S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — Q3 2017 Earnings Presentation
41 slides from S&t Bancorp's earnings presentation, Nov 15, 2017
Slide 1: Third Quarter 2017
MEMBER FDIC Third Quarter 2017
Slide 2: Forward-looking statements
2 This presentation 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, results of operations, plans, objectives, outlook
Slide 3: Non-GAAP Financial Measures
3 Non-GAAP Financial Measures In addition to the results of operations presented in accordance with Generally Accepted Accounting Principles (GAAP), S&T management uses and this presentation contains or references certain non- GAAP financial measures, such as net interest income on a fully taxable e
Slide 4: Table of Contents
4 Table of Contents Corporate Profile ............................................................................................................................................ 5 3Q Highlights .........................................................................................................
Slide 5: Corporate Profile
5 Corporate Profile 5 • Headquartered in Indiana, PA • $7.2 billion in assets (as of 09.30.17) • $1.4 billion market cap (as of 09.30.17) • Locations in 5 regional markets • Stock symbol: STBA Corporate Profile
Slide 6: 3Q Highlights
6 3Q Highlights • 3Q EPS +12% vs 2Q (excluding $3.6M security gains) • 3Q EPS +10% vs 3Q16 • ROA 1.27%; ROE 10.23%; ROTE 15.47% • NIM (FTE) up 2 bps to 3.59%(1) • NPLs Decreased by 20% ($7.2M) • Efficiency Ratio 50.16% • 10% Dividend Increase to $0.22/share (1)Refer to appendix for reconciliation of
Slide 7: Performance Summary
7 Performance Summary (1) Annualized for quarterly data (2)Refer to appendix for reconciliation of Non-GAAP financial measures 3Q17 2Q17 1Q17 2016 2015 2014 Net Income (in $ thousands) $22,721 $22,765 $18,188 $71,392 $67,081 $57,910 Diluted Earnings per Share $0.65 $0.65 $0.52 $2.05 $1.98 $1.95 Divi
Slide 8: STBA Investment Thesis
8 STBA Investment Thesis • Above peer performance • Demonstrated expense discipline and efficiency • Organic growth • Strategic and effective mergers and expansion • Stable regional markets with long-term oil and gas benefit • Sound asset quality STBA Investment Thesis
Slide 9: Return on Average Assets
9 Return on Average Assets 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% 2013 2014 2015 2016 YTD 3Q17 1.12% 1.22% 1.13% 1.08% 1.21% (1) BHCPR Peer Group 2: Bank Holding Companies with $3-10 Billion of Assets through 2Q17 (2)Annualized Performance Peer(1) (2)
Slide 10: Return on Average Equity
10 Performance Return on Average Equity 12.5% 10.0% 7.5% 5.0% 2.5% 0.0% 2013 2014 2015 2016 YTD 3Q17 9.21% 9.71% 8.94% 8.67% 9.83% (1) BHCPR Peer Group 2: Bank Holding Companies with $3-10 Billion of Assets through 2Q17 (2)Annualized Peer(1) (2)
Slide 11: Return on Average Tangible Equity
11 Performance Return on Average Tangible Equity 20.0% 15.0% 10.0% 5.0% 0.0% 2013 2014 2015 2016 YTD 3Q17 13.94% 14.02% 14.39% 13.71% 15.05% (1) SNL Financial Custom Peer Group Holding Companies with $3-10 Billion of Assets through 2Q17. (2) Annualized (3)Refer to appendix for reconciliation of Non-
Slide 12: Expenses: Non Interest Expense / Average Assets
12 Expenses Non Interest Expense / Average Assets 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2013 2014 2015 2016 YTD 3Q17 2.61% 2.46% 2.30% 2.17% 2.09% (1) BHCPR Peer Group 2: Bank Holding Companies with $3-10 Billion of Assets through 2Q17. (2)Annualized Peer(1) (2)
Slide 13: Expenses: Efficiency Ratio
13 Expenses Efficiency Ratio 70% 60% 50% 40% 2013 2014 2015 2016 YTD 3Q17 60.03% 58.67% 55.86% 54.06% 51.78% Peer(1) (1) BHCPR Peer Group 2: Bank Holding Companies with $3-10 Billion of Assets through 2Q17. (2)Refer to appendix for reconciliation of Non-GAAP financial measures (2)
Slide 14: Loan Growth
14 Loan Growth $6,000 $5,500 $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 Lo an D ol la rs (in m ill io ns ) 2011 2012 2013 2014 2015 2016 3Q17 $3,130 $3,347 $3,566 $3,869 $5,028 $5,611 $5,821 Growth CA GR = 11.4 %
Slide 15: Mergers and expansion
15 Mergers and expansion S&T Bank Mainline Bank Gateway Bank Integrity Bank $7,000 $6,000 $5,000 $4,000 $3,000 $ (M ill io ns ) 2012 2013 2014 2015 2016 3Q17 4,159 4,533 $4,533 4,965 $4,965 5,452 6,943 $6,943 7,170 $7,170 242 126 $4,527 866 $6,318 North Shore Pittsburgh LPO opened - November 16, 201
Slide 16: Loan Growth by Market
16 Loan Growth by Market 2012 2017 Markets Western NY Western NY Central PA Central PA Southwestern PA Southwestern PA Northeast OH Northeast OH Central OH Central OH
Slide 17: S&T Operates in 5 Regional Markets
17 MSAs Locations Deposits(2) % Portfolio Loans(2) % Southwestern PA(1) Pittsburgh 51 $3,764 69.2% $3,019 51.9%Altoona Johnstown Central PA Lancaster 8 737 13.5% 840 14.4%Harrisburg York Other PA 160 2.9% 411 7.1% Total PA 4,661 85.6% 4,270 73.4% Northeast OH Akron 1 33 0.6% 312 5.4% Cleveland Centr
Slide 18: Projected Population Change 2018-2023
18 Projected Population Change 2018-2023 5% 4% 3% 2% 1% 0% -1% -2% Southwestern PA Central PA Northeast OH Central OH Western NY (0.66)% 1.99% (0.14)% 4.01% 0.25% 3.50% 2,838 1,561 2,752 2,076 2,208 Source: SNL & Nielson 2017 Estimated Population 2018 in 000s Markets U.S. Average
Slide 19: Median Household Income
19 Median Household Income $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 Southwestern PA Central PA Northeast OH Central OH Western NY $57,787 $64,246 $56,107 $63,009 $58,110 $61,045 U.S. Average Source: SNL & Nielson 2017 Markets
Slide 20: Unemployment Rate
20 Unemployment Rate 7% 6% 5% 4% 3% 2% 1% Southwestern PA Central PA Northeast OH Central OH Western NY 4.46% 3.72% 5.42% 3.80% 4.80% 4.10% Source: September 2017 Bureau of Labor Statistics; seasonally adjusted U.S. Average Markets
Slide 21: Stable regional markets with long-term oil & gas benefit
21 Stable regional markets with long-term oil & gas benefit Markets
Slide 22: Asset quality: Nonperforming Loans / Total Loans
22 Asset quality Nonperforming Loans / Total Loans 1.5% 1.0% 0.5% 0.0% 2013 2014 2015 2016 3Q17 0.63% 0.32% 0.70% 0.76% 0.50% (1) BHCPR Peer Group 2: Bank Holding Companies with $3-10 Billion of Assets through 2Q17 Peer(1)
Slide 23: Asset quality: Net Charge Offs / Average Loans
23 Asset quality Net Charge Offs / Average Loans 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% 2013 2014 2015 2016 YTD 3Q17 0.25% 0.00% 0.22% 0.25% 0.21% (1) BHCPR Peer Group 2: Bank Holding Companies with $3-10 Billion of Assets through 3Q17 (2)Annualized Peer(1) (2)
Slide 24: Asset quality: Loan Mix
24 Commercial CRE $2,682 59% C&I $1,447 32% Construction $433 9% Asset quality Loan Mix As of 9.30.17 Total Portfolio Loans $5,821 Commercial $4,562 78% Consumer $1,259 22% Consumer Mortgage/ Construction $702 56% Home Equity $488 39% Other $69 5% in $ Millions
Slide 25: Commercial Real Estate Diversification
25 Asset quality Recreational 1% Convenience Stores 2% Mobile Home Park 2% Restaurant 2% Dealerships 4% Other 4% Warehouse/Storage 4% Student Rentals 4% Manufacturing 7% Retail Space 7% Healthcare 8% Flex/Mixed Use 9% Strip Malls 9% Hotels 10% Multi-Family 12% Offices 15% Commercial Real Estate Dive
Slide 26: Commercial & Industrial Diversification
26 Asset quality Commercial & Industrial Diversification As of 9.30.17 Total C&I $1,447 million Agriculture 1% Information 1% Co. & Enter. 1% Support Svs. 1% Arts, Enter. & Recr. 1% Food Svs. 1% Finance/Insurance 3% Mining 3% Utilities 3% Transportation 3% Professional Svs. 3% Wholesale Trade 4% Oth
Slide 27: Rate Sensitivity
27 Loans & Securities Floating Rate $2,497 37% ARM/Future Reset 1,702 26% Fixed Rate 2,461 37% Total $6,660 100% Deposits & Borrowings Floating Rate/Short Wholesale Borrowings $1,174 19% Non-Maturity Variable Deposits 2,361 38% Non-Interest Bearing DDA 1,357 22% Fixed Rate 1,335 21% Total $6,227 100
Slide 28: Senior Management
28 Senior Management Name Title Years in Banking Years with S&T Todd D. Brice President & CEO 32 32 Mark Kochvar Chief Financial Officer 31 25 David G. Antolik Chief Lending Officer 29 27 Ernest J. Draganza Chief Risk Officer 30 25 Patrick J. Haberfield Chief Credit Officer 30 7 David P. Ruddock Chi
Slide 29: Lines of Business
29 Lines of Business Commercial Banking • 45 commercial bankers • 17 business bankers • C&I growth focused on privately held companies with sales up to $150 million • Regional team based approach to credit delivery • Dedicated small business (B2B) delivery channel • Dedicated treasury management tea
Slide 30: Stock Performance
30 1 YR 3 YR 5 YR 10 YR STBA 39.81% 22.07% 20.74% 5.27% NASDAQ Bank 33.08% 18.79% 18.12% 4.99% KRX-Dow Jones KBW Regional Bank 28.86% 17.22% 16.59% 4.57% S&P 500 18.66% 10.79% 14.18% 7.42% Valuation NASDAQ Bank S&P 500 KRX Regional Bank S&T Bancorp Stock Price Change (%) 70 60 50 40 30 20 10 0 -10 P
Slide 31: The Right Size
31 The Right Size • Big enough to: • Provide full complement of products and services • Access technology • Access capital markets • Attract talent • Expand – mergers and acquisitions/de novo • Small enough to: • Stay close to our customers • Understand our markets • Be responsive The Right Size
Slide 32: Income Statement
32 Income Statement Dollars in thousands, except per share data 3Q17 2Q17 1Q17 2016 2015 2014 Net Interest Income $57,456 $56,570 $53,878 $203,259 $187,551 $148,042 Noninterest Income 13,551 16,265 12,996 54,635 51,033 46,338 Total Revenue 71,007 72,835 66,874 257,894 238,584 194,380 Noninterest Exp
Slide 33: Balance Sheet
33 Balance Sheet Dollars in thousands 3Q17 2Q17 1Q17 2016 2015 2014 Securities $697,954 $689,388 $713,198 $693,487 $660,963 $640,273 Interest-bearing Balances 59,725 66,764 47,469 87,201 41,639 57,048 Loans, Net 5,811,982 5,725,588 5,705,365 5,562,437 5,014,786 3,823,805 Other 600,518 604,426 599,06
Slide 34: Net Interest Margin
34 Net Interest Margin (1)Refer to appendix for reconciliation of Non-GAAP financial measures 3Q17 2Q17 1Q17 2016 2015 2014 Securities - FTE 2.46% 2.48% 2.44% 2.41% 2.48% 2.58% Loans - FTE 4.38% 4.30% 4.18% 4.08% 4.09% 4.06% Total Interest-earning Assets - FTE 4.15% 4.08% 3.96% 3.87% 3.86% 3.78% Dep
Slide 35: Loan Portfolio
35 Loan Portfolio Dollars in thousands 3Q17 2Q17 1Q17 2016 2015 2014 Commercial Commercial Real Estate $2,681,693 $2,664,642 $2,614,724 $2,498,476 $2,166,603 $1,682,236 Commercial & Industrial 1,446,811 1,401,283 1,422,297 1,401,035 1,256,830 994,138 Construction 432,887 426,754 455,211 455,884 413,
Slide 36: Asset Quality
36 Asset Quality Dollars in thousands (1)Annualized for quarterly data 3Q17 2Q17 1Q17 2016 2015 2014 Total Nonperforming Loans $29,493 $36,669 $45,992 $42,635 $35,382 $12,457 Nonperforming Loans/Total Loans 0.50% 0.63% 0.80% 0.76% 0.70% 0.32% Nonperforming Assets/Total Loans + OREO 0.52% 0.66% 0.81%
Slide 37: Capital
37 Capital (1)Refer to appendix for reconciliation of Non-GAAP financial measures 3Q17 2Q17 1Q17 2016 2015 2014 Leverage 9.25% 9.01% 8.92% 8.98% 8.96% 9.80% Common Tier 1 – Risk-Based Capital 10.70% 10.53% 10.16% 10.04% 9.77% 11.81% Tier 1 – Risk-Based Capital 11.05% 10.89% 10.52% 10.39% 10.15% 12.3
Slide 38: APPENDIX – Non-GAAP Measures
38 APPENDIX – Non-GAAP Measures 3Q17 2Q17 1Q17 2016 2015 2014 Tangible common equity/tangible assets (non-GAAP) Total Shareholders’ Equity (GAAP basis) $887,576 $871,062 $855,180 $841,956 $792,237 $608,389 Less: goodwill & other intangible assets (295,627) (295,861) (296,222) (296,580) (298,289) (17
Slide 39: APPENDIX – Non-GAAP Measures: Efficiency ratio
39 APPENDIX – Non-GAAP Measures 3Q17 2Q17 1Q17 2016 2015 2014 Efficiency ratio (non-GAAP) Noninterest expense $36,553 $36,597 $36,808 $143,232 $136,717 $117,240 Net interest income 57,456 56,570 53,878 203,259 187,551 148,042 Plus: taxable equivalent adjustment 1,867 1,877 1,871 7,043 6,123 5,461 Ne
Slide 40: APPENDIX – Non-GAAP Measures: Net Interest Margin
40 APPENDIX – Non-GAAP Measures 3Q17 2Q17 1Q17 2016 2015 2014 Net Interest Margin Rate (FTE) (Non-GAAP) Total interest income $66,723 $64,914 $61,150 $227,774 $203,548 $160,523 Total interest expense (9,267) (8,344) (7,272) (24,515) (15,997) (12,481) Net interest income per consolidated statements o
Slide 41: Third Quarter 2017
MEMBER FDIC Third Quarter 2017