Le Lézard
Classified in: Business, Covid-19 virus
Subjects: ERN, CCA, DIV

S&T Bancorp, Inc. Announces Second Quarter 2020 Results and Declares Second Quarter Dividend


INDIANA, Pa., July 30, 2020 /PRNewswire/ -- S&T Bancorp, Inc. (S&T) (NASDAQ: STBA), the holding company for S&T Bank, with operations in five markets including Western Pennsylvania, Eastern Pennsylvania, Northeast Ohio, Central Ohio, and Upstate New York, announced a net loss of ($33.1) million, or ($0.85) per diluted share, for the second quarter of 2020 compared to net income of $13.2 million, or $0.34 per diluted share, for the first quarter of 2020, and $26.1 million, or $0.76 per diluted share, for the second quarter of 2019.

A loss of  $58.7 million was recognized during the second quarter of 2020 related to a previously disclosed customer fraud resulting from a check kiting scheme. This fraud loss reduced net income by $46.3 million, or $1.19 per diluted share, resulting in a net loss for the second quarter of 2020. S&T continues to pursue all available sources of recovery to mitigate the loss.

"While we are very disappointed in the loss that we experienced this quarter related to the fraudulent activities of a single business customer, we are a resilient company with 118 years of history overcoming all manner of challenges. I am confident we will emerge from this situation as strong, if not stronger, than before," said Todd Brice, Chief Executive Officer. "The personalized assistance given to our customers who are experiencing financial hardships as a result of COVID-19 is a direct reflection of the integral role we play in the communities where we operate. As we move forward, we will continue to be a source of strength for our customers and our employees."

Impact and Response to the COVID-19 Pandemic:

As we navigate through these uncertain times, our focus remains on the health and safety of our employees and the customers and communities that we serve. We continue to support our customers through the potential financial hardships that have arisen through this crisis, including:

Second Quarter of 2020 Highlights:

"While we faced many challenges during the quarter given the uncertain environment, I couldn't be prouder of the incredible work that our employees have done for our customers," said Todd Brice. "A testament to our employees was the recent announcement that S&T Bank was ranked #1 in customer satisfaction with retail banking in the Mid-Atlantic, including best in communication and advice,  by J.D. Power which is a reflection of the confidence and trust our customers have in our great employees at S&T Bank."

Net Interest Income

Net interest income was $70.1 million for the second quarter of 2020 compared to $70.0 million for the first quarter of 2020. Average loans increased $474.2 million mainly due to loans from the PPP of $449.3 million compared to the first quarter of 2020. Net interest margin on a fully taxable equivalent basis (FTE) (non-GAAP) declined 22 basis points to 3.31% for the second quarter of 2020 from 3.53% in the first quarter of 2020 primarily due to decreases in short-term rates. Loan rates decreased 64 basis points to 4.00% and total interest-bearing deposit costs decreased 48 basis points to 0.67%.

Asset Quality

The customer fraud that resulted in a $58.7 million loss to the bank had a significant impact on asset quality during the second quarter of 2020. The customer also had a $15.1 million lending relationship which was charged down by $4.2 million leaving a new nonperforming loan of $10.9 million in the second quarter of 2020. Net loan charge-offs were $68.1 million for the second quarter of 2020 compared to $11.2 million in the first quarter of 2020. Excluding the fraud, net loan charge-offs were $9.4 million for the second quarter of 2020. The provision for credit losses increased $66.7 million to $86.8 million in the second quarter of 2020 compared to $20.1 million in the first quarter of 2020. Total nonperforming loans increased $16.3 million to $90.1 million, or 1.19% of total loans, at June 30, 2020 compared to $73.8 million, or 1.02% of total loans at March 31, 2020. The uncertainty around the economic environment due to the COVID-19 pandemic contributed to the higher allowance for credit losses of 1.52% of total portfolio loans as of June 30, 2020 compared to 1.34% at March 31, 2020. Excluding the PPP loans, the allowance for credit losses to total portfolio loans was 1.64%.

Noninterest Income and Expense

Noninterest income increased $2.8 million to $15.2 million in the second quarter of 2020 compared to $12.4 million in the first quarter of 2020. Other noninterest income increased by $3.7 million primarily due to the increase in the fair value of the assets in a nonqualified benefit plan of $2.1 million and an increase in the fair value of equity securities of $1.9 million. Mortgage banking income improved during the quarter by $1.4 million due to increased refinancing activity. These increases were offset by a decrease in service charges on deposit accounts of $1.2 million and commercial loan swap income of $1.5 million due to lower activity as a result of the COVID-19 pandemic. 

Noninterest expense decreased $2.9 million to $43.5 million for the second quarter of 2020 compared to $46.4 million in the first quarter of 2020. The decrease in noninterest expense was mainly due to  merger expenses of $2.3 million in the first quarter of 2020.  Other expense decreased $1.6 million related to historic tax credits of $1.2 million in the first quarter of 2020. Professional services and legal increased $0.9 million mainly due to higher legal expense compared to the first quarter of 2020.

Financial Condition

Total assets increased $468.8 million to $9.5 billion at June 30, 2020 compared to $9.0 billion at March 31, 2020. Portfolio loans increased $301.8 million, which included $547.6 million of loans from the PPP, compared to March 31, 2020. Excluding the PPP portfolio, loans decreased $245.8 million due to decreased activity related to the COVID-19 pandemic. Deposits increased $810.0 million to $7.9 billion at June 30, 2020 compared to $7.1 billion at March 31, 2020. The increase in deposits relates largely to customer PPP loans and stimulus payments along with customers conservatively holding cash deposits in these uncertain times.

All regulatory risk-based capital ratios declined at June 30, 2020 compared to March 31, 2020, except for total capital, due to a decrease in retained earnings offset in part by a reduction in risk weighted assets. S&T continues to maintain a strong capital position with all capital ratios above the well-capitalized thresholds of federal bank regulatory agencies.

Dividend

The Board of Directors of S&T declared a $0.28 per share cash dividend on July 27, 2020. This is an increase of 3.7% compared to a dividend of $0.27 per share declared in the same period in the prior year. The dividend is payable August 27, 2020 to shareholders of record on August 13, 2020.

Conference Call

S&T will host its second quarter 2020 earnings conference call live over the Internet at 1:00 p.m. ET on Thursday, July 30, 2020. To access the webcast, go to S&T's webpage at www.stbancorp.com and click on "Events & Presentations." Select "2nd Quarter 2020 Earnings Conference Call" and follow the instructions. After the live presentation, the webcast will be archived on this website for at least 90 days. A replay of the call will also be available until August 6, 2020, by dialing 1.877.481.4010; the Conference ID is 35499.

About S&T Bancorp, Inc. and S&T Bank

S&T Bancorp, Inc. is a $9.5 billion bank holding company that is headquartered in Indiana, Pennsylvania and trades on the NASDAQ Global Select Market under the symbol STBA. Its principal subsidiary, S&T Bank, was recently ranked #1 in customer satisfaction with retail banking in the Mid-Atlantic including best in communication and advice by J.D. Power. Established in 1902, S&T Bank operates in five markets including Western Pennsylvania, Eastern Pennsylvania, Northeast Ohio, Central Ohio, and Upstate New York. For more information visit stbancorp.com or stbank.com. Follow us on Facebook, Instagram, and LinkedIn.

This quarterly report on Form 10-Q 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 for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, financial position, and other matters regarding or affecting S&T and its future business and operations. Forward-looking statements are typically identified by words or phrases such as "will likely result", "expect", "anticipate", "estimate", "forecast", "project", "intend", " believe", "assume", "strategy", "trend", "plan", "outlook", "outcome", "continue", "remain", "potential", "opportunity", "believe", "comfortable", "current", "position", "maintain", "sustain", "seek", "achieve" and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. The matters discussed in these forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward-looking statements depending on a variety of uncertainties or other factors including, but not limited to: credit losses and the credit risk of our commercial and consumer loan products; changes in the level of charge-offs and changes in estimates of the adequacy of the allowance for credit losses; cyber-security concerns; rapid technological developments and changes; operational risks or risk management failures by us or critical third parties, including fraud risk; our ability to manage our reputational risks; sensitivity to the interest rate environment including a prolonged period of low interest rates, a rapid increase in interest rates or a change in the shape of the yield curve; a change in spreads on interest-earning assets and interest-bearing liabilities; regulatory supervision and oversight, including changes in regulatory capital requirements and our ability to address those requirements; unanticipated changes in our liquidity position; changes in accounting policies, practices, or guidance, for example, our adoption of CECL; legislation affecting the financial services industry as a whole, and S&T, in particular; the outcome of pending and future litigation and governmental proceedings; increasing price and product/service competition; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; managing our internal growth and acquisitions; the possibility that the anticipated benefits from acquisitions, including DNB, cannot be fully realized in a timely manner or at all, or that integrating the acquired operations will be more difficult, disruptive or costly than anticipated; containing costs and expenses; reliance on significant customer relationships; an interruption or cessation of an important service by a third-party provider; our ability to attract and retain talented executives and employees; general economic or business conditions, including the strength of regional economic conditions in our market area; the duration and severity of the coronavirus ("COVID-19") pandemic, both in our principal area of operations and nationally, including the ultimate impact of the pandemic on the economy generally and on our operations; deterioration of the housing market and reduced demand for mortgages; deterioration in the overall macroeconomic conditions or the state of the banking industry that could warrant further analysis of the carrying value of goodwill and could result in an adjustment to its carrying value resulting in a non-cash charge to net income; the stability of our core deposit base and access to contingency funding; re-emergence of turbulence in significant portions of the global financial and real estate markets that could impact our performance, both directly, by affecting our revenues and the value of our assets and liabilities, and indirectly, by affecting the economy generally and access to capital in the amounts, at the times and on the terms required to support our future businesses.

Many of these factors, as well as other factors, are described in our Annual Report on Form 10-K for the year ended December 31, 2019, including Part I, Item 1A-"Risk Factors" and any of our subsequent filings with the SEC. Forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. We caution you not to unduly rely on forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.

 

S&T Bancorp, Inc.




Consolidated Selected Financial Data



Unaudited





2020


2020


2019



Second


First


Second


(dollars in thousands, except per share data)

Quarter


Quarter


Quarter


INTEREST AND DIVIDEND INCOME







Loans, including fees

$75,498



$82,051



$74,728


Investment securities:







Taxable

3,791



4,282



3,647


Tax-exempt

959



803



834


Dividends

231



453



415


Total Interest and Dividend Income

80,479



87,589



79,624









INTEREST EXPENSE







Deposits

9,227



15,338



16,055


Borrowings and junior subordinated debt securities

1,104



2,215



2,742


Total Interest Expense

10,331



17,553



18,797









NET INTEREST INCOME

70,148



70,036



60,827


Provision for credit losses

86,759



20,050



2,205


Net Interest (Loss)  Income After Provision for Credit Losses

(16,611)



49,986



58,622









NONINTEREST INCOME







Net gain on sale of securities

142



?



?


Debit and credit card

3,612



3,482



3,501


Mortgage banking

2,623



1,236



637


Wealth management

2,586



2,362



2,062


Service charges on deposit accounts

2,342



3,558



3,212


Commercial loan swap income

945



2,484



1,102


Other

2,974



(719)



2,387


Total Noninterest Income

15,224



12,403



12,901









NONINTEREST EXPENSE







Salaries and employee benefits

21,419



21,335



20,290


Data processing and information technology

3,585



3,868



3,414


Net occupancy

3,437



3,765



2,949


Furniture, equipment and software

3,006



2,519



2,301


Professional services and legal

1,932



1,048



1,145


Other taxes

1,604



1,600



1,456


FDIC insurance

1,048



770



695


Marketing

979



1,111



1,310


Merger related expense

?



2,342



618


Other

6,468



8,033



6,174


Total Noninterest Expense

43,478



46,391



40,352


(Loss) Income Before Taxes

(44,865)



15,998



31,171


Income tax (benefit) expense

(11,793)



2,767



5,070


Net (Loss) Income

($33,072)



$13,231



$26,101









Per Share Data







Shares outstanding at end of period

39,263,460



39,125,425



34,330,338


Average shares outstanding - diluted

39,013,161



39,325,938



34,201,448


Diluted (loss) earnings per share

($0.85)



$0.34



$0.76


Dividends declared per share

$0.28



$0.28



$0.27


Dividend yield (annualized)

4.78%



4.10%



2.88%


Dividends paid to net income

NM



83.52%



35.41%


Book value

$28.93



$30.06



$28.11


Tangible book value (1)

$19.22



$20.29



$19.68


Market value

$23.45



$27.32



$37.48


Profitability Ratios (Annualized)







Return on average assets

(1.41%)



0.61%



1.44%


Return on average shareholders' equity

(11.17%)



4.47%



11.00%


Return on average tangible shareholders' equity (2)

(16.19%)



6.82%



15.89%


Efficiency ratio (FTE) (3)

50.51%



52.89%



54.03%


NM - Not Meaningful







 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited


Six Months Ended June 30,


(dollars in thousands, except per share data)

2020


2019


INTEREST INCOME





Loans, including fees

$157,549



$148,120



Investment securities:





Taxable

8,074



7,437



Tax-exempt

1,762



1,679



Dividends

684



978



Total Interest and Dividend Income

168,069



158,214








INTEREST EXPENSE





Deposits

24,565



31,036



Borrowings and junior subordinated debt securities

3,320



5,995



Total Interest Expense

27,885



37,031








NET INTEREST INCOME

140,184



121,183



Provision for credit  losses

106,809



7,854



Net Interest Income After Provision for Credit Losses

33,375



113,329








NONINTEREST INCOME





Net gain on sale of securities

142



?



Debit and credit card

7,093



6,476



Mortgage banking

3,859



1,131



Wealth management

4,949



4,109



Service charges on deposit accounts

5,900



6,365



Commercial swap fee income

3,429



1,683



Other

2,255



4,499



Total Noninterest Income

27,627



24,263








NONINTEREST EXPENSE





Salaries and employee benefits

42,754



41,199



Data processing and information technology

7,453



6,646



Net occupancy

7,202



5,986



Furniture, equipment and software

5,525



4,531



Professional services and legal

2,980



2,329



Other taxes

3,205



2,641



FDIC insurance

1,818



1,211



Marketing

2,090



2,452



Merger related expense

2,342



618



Other

14,501



11,658



Total Noninterest Expense

89,869



79,271








(Loss) Income Before Taxes

(28,867)



58,321



Income tax (benefit) expense

(9,026)



9,292








Net (Loss) Income

($19,841)



$49,029








Per Share Data





Average shares outstanding - diluted

39,142,351



34,369,756



Diluted (loss) earnings per share

($0.51)



$1.43



Dividends declared per share

$0.56



$0.54



Dividends paid to net income

NM



37.85%








Profitability Ratios (annualized)





Return on average assets

(0.44%)



1.37%



Return on average shareholders' equity

(3.35%)



10.43%



Return on average tangible shareholders' equity (6)

(4.68%)



15.09%



Efficiency ratio (FTE) (7)

51.68%



53.37%



NM - Not Meaningful





 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited


2020


2020


2019



Second


First


Second


(dollars in thousands)

Quarter


Quarter


Quarter


ASSETS







Cash and due from banks, including interest-bearing deposits

$351,365



$187,684



$122,876



Securities, at fair value

804,366



799,532



668,588



Loans held for sale

14,259



7,309



8,135



Commercial loans:







Commercial real estate

3,345,513



3,442,495



2,906,895



Commercial and industrial

2,140,355



1,781,402



1,559,727



Commercial construction

459,264



396,518



267,203



Total Commercial Loans

5,945,132



5,620,415



4,733,825



Consumer loans:







Residential mortgage

971,023



988,816



751,355



Home equity

539,519



544,405



464,195



Installment and other consumer

79,816



79,887



72,041



Consumer construction

13,068



13,222



11,784



Total Consumer Loans

1,603,426



1,626,330



1,299,375



Total Portfolio Loans

7,548,558



7,246,745



6,033,200



Allowance for credit losses

(114,609)



(96,850)



(61,479)



Total Portfolio Loans, Net

7,433,949



7,149,895



5,971,721



Federal Home Loan Bank and other restricted stock, at cost

15,151



28,253



22,491



Goodwill

373,289



374,270



287,446



Other assets

481,917



458,553



253,348



Total Assets

$9,474,296



$9,005,496



$7,334,605










LIABILITIES







Deposits:







Noninterest-bearing demand

$2,250,958



$1,702,960



$1,462,386



Interest-bearing demand

1,055,261



962,937



549,663



Money market

2,121,588



1,967,692



1,742,334



Savings

916,268



836,237



754,062



Certificates of deposit

1,523,841



1,588,053



1,348,255



Total Deposits

7,867,916



7,057,879



5,856,700










Borrowings:







Securities sold under repurchase agreements

92,159



69,644



14,154



Short-term borrowings

84,541



410,240



295,000



Long-term borrowings

49,489



50,180



69,791



Junior subordinated debt securities

64,053



64,038



45,619



Total Borrowings

290,242



594,102



424,564



Other liabilities

180,361



177,264



88,388



Total Liabilities

8,338,519



7,829,245



6,369,652










SHAREHOLDERS' EQUITY







Total Shareholders' Equity

1,135,777



1,176,251



964,953



Total Liabilities and Shareholders' Equity

$9,474,296



$9,005,496



$7,334,605










Capitalization Ratios







Shareholders' equity / assets

11.99%



13.06%



13.16%



Tangible common equity / tangible assets (4)

8.30%



9.21%



9.59%



Tier 1 leverage ratio

8.89%



10.03%



10.12%



Common equity tier 1 capital

10.70%



10.93%



11.35%



Risk-based capital - tier 1

11.10%



11.32%



11.68%



Risk-based capital - total

12.74%



12.73%



13.15%



 

S&T Bancorp, Inc.


Consolidated Selected Financial Data


Unaudited



2020


2020


2019




Second


First


Second



(dollars in thousands)

Quarter


Quarter


Quarter



Net Interest Margin (FTE) (QTD Averages)








ASSETS








Interest-bearing deposits with banks

$163,019

0.08%

$99,646

1.42%

$49,949

2.19%


Securities, at fair value

785,229

2.56%

786,858

2.54%

673,117

2.66%


Loans held for sale

9,931

3.08%

1,867

3.76%

1,452

4.44%


Commercial real estate

3,389,616

4.23%

3,408,684

4.73%

2,895,146

5.01%


Commercial and industrial

2,200,148

3.61%

1,751,678

4.53%

1,559,222

5.17%


Commercial construction

430,912

3.75%

386,363

4.68%

242,192

5.37%


Total Commercial Loans

6,020,676

3.97%

5,546,725

4.66%

4,696,560

5.08%


Residential mortgage

976,916

4.20%

990,866

4.18%

734,372

4.50%


Home equity

543,770

3.69%

540,193

4.84%

463,480

5.42%


Installment and other consumer

79,944

6.34%

79,680

7.01%

71,319

7.23%


Consumer construction

12,758

4.58%

10,508

4.61%

11,014

5.41%


Total Consumer Loans

1,613,388

4.14%

1,621,247

4.54%

1,280,185

4.99%


Total Portfolio Loans

7,634,064

4.00%

7,167,972

4.64%

5,976,745

5.06%


Total Loans

7,643,995

4.00%

7,169,839

4.64%

5,978,197

5.06%


Federal Home Loan Bank and other restricted stock

19,709

3.75%

23,601

6.90%

21,141

6.97%


Total Interest-earning Assets

8,611,952

3.80%

8,079,944

4.40%

6,722,404

4.81%


Noninterest-earning assets

817,767


687,382


523,636



Total Assets

$9,429,719


$8,767,326


$7,246,040











LIABILITIES AND SHAREHOLDERS' EQUITY








Interest-bearing demand

$1,033,905

0.24%

$942,030

0.59%

$550,200

0.46%


Money market

2,076,483

0.50%

1,993,764

1.27%

1,695,349

1.93%


Savings

887,357

0.07%

830,985

0.23%

760,743

0.26%


Certificates of deposit

1,560,885

1.51%

1,601,324

1.80%

1,389,968

1.95%


Total Interest-bearing Deposits

5,558,630

0.67%

5,368,103

1.15%

4,396,260

1.46%


Securities sold under repurchase agreements

85,302

0.25%

30,790

0.56%

16,337

0.69%


Short-term borrowings

178,273

0.38%

286,365

1.61%

242,759

2.71%


Long-term borrowings

49,774

2.53%

51,845

2.52%

70,049

2.86%


Junior subordinated debt securities

64,044

3.58%

64,195

4.40%

45,619

5.03%


Total Borrowings

377,393

1.18%

433,195

2.06%

374,764

2.94%


Total Interest-bearing Liabilities

5,936,023

0.70%

5,801,298

1.22%

4,771,024

1.58%


Noninterest-bearing liabilities

2,302,676


1,776,453


1,523,676



Shareholders' equity

1,191,020


1,189,575


951,340



Total Liabilities and Shareholders' Equity

$9,429,719


$8,767,326


$7,246,040











Net Interest Margin (5)


3.31%


3.53%


3.68%


 

S&T Bancorp, Inc.


Consolidated Selected Financial Data


Unaudited



Six Months Ended June 30,



(dollars in thousands)

2020


2019



Net Interest Margin (FTE) (YTD Averages)






ASSETS






Interest-bearing deposits with banks

$131,332

0.59%

$51,758

2.42%


Securities, at fair value

786,043

2.55%

676,797

2.67%


Loans held for sale

5,899

3.19%

1,175

4.29%


Commercial real estate

3,399,150

4.48%

2,900,181

5.01%


Commercial and industrial

1,975,913

4.02%

1,534,080

5.18%


Commercial construction

408,638

4.19%

246,073

5.37%


Total Commercial Loans

5,783,701

4.30%

4,680,334

5.09%


Residential mortgage

983,891

4.19%

728,495

4.44%


Home equity

541,981

4.26%

465,598

5.43%


Installment and other consumer

79,812

6.67%

70,215

7.20%


Consumer construction

11,633

4.59%

10,244

5.77%


Total Consumer Loans

1,617,317

4.34%

1,274,552

4.96%


Total Portfolio Loans

7,401,018

4.31%

5,954,886

5.06%


Total Loans

7,406,917

4.31%

5,956,061

5.06%


Federal Home Loan Bank and other restricted stock

21,655

5.47%

22,797

7.79%


Total Interest-earning Assets

8,345,947

4.09%

6,707,413

4.81%


Noninterest-earning assets

752,576


521,082



Total Assets

$9,098,523


$7,228,495









LIABILITIES AND SHAREHOLDERS' EQUITY






Interest-bearing demand

$987,968

0.41%

$547,960

0.44%


Money market

2,035,124

0.88%

1,632,234

1.91%


Savings

859,171

0.15%

765,638

0.25%


Certificates of deposit

1,581,104

1.66%

1,412,117

1.92%


Total Interest-bearing deposits

5,463,367

0.90%

4,357,949

1.44%


Securities sold under repurchase agreements

58,046

0.33%

19,735

0.59%


Short-term borrowings

232,319

1.14%

280,862

2.72%


Long-term borrowings

50,809

2.53%

70,122

2.85%


Junior subordinated debt securities

64,120

3.99%

45,619

5.12%


Total Borrowings

405,294

1.65%

416,338

2.90%


Total Interest-bearing Liabilities

5,868,661

0.96%

4,774,287

1.56%


Noninterest-bearing liabilities

2,039,565


1,505,964



Shareholders' equity

1,190,297


948,244



Total Liabilities and Shareholders' Equity

$9,098,523


$7,228,495









Net Interest Margin (8)


3.42%


3.70%


 

S&T Bancorp, Inc.


Consolidated Selected Financial Data


Unaudited



2020


2020


2019




Second


First


Second



(dollars in thousands)

Quarter


Quarter


Quarter



Nonperforming Loans (NPL)








Commercial loans:


% NPL


% NPL


% NPL


Commercial real estate

$61,643


1.84%

$50,508


1.47%

$28,783


0.99%


Commercial and industrial

8,484


0.40%

9,081


0.51%

4,130


0.26%


Commercial construction

1,504


0.33%

571


0.14%

1,226


0.46%


Total Nonperforming Commercial Loans

71,631


1.20%

60,160


1.07%

34,139


0.72%


Consumer loans:








Residential mortgage

14,649


1.51%

10,582


1.07%

6,782


0.90%


Home equity

3,814


0.71%

2,797


0.51%

4,081


0.88%


Installment and other consumer

19


0.02%

258


0.32%

25


0.03%


Total Nonperforming Consumer Loans

18,482


1.14%

13,637


0.83%

10,888


0.83%


Total Nonperforming Loans

$90,113


1.19%

$73,797


1.02%

$45,027


0.75%





2020


2020


2019




Second


First


Second



(dollars in thousands)

Quarter


Quarter


Quarter



Loan Charge-offs (Recoveries)








Charge-offs

$68,304



$11,445



$2,667




Recoveries

(231)



(289)



(532)




Net Loan Charge-offs (Recoveries)

$68,072



$11,156



$2,135












Net Loan Charge-offs (Recoveries)








Commercial loans:








Customer fraud

$58,671



$?



$?




Commercial real estate

5,588



428



522




Commercial and industrial

3,060



10,265



1,344




Commercial construction

(19)



(2)



(2)




Total Commercial Loan Charge-offs (Recoveries)

67,300



10,691



1,864




Consumer loans:








Residential mortgage

74



19



(154)




Home equity

16



80



57




Installment and other consumer

682



366



368




Total Consumer Loan Charge-offs

772



465



271




Total Net Loan Charge-offs (Recoveries)

$68,072



$11,156



$2,135









Six Months Ended June 30,



(dollars in thousands)



2020


2019



Loan Charge-offs (Recoveries)








Charge-offs



$79,749



$8,691




Recoveries



(520)



(1,320)




Net Loan Charge-offs (Recoveries)



$79,229



$7,371












Net Loan Charge-offs (Recoveries)








Commercial loans:








Customer fraud



$58,671



$?




Commercial real estate



6,016



401




Commercial and industrial



13,325



6,403




Commercial construction



(21)



(3)




Total Commercial Loan Charge-offs/(Recoveries)



77,991



6,801




Consumer loans:








Residential mortgage



93



(38)




Home equity



97



39




Installment and other consumer



1,048



651




Consumer construction



?



(82)




Total Consumer Loan Charge-offs



1,238



570




Total Net Loan Charge-offs (Recoveries)



$79,229



$7,371




 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited



2020


2020


2019



Second


First


Second


(dollars in thousands)

Quarter


Quarter


Quarter


Asset Quality Data







Nonperforming loans

$90,113



$73,797



$45,027



OREO

2,740



3,389



1,495



Nonperforming assets

92,853



77,186



46,522



Troubled debt restructurings (nonaccruing)

31,755



36,054



9,943



Troubled debt restructurings (accruing)

15,536



15,189



20,690



Total troubled debt restructurings

47,291



51,243



30,633



Nonperforming loans / loans

1.19%



1.02%



0.75%



Nonperforming assets / loans plus OREO

1.23%



1.06%



0.77%



Allowance for credit losses / total portfolio loans

1.52%



1.34%



1.02%



Allowance for credit losses / nonperforming loans

127%



131%



137%



Net loan charge-offs (recoveries)

$68,072



$11,156



$2,135



Net loan charge-offs (recoveries)(annualized) / average loans

3.58%



0.63%



0.14%








Six Months Ended June 30,


(dollars in thousands)



2020


2019


Asset Quality Data







Net loan charge-offs (recoveries)



$79,229



$7,371



Net loan charge-offs (recoveries)(annualized) / average loans



2.15%



0.25%



 

S&T Bancorp, Inc.


Consolidated Selected Financial Data


Unaudited




Definitions and Reconciliation of GAAP to Non-GAAP Financial Measures:





2020


2020


2019



Second


First


Second



Quarter


Quarter


Quarter









(1) Tangible Book Value (non-GAAP)







 Total shareholders' equity

$1,135,777



$1,176,251



$964,953



      Less: goodwill and other intangible assets

(383,032)



(384,557)



(289,701)



     Tax effect of other intangible assets

2,046



2,160



474



 Tangible common equity (non-GAAP)

$754,791



$793,854



$675,726



 Common shares outstanding

39,263



39,125



34,330



 Tangible book value (non-GAAP)

$19.22



$20.29



$19.68










(2) Return on Average Tangible Shareholders' Equity (non-GAAP)







  Net (loss) income (annualized)

($133,016)



$53,216



$104,689



       Plus: amortization of intangibles (annualized)

2,623



2,542



654



       Tax effect of amortization of intangibles (annualized)

(551)



(534)



(137)



  Net (loss)  income before amortization of intangibles (annualized)

($130,944)



$55,224



$105,206










  Average total shareholders' equity

$1,191,020



$1,189,575



$951,340



       Less: average goodwill and other intangible assets

(384,197)



(382,025)



(289,784)



       Tax effect of average goodwill and other intangible assets

2,116



2,235



491



  Average tangible equity (non-GAAP)

$808,939



$809,785



$662,047



  Return on average tangible shareholders' equity (non-GAAP)

(16.19%)



6.82%



15.89%










(3) Efficiency Ratio (non-GAAP)







Noninterest expense

$43,478



$46,391



$40,352



Less: merger related expenses

?



(2,342)



618



Noninterest expense excluding nonrecurring items

$43,478



$44,049



$40,352










Net interest income per consolidated statements of net income

$70,148



$70,036



$60,827



     Less: net (gains) losses on sale of securities

(142)



?



?



     Plus: taxable equivalent adjustment

847



849



958



Net interest income (FTE) (non-GAAP)

$70,853



$70,885



$61,785



Noninterest income

15,224



12,403



12,901



Net interest income (FTE) (non-GAAP) plus noninterest income

$86,077



$83,288



$74,686



Efficiency ratio (non-GAAP)

50.51%



52.89%



54.03%










(4) Tangible Common Equity / Tangible Assets (non-GAAP)







 Total shareholders' equity

$1,135,777



$1,176,251



$964,953



      Less: goodwill and other intangible assets

(383,032)



(384,557)



(289,701)



      Tax effect of goodwill and other intangible assets

2,046



2,160



474



 Tangible common equity (non-GAAP)

$754,791



$793,854



$675,726










 Total assets

$9,474,296



$9,005,496



$7,334,605



      Less: goodwill and other intangible assets

(383,032)



(384,557)



(289,701)



      Tax effect of goodwill and other intangible assets

2,046



2,160



474



 Tangible assets (non-GAAP)

$9,093,310



$8,623,099



$7,045,378



 Tangible common equity to tangible assets (non-GAAP)

8.30%



9.21%



9.59%










(5) Net Interest Margin Rate (FTE) (non-GAAP)







 Interest income

$80,479



$87,589



$79,624



      Less: interest expense

10,331



17,553



18,797



 Net interest income per consolidated statements of net income

$70,148



$70,036



$60,827



      Plus: taxable equivalent adjustment

847



849



958



 Net interest income (FTE) (non-GAAP)

$70,995



$70,885



$61,785



 Net interest income (FTE) (annualized)

$285,540



$285,098



$247,819



 Average earning assets

$8,611,952



$8,079,944



$6,722,404



 Net interest margin - (FTE) (non-GAAP)

3.31%



3.53%



3.68%



 

S&T Bancorp, Inc.


Consolidated Selected Financial Data


Unaudited




Definitions and Reconciliation of GAAP to Non-GAAP Financial Measures - continued:





Six Months Ended June 30,



2020


2019







(6) Return on Average Tangible Shareholders' Equity (non-GAAP)





  Net (loss) income (annualized)

($39,900)



$98,870



  Plus: amortization of intangibles (annualized)

2,582



697



  Tax effect of amortization of intangibles (annualized)

(542)



(146)



  Net (loss)  income before amortization of intangibles (annualized)

($37,860)



$99,421








  Average total shareholders' equity

$1,190,297



$948,244



  Less: average goodwill and other intangible assets

(383,111)



(289,869)



  Tax effect of average goodwill and other intangible assets

2,176



509



  Average tangible equity (non-GAAP)

$809,362



$658,884



  Return on average tangible equity (non-GAAP)

(4.68%)



15.09%








(7) Efficiency Ratio (non-GAAP)





Noninterest expense

$89,869



$79,271



Less: merger related expenses

(2,342)



(618)



Noninterest expense excluding nonrecurring items

$87,527



$78,653








Net interest income per consolidated statements of net income

$140,184



$121,183



Less: net (gains) losses on sale of securities

(142)



?



Plus: taxable equivalent adjustment

1,697



1,919



Net interest income (FTE) (non-GAAP)

$141,739



$123,102



Noninterest income

27,627



24,263



Net interest income (FTE) (non-GAAP) plus noninterest income

$169,366



$147,365



Efficiency ratio (non-GAAP)

51.68%



53.37%








(8) Net Interest Margin Rate (FTE) (non-GAAP)





 Interest income

$168,069



$158,214



 Less: interest expense

27,885



37,031



 Net interest income per consolidated statements of net income

140,184



121,183



 Plus: taxable equivalent adjustment

1,697



1,919



 Net interest income (FTE) (non-GAAP)

$141,881



$123,102



 Net interest income (FTE) (annualized)

$285,321



$248,244



 Average earning assets

$8,345,947



$6,707,413



 Net interest margin - (FTE) (non-GAAP)

3.42%



3.70%



 

S&T Bancorp, Inc.


Consolidated Selected Financial Data


Unaudited




The following profitability metrics for the three and six months ended June 30, 2020 are adjusted to exclude a $58.7 million loss related to a customer fraud.



2020


2020



Second


Six Months



Quarter


Ended June 30,






Return on Average Tangible Shareholders' Equity (non-GAAP)





Net loss

($33,072)



($19,841)



Provision for credit losses

58,671



58,671



Tax effect

(12,321)



(12,321)



Net income excluding fraud

$13,278



$26,509








Net income excluding fraud (annualized)

$53,404



$53,309



Plus: amortization of intangibles (annualized)

2,623



2,582



Tax effect of amortization of intangibles (annualized)

(551)



(542)



Net income before amortization of intangibles (annualized)

$55,476



$55,349








Average total shareholders' equity

$1,191,020



$1,190,297



Less: average goodwill and other intangible assets

(384,197)



(383,111)



Tax effect of average goodwill and other intangible assets

2,116



2,176



Average tangible equity (non-GAAP)

$808,939



$809,362



Return on average tangible shareholders' equity (non-GAAP)

6.86%



6.84%








Return on Average Assets (non-GAAP)





Net income excluding fraud (annualized)

$53,404



$53,309



Average total assets

9,429,719



9,098,523



Return on average assets (non-GAAP)

0.57%



0.59%








Return on Average Equity (non-GAAP)





Net income excluding fraud (annualized)

$53,404



$53,309



Average total shareholders' equity

1,191,020



1,190,297



Return on average assets (non-GAAP)

4.48%



4.48%




 

SOURCE S&T Bancorp, Inc.


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