S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — Q2 2024 Earnings Presentation
36 slides from S&t Bancorp's earnings presentation, Aug 30, 2024
Slide 1: Second Quarter 2024
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer Second Quarter 2024
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
3 • $9.6 billion in assets • $7.7 billion in deposits • $7.7 billion in loans • $1.3 billion market cap • Stock symbol: STBA Corporate Profile As of 6.30.24
Slide 4: Geographic Footprint
Geographic Footprint 4 Serving more than 230,000 customers in Pennsylvania and Ohio Footprint comprises 9.6 million people and 215,000 businesses Over 1,200 team members providing award-winning customer satisfaction at 71 locations Akron Columbus Philadelphia Harrisburg Pittsburgh Indiana
Slide 5: Awards
Forbes America’s Best Midsize Employers S&T was honored as one of America’s Best Midsize Employers by Forbes and Statista in 2023 and 2024. This annual ranking is based on a survey of more that 170,000 U.S.-based workers at American companies that were asked to rate their employer. Awards 5 Financia
Slide 6: Strategic Path Forward: Our Shared Future
6 Strategic Path Forward “Our Shared Future” VALUES PURPOSE DRIVERS
Slide 7: Key Drivers of business performance
7 Delivering long-term, sustainable financial performance (Measured by top quartile Price/TBV and Total Shareholder Return) Unwavering focus on key Drivers of business performance and profitable growth ASSET QUALITY DEPOSIT FRANCHISE Loan/Deposit Ratio, Cost of Deposits ◦ Treasury Management distrib
Slide 8: Positioned for Growth
Positioned for Growth 8 We have been making meaningful and scalable investments in technology and people to prepare for future growth. ◦ Enhanced governance structure ◦ Integrated, Enterprise Risk Management Program ◦ Strengthened Credit Administration practices ◦ Advanced Consumer Compliance Infras
Slide 9: Second Quarter Overview
9 Second Quarter Overview RETURN METRICS EARNINGS Net Income $34.4 million *Refer to appendix for reconciliation of non-GAAP financial measures EPS $0.89 ROA 1.45% ROE 10.61% ROTE* 15.01% PPNR* 1.82% HIGHLIGHTS • Solid earnings and return metrics • NIM increased one basis point to 3.85% • Strong cus
Slide 10: Performance
PPNR / AVERAGE ASSETS * 2020 2021 2022 2023 YTD 2Q24 0.0% 0.6% 1.2% 1.8% 2.4% RETURN ON AVERAGE TANGIBLE EQUITY * 2020 2021 2022 2023 YTD 2Q24 0.0% 5.0% 10.0% 15.0% 20.0% RETURN ON AVERAGE EQUITY 2020 2021 2022 2023 YTD 2Q24 0.0% 5.0% 10.0% 15.0% RETURN ON AVERAGE ASSETS 2020 2021 2022 2023 YTD 2Q24
Slide 11: Balance Sheet
Balance Sheet • Loan growth of $57.5 million (3.02% annualized) • Strong customer deposit growth of $155.1 million (8.63% annualized); brokered CDs declined $75.0 million • DDA growth of $17.7 million • Reduction in borrowings of $10.1 million Dollars in millions 11 2Q24 1Q24 Var $ 246 $ 207 $ 39 97
Slide 12: Loan Mix
Loan Mix Our loan portfolio is well-diversified: Dollars in millions 12 Amount % of Total CRE $3,348 43% Consumer 2,375 31% C&I 1,611 21% Construction 380 5% Total $7,714 100%
Slide 13: CRE Maturities
CRE Maturities Dollars in millions 13 CRE MATURITIES BY SIZE: CRE MATURITIES BY INDUSTRY: Size Total # Loans Avg Size 10mm+ $114.7 7 $16.4 5mm-10mm 250.4 35 7.2 1mm-5mm 222.3 97 2.3 Under 1mm 56.4 227 0.2 Total $643.8 366 $1.8 in next 24 months CRE MATURITIES BY QUARTER: Only 19% of our CRE loans ma
Slide 14: Office CRE
Office CRE Dollars in millions 14 CBD 15% $72 OFFICE LOANS BY SIZE: Size Total # Loans Avg Size Avg LTV 10mm+ $46.9 4 $11.7 68 % 5mm-10mm 157.2 23 6.8 55 % 1mm-5mm 172.1 76 2.3 57 % Under 1mm 86.2 335 0.3 48 % Total $462.4 438 $1.1 56 % OFFICE LOAN MATURITIES BY YEAR: Avg LTV: 52% 61% 49% 67% 49% OF
Slide 15: Multifamily - CRE
Multifamily - CRE Dollars in millions 15 MULTIFAMILY LOANS BY SIZE: Size Total # Loans Avg Size Avg LTV 10mm+ $142.1 10 $14.2 65 % 5mm-10mm 157.7 22 7.2 55 % 1mm-5mm 168.6 82 2.1 53 % Under 1mm 137.0 475 0.3 58 % Total $605.4 589 $1.0 58 % MULTIFAMILY LOAN MATURITIES BY YEAR: Avg LTV: 50% 51% 51% 52
Slide 16: Asset Quality
Asset Quality ACL Trend: Dollars in millions 16 ASSET QUALITY TRENDS • ACL of 1.38% of total loans compared to 1.37% as of March 31, 2024 • Net loan recoveries of ($0.4) million, or (0.02)% of average loans (annualized) • NPAs are manageable at 0.45% of total loans plus OREO % o f A verage Lo ans Ne
Slide 17: Deposit Mix
Deposit Mix We have a strong, well-diversified deposit base of 230,000 customers: Dollars in millions 17 Amount % of Total DDA $2,207 29% MM 2,008 26% CDs 1,769 23% Savings 907 12% Int Bear DDA 789 10% Total $7,680 100% Amount % of Total Average Account Size (in $000) Average Age (in years) Personal
Slide 18: Funding Capacity
FUNDING SOURCES Funding Capacity • Strong liquidity position with well-diversified deposit base • Significant funding availability through FHLB and Federal Reserve • Insured and collateralized deposits comprise 72% of total deposits • Funding availability meets liquidity needs in both normal and str
Slide 19: Net Interest Income
• Net interest income increased $0.1 million • NIM increased 1 basis point to 3.85% and remains well above pre-rate cycle level • Cost of funds increases are declining as deposit mix shift moderates and higher cost brokered deposits and borrowings are reduced Net Interest Income Dollars in millions;
Slide 20: Noninterest Income
2Q24 2Q24 vs 1Q24 2Q24 vs 2Q23 Debit and Credit Card $4.7 $0.5 $— Service Charges 4.1 0.2 0.2 Wealth 3.0 — (0.2) Mortgage 0.3 — — Security Loss (3.2) (3.2) (3.2) Other 4.4 3.0 2.3 Noninterest Income $13.3 $0.5 ($0.9) Noninterest Income 20Dollars in millions • Debit and credit card increase due to se
Slide 21: Noninterest Expense
2Q24 2Q24 vs 1Q24 2Q24 vs 2Q23 Salaries & Benefits $30.4 $0.9 $5.0 Data Processing 4.2 (0.7) — Occupancy 3.6 (0.2) (0.1) FF&E 3.4 (0.1) 0.2 Other Taxes 1.4 (0.4) 0.1 Marketing 1.4 (0.6) — Professional Services 1.4 (0.3) (0.6) FDIC 1.1 — — Other 6.7 0.5 (0.6) Noninterest Expense $53.6 ($0.9) $4.0 Non
Slide 22: Securities
Securities 22 • Securities portfolio is only 10% of total assets • 100% of securities portfolio is classified as available for sale • Average duration of 3.7 years at 2Q24 unchanged from 3.7 years in 4Q21 • AOCI of $84.6 million related to securities portfolio, if realized, would decrease CET1 ratio
Slide 23: Capital
Capital Dollars in millions; *Refer to appendix for reconciliation of non-GAAP financial measures 23 TCE / TA* • We have strong capital levels and are well positioned for growth • TCE / TA improvement due to solid earnings 9.42% 9.31% 9.88% 10.03% 10.21% 2Q23 3Q23 4Q23 1Q24 2Q24
Slide 24: Income Statement
Income Statement 2Q24 2023 2022 2021 2020 2020 Dollars in thousands, except for share data YTD Excludes Fraud (1) Net Interest Income $167,071 $349,410 $315,783 $276,112 $279,388 Noninterest Income 26,135 57,620 58,259 64,696 59,746 Total Revenue 193,206 407,030 374,042 340,808 339,134 Noninterest E
Slide 25: Financial Data: Balance Sheet
Financial Data 25 Balance Sheet 2Q24 2023 2022 2021 2020 Dollars in thousands Total Securities $977,958 $970,391 $1,002,778 $910,793 $773,693 Interest-Bearing Deposits 172,549 160,802 138,149 857,192 158,903 Total Net Loans 7,607,608 7,545,528 7,082,645 6,902,936 7,126,776 Other Assets 877,347 874,8
Slide 26: Net Interest Margin
Net Interest Margin 2Q24 2023 2022 2021 2020 Securities - FTE(1) 2.87% 2.61% 2.25% 2.18% 2.49% Loans - FTE(1) 6.27% 6.04% 4.50% 3.84% 4.09% Total Interest-earning Assets - FTE(1) 5.89% 5.64% 4.06% 3.37% 3.87% Interest-bearing Deposits 2.85% 1.92% 0.40% 0.20% 0.66% Borrowings 5.54% 5.59% 3.01% 1.49%
Slide 27: Financial Data: Loan Portfolio
Financial Data 27 Loan Portfolio 2Q24 2023 2022 2021 2020 Dollars in thousands Commercial Real Estate $3,347,699 $3,357,603 $3,128,187 $3,236,653 $3,244,974 Commercial and Industrial 1,611,183 1,642,106 1,718,976 1,728,969 1,954,453 Commercial Construction 380,128 363,284 399,371 440,962 474,280 Tot
Slide 28: Asset Quality
Asset Quality 2Q24 2023 2022 2021 2020 Dollars in thousands Total Nonaccrual Loans $34,857 $22,946 $19,052 $66,291 $146,774 Nonaccrual Loans/Total Loans 0.45% 0.30% 0.27% 0.95% 2.03% Nonperforming Assets/Total Loans + OREO 0.45% 0.30% 0.31% 1.13% 2.06% YTD Net Charge-offs/Average Loans(1) 0.16% 0.18
Slide 29: Capital
Capital 2Q24 2023 2022 2021 2020 Tier 1 Leverage 11.51% 11.21% 11.06% 9.74% 9.43% Common Equity Tier 1 – Risk-Based Capital 13.89% 13.37% 12.81% 12.03% 11.33% Tier 1 – Risk-Based Capital 14.21% 13.69% 13.21% 12.43% 11.74% Total – Risk-Based Capital 15.79% 15.27% 14.73% 13.79% 13.44% Tangible Common
Slide 30: Definitions of GAAP to Non-GAAP Financial Measures
2Q24 Return on Average Tangible Shareholders' Equity (ROTE) (non-GAAP) Net income (annualized) $138,239 Plus: amortization of intangibles (annualized), net of tax 921 Net income before amortization of intangibles (annualized) $139,160 Average total shareholders' equity $1,303,270 Less: average goodw
Slide 31: Tangible Common Equity/Tangible Assets Reconciliation
2Q24 1Q24 4Q23 3Q23 2Q23 1Q23 4Q22 3Q22 2Q22 1Q22 4Q21 Tangible Common Equity (TCE)/Tangible Assets (non-GAAP) Total shareholders' equity $1,321,443 $1,295,074 $1,283,445 $1,223,532 $1,212,853 Less: goodwill and other intangible assets, net of deferred tax liability (376,154) (376,396) (376,631) (37
Slide 32: 2020 Excludes Fraud Reconciliation
2020 Excludes Fraud Net Income Excluding Nonrecurring items Net income $21,040 Nonrecurring items 58,671 Tax effect of nonrecurring items (12,321) Adjusted net income (non-GAAP) $67,390 Diluted Earnings Per Share Adjusted net income (non-GAAP) $67,390 Average shares outstanding - diluted 39,073 Dilu
Slide 33: Return on Average Tangible Equity Reconciliation
2Q24 2023 2022 2021 2020 2020 YTD Excludes Fraud Return on Average Tangible Shareholders' Equity (ROTE) (non-GAAP) Net income(1) $131,941 $144,781 $135,520 $110,343 $21,040 $21,040 Nonrecurring items — — — — — 58,671 Tax effect of nonrecurring items — — — — — (12,321) Adjusted net income (non-GAAP)(
Slide 34: PPNR/Average Assets Reconciliation
2Q24 2023 2022 2021 2020 2020 YTD Excludes Fraud PPNR/Average Assets (Non-GAAP) Income before taxes $82,029 $178,804 $168,930 $135,668 $21,039 Plus: provision for credit losses 3,049 17,892 8,366 16,215 131,424 Total adjusted income before taxes (non-GAAP) $85,078 $196,696 $177,296 $151,883 $152,463
Slide 35: Net Interest Margin Reconciliation
2Q24 2023 2022 2021 2020 YTD Interest and Dividend Income Interest-bearing deposits with banks $4,018 $7,344 $2,952 $973 $515 Securities 13,744 25,207 22,449 17,432 18,060 Loans 237,952 442,675 314,774 270,460 300,960 Other earning assets 805 2,675 576 397 929 Total Interest and Dividend Income $256
Slide 36: Second Quarter 2024
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer Second Quarter 2024