S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — FY2020 Earnings Presentation
32 slides from S&t Bancorp's earnings presentation, Feb 9, 2021
Slide 1: Full Year 2020
MEMBER FDICMEMBER FDIC Todd Brice Chief Executive Officer Dave Antolik President Mark Kochvar Chief Financial Officer Full Year 2020
Slide 2: Forward Looking Statements and Risk Factors
MEMBER FDIC 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, objec
Slide 3: Corporate Profile
MEMBER FDIC Rated highest in customer satisfaction with retail banking in the Mid-Atlantic Region. S&T Bank received the highest score in the Mid-Atlantic Region of the J.D. Power 2020 U.S. Retail Banking Satisfaction Study of customers' satisfaction with their own retail bank. Visit jdpower.com/awa
Slide 4: STBA Investment Thesis
MEMBER FDIC 4 STBA Investment Thesis The Right SizeSTBA Investment Thesis • Demonstrated expense discipline and efficiency • Organic growth • Strategic and effective mergers and expansion • Exposure to five regional markets • Big enough to: – Provide full complement of products and services – Access
Slide 5: Strategic Goals
MEMBER FDIC 5 Strategic Goals • 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 efficiency of our lines of business • Build on the
Slide 6: J.D. Power Award
MEMBER FDIC 6 J.D. Power Award • S&T ranked highest in customer satisfaction with retail banking in the Mid-Atlantic by J.D. Power in the 2020 U.S. Retail Banking Satisfaction Study. • We ranked #1 in the following factors: – Communication and Advice – Convenience – Product and Fees – Channel Activi
Slide 7: Fourth Quarter Highlights
MEMBER FDIC*Refer to appendix for reconciliation of non-GAAP financial measures 7 Fourth Quarter Highlights EPS: Net Income: Returns: Asset Quality: $ 0.62 ROTE* 12.71% ROE 8.35% ROA 1.05% $24.2 million Provision $7.1 million ACL 1.63% ex-PPP 1.74% NCO 0.61% • PTPP* 1.61%, $37.0 million • NIM improv
Slide 8: Full Year Highlights
MEMBER FDIC (1)This is a non-GAAP number that adjusts for a pre-tax loss of $58.7 million resulting from customer fraud related to a check kiting scheme that was discovered during Q2 2020. Refer to appendix for reconciliation of non-GAAP financial measures. *Refer to appendix for reconciliation of n
Slide 9: Key Metrics
MEMBER FDIC*Refer to appendix for reconciliation of non-GAAP financial measures 9 Key Metrics 2020 2020 2019 Fourth Third Fourth Quarter Quarter Quarter Reported Metrics: Net income $24.2 million $16.7 million $22.3 million Diluted earnings per share $0.62 $0.43 $0.62 Dividends declared per share $0
Slide 10: Performance
MEMBER FDIC Return on Average Tangible Equity 12.77% 14.41% 2016 2017 2018 2019 2020 0.0% 5.0% 10.0% 15.0% 20.0% Return on Average Equity 2016 2017 2018 2019 2020 0.0% 5.0% 10.0% 15.0% PTPP / Average Assets 2016 2017 2018 2019 2020 0.0% 0.4% 0.8% 1.2% 1.6% 2.0% 2.4% 15.76%(3) Return on Average Asset
Slide 11: Expenses
MEMBER FDIC Efficiency Ratio 54.06% 51.77% 50.60% 51.39% 53.86% 2016 2017 2018 2019 2020 40% 45% 50% 55% 60% 65% 11 Expenses Noninterest Expense / Average Assets 2016 2017 2018 2019 2020 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Peer(1) 2.17% 2.10% 2.06% (1) BHCPR Peer Group 2: Bank Holding Companies with
Slide 12: S&T Operates in 5 Regional Markets
MEMBER FDIC Portfolio Loans - $7,226 Deposits - $7,421 Upstate NY 0% $27 Northeast OH 2% $149 Central OH 2% $118 S&T Operates in 5 Regional Markets Totals as of 12.31.20 12 Markets Western PA Eastern PA Upstate NY Central OH Northeast OH Eastern PA Western PA50% $3,631 28% $1,977 8% $563 8% $606 6%
Slide 13: Loan Mix
MEMBER FDIC 13 Loan Mix Dollars in millions
Slide 14: Deposit Mix
MEMBER FDIC 14 Dollars in millions Deposit Mix Amount % of Total DDA $2,262 30 % Money Market 1,937 26 % CDs 1,387 19 % Savings 970 13 % Int Bear DDA 865 12 % Total Deposits $7,421 100 % Amount % of Total Personal $4,288 58 % Business 3,065 41 % Brokered 68 1 % Total Deposits $7,421 100 %
Slide 15: Loan Modifications
MEMBER FDIC *Reported as Consumer Loans Dollars in millions Excludes PPP loans 15 Loan Modifications We continue to see declines in customers requiring needs-based payment deferrals and modifications to interest only periods. Modifications have been reduced to 3% of loans. Loan Type June 30, 2020 Se
Slide 16: Hotels
MEMBER FDIC Data as of December 31, 2020 Dollars in millions (1) 6 of 10 appraisals completed in fourth quarter 2020. 3 of the remaining 4 ($4.9 million) are related to participations where S&T is not the lead bank. (2) 16 of 18 appraisals completed in fourth quarter 2020. 16 Internal Risk Rating To
Slide 17: SBA PPP
MEMBER FDIC Ratios as of December 31, 2020 Dollars in millions *Refer to appendix for reconciliation of non-GAAP financial measures 17 SBA PPP 29% of our round 1 PPP loans have been forgiven and we are participating in round 2: Date Balance % Forgiven September 30, 2020 $550 December 31, 2020 465 15
Slide 18: Asset Quality
MEMBER FDIC Nonperforming Loans / Total Loans 2016 2017 2018 2019 2020 0.00% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% 2.25% 2.50% 18 (1) BHCPR Peer Group 2: Bank Holding Companies with $3-10 billion of assets through 3Q20. (2) Excludes loss from customer fraud in Q2 2020, actual ratio is 1.40
Slide 19: Allowance for Credit Losses
MEMBER FDIC Dollars in millions Portfolio Changes: Includes balance changes, internal risk rating changes, and net charge-offs Economic/Qualitative Factors: Includes changes to the reasonable and supportable forecast and changes to qualitative factors 19 Allowance for Credit Losses After adopting CE
Slide 20: Net Interest Income
MEMBER FDIC Data as of December 31, 2020 $ in millions 20 Net Interest Income We are asset sensitive but have experienced core NIM stabilization: We expect favorable repricing on the following funding throughout the next six months: Funding type Balance Rate CD maturities $320 1.77 % Long-term whole
Slide 21: Capital
MEMBER FDIC Data as of December 31, 2020 Dollars in millions *Refer to appendix for reconciliation of non-GAAP financial measures 21 Capital We are well-capitalized and have sufficient excess capital: Key points: • Our Total Capital Ratio improved 0.26% compared to September 30, 2020. • The Leverage
Slide 22: Stock Performance
MEMBER FDIC Stock Performance 22 1 YR 3 YR 5 YR 10 YR STBA (35.32) % (11.67) % (1.32) % 3.95 % S&P 600 Bank (10.76) % (0.57) % 7.33 % 10.29 % NASDAQ Bank (7.48) % (1.20) % 7.00 % 9.20 % S&P 500 18.33 % 14.13 % 15.19 % 13.86 % Institutional Ownership 62.27 % Insider Ownership 2.18 % Source: NASDAQ So
Slide 23: Performance Summary
MEMBER FDIC Performance Summary 23 (1) Refer to appendix for reconciliation of non-GAAP financial measures. (2)These are non-GAAP numbers that adjust for $11.4 million of merger related expenses in 2019. Refer to appendix for reconciliation of these non-GAAP financial measures. (3)These are non-GAAP
Slide 24: Income Statement
MEMBER FDIC 24 Income Statement (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 that was discovered during Q2 2020. Refer to appendix for reconciliation of non-GAAP financial measures. (2)These are non-GAA
Slide 25: Capital and Loan Portfolio
MEMBER FDIC 25 Capital Loan Portfolio (1)Refer to appendix for reconciliation of non-GAAP financial measures. Dollars in thousands 2020 2019 2018 2017 2016 Commercial Commercial Real Estate $3,244,974 $3,416,518 $2,921,832 $2,685,994 $2,498,476 Commercial & Industrial 1,954,453 1,720,833 1,493,416 1
Slide 26: Tangible Book Value and ROTE Reconciliation
MEMBER FDIC 26 2020 Fourth Quarter 2020 Third Quarter 2019 Fourth Quarter Tangible Book Value (non-GAAP) Total shareholders' equity $1,154,711 $1,142,115 $1,191,998 Less: goodwill and other intangible assets, net of deferred tax liability (380,278) (380,735) (380,247) Tangible common equity (non-GAA
Slide 27: PTPP and Efficiency Ratio Reconciliation
MEMBER FDIC 27 2020 Fourth Quarter 2020 Third Quarter 2019 Fourth Quarter PTPP / Average Assets (non-GAAP) Income before taxes $29,880 $20,028 $27,360 Plus: Provision for credit losses 7,130 17,485 2,238 Total 37,010 37,513 29,598 Total (annualized) (non-GAAP) $147,235 $149,237 $117,427 Average asse
Slide 28: Net Income Excluding Nonrecurring Items
MEMBER FDIC 28 2020 Excludes Fraud 2019 Excludes Merger Exp 2017 Excludes DTA Net Income excluding nonrecurring items Net income $21,040 $98,234 $72,968 Nonrecurring items 58,671 11,350 13,433 Tax effect of nonrecurring items (12,321) (2,106) — Adjusted net income (non-GAAP) $67,390 $107,478 $86,401
Slide 29: Return on Average Tangible Equity Reconciliation
MEMBER FDIC 29 2020 2020 Excludes Fraud 2019 2019 Excludes Merger Exp 2018 2017 2017 Excludes DTA 2016 Return on Average Tangible Equity (non-GAAP) Net income $21,040 $21,040 $98,234 $98,234 $105,334 $72,968 $72,968 $71,392 Nonrecurring items — 58,671 — 11,350 — — 13,433 — Tax effect of nonrecurring
Slide 30: Efficiency Ratio and PTPP Reconciliation
MEMBER FDIC 30 2020 2020 Excludes Fraud 2019 2019 Excludes Merger Exp 2018 2017 2016 Efficiency Ratio (YTD) (non-GAAP) Noninterest expense $186,643 $167,116 $145,445 $147,907 $143,232 Less: nonrecurring items (2,342) (11,350) — — — Noninterest income excluding nonrecurring items 184,301 155,766 145,
Slide 31: Provision and Net Charge-Off Reconciliation
MEMBER FDIC 31 2020 2020 Excludes Fraud Provision for credit losses Provision $131,424 $131,424 Less: customer fraud — 58,671 Adjusted provision for credit losses 131,424 72,753 YTD Net loan charge offs/ YTD Average loans Net charge-offs $103,379 $103,379 Less: customer fraud — 58,671 Adjusted net c
Slide 32: Full Year 2020
MEMBER FDICMEMBER FDIC Full Year 2020