S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — Q3 2016 Earnings Presentation
35 slides from S&t Bancorp's earnings presentation, Dec 7, 2016
Slide 1: Third Quarter 2016
MEMBER FDIC Third Quarter 2016
Slide 2: Forward Looking Statement and Risk Factor
Forward Looking Statement and Risk Factor • This presentation contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include, among others, statements regarding tre
Slide 3: Non-GAAP Financial Measures
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 equ
Slide 4: Corporate Profile
Corporate Profile 4 • Headquartered in Indiana, PA • $6.7 billion in assets (as of 9.30.16) • $1.0 billion market cap (as of 9.30.16) • Bank holding company with 64 offices and 5 insurance locations • Stock symbol: STBA • Named Sandler O’Neill Sm-All Star in 2013, 2014, and 2015
Slide 5: Performance Summary
Performance Summary (1)Refer to appendix for reconciliation of Non-GAAP financial measures (2)Annualized for quarterly data 5 3Q16 2Q16 1Q16 2015 2014 2013 2012 Net Income (in $ thousands) $20,581 $17,059 $16,093 $67,081 $57,910 $50,539 $34,200 Diluted Earnings per Share $0.59 $0.49 $0.46 $1.98 $1.9
Slide 6: STBA Investment Thesis
STBA Investment Thesis • Above peer performance • Strategic and effective mergers and expansion • Demonstrated expense discipline and efficiency • Organic growth • Sound asset quality • Stable regional economies with long-term oil and gas benefit • Undervalued compared to peer 6
Slide 7: Performance: Return on Average Assets
Performance Saki Bancorp. Return on Average Assets tae 12s 110% 01% 0.6% 2013, 2014 2015 1016” 2a16" 3q16” annualized 7
Slide 8: Performance: Return on Average Equity
Performance Saki Bancorp. Return on Average Equity 12.5% 10.0% 76 9.05% | —— 7% 306% 75% 5.0% 25% 0.0% i 2013, 2014 2015, 1916” 2a16” 3016 ns
Slide 9: Performance: Return on Average Tangible Equity
Performance Saki Bancorp. Return on Average Tangible Equity 16.0% 5.06% ras9% ‘sae 14.00% 140% 13.30% 13.00% 12.0% 10.0% 0.0% 2013 2014 2015 1a16” 2a16” 3q16"
Slide 10: Mergers and expansion
Mergers and expansion SalBancorp.. Bone GatewayBank acquired ‘August 13,2012, Mainline National rch 9, 2012 eae 7,000 T U u i Northeast Ohio Cental onioLPO Westem¥firo S&T Benkbranch Loan production Ofce opened Jnr 2i,2034 ‘renedstarcy opensinaiconsod 6,718 opened Agu 27 2032 Tasos” Bocembers), 2015
Slide 11: Expenses
Expenses Sai Bancorp. 1h Asset: 3.5% 3.0% 2.61% 2.46% 2.5% 2.42% 230% 2.06% 2.0% 1.5% 1.0% 0.5% 0.0% . . 2013, 2014 2015, 1916" 2a16” 3a16” Anouolzes
Slide 12: Expenses: Efficiency Ratio
Expenses Saki Bancorp. 70% 40% Efficiency Ratio sos seem s739% ss.00% sus7% su65% 2013 2014 2015 1016 2016 3@16 \8IBHCPR Peer Group2:Bork Holding Companies with $5-10}
Slide 13: Growth: Loan Dollars
Growth Saki Bancorp. ‘Loan Dollars (in milions) (250) (500) (750) (4,000) (1,250) 2013, 2014 2015 YTD 2016 == Line Utilization New Payments Payot eNet Growth
Slide 14: Market Opportunity
Market Opportunity MSA 2017 Population (in thousands) 2017-2022 % Change Median HH Income (in thousands) Locations Deposits (in millions) Deposit Market Share % Loans (in millions) Pittsburgh, PA 2,349 0.08 % $56 27 $1,955 1.6% $2,009 Indiana, PA1 86 (1.42)% $46 9 $1,345 58.0% $379 Jefferson-Clarion
Slide 15: Asset quality: Non Performing Loans / Total Loans
Asset quality Sai Bancorp. Non Performing Loans / Total Loans 2.0% 15% 1.00% 1.0% O72, 0.75% 0.70% 0.3% ~~] 0.5% 0.32% 0.0% 2013, 2014 2015, 1016 2a16 3016 ——_—
Slide 16: Asset quality: Net Charge Offs / Average Loans
Asset quality Sai Bancorp. Net Charge Offs / Average Loans 0.40% 0.30% 0.25% 0.23% 22% 0.22% 0.20% 0.10%
Slide 17: Asset quality: Loan Mix
Asset quality Sai Bancorp. Loan Mix As of 09.30.16 Total Portfolio Loans $5,418 Commercial Consumer Mort gqige/Gonstructl ‘$699 56%
Slide 18: Asset quality: Commercial Real Estate Diversification
Asset quality Recreational 2% Saki Bancorp. Commercial Real Estate Diversification As of 09.30.16 Total CRE $2,427 million Pennsylvania 4 gfe) Ohio lew York West Virginia Other
Slide 19: Stable regional economies with long-term oil & gas benefit
Stable regional economies with long-term oil & gas benefit 19 Regional economy
Slide 20: Undervalued compared to peer: Valuation
20 Undervalued compared to peer(1) Valuation (1)KRX-Dow Jones KBW Regional Bank Index Members Stock prices as of 11.28.16; Performance for last twelve months reported Source: Bloomberg
Slide 21: Valuation: Stock Performance
Valuation Saki Bancorp. Stock Performance Total Annualized Shareholder Return 5 reinvested dividends (Data as of 09.30.16) 1YR 3YR 5YR STBA ~8.55% 9.01% 15.64% 2.05% NASDAQ Bank 10.67% 11.12% 19.18% 1.48% KRX-Dow Jones KBW Regional Bank 9.30% 10.07% 19.88% 1.33% S&P 500 15.37% 11.13% 16.33% 7.22% So
Slide 22: Rate Sensitivity
Saki Bancorp. Rate Sensitivity As of 09.30.16 Loans & Securities Floating Rate m $2,334 38% ARM/Future Reset $1,599 26% Fixed Rate $2,266 36% Total $6,199 100% | Floating Rate/Short Wholesale mi ‘38 16% | Non-Maturity Variable Deposits $2,234 39% Non-Interest Bearing DDA $1,232 21% Fixed Rate $1,409
Slide 23: Senior Management
Senior Management 23 Name Title Years in Banking Years with S&T Todd D. Brice President & CEO 31 31 Mark Kochvar Chief Financial Officer 30 24 David G. Antolik Chief Lending Officer 28 26 Ernest J. Draganza Chief Risk Officer 30 25 Patrick J. Haberfield Chief Credit Officer 29 6 David P. Ruddock Chi
Slide 24: Continuous Improvement
Continuous Improvement 24 Multi-Faceted Growth Profit Improvement Operational Effectiveness Culture Customer Experience Risk Management 3 mergers since 2012 LPO expansions to new markets McCandless, PA branch opened in 2015 Akron, OH branch opened in 2015 Platinum banking Closed 6 locations Converte
Slide 25: Lines of Business
Lines of Business Commercial Banking • 48 commercial bankers • 18 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 team R
Slide 26: The Right Size
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 26
Slide 27: Income Statement
Income Statement Dollars in thousands, except per share data 27 3Q16 2Q16 1Q16 2015 2014 2013 2012 Net Interest Income $51,455 $49,708 $49,637 $187,551 $148,042 $139,193 $135,227 Noninterest Income 13,448 12,448 15,817 51,033 46,338 51,527 51,912 Total Revenue 64,903 62,156 65,454 238,584 194,380 19
Slide 28: Balance Sheet
Balance Sheet Dollars in thousands 28 3Q16 2Q16 1Q16 2015 2014 2013 2012 Securities $671,128 $683,479 $677,221 $660,963 $640,273 $509,425 $452,266 Interest-bearing Balances 68,961 40,879 71,200 41,639 57,048 53,594 257,116 Loans, Net 5,376,135 5,348,050 5,138,140 5,014,786 3,823,805 3,522,080 3,322,
Slide 29: Net Interest Margin
Net Interest Margin (1)Refer to appendix for reconciliation of Non-GAAP financial measures 29 3Q16 2Q16 1Q16 2015 2014 2013 2012 Securities/Other – FTE 2.36% 2.35% 2.39% 2.41% 2.28% 2.00% 1.86% Loans - FTE 4.08% 4.05% 4.11% 4.09% 4.06% 4.22% 4.59% Total Interest-earning Assets 3.87% 3.85% 3.89% 3.86
Slide 30: Loan Portfolio
Loan Portfolio Dollars in thousands 30 3Q16 2Q16 1Q16 2015 2014 2013 2012 Commercial Commercial Real Estate $2,427,164 $2,388,786 $2,260,231 $2,166,603 $1,682,236 $1,607,756 $1,452,133 Commercial & Industrial 1,344,297 1,385,746 1,334,119 1,256,830 994,138 842,449 791,396 Construction 402,124 398,12
Slide 31: Asset Quality
Asset Quality 31 Dollars in thousands 3Q16 2Q16 1Q16 2015 2014 2013 2012 Total Nonperforming Loans $40,493 $42,905 $51,834 $35,382 $12,457 $22,454 $54,959 Nonperforming Loans/Total Loans 0.75% 0.79% 1.00% 0.70% 0.32% 0.63% 1.63% Nonperforming Assets/Total Loans + OREO 0.76% 0.80% 1.00% 0.71% 0.33% 0
Slide 32: Capital
Capital (1)Refer to appendix for reconciliation of Non-GAAP financial measures 32 3Q16 2Q16 1Q16 2015 2014 2013 2012 Leverage 9.02% 8.92% 8.98% 8.96% 9.80% 9.75% 9.31% Common Tier 1 – Risk-Based Capital 10.01% 9.70% 9.74% 9.77% 11.81% 11.79% 11.37% Tier 1 – Risk-Based Capital 10.37% 10.06% 10.11% 10
Slide 33: APPENDIX – Non-GAAP Measures
APPENDIX – Non-GAAP Measures 33 3Q16 2Q16 1Q16 2015 2014 2013 2012 Tangible Common Equity/Tangible Assets (Non-GAAP) Total Shareholders’ Equity $838,707 $825,050 $810,801 $792,237 $608,389 $571,306 $537,422 Less: Preferred Equity, Goodwill & Other Intangible Assets, net of deferred tax liability (29
Slide 34: APPENDIX – Non-GAAP Measures
APPENDIX – Non-GAAP Measures 34 3Q16 2Q16 1Q16 2015 2014 2013 2012 Net Interest Margin Rate (FTE) (Non-GAAP) Total Interest Income $57,808 $55,850 $55,019 $203,548 $160,523 $153,756 $156,251 Total Interest Expense (6,353) (6,142) (5,382) (15,997) (12,481) (14,563) (21,024) Net Interest Income per Co
Slide 35: Third Quarter 2016
MEMBER FDIC Third Quarter 2016