S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — Q1 2022 Earnings Presentation
31 slides from S&t Bancorp's earnings presentation, May 6, 2022
Slide 1: First Quarter 2022
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer First Quarter 2022
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 Corporate Profile The Markets We Serve• $9.4 billion in assets • $7.0 billion in loans • $8.0 billion in deposits • $1.2 billion market cap • Stock symbol: STBA • Founded in 1902 120th Anniversary • Locations in 5 attractive markets in 3 states • Markets comprise 9.1 million people and 179,000 bus
Slide 4: J.D. Power Award
J.D. Power Award 4 S&T Bank ranked #1 in overall customer satisfaction in the Pennsylvania region, in the 2022 U.S. Retail Banking Satisfaction Study by J.D. Power. We ranked #1 in the following areas: • account offerings • convenience banking • people • trust For J.D. Power 2022 award information,
Slide 5: iHeartMedia Partnership
iHeartMedia Partnership 5 S&T Bank announced a partnership with iHeartMedia to become the first and exclusive regional presenting sponsor of the NFL Podcast Network, including all Pittsburgh NFL podcasts • Podcasts are one of the fastest growing communication channels in the country • iHeartRadio is
Slide 6: Opportunity for Growth
Foundational franchise with stable customer base (Western PA/Eastern PA); Supported by 80% of branch distribution network 6 Opportunity for Growth S&T Bank Mkt Share Leader Other Banks Deposits as published in the 2021 FDIC Summary of Deposits survey Pittsburgh Eastern PA Cleveland Columbus Buffalo
Slide 7: Building the Foundation for Growth
Internal promotion External hire Infrastructure We are rolling out “The S&T Way” to ensure a consistent and effective operating model. Partnering with industry-leading technology companies/fintechs to: Enhance our risk management and Drive consistent revenue growth Capabilities We have enhanced our
Slide 8: Drivers of Performance
Promote strategic clarity and effective communications Invest in organization talent and performance Advance strategic infrastructure and platform investments Ensure rigorous credit risk and enterprise governance practices Pursue high impact growth initiatives Drivers of Performance 8 ENGAGEMENT • T
Slide 9: First Quarter Overview
9 First Quarter Overview RETURNS EARNINGS 1S&T Bank received the highest score in Pennsylvania in the J.D. Power 2022 U.S. Retail Banking Satisfaction Study of customers’ satisfaction with their primary bank. Visit jdpower.com/awards for more details. 2Refer to appendix for reconciliation of non-GAA
Slide 10: Performance
PPNR / AVERAGE ASSETS * 2018 2019 2020 2021 1Q22 0.0% 0.4% 0.8% 1.2% 1.6% 2.0% 2.4% RETURN ON AVERAGE TANGIBLE EQUITY * 2018 2019 2020 2021 1Q22 0.0% 5.0% 10.0% 15.0% 20.0% RETURN ON AVERAGE EQUITY 2018 2019 2020 2021 1Q22 0.0% 5.0% 10.0% 15.0% RETURN ON AVERAGE ASSETS 2018 2019 2020 2021 1Q22 0.0%
Slide 11: 1Q22 vs 4Q21: Balance Sheet
1Q22 VS 4Q21: Balance Sheet • Consumer business drove strong growth of $38.6 million, or 9.8% annualized • Deposits remain stable with an improvement in the overall deposit mix to lower costing products • Securities increased $117.4 million due to cash being redeployed to higher yielding assets Doll
Slide 12: Asset Quality
Asset Quality ACL 1Q22 VS 4Q21: Dollars in millions 12 ASSET QUALITY TRENDS • Net loan recoveries of $2.0 million drove a negative provision of $0.5 million • NPAs decreased 25% due to the sale of an OREO property, hotels returning to accruing status, and payoffs
Slide 13: Net Interest Income
• Net interest income, excluding PPP, increased $0.7 million • NIM, excluding-PPP, increased 7 bps primarily due to an improved asset mix • We are well-positioned to benefit from rising rates Net Interest Income Dollars in millions; *Refer to appendix for reconciliation of non-GAAP financial measure
Slide 14: Noninterest Income
1Q22 1Q22 vs 4Q21 1Q22 vs 1Q21 Debit and Credit Card $5.1 $0.6 $0.9 Service Charges 4.0 0.0 0.5 Wealth 3.2 (0.1) 0.3 Mortgage 1.0 (0.5) (3.3) Other 1.9 (0.9) (0.4) Noninterest Income $15.2 ($0.9) ($2.0) Noninterest Income 14Dollars in millions • Increased debit and credit card revenue • Moderating m
Slide 15: Noninterest Expense
1Q22 1Q22 vs 4Q21 1Q22 vs 1Q21 Salaries & Benefits $23.7 ($3.4) $0.4 Data Processing 4.4 (0.2) 0.2 Occupancy 3.9 0.3 0.1 FF&E 2.8 (0.1) 0.1 Professional Services 1.9 0.3 0.4 Other Taxes 1.5 0.0 0.1 Marketing 1.4 0.0 0.0 FDIC 0.9 (0.1) (0.1) Other 6.8 0.6 0.6 Noninterest Expense $47.4 ($2.8) $1.8 • D
Slide 16: Markets
Western PA Upstate NY Central OH Northeast OH Eastern PA 48% $3,372 28% $1,931 9% $617 9% $641 6% $403 Portfolio Loans $6,964 Upstate NY 0% $19 Northeast OH 2% $147 Central OH 2% $137 Eastern PA Western PA69% $5,503 25% $1,980 Other 2% $174 Deposits $7,960 We operate in 5 regional markets: Markets 1
Slide 17: Loan Mix
Loan Mix Our loan portfolio is well-diversified: Dollars in millions 17 Amount % of Total CRE $3,258 47% C&I 1,675 24% Consumer 1,632 23% Construction 399 6% Total $6,964 100%
Slide 18: Deposit Mix
Deposit Mix We have a solid core deposit profile: Dollars in millions 18 Amount % of Total DDA $2,740 34% MM 1,993 25% Savings 1,118 14% Int Bear DDA 1,071 14% CDs 1,038 13% Total $7,960 100% Amount % of Total Personal $4,397 55% Business 3,558 45% Brokered 5 0% Total $7,960 100%
Slide 19: Capital
Capital We have strong capital levels and are well-positioned for growth Dollars in millions; *Refer to appendix for reconciliation of non-GAAP financial measures 19 TOTAL CAPITAL
Slide 20: Financial Data: Income Statement
Financial Data (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 in Q2 2020. Refer to appendix for reconciliation of non-GAAP financial measures. (2)These are non-GAAP numbers that adjust for $11.4 million o
Slide 21: Financial Data: Balance Sheet
Financial Data 21 Balance Sheet 1Q22 2021 2020 2019 2018 Dollars in thousands Securities $1,028,218 $910,793 $773,693 $784,283 $684,872 Interest-bearing Balances 751,378 857,192 158,903 124,491 82,740 Loans, Net 6,865,343 6,902,936 7,126,776 7,080,184 5,888,023 Other 787,342 817,608 908,525 775,691
Slide 22: Net Interest Margin
Net Interest Margin 1Q22 2021 2020 2019 2018 Securities - FTE 2.10% 2.18% 2.49% 2.64% 2.62% Loans - FTE 3.77% 3.84% 4.09% 4.95% 4.72% Total Interest-earning Assets - FTE 3.27% 3.37% 3.87% 4.71% 4.48% Interest-bearing Deposits 0.14% 0.20% 0.66% 1.40% 1.01% Borrowings 1.34% 1.49% 1.56% 2.76% 2.19% Tot
Slide 23: Financial Data: Loan Portfolio
Financial Data 23 Loan Portfolio 1Q22 2021 2020 2019 2018 Dollars in thousands Commercial Real Estate $3,257,955 $3,236,653 $3,244,974 $3,416,518 $2,921,832 Commercial and Industrial 1,675,316 1,728,969 1,954,453 1,720,833 1,493,416 Commercial Construction 398,592 440,962 474,280 375,445 257,197 Tot
Slide 24: Financial Data: Asset Quality
Financial Data 24 Asset Quality 1Q22 2021 2020 2019 2018 Dollars in thousands Total Nonperforming Loans $52,524 $66,291 $146,774 $54,057 $46,073 Nonperforming Loans/Total Loans 0.75% 0.95% 2.03% 0.76% 0.77% Nonperforming Assets/Total Loans + OREO 0.85% 1.13% 2.06% 0.81% 0.83% YTD Net Charge-offs (Re
Slide 25: Financial Data: Capital
Financial Data 25 Capital 1Q22 2021 2020 2019 2018 Tier 1 Leverage 9.85% 9.74% 9.43% 10.29% 10.05% Common Equity Tier 1 – Risk-Based Capital 12.26% 12.03% 11.33% 11.43% 11.38% Tier 1 – Risk-Based Capital 12.67% 12.43% 11.74% 11.84% 11.72% Total – Risk-Based Capital 14.18% 13.79% 13.44% 13.22% 13.21%
Slide 26: Non-GAAP Reconciliation 1Q22
1Q22 Return on Average Tangible Shareholders' Equity (non-GAAP) Net income (annualized) $118,192 Plus: amortization of intangibles (annualized), net of tax 1,276 Net income before amortization of intangibles (annualized) $119,468 Average total shareholders' equity $1,196,694 Less: average goodwill a
Slide 27: Efficiency Ratio and Net Interest Margin Reconciliation
1Q22 4Q21 3Q21 2Q21 1Q21 Efficiency Ratio (non-GAAP) Noninterest expense $47,414 $50,189 $47,241 $45,829 $45,580 Net interest income per consolidated statements of net income $67,733 $68,438 $68,712 $68,304 $70,659 Plus: taxable equivalent adjustment 493 510 557 585 664 Net interest income (FTE) (no
Slide 28: Definitions of GAAP to Non-GAAP Financial Measures
2020 2019 Excludes Fraud Excludes Merger Exp Net Income excluding nonrecurring items Net income $21,040 $98,234 Nonrecurring items 58,671 11,350 Tax effect of nonrecurring items (12,321) (2,106) Adjusted net income (non-GAAP) $67,390 $107,478 Diluted Earnings Per Share Adjusted net income (non-GAAP)
Slide 29: Return on Average Tangible Equity Reconciliation
1Q22 2021 2020 2020 2019 2019 2018 Excludes Fraud Excludes Merger Exp Return on Average Tangible Equity (non-GAAP) Net income (annualized) $118,192 $110,343 $21,040 $21,040 $98,234 $98,234 $105,334 Nonrecurring items — — — 58,671 — 11,350 — Tax effect of nonrecurring items — — — (12,321) — (2,106) —
Slide 30: PPNR and Tangible Common Equity Reconciliation
1Q22 2021 2020 2020 2019 2019 2018 Excludes Fraud Excludes Merger Exp PPNR / Average Assets (Non-GAAP) Income before taxes $36,057 $135,668 $21,040 $117,360 $117,360 $123,179 Plus: merger related expenses — — — — 11,350 — Plus: provision for credit losses (512) 16,215 131,424 14,873 14,873 14,995 To
Slide 31: First Quarter 2022
Christopher J. McComish Chief Executive Officer Mark Kochvar Chief Financial Officer First Quarter 2022