S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — Q1 2017 Earnings Presentation
38 slides from S&t Bancorp's earnings presentation, May 15, 2017
Slide 1: First Quarter 2017
MEMBER FDIC First 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: Corporate Profile
4 Corporate Profile 4 • Headquartered in Indiana, PA • $7.1 billion in assets (as of 03.31.17) • $1.2 billion market cap (as of 03.31.17) • Locations in 5 regional markets • Stock symbol: STBA
Slide 5: Performance Summary
5 Performance Summary (1) Annualized for quarterly data (2)Refer to appendix for reconciliation of Non-GAAP financial measures 1Q17 2016 2015 2014 2013 Net Income (in $ thousands) $18,188 $71,392 $67,081 $57,910 $50,539 Diluted Earnings per Share $0.52 $2.05 $1.98 $1.95 $1.70 Dividends Declared per
Slide 6: STBA Investment Thesis
6 STBA Investment Thesis • Above peer performance • Undervalued compared to peer • Strategic and effective mergers and expansion • Demonstrated expense discipline and efficiency • Organic growth • Stable regional markets with long-term oil and gas benefit • Sound asset quality
Slide 7: Peer Return on Average Assets
7 Peer Return on Average Assets 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% 2013 2014 2015 2016 1Q17 1.12% 1.22% 1.13% 1.08% 1.06% (1) BHCPR Peer Group 2: Bank Holding Companies with $3-10 Billion of Assets (2)Annualized Performance Peer(1) (2)
Slide 8: Performance: Return on Average Equity
8 Performance Return on Average Equity 12.5% 10.0% 7.5% 5.0% 2.5% 0.0% 2013 2014 2015 2016 1Q17 9.21% 9.71% 8.94% 8.67% 8.68% (1) BHCPR Peer Group 2: Bank Holding Companies with $3-10 Billion of Assets (2)Annualized Peer(1) (2)
Slide 9: Performance: Return on Average Tangible Equity
9 Performance Return on Average Tangible Equity 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2013 2014 2015 2016 1Q17 13.94% 14.02% 14.39% 13.71% 13.45% (1) SNL Financial Custom Peer Group Holding Companies with $3-10 Billion of Assets (2) Annualized (3)Refer to appendix for reconciliation of No
Slide 10: Undervalued compared to peer
10 Undervalued compared to peer(1) Valuation (1)KRX-Dow Jones KBW Regional Bank Index Members Stock prices as of 05.08.17; Performance for last twelve months reported Source: Bloomberg
Slide 11: Stock Performance
11 NASDAQ Bank S&P 500 KRX Regional Bank S&T Bancorp Stock Price Change (%) 60 50 40 30 20 10 0 -10 Pr ic e C ha ng e( % ) M ar 16 Ap r1 6 M ay 16 Ju n 16 Ju l1 6 Au g 16 Se p 16 O ct 16 N ov 16 D ec 16 Ja n 17 Fe b 17 M ar 17 Valuation 1 YR 3 YR 5 YR 10 YR STBA 38.00% 16.39% 12.88% 3.64% NASDAQ Ban
Slide 12: Mergers and expansion
12 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 ) 2011 2012 2013 2014 2015 2016 1Q17 $4,120 4,159 $4,533 $4,965 5,452 $6,943 $7,065 242 126 $4,527 866 $6,318
Slide 13: Expenses: Non Interest Expense / Average Assets
13 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 1Q17 2.61% 2.46% 2.30% 2.17% 2.15% (1) BHCPR Peer Group 2: Bank Holding Companies with $3-10 Billion of Assets (2)Annualized Peer(1) (2)
Slide 14: Expenses: Efficiency Ratio
14 Expenses Efficiency Ratio 70% 60% 50% 40% 2013 2014 2015 2016 1Q17 60.03% 58.67% 55.86% 54.06% 53.83% Peer(1) (1) BHCPR Peer Group 2: Bank Holding Companies with $3-10 Billion of Assets (2)Refer to appendix for reconciliation of Non-GAAP financial measures (2)
Slide 15: Organic Loan Growth
15 Organic Loan Growth Annual Change $700 $600 $500 $400 $300 $200 $100 $0 Lo an D ol la rs (in m ill io ns ) 2013 2014 2015 2016 1Q17 $220 $303 $370 $584 $135 Growth (1)Annualized for quarterly data (8.5%) (9.6%) (11.6%) (9.8%)(1) (6.6%)
Slide 16: Markets: S&T Operates in Regional Markets
16 Markets S&T Operates in 5 Regional Markets MSAs Locations Deposits(2) Loans(2) Southwestern PA(1) Pittsburgh Altoona Johnstown 51 $3,801 $2,998 Southcentral PA Lancaster Harrisburg York 8 722 975 Northeast OH AkronCleveland 1 33 356 Central OH Columbus 1 27 313 Western NY RochesterBuffalo 1 14 34
Slide 17: Projected Population Change 2017-2022
17 Projected Population Change 2017-2022 5% 4% 3% 2% 1% 0% -1% Southwestern PA Southcentral PA Northeast Ohio Central Ohio Western New York (0.33)% 2.25% 0.10% 4.34% 0.69% 3.77% 2,859 1,557 2,762 2,058 2,216 Source: SNL & Nielson 2017 Population 2017 in 000s Markets U.S. Average
Slide 18: Median Household Income
18 Median Household Income $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 Southwestern PA Southcentral PA Northeast Ohio Central Ohio Western New York $53,961 $61,435 $52,697 $60,039 $53,890 $57,462 U.S. Average Source: SNL & Nielson 2017 Markets
Slide 19: Unemployment Rate
19 Unemployment Rate 7% 6% 5% 4% 3% 2% 1% Southwestern PA Southcentral PA Northeast Ohio Central Ohio Western New York 5.54% 4.12% 6.22% 4.00% 5.00% 4.60% Source: March 2017 Bureau of Labor Statistics U.S. Average Markets
Slide 20: Stable regional markets with long-term oil & gas benefit
20 Stable regional markets with long-term oil & gas benefit Markets
Slide 21: Asset quality: Nonperforming Loans / Total Loans
21 Asset quality Nonperforming Loans / Total Loans 1.5% 1.0% 0.5% 0.0% 2013 2014 2015 2016 1Q17 0.63% 0.32% 0.70% 0.76% 0.80% (1) BHCPR Peer Group 2: Bank Holding Companies with $3-10 Billion of Assets Peer(1)
Slide 22: Asset quality: Net Charge Offs / Average Loans
22 Asset quality Net Charge Offs / Average Loans 0.40% 0.30% 0.20% 0.10% 0.00% 2013 2014 2015 2016 1Q17 0.25% 0.00% 0.22% 0.25% 0.15% (1) BHCPR Peer Group 2: Bank Holding Companies with $3-10 Billion of Assets (2)Annualized Peer(1) (2)
Slide 23: Asset quality: Loan Mix
23 Consumer Mortgage/ Construction $705 56% Home Equity $480 38% Other $70 6% Commercial CRE $2,615 58% C&I $1,422 32% Construction $455 10% Asset quality Total Portfolio Loans $5,747 Commercial $4,492 78% Consumer $1,255 22% Loan Mix As of 3.31.17 in $ Millions
Slide 24: Commercial Real Estate Diversification
24 Pennsylvania 70% Ohio 16% New York 7% West Virginia 2% Other 5% Asset quality Convenience Stores 2% Mobile Home Park 2% Recreational 2% Restaurant 2% Dealerships 4% Warehouse/Storage 4% Student Rentals 4% Healthcare 5% Retail Space 5% Manufacturing 6% Other 7% Flex/Mixed Use 8%Hotels10% Strip Mal
Slide 25: Rate Sensitivity
25 Loans & Securities Floating Rate $2,415 37% ARM/Future Reset 1,670 25% Fixed Rate 2,467 38% Total $6,552 100% Deposits & Borrowings Floating Rate/Short Wholesale Borrowings $1,181 19% Non-Maturity Variable Deposits 2,328 38% Non-Interest Bearing DDA 1,301 21% Fixed Rate 1,342 22% Total $6,152 100
Slide 26: Senior Management
26 Senior Management 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 27: Lines of Business
27 Lines of Business Commercial Banking • 47 commercial bankers • 16 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 28: The Right Size
28 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
Slide 29: Income Statement
29 Income Statement Dollars in thousands, except per share data 1Q17 2016 2015 2014 2013 Net Interest Income $53,878 $203,259 $187,551 $148,042 $139,193 Noninterest Income 12,996 54,635 51,033 46,338 51,527 Total Revenue 66,874 257,894 238,584 194,380 190,720 Noninterest Expense 36,808 143,232 136,7
Slide 30: Balance Sheet
30 Balance Sheet Dollars in thousands 1Q17 2016 2015 2014 2013 Securities $713,198 $693,487 $660,963 $640,273 $509,425 Interest-bearing Balances 47,469 87,201 41,639 57,048 53,594 Loans, Net 5,705,365 5,562,437 5,014,786 3,823,805 3,522,080 Other 599,066 599,928 600,966 443,560 448,091 Total Assets
Slide 31: Net Interest Margin
31 Net Interest Margin (1)Refer to appendix for reconciliation of Non-GAAP financial measures 1Q17 2016 2015 2014 2013 Securities - FTE 2.44% 2.41% 2.48% 2.58% 2.64% Loans - FTE 4.18% 4.08% 4.09% 4.06% 4.22% Total Interest-earning Assets - FTE 3.96% 3.87% 3.86% 3.78% 3.86% Deposits 0.54% 0.51% 0.37%
Slide 32: Loan Portfolio
32 Loan Portfolio Dollars in thousands 1Q17 2016 2015 2014 2013 Commercial Commercial Real Estate $2,614,724 $2,498,476 $2,166,603 $1,682,236 $1,607,756 Commercial & Industrial 1,422,297 1,401,035 1,256,830 994,138 842,449 Construction 455,211 455,884 413,444 216,148 143,675 Total Commercial 4,492,2
Slide 33: Asset Quality
33 Asset Quality Dollars in thousands (1)Annualized for quarterly data 1Q17 2016 2015 2014 2013 Total Nonperforming Loans $45,992 $42,635 $35,382 $12,457 $22,454 Nonperforming Loans/Total Loans 0.80% 0.76% 0.70% 0.32% 0.63% Nonperforming Assets/Total Loans + OREO 0.81% 0.77% 0.71% 0.33% 0.64% Net Ch
Slide 34: Capital
34 Capital (1)Refer to appendix for reconciliation of Non-GAAP financial measures 1Q17 2016 2015 2014 2013 Leverage 8.92% 8.98% 8.96% 9.80% 9.75% Common Tier 1 – Risk-Based Capital 10.16% 10.04% 9.77% 11.81% 11.79% Tier 1 – Risk-Based Capital 10.52% 10.39% 10.15% 12.34% 12.37% Total – Risk-Based Cap
Slide 35: APPENDIX – Non-GAAP Measures
35 APPENDIX – Non-GAAP Measures 1Q17 2016 2015 2014 2013 Tangible common equity/tangible assets (non-GAAP) Total Shareholders’ Equity (GAAP basis) $855,180 $841,956 $792,237 $608,389 $571,306 Less: goodwill & other intangible assets (296,222) (296,580) (298,289) (178,451) (179,580) Tax effect of oth
Slide 36: APPENDIX – Non-GAAP Measures: Efficiency ratio
36 1Q17 2016 2015 2014 2013 Efficiency ratio (non-GAAP) Noninterest expense $36,808 $143,232 $136,717 $117,240 $117,392 Net interest income 53,878 203,259 187,551 148,042 139,193 Plus: taxable equivalent adjustment 1,871 7,043 6,123 5,461 4,850 Net interest income (FTE) (non-GAAP) 55,749 210,302 193
Slide 37: APPENDIX – Non-GAAP Measures: Net Interest Margin
37 APPENDIX – Non-GAAP Measures 1Q17 2016 2015 2014 2013 Net Interest Margin Rate (FTE) (Non-GAAP) Total interest income $61,150 $227,774 $203,548 $160,523 $153,756 Total interest expense (7,272) (24,515) (15,997) (12,481) (14,563) Net interest income per consolidated statements of net income 53,878
Slide 38: First Quarter 2017
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