S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — Q4 2023 Earnings Presentation
35 slides from S&t Bancorp's earnings presentation, Feb 15, 2024
Slide 1: Full Year and Fourth Quarter 2023
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer Full Year and Fourth 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 • $9.6 billion in assets • $7.5 billion in deposits • $7.7 billion in loans • $1.3 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: Awards
Awards 5 Top Workplaces USA 2023 S&T Bank was recognized as a top workplace in the United States, issued by Energage. We were chosen based solely on employee feedback gathered through an anonymous, research-based employee engagement survey. Forbes Best-In-State Banks S&T Bank was named on the Forbes
Slide 6: Strategic Path Forward: Our Shared Future
6 Strategic Path Forward “Our Shared Future” VALUES PURPOSE DRIVERS
Slide 7: Key Drivers of business performance and profitable growth
7 Delivering long-term, sustainable financial performance (measured by top quartile Price/TBV and Total Shareholder Return) Unwavering focus on key Drivers of business performance and profitable growth ASSET QUALITY DEPOSIT FRANCHISE Loans/Deposit Ratio, Cost of Deposits ◦ Treasury Management distri
Slide 8: Positioned for Growth
Positioned for Growth 8 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 9: Full Year Overview
9 Full Year Overview RETURNS EARNINGS *Refer to appendix for reconciliation of non-GAAP financial measures EPS $3.74 Net Income $144.8 million ROA 1.56% ROE 11.80% ROTE* 17.15% PPNR* 2.12% HIGHLIGHTS • Record EPS and net income • Strong return metrics and EPS growth of 8.09% • Solid NIM of 4.13% com
Slide 10: Fourth Quarter Overview
10 Fourth Quarter Overview RETURNS EARNINGS *Refer to appendix for reconciliation of non-GAAP financial measures EPS $0.96 Net Income $37.0 million ROA 1.55% ROE 11.79% ROTE* 17.00% PPNR* 1.97% HIGHLIGHTS • Strong earnings and return metrics • NIM remains solid at 3.92% • Net charge-offs of $3.6 mil
Slide 11: Performance
PPNR / AVERAGE ASSETS * 2019 2020 2021 2022 2023 0.0% 0.4% 0.8% 1.2% 1.6% 2.0% 2.4% RETURN ON AVERAGE TANGIBLE EQUITY * 2019 2020 2021 2022 2023 0.0% 5.0% 10.0% 15.0% 20.0% RETURN ON AVERAGE EQUITY 2019 2020 2021 2022 2023 0.0% 5.0% 10.0% 15.0% RETURN ON AVERAGE ASSETS 2019 2020 2021 2022 2023 0.0%
Slide 12: Balance Sheet
Balance Sheet • Loans increased $137.4 million, or 7.25% annualized, since September 30, 2023 • Customer deposit growth of $98.2 million in money market and CDs • Added $200.7 million of brokered money markets Dollars in millions 12 4Q23 3Q23 Var $234 $238 ($4) 970 955 15 7,653 7,516 137 7,522 7,223
Slide 13: Loan Mix
Loan Mix Our loan portfolio is well-diversified: Dollars in millions 13 Amount % of Total CRE $3,358 44% Consumer 2,290 30% C&I 1,642 21% Construction 363 5% Total $7,653 100%
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 $7,653 CRE LOANS $3,358 OFFICE $481 85% of our office loans are non-CBD CBD 15% $72 OFFICE LOANS BY SIZE: Size Total # Loans Avg Size Avg LTV 10mm+ $47.6 4 $11.9 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+ $78.1 5 $15.6 5mm-10mm 258.3 36 7.2 1mm-5mm 157.3 75 2.1 Under 1mm 51.6 206 0.3 Total $545.3 322 $1.7 in next 24 months CRE MATURITIES BY QUARTER: Only 16% of our CRE loans mat
Slide 16: Asset Quality
Asset Quality ACL Trend: Dollars in millions 16 ASSET QUALITY TRENDS • ACL relatively stable at 1.41% • Net charge-offs of $3.6 million, or 0.19% of average loans (annualized) • NPAs remain low at 0.30% 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 $2,222 29% MM 1,942 26% CDs 1,582 21% Savings 950 13% Int Bear DDA 826 11% Total $7,522 100% Amount % of Total Average Account Size (in $000) Average Age (in years) Personal
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 74% of total deposits • Funding availability meets liquidity needs in both normal and str
Slide 19: Net Interest Income
• NIM was solid at 3.92% • Significant NIM outperformance compared to peer in this rate cycle • NIM has increased 80 basis points through this interest rate cycle • Quarterly net interest income has improved $16.7 million, or 24.36%, since the fourth quarter of 2021 Net Interest Income Dollars in mi
Slide 20: Noninterest Income
4Q23 4Q23 vs 3Q23 4Q23 vs 4Q22 Debit and Credit Card $4.5 ($0.2) $0.1 Service Charges 4.1 — (0.2) Wealth 3.1 0.1 0.1 Mortgage 0.3 — — Other 6.1 6.0 2.5 Noninterest Income $18.1 $5.9 $2.5 Noninterest Income 20Dollars in millions • Increase in other related to a $3.3 million gain on OREO and valuation
Slide 21: Noninterest Expense
4Q23 4Q23 vs 3Q23 4Q23 vs 4Q22 Salaries & Benefits $31.0 $3.5 $3.0 Data Processing 4.5 — 0.3 FF&E 3.7 0.6 0.7 Occupancy 3.6 (0.1) (0.2) Professional Services 2.0 — (0.1) Other Taxes 1.9 — 0.1 Marketing 1.4 (0.3) — FDIC 1.0 — 0.6 Other 7.1 (0.3) 0.5 Noninterest Expense $56.2 $3.4 $4.9 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 3.7 years at 4Q23 unchanged from 4Q21 • AOCI of $82.0 million related to securities portfolio, if realized, would decrease CET1 ratio by 108 basis
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 improvement due to strong earnings and AOCI
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 2023 2022 2021 2020 2019 Dollars in thousands Total Securities $970,391 $1,002,778 $910,793 $773,693 $784,283 Interest-Bearing Deposits 160,802 138,149 857,192 158,903 124,491 Total Net Loans 7,545,528 7,082,645 6,902,936 7,126,776 7,080,184 Other Assets 874,805 886,9
Slide 26: Net Interest Margin
Net Interest Margin 2023 2022 2021 2020 2019 Securities - FTE 2.61% 2.25% 2.18% 2.49% 2.64% Loans - FTE 6.04% 4.50% 3.84% 4.09% 4.95% Total Interest-earning Assets - FTE 5.64% 4.06% 3.37% 3.87% 4.71% Interest-bearing Deposits 1.92% 0.40% 0.20% 0.66% 1.40% Borrowings 5.59% 3.01% 1.49% 1.56% 2.76% Tot
Slide 27: Financial Data: Loan Portfolio
Financial Data 27 Loan Portfolio 2023 2022 2021 2020 2019 Dollars in thousands Commercial Real Estate $3,357,603 $3,128,187 $3,236,653 $3,244,974 $3,416,518 Commercial and Industrial 1,642,106 1,718,976 1,728,969 1,954,453 1,720,833 Commercial Construction 363,284 399,371 440,962 474,280 375,445 Tot
Slide 28: Financial Data: Asset Quality
Financial Data 28 Asset Quality 2023 2022 2021 2020 2019 Dollars in thousands Total Nonaccrual Loans $22,946 $19,052 $66,291 $146,774 $54,057 Nonaccrual Loans/Total Loans 0.30% 0.27% 0.95% 2.03% 0.76% Nonperforming Assets/Total Loans + OREO 0.30% 0.31% 1.13% 2.06% 0.81% Net Charge-offs/Average Loans
Slide 29: Financial Data: Capital
Financial Data 29 Capital 2023 2022 2021 2020 2019 Tier 1 Leverage 11.21% 11.06% 9.74% 9.43% 10.29% Common Equity Tier 1 – Risk-Based Capital 13.37% 12.81% 12.03% 11.33% 11.43% Tier 1 – Risk-Based Capital 13.69% 13.21% 12.43% 11.74% 11.84% Total – Risk-Based Capital 15.27% 14.73% 13.79% 13.44% 13.22
Slide 30: 4Q23 ROTE and PPNR Reconciliation
4Q23 Return on Average Tangible Shareholders' Equity (ROTE) (non-GAAP) Net income (annualized) $146,980 Plus: amortization of intangibles (annualized), net of tax 1,003 Net income before amortization of intangibles (annualized) $147,983 Average total shareholders' equity $1,247,030 Less: average goo
Slide 31: TCE/Tangible Assets and Efficiency Ratio
4Q23 3Q23 2Q23 1Q23 4Q22 3Q22 2Q22 1Q22 4Q21 Tangible Common Equity (TCE)/Tangible Assets (non-GAAP) Total shareholders' equity $1,283,445 $1,223,532 $1,212,853 $1,227,795 $1,184,659 Less: goodwill and other intangible assets, net of deferred tax liability (376,631) (376,883) (377,144) (377,405) (37
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 2019-2023
2023 2022 2021 2020 2020 2019 2019 Excludes Fraud Excludes Merger Exp Return on Average Tangible Shareholders' Equity (ROTE) (non-GAAP) Net income $144,781 $135,520 $110,343 $21,040 $21,040 $98,234 $98,234 Nonrecurring items — — — — 58,671 — 11,350 Tax effect of nonrecurring items — — — — (12,321) —
Slide 34: PPNR/Average Assets and TCE Reconciliation
2023 2022 2021 2020 2020 2019 2019 Excludes Fraud Excludes Merger Exp PPNR/Average Assets (Non-GAAP) Income before taxes $178,804 $168,930 $135,668 $21,039 $117,360 $117,360 Plus: merger related expenses — — — — — 11,350 Plus: provision for credit losses 17,892 8,366 16,215 131,424 14,873 14,873 Tot
Slide 35: Full Year and Fourth Quarter 2023
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer Full Year and Fourth Quarter 2023