S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — Q3 2022 Earnings Presentation
28 slides from S&t Bancorp's earnings presentation, Nov 14, 2022
Slide 1: Third Quarter 2022
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer Third 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 $8.9 billion in assets $7.4 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: Top Workplace Recognition
Top Workplace Recognition 5 Top Workplaces for Diversity, Equity, and Inclusion (DE&I) 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 availabl
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: Third Quarter Overview
7 Third Quarter Overview RETURNS EARNINGS *Refer to appendix for reconciliation of non-GAAP financial measures EPS $0.95 Net Income $37.2 million ROA 1.64% ROE 12.47% ROTE* 18.46% PPNR* 2.15% HIGHLIGHTS • Record EPS and net income • EPS and net income increased more than 28% compared to 2Q22 • Solid
Slide 8: Performance
PPNR / AVERAGE ASSETS * 2018 2019 2020 2021 YTD 3Q22 0.0% 0.4% 0.8% 1.2% 1.6% 2.0% 2.4% RETURN ON AVERAGE TANGIBLE EQUITY * 2018 2019 2020 2021 YTD 3Q22 0.0% 5.0% 10.0% 15.0% 20.0% RETURN ON AVERAGE EQUITY 2018 2019 2020 2021 YTD 3Q22 0.0% 5.0% 10.0% 15.0% RETURN ON AVERAGE ASSETS 2018 2019 2020 202
Slide 9: Loan and Deposit Change by Type 3Q22 vs 2Q22
Loan Change by Type 3Q22 VS 2Q22: Balance Sheet • Loans, excluding PPP, increased $63 million, or 3.6% annualized, with consumer growth of $114 million • Deposits declined $202 million due to the rate environment Dollars in millions 9 CRE C&I Comm Const Residential Home Equity Consumer Cons Const ($
Slide 10: Asset Quality
Asset Quality ACL 3Q22 VS 2Q22: Dollars in millions 10 ASSET QUALITY TRENDS • ACL increased mainly due to higher qualitative reserve for macro environment • NPAs decreased 26%, or $10 million • Minimal net charge-off activity in 2022
Slide 11: Net Interest Income
• Net interest income increased $8.6 million, or 11%, due to higher rates • NIM expanded 48 bps to 4.04% • 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 11 Loan Rate Sensitivity Mix 51
Slide 12: Noninterest Income
3Q22 3Q22 vs 2Q22 3Q22 vs 3Q21 Debit and Credit Card $4.8 $0.0 $0.2 Service Charges 4.4 0.2 0.5 Wealth 3.2 0.0 (0.3) Mortgage 0.4 (0.1) (1.8) Security Gain 0.2 0.2 0.2 Other 1.8 1.8 0.1 Noninterest Income $14.8 $2.1 ($1.1) Noninterest Income 12Dollars in millions Increased due to lower unfavorable d
Slide 13: Noninterest Expense
3Q22 3Q22 vs 2Q22 3Q22 vs 3Q21 Salaries & Benefits $26.7 $1.9 $1.5 Data Processing 4.2 0.1 0.2 Occupancy 3.4 (0.2) (0.3) FF&E 2.9 0.0 0.2 Professional Services 1.9 (0.5) 0.3 Other Taxes 1.6 (0.1) (0.2) Marketing 1.4 (0.1) 0.5 FDIC 0.6 (0.3) (0.6) Other 6.9 0.4 0.8 Noninterest Expense $49.6 $1.2 $2.4
Slide 14: Loan Mix
Loan Mix Our loan portfolio is well-diversified: Dollars in millions 14 Amount % of Total CRE $3,135 44% Consumer 1,857 26% C&I 1,715 24 % Construction 390 6 % Total $7,097 100%
Slide 15: Deposit Mix
Deposit Mix We have a solid core deposit profile: Dollars in millions 15 Amount % of Total DDA $2,663 36% MM 1,819 25% Savings 1,128 15% CDs 953 13% Int Bear DDA 848 11% Total $7,411 100% Amount % of Total Personal $4,240 57% Business 3,171 43% Total $7,411 100%
Slide 16: Capital
Capital Dollars in millions; *Refer to appendix for reconciliation of non-GAAP financial measures 16 TCE / TA* • Capital levels remain strong • TCE / TA is relatively unchanged despite AOCI adjustments • $3.5 million of buybacks executed in 3Q22
Slide 17: 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 18: Financial Data: Balance Sheet
Financial Data 18 Balance Sheet 3Q22 2021 2020 2019 2018 Dollars in thousands Total Securities $997,428 $910,793 $773,693 $784,283 $684,872 Interest-Bearing Deposits 61,186 857,192 158,903 124,491 82,740 Total Net Loans 6,997,222 6,902,936 7,126,776 7,080,184 5,888,023 Other Assets 880,133 817,608 9
Slide 19: Financial Data: Net Interest Margin
Net Interest Margin YTD 3Q22 2021 2020 2019 2018 Securities - FTE 2.19% 2.18% 2.49% 2.64% 2.62% Loans - FTE 4.19% 3.84% 4.09% 4.95% 4.72% Total Interest-earning Assets - FTE 3.75% 3.37% 3.87% 4.71% 4.48% Interest-bearing Deposits 0.24% 0.20% 0.66% 1.40% 1.01% Borrowings 2.09% 1.49% 1.56% 2.76% 2.19%
Slide 20: Financial Data: Loan Portfolio
Financial Data 20 Loan Portfolio 3Q22 2021 2020 2019 2018 Dollars in thousands Commercial Real Estate $3,134,841 $3,236,653 $3,244,974 $3,416,518 $2,921,832 Commercial and Industrial 1,714,714 1,728,969 1,954,453 1,720,833 1,493,416 Commercial Construction 390,093 440,962 474,280 375,445 257,197 Tot
Slide 21: Financial Data: Asset Quality
Financial Data 21 Asset Quality 3Q22 2021 2020 2019 2018 Dollars in thousands Total Nonperforming Loans $22,777 $66,291 $146,774 $54,057 $46,073 Nonperforming Loans/Total Loans 0.32% 0.95% 2.03% 0.76% 0.77% Nonperforming Assets/Total Loans + OREO 0.41% 1.13% 2.06% 0.81% 0.83% YTD Net Charge-offs/Ave
Slide 22: Financial Data: Capital
Financial Data 22 Capital 3Q22 2021 2020 2019 2018 Tier 1 Leverage 10.75% 9.74% 9.43% 10.29% 10.05% Common Equity Tier 1 – Risk-Based Capital 12.53% 12.03% 11.33% 11.43% 11.38% Tier 1 – Risk-Based Capital 12.93% 12.43% 11.74% 11.84% 11.72% Total – Risk-Based Capital 14.43% 13.79% 13.44% 13.22% 13.21
Slide 23: Definitions of GAAP to Non-GAAP Financial Measures
3Q22 Return on Average Tangible Shareholders' Equity (non-GAAP) Net income (annualized) $147,781 Plus: amortization of intangibles (annualized), net of tax 1,181 Net income before amortization of intangibles (annualized) $148,962 Average total shareholders' equity $1,185,162 Less: average goodwill a
Slide 24: Tangible Common Equity and Efficiency Ratio Reconciliation
3Q22 2Q22 1Q22 4Q21 3Q21 Tangible Common Equity/Tangible Assets (non-GAAP) Total shareholders' equity $1,153,181 $1,178,358 $1,184,950 $1,206,454 $1,201,681 Less: goodwill and other intangible assets, net of deferred tax liability (377,961) (378,259) (378,557) (378,871) (379,218) Tangible common equ
Slide 25: Net Income Excluding Nonrecurring Items
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 26: Return on Average Tangible Shareholders' Equity
3Q22 2021 2020 2020 2019 2019 2018 YTD Excludes Fraud Excludes Merger Exp Return on Average Tangible Shareholders' Equity (non-GAAP) Net income (annualized) $127,350 $110,343 $21,040 $21,040 $98,234 $98,234 $105,334 Nonrecurring items — — — 58,671 — 11,350 — Tax effect of nonrecurring items — — — (1
Slide 27: PPNR/Average Assets and TCE/TA Reconciliation
3Q22 2021 2020 2020 2019 2019 2018 YTD Excludes Fraud Excludes Merger Exp PPNR/Average Assets (Non-GAAP) Income before taxes $118,680 $135,668 $21,039 $117,360 $117,360 $123,179 Plus: merger related expenses — — — — 11,350 — Plus: provision for credit losses 5,190 16,215 131,424 14,873 14,873 14,995
Slide 28: Third Quarter 2022
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer Third Quarter 2022