S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — Q2 2021 Earnings Presentation
29 slides from S&t Bancorp's earnings presentation, Sep 7, 2021
Slide 1: Second Quarter 2021
Christopher J. McComish Chief Executive Officer David G. Antolik President Mark Kochvar Chief Financial Officer Second Quarter 2021
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 Corporate Profile The Markets We Serve • $9.5 billion in assets • $7.0 billion in loans • $8.0 billion in deposits • $1.2 billion market cap • Stock symbol: STBA • Locations in 5 attractive markets in 3 states • Markets comprise 9.1 million people and 179,000 businesses • The customers we serve: •
Slide 4: New Leadership
4 New Leadership • S&T President since January 2019 • 31 years of experience at S&T • Deep commercial and small business expertise • Proven ability to attract and retain talent • Regional market knowledge and connections COMPLEMENTARY LEADERSHIP Christopher J. McComish CHIEF EXECUTIVE OFFICER David
Slide 5: CEO First Days: Our Strengths
CEO FIRST 100 DAYS 5 Our Strengths Stable, low-cost deposit base Strong capital and liquidity Attractive legacy and expansion markets Proven ability to grow organically and through M&A Commercial and small business expertise Efficient operator Understand the current state through engaging with our e
Slide 6: Drivers of Performance
EMPLOYEE ENGAGEMENT • Maintain best-in-class culture • Attract and retain talent • Build on ownership mentality • Drive customer growth RISK/OPERATIONAL EXCELLENCE • Credit risk appetite and management • Enhance technology • Build out infrastructure BRAND AND REPUTATION • Capitalize on legacy market
Slide 7: Second Quarter Overview
7 Second Quarter Overview HIGHLIGHTS • Chris McComish named CEO • Good return metrics • Increased customer activity • Well-positioned for growth • $0.28 dividend declared RETURNS EARNINGS *Refer to appendix for reconciliation of non-GAAP financial measures EPS $0.72 Net Income $28.4 million ROA 1.21
Slide 8: Performance
Performance 8 1.50% 1.32% 1.45%(2*) 1.22(1*) 0.74%(3*) 0.23% 1.03% 1.31% 9.90%(1*) 11.60% 9.98% 10.92%(2*) 5.76%(3*) 1.80% 8.37% 10.39% 9.98% 1.78%1.93%(2*) 1.67% 1.89% 1.96% (*) 1.75% 1.78% 15.76%(2*) 15.08%(1*) 17.14% 2.92% 8.80%(3*) 15.57% 12.77% 14.41% Return on Average Tangible Equity(*) RETURN
Slide 9: 2Q21 vs 1Q21: Balance Sheet Highlights
2Q21 VS 1Q21: Balance Sheet HIGHLIGHTS • Cash increased due to: • PPP loan decrease of $163.1 million • $139.2 million of deposit growth related to PPP loans and stimulus payments • Excluding PPP, portfolio loans decreased $12.7 million in 2Q21 LOAN OUTLOOK • Strong loan pipeline and commitment grow
Slide 10: Net Interest Income: NIM Change vs Prior Quarter
NIM pressure mainly due to increased cash and lower PPP contribution NIM Change vs Prior Quarter 1Q21: 3.47% Elevated Fed cash (0.18%) PPP impact (0.08%) Loan yields (0.07%) Liability costs 0.05% Other (0.03%) 2Q21: 3.16% Net Interest Income Dollars in millions; *Refer to appendix for reconciliation
Slide 11: Noninterest Income
2Q21 2Q21 vs 1Q21 2Q21 vs 2Q20 Debit and Credit Card $4.7 $0.6 $1.1 Service Charges 3.6 0.2 0.8 Wealth 3.2 0.2 0.6 Mortgage 1.7 (2.6) (0.9) Other 2.1 (0.2) (1.3) Noninterest Income $15.4 ($1.8) $0.3 Debit card growth; lower levels of mortgage banking Noninterest Income 11Dollars in millions
Slide 12: Noninterest Expense
2Q21 2Q21 vs 1Q21 2Q21 vs 2Q20 Salaries & Benefits $24.5 $1.2 $3.1 Data Processing 3.8 (0.4) 0.2 Occupancy 3.4 (0.4) 0.0 FF&E 2.4 (0.2) (0.6) Other Taxes 1.8 0.4 0.2 Professional Services 1.6 0.1 (0.3) Marketing 1.0 (0.3) 0.0 FDIC 0.9 (0.1) (0.1) Other 6.3 0.1 (0.2) Noninterest Expense $45.8 $0.2 $2
Slide 13: Markets
Western PA Upstate NY Central OH Northeast OH Eastern PA 50% $3,467 27% $1,896 8% $578 9% $659 6% $407 Portfolio Loans $7,007 Upstate NY 0% $20 Northeast OH 2% $158 Central OH 2% $141 Eastern PA Western PA 68% $5,418 26% $2,084 Other 2% $194 Deposits $8,015 We operate in 5 regional markets: Markets
Slide 14: Loan Mix
Loan Mix Our loan portfolio is well-diversified: Dollars in millions; as of June 30, 2021 14 Amount % of Total CRE $3,247 46% C&I 1,774 25% Consumer 1,508 22% Construction 478 7% Total $7,007 100%
Slide 15: Deposit Mix
Deposit Mix We have a solid core deposit profile: Dollars in millions; as of June 30, 2021 15 Amount % of Total DDA $2,669 33% MM 2,047 26% CDs 1,270 16% Savings 1,050 13% Int Bear DDA 979 12% Total $8,015 100% Amount % of Total Personal 4,374 55% Business 3,636 45% Brokered 5 0% Total $8,015 100%
Slide 16: Asset Quality
Asset Quality ACL 2Q21 VS 1Q21: HIGHLIGHTS • ACL release of $5.5 million • Nonperforming loans declined • COVID modifications remain <1% of loans • Hotel portfolio is being closely monitored Dollars in millions; *Excludes loss from customer fraud related to a check kiting scheme 16 ASSET QUALITY TRE
Slide 17: Capital
Capital We have strong capital levels and are well-positioned for growth Dollars in millions; *Refer to appendix for reconciliation of non-GAAP financial measures 17 TOTAL CAPITAL
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 2Q21 2020 2019 2018 2017 Dollars in thousands Securities $840,375 $773,693 $784,283 $684,872 $698,291 Interest-bearing Balances 897,999 158,903 124,491 82,740 61,965 Loans, Net 6,905,363 7,126,776 7,080,184 5,888,023 5,709,544 Other 852,095 908,525 775,691 596,586 590
Slide 20: Financial Data: Net Interest Margin
Net Interest Margin YTD 2Q21 2020 2019 2018 2017 Securities - FTE 2.26% 2.49% 2.64% 2.62% 2.48% Loans - FTE 3.88% 4.09% 4.95% 4.72% 4.32% Total Interest-earning Assets - FTE 3.49% 3.87% 4.71% 4.48% 4.09% Interest-bearing Deposits 0.23% 0.66% 1.40% 1.01% 0.62% Borrowings 1.53% 1.56% 2.76% 2.19% 1.27%
Slide 21: Financial Data: Loan Portfolio
Financial Data 21 Loan Portfolio 2Q21 2020 2019 2018 2017 Dollars in thousands Commercial Real Estate $3,246,533 $3,244,974 $3,416,518 $2,921,832 $2,685,994 Commercial and Industrial 1,774,358 1,954,453 1,720,833 1,493,416 1,433,266 Commercial Construction 478,153 474,280 375,445 257,197 384,334 Tot
Slide 22: Financial Data: Asset Quality
Financial Data 22 Asset Quality 2Q21 2020 2019 2018 2017 Dollars in thousands Total Nonperforming Loans $112,619 $146,774 $54,057 $46,073 $23,938 Nonperforming Loans/Total Loans 1.61% 2.03% 0.76% 0.77% 0.42% Nonperforming Assets/Total Loans + OREO 1.62% 2.06% 0.81% 0.83% 0.42% YTD Net Charge-offs /A
Slide 23: Financial Data: Capital
Financial Data 23 Capital 2Q21 2020 2019 2018 2017 Tier 1 Leverage 9.52% 9.43% 10.29% 10.05% 9.17% Common Tier 1 – Risk-Based Capital 11.98% 11.33% 11.43% 11.38% 10.71% Tier 1 – Risk-Based Capital 12.40% 11.74% 11.84% 11.72% 11.06% Total – Risk-Based Capital 14.00% 13.44% 13.22% 13.21% 12.55% Tangib
Slide 24: 2Q21 Return on Average Tangible Shareholders' Equity (non-GAAP)
2Q21 Return on Average Tangible Shareholders' Equity (non-GAAP) Net income (annualized) $113,778 Plus: amortization of intangibles (annualized), net of tax 1,395 Net income before amortization of intangibles (annualized) $115,173 Average total shareholders' equity $1,179,002 Less: average goodwill a
Slide 25: Efficiency Ratio and Net Interest Margin (non-GAAP)
2Q21 1Q21 4Q20 3Q20 2Q20 Efficiency Ratio (non-GAAP) Noninterest expense $45,829 $45,580 $48,528 $48,246 $43,478 Net interest income per consolidated statements of net income $68,304 $70,659 $69,929 $69,276 $70,148 Plus: taxable equivalent adjustment 585 664 725 780 847 Net interest income (FTE) (no
Slide 26: Net Income Excluding Nonrecurring Items
2020 2019 2017 Excludes Fraud Excludes Merger Exp Excludes DTA Net Income excluding nonrecurring items Net income $21,040 $98,234 $72,968 Nonrecurring items 58,671 11,350 13,433 Tax effect of nonrecurring items (12,321) (2,106) — Adjusted net income (non-GAAP) $67,390 $107,478 $86,401 Diluted Earnin
Slide 27: Return on Average Tangible Equity (non-GAAP)
2Q21 2020 2020 2019 2019 2018 2017 2017 YTD Excludes Fraud Excludes Merger Exp Excludes DTA Return on Average Tangible Equity (non-GAAP) Net income (annualized) $121,535 $21,040 $21,040 $98,234 $98,234 $105,334 $72,968 $72,968 Nonrecurring items — — 58,671 — 11,350 — — 13,433 Tax effect of nonrecurr
Slide 28: PTPP / Average Assets (non-GAAP)
2Q21 2020 2020 2019 2019 2018 2017 YTD Excludes Fraud Excludes Merger Exp PTPP / Average Assets (Non-GAAP) Income before taxes $74,515 $21,040 $117,360 $117,360 $123,179 $119,405 Plus: merger related expenses — — — 11,350 — — Plus: provision for credit losses 5,699 131,424 14,873 14,873 14,995 13,88
Slide 29: Second Quarter 2021
Christopher J. McComish Chief Executive Officer David G. Antolik President Mark Kochvar Chief Financial Officer Second Quarter 2021