/Total Loans + OREO 0.22% 0.31% 1.13% 2.06% 0.81% YTD Net (Recoveries) Charge-o
Slide 29: Financial Data: Capital
Financial Data 29 Capital 3Q23 2022 2021 2020 2019 Tier 1 Leverage 11.12% 11.06% 9.74% 9.43% 10.29% Common Equity Tier 1 – Risk-Based Capital 13.11% 12.81% 12.03% 11.33% 11.43% Tier 1 – Risk-Based Capital 13.43% 13.21% 12.43% 11.74% 11.84% Total – Risk-Based Capital 15.01% 14.73% 13.79% 13.44% 13.22
Slide 30: 3Q23 ROTE and PPNR Reconciliation
3Q23 Return on Average Tangible Shareholders' Equity (ROTE) (non-GAAP) Net income (annualized) $132,779 Plus: amortization of intangibles (annualized), net of tax 1,034 Net income before amortization of intangibles (annualized) $133,813 Average total shareholders' equity $1,224,905 Less: average goo
Slide 31: TCE/Tangible Assets and Efficiency Ratio
3Q23 2Q23 1Q23 4Q22 3Q22 2Q22 1Q22 4Q21 Tangible Common Equity (TCE)/Tangible Assets (non-GAAP) Total shareholders' equity $1,223,532 $1,212,853 $1,227,795 $1,184,659 $1,153,181 Less: goodwill and other intangible assets, net of deferred tax liability (376,883) (377,144) (377,405) (377,673) (377,961
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 by Period
3Q23 2022 2021 2020 2020 2019 2019 YTD Excludes Fraud Excludes Merger Exp Return on Average Tangible Shareholders' Equity (ROTE) (non-GAAP) Net income (annualized) $144,040 $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
3Q23 2022 2021 2020 2020 2019 2019 YTD Excludes Fraud Excludes Merger Exp PPNR/Average Assets (Non-GAAP) Income before taxes $132,780 $168,930 $135,668,114 $21,039 $117,360 $117,360 Plus: merger related expenses — — — — — 11,350 Plus: provision for credit losses 16,949 8,366 16,215,300 131,424 14,87
Slide 35: Christopher J. McComish and Mark Kochvar
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer Third Quarter 2023