S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — Q1 2020 Earnings Presentation
32 slides from S&t Bancorp's earnings presentation, May 7, 2020
Slide 1: First Quarter 2020
First Quarter 2020 Todd Brice Chief Executive Officer Dave Antolik President Mark Kochvar Chief Financial Officer MEMBERMEMBER FDIC FDIC
Slide 2: Forward Looking Statements and Risk Factors
Forward Looking Statements and Risk Factors This information contains certain 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, outlo
Slide 3: Corporate Profile
Corporate Profile • Headquartered in Indiana, PA • $9.0 billion in assets (as of 03.31.20) • $1.1 billion market cap (as of 03.31.20) • Locations in 5 markets • Stock symbol: STBA MEMBER FDIC 3
Slide 4: STBA Investment Thesis
STBA Investment Thesis STBA Investment Thesis The Right Size • Above peer performance • Big enough to: • Demonstrated expense • Provide full complement of discipline and efficiency products and services • Organic growth • Access technology • Strategic and effective mergers • Access capital markets a
Slide 5: Strategic Goals
Strategic Goals • Remain a high performing, independent, regional community bank • Follow a disciplined approach focused on organic growth • Continue to enhance our market-based growth platform focused on the unique opportunities in our 5 distinct markets • Continue to improve the effectiveness and
Slide 6: COVID-19
COVID-19 We are committed to helping our employees, customers, and communities during these unprecedented and challenging times: Employees Consumers Businesses Communities • Working from home • Needs-based loan • Needs-based loan • $75,000 donation to • Rotating schedules payment deferrals payment d
Slide 7: Performance
Performance Return on Average Assets Return on Average Equity 1.8% 1.6% 1.50% 1.45%(3) 15.0% 1.4% (2) 1.22 Peer(1) 11.60% (3) 12.5% (2) 10.92% (1) 1.2% 1.08% 9.90% Peer 8.67% 1.0% 10.0% 0.8% (5) 1.03% 1.32% 0.70% 7.5% 5.13%(5) 0.6% 9.98% 5.0% 8.37% 0.4% 0.61% 4.47% 0.2% 2.5% 0.0% 0.0% (6) (6) 2016 2
Slide 8: Expenses
Expenses Noninterest Expense / Average Assets Efficiency Ratio(3) 3.0% 70% Peer(1) 2.5% 2.17% 2.10% 2.06% 2.09%(2) (4) 2.02% Peer(1) 2.0% 60% 54.06% (4) (2) 52.89% 1.5% 51.77% 50.60% 51.39% 1.0% 50% 0.5% 0.0% 40% (5) 2016 2017 2018 2019 1Q 2020 2016 2017 2018 2019 1Q 2020 (1) BHCPR Peer Group 2: Ban
Slide 9: Mergers and Expansion
Mergers and Expansion Upstate NY Northeast OH Central OH Eastern PA Eastern PA LPO opens in Rochester, NY LPO opens in Independence, OH Branch opens in Hillard, OH LPO Opens in Gr. Berks, PA Acquired DNB Financial Corp. March 24, 2015 August 13, 2018 March 4, 2019 (LPO 2014) November 4, 2019 Novembe
Slide 10: Eastern PA Expansion
Eastern PA Expansion DNB Financial Timeline • June 5, 2019 - S&T & DNB announced merger • November 30, 2019 - Merger is finalized • February 10, 2020 - All systems are converted and DNB starts operating under the name S&T Bank • DNB adds ◦ 14 Branches ◦ $900 million in Loans ◦ $991 million in Deposi
Slide 11: Markets
Markets S&T Operates in 5 Regional Markets Totals as of 03.31.20 Portfolio Loans - $7,247 Deposits - $7,058 Western PA Western PA Upstate NY 6% $414 51% $3,659 64% 8% Other 7% $4,510 Central OH $609 $469 Upstate NY 0% $18 7% Central OH 1% $79 Northeast OH 2% $117 $522 Northeast OH Eastern PA 26% 28%
Slide 12: Deposits
Deposits Deposit Mix as of 03.31.20 Amount % of Total Money Market $1,968 27% DDA 1,703 24% CD's 1,588 23% Int Bear DDA 963 14% Savings 836 12% Total Deposits $7,058 100% Amount % of Total Personal $4,172 59% Business 2,542 36% Brokered 344 5% Total $7,058 100% MEMBER FDIC 12 Dollars in millions
Slide 13: Loan Mix
Loan Mix Data as of March 31, 2020 $ in millions MEMBER FDIC 13
Slide 14: Commercial Loan Modifications
Commercial Loan Modifications In response to COVID-19, we are offering commercial loan customers needs-based payment deferrals and modifications to interest only periods: Total Modified % of Bal Total Modified % of Bal Loan Type Balance Balance Modified Loan Type Balance Balance Modified Other $511
Slide 15: Hotels
Hotels The COVID-19 pandemic is negatively impacting the hotel industry. Our hotel portfolio is comprised of 79 loans and totals $254 million: • 92% of the hotel portfolio is pass-rated. • 84% of the portfolio is with a Marriott, Geography: Hilton, Holiday Inn, or Hyatt chain. State Balance • 90% of
Slide 16: Consumer Loan Modifications
Consumer Loan Modifications In response to COVID-19, we are offering mortgage and consumer loan payment deferrals with no negative credit bureau reporting and have paused foreclosures/ repossessions: Total Modified % of Bal Total Avg Mod Avg Loan Type Balance Balance Modified FICO FICO General Progr
Slide 17: SBA PPP
SBA PPP We dedicated substantial resources to the SBA PPP and approved over $547 million: Total Number of Average Loan Size Balance Loans Balance Total $547,974 2,959 $185 Data as of May 5, 2020. $ in thousands MEMBER FDIC 17
Slide 18: Line Utilization
Line Utilization We have experienced limited increases in line usage since February 2020: Data as of April 24, 2020 $ in millions MEMBER FDIC 18
Slide 19: Asset Quality
Asset Quality Nonperforming Loans / Total Loans Net Charge Offs / Average Loans 1.25% 0.70% 0.63% 1.02% 0.60% 1.00% 0.76% 0.77% 0.76% 0.50% 0.75% Peer(1) 0.40% 0.30% 0.25% 0.50% 0.42% 0.22% 0.18% 0.18% 0.20% Peer(1) 0.25% 0.10% 0.00% 0.00% (2) 2016 2017 2018 2019 1Q 2020 2016 2017 2018 2019 1Q 2020
Slide 20: Allowance for Credit Losses (ACL)
Allowance for Credit Losses (ACL) Our allowance for credit losses increased $34.7 million, or 47 bps, since last quarter, due to the adoption of CECL and the uncertainty of the COVID-19 pandemic: Does not include unfunded commitment reserve. $ in millions MEMBER FDIC 20
Slide 21: Low Interest Rate Environment
Low Interest Rate Environment We are asset sensitive and expect NIM compression in a low rate environment: Loans and Securities LIBOR Fixed Floating Rate Rate We benefit from LIBOR's delayed decrease, as we have more LIBOR-based assets than LIBOR-based LIBOR-based assets $2,671 LIBOR-based liabiliti
Slide 22: Capital
Capital We are well-capitalized and have sufficient excess capital: Ratio Well Cap Excess % Capital $ Excess $ Leverage Ratio 10.03% 5.00% 5.03% $844 $423 Common Equity Tier 1 Ratio 10.93% 6.50% 4.43% 815 330 Tier 1 Capital Ratio 11.32% 8.00% 3.32% 844 247 Total Capital Ratio 12.73% 10.00% 2.73% 949
Slide 23: Liquidity
Liquidity We have access to over $3.5 billion of liquidity from multiple sources: Liquidity Source Availability FHLB $2,455 Federal Reserve 610 Unpledged securities 498 Fed Funds Lines 130 Total $3,693 We have established access to the Federal Reserve’s PPP Lending Facility. Loans and deposits have
Slide 24: Senior Management
Senior Management Name Title Years in Banking Years with S&T Todd D. Brice CEO 34 34 David G. Antolik President 31 29 Mark Kochvar Chief Financial Officer 33 27 Ernest J. Draganza Chief Risk Officer 32 27 David P. Ruddock Chief Operating Officer 34 34 Rebecca A. Stapleton Chief Banking Officer 31 31
Slide 25: Valuation Stock Performance
Valuation Stock Performance Total Annualized Shareholder Return Includes reinvested dividends (Data as of 03.31.20) 1 YR 3 YR 5 YR 10 YR STBA (28.70)% (5.23)% 1.82% 5.57% S&P 600 Bank (25.81)% (8.72)% 2.23% 7.06% NASDAQ Bank (28.61)% (11.16)% 0.35% 4.97% S&P 500 (6.93)% 5.09 % 6.71% 10.51% Source: B
Slide 26: Performance Summary
Performance Performance Summary 2019 2017 1Q 2020 2019 Excludes 2018 2017 Excludes DTA(3) 2016 Merger Exp(2) Net Income (in thousands) $13,231 $98,234 $107,478 $105,334 $72,968 $86,401 $71,392 Diluted Earnings per Share $0.34 $2.82 $3.09 $3.01 $2.09 $2.47 $2.05 Dividends Declared per Share $0.28 $1.
Slide 27: Financial Data
Financial Data Income Statement Balance Sheet 2017 1Q 2020 2019 2018 2017 Excludes DTA(1) 2016 1Q 2020 2019 2018 2017 2016 Net Interest Income $70,036 $246,791 $234,438 $225,733 $203,259 Securities $799,532 $784,283 $684,872 $698,291 $693,487 Noninterest Income 12,403 52,558 49,181 55,462 54,635 Int
Slide 28: Financial Data: Net Interest Margin, Loan Portfolio
Financial Data Net Interest Margin Loan Portfolio 1Q 2020 2019 2018 2017 2016 Dollars in thousands 1Q 2020 2019 2018 2017 2016 Commercial Securities - FTE 2.54% 2.64% 2.62% 2.48% 2.41% Commercial Real Estate $3,442,495 $3,416,518 $2,921,832 $2,685,994 $2,498,476 Commercial & Industrial 1,781,402 1,7
Slide 29: APPENDIX – Non-GAAP Measures
Appendix APPENDIX – Non-GAAP Measures Tangible Shareholders' Equity/Tangible Assets (Non-GAAP) Net Interest Margin Rate (FTE) (Non-GAAP) 1Q 2020 2019 2018 2017 2016 1Q 2020 2019 2018 2017 2016 Total Shareholders’ Equity (GAAP basis) $1,176,251 $1,191,998 $935,761 $884,031 $841,956 Total interest inc
Slide 30: APPENDIX – Non-GAAP Measures
Appendix APPENDIX – Non-GAAP Measures Return on Average Equity Return on Tangible Shareholders' Equity Return on Average Equity Return on Tangible Shareholders' Equity 1Q 2020 1Q 2020 2019 2019 Net Income $13,231 Net Income (1) $53,215 Net Income $98,234 Net Income $98,234 Adjust for merger related
Slide 31: APPENDIX – Non-GAAP Measures
Appendix APPENDIX – Non-GAAP Measures Return on Average Equity Return on Tangible Shareholders' Equity 2017 2017 Net Income $72,968 Net Income $72,968 Plus: DTA re-measurement 13,433 Plus: DTA re-measurement 13,433 Adjusted net income (non-GAAP) 86,401 Adjusted net income (non-GAAP) 86,401 Average a
Slide 32: First Quarter 2020
First Quarter 2020 MEMBERMEMBER FDIC FDIC