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S&T Bancorp, Inc. Announces First Quarter 2017 Results

  (April 20, 2017)

INDIANA, Pa., April 20, 2017 /PRNewswire/ -- S&T Bancorp, Inc. (S&T) (NASDAQ: STBA), the holding company for S&T Bank with locations in Pennsylvania, Ohio and New York, announced today its first quarter 2017 earnings. First quarter earnings were $18.2 million, or $0.52 per diluted share, compared to fourth quarter of 2016 earnings of $17.7 million, or $0.51 per diluted share.  First quarter of 2017 earnings increased 13% compared to the first quarter of 2016 earnings of $16.1 million, or $0.46 per diluted share.

First Quarter of 2017 Highlights:


  • Total portfolio loans increased $135 million, or 9.8% annualized, compared to the fourth quarter of 2016.
  • S&T's total assets increased to over $7 billion for the first time this quarter.
  • Net interest margin (FTE) (Non-GAAP) improved 5 basis points to 3.50% and net interest income increased $1.4 million, or 2.7%, to $53.9 million compared to the fourth quarter of 2016.
  • Return on average assets was 1.06% and return on average equity was 8.68%.

"We are pleased to announce another quarter of solid earnings driven by strong loan growth," said Todd Brice, president and chief executive officer of S&T. "Our ability to grow organically combined with recent increases in short term rates positively impacted our earnings with higher net interest income and expansion of our net interest margin."

Net Interest Income

Net interest income increased $1.4 million, or 2.7%, to $53.9 million for the first quarter of 2017 compared to $52.5 million in the prior quarter. Net interest margin on a fully taxable equivalent basis (FTE) (Non-GAAP) increased 5 basis points to 3.50% compared to 3.45% in the prior quarter. The increases in short term interest rates in December of 2016 and March of 2017 positively impacted both net interest income and net interest margin. Loan rates increased 11 basis points to 4.18% compared to 4.07% in the prior quarter, while total interest-bearing liabilities increased only 4 basis points to 0.61% compared to 0.57%. Net interest income was also favorably impacted by an increase of $143 million, or 10.6% annualized, in average portfolio loans.

Asset Quality

Nonperforming loans and the provision for loan losses remained relatively unchanged in the first quarter of 2017 compared to the fourth quarter of 2016.  Although net loan charge-offs decreased significantly by $4.5 million, this was partially offset by an increase in specific reserves of $2.5 million.  Higher specific reserves led to an increase in the allowance for loan losses, which stood at 0.97% of total loans at March 31, 2017.

Noninterest Income and Expense

Noninterest income remained relatively unchanged at $13.0 million for the first quarter of 2017 compared to $12.9 million for the fourth quarter of 2016. Insurance fees increased $0.4 million primarily due to annual profit sharing received from insurance carriers.  Securities gains were $0.4 million compared to no gains in the prior quarter. These increases were offset by decreases of $0.3 million in debit and credit card fees and $0.2 million in service charges on deposit accounts mainly due to seasonality.

Noninterest expense increased $1.2 million to $36.8 million compared to $35.6 million for the fourth quarter of 2016.  The increase is primarily due to higher salaries and employee benefits expense of $0.8 million related to annual merit increases and higher incentive costs. Furniture and equipment expense increased $0.3 million compared to the prior quarter mainly due to the timing of normal asset purchases. The efficiency ratio was 53.83% compared to 53.04% in the prior quarter and improved from 57.19% in the first quarter of 2016.

Financial Condition

Total assets increased $0.2 billion to $7.1 billion at March 31, 2017 compared to $6.9 billion at December 31, 2016. Portfolio loans increased $135 million for the quarter driven by commercial loans which increased $137 million, or 12.7% annualized, with growth in commercial real estate and commercial and industrial categories. Total deposits increased $163 million with growth in noninterest-bearing demand, money market accounts and certificates of deposit. Risk-based capital ratios increased this quarter due to earnings retention outpacing risk weighted asset growth. All capital ratios remain above the well-capitalized thresholds of federal bank regulatory agencies.

Dividend

The Board of Directors of S&T declared a $0.20 per share cash dividend at its regular meeting held April 17, 2017. This is an increase of 5.3% compared to a common stock dividend of $0.19 per share declared in the same period in the prior year. The dividend is payable May 18, 2017 to shareholders of record on May 4, 2017.

Conference Call

S&T will host its first quarter 2017 earnings conference call live over the Internet at 1:00 p.m. ET on Thursday, April 20, 2017. To access the webcast, go to S&T's webpage at www.stbancorp.com and click on "Events & Presentations." Select "1st Quarter 2017 Conference Call" and follow the instructions.

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

S&T Bancorp, Inc. is a $7.1 billion bank holding company that is headquartered in Indiana, Pa. and trades on the NASDAQ Global Select Market under the symbol STBA. Its principal subsidiary, S&T Bank, was established in 1902, and operates locations in Pennsylvania, Ohio and New York. For more information visit www.stbancorp.com or www.stbank.com.

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, 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, cyber-security concerns; rapid technological developments and changes; 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; 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 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; general economic or business conditions; 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; 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 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




2017


2016


2016



First


Fourth


First


(dollars in thousands, except per share data)

Quarter


Quarter


Quarter


INTEREST INCOME







Loans, including fees

$56,900


$55,168


$51,158


Investment securities:







Taxable

2,848


2,636


2,553


Tax-exempt

920


894


942


Dividends

482


398


366


Total Interest Income

61,150


59,096


55,019









INTEREST EXPENSE







Deposits

5,379


5,289


4,254


Borrowings and junior subordinated debt securities

1,893


1,349


1,128


Total Interest Expense

7,272


6,638


5,382









NET INTEREST INCOME

53,878


52,458


49,637


Provision for loan losses

5,183


5,586


5,014


Net Interest Income After Provision for Loan Losses

48,695


46,872


44,623









NONINTEREST INCOME







Securities gains (losses), net

370


?


?


Service charges on deposit accounts

3,014


3,240


2,999


Debit and credit card fees

2,843


3,125


2,786


Wealth management fees

2,403


2,509


2,752


Insurance fees

1,464


1,066


1,774


Mortgage banking

733


694


529


Gain on sale of credit card portfolio

?


?


2,066


Other

2,169


2,288


2,911


Total Noninterest Income

12,996


12,922


15,817









NONINTEREST EXPENSE







Salaries and employee benefits

20,541


19,787


20,902


Net occupancy

2,815


2,644


2,950


Data processing

2,251


2,083


2,111


Furniture and equipment

2,047


1,710


1,929


FDIC insurance

1,123


1,046


940


Professional services and legal

1,043


1,177


947


Other taxes

976


974


1,100


Marketing

754


840


901


Other

5,258


5,364


6,636


Total Noninterest Expense

36,808


35,625


38,416









Income Before Taxes

24,883


24,169


22,024


Provision for income taxes

6,695


6,510


5,931









Net Income

$18,188


$17,659


$16,093









Per Share Data







Shares outstanding at end of period

34,980,556


34,913,023


34,901,210


Average shares outstanding - diluted

34,912,261


34,839,189


34,739,514


Diluted earnings per share

$0.52


$0.51


$0.46


Dividends declared per share

$0.20


$0.20


$0.19


Dividend yield (annualized)

2.31%


2.05%


2.95%


Dividends paid to net income

38.27%


39.41%


41.02%


Book value

$24.45


$24.12


$23.23


Tangible book value (1)

$16.02


$15.67


$14.76


Market value

$34.60


$39.04


$25.76









Profitability Ratios (annualized)







Return on average assets

1.06%


1.04%


1.01%


Return on average shareholders' equity

8.68%


8.36%


8.06%


Return on average tangible shareholders' equity (2)

13.45%


13.05%


13.00%


Efficiency ratio (FTE) (3)

53.83%


53.04%


57.19%












 

 

S&T Bancorp, Inc.
Consolidated Selected Financial Data
Unaudited




2017


2016


2016



First


Fourth


First


(dollars in thousands)

Quarter


Quarter


Quarter


ASSETS







Cash and due from banks, including interest-bearing deposits

$104,705


$139,486


$121,669


Securities available-for-sale, at fair value

713,198


693,487


677,221


Loans held for sale

14,355


3,793


11,739


Commercial loans:







Commercial real estate

2,614,724


2,498,476


2,260,231


Commercial and industrial

1,422,297


1,401,035


1,334,119


Commercial construction

455,211


455,884


379,293


Total Commercial Loans

4,492,232


4,355,395


3,973,643


Consumer loans:







Residential mortgage

700,610


701,982


650,544


Home equity

479,402


482,284


467,671


Installment and other consumer

70,219


65,852


76,189


Consumer construction

4,363


5,906


8,701


Total Consumer Loans

1,254,594


1,256,024


1,203,105


Total portfolio loans

5,746,826


5,611,419


5,176,748


Allowance for loan losses

(55,816)


(52,775)


(50,347)


Total portfolio loans, net

5,691,010


5,558,644


5,126,401


Federal Home Loan Bank and other restricted stock, at cost

29,739


31,817


23,337


Goodwill

291,670


291,670


291,670


Other assets

220,421


224,156


227,125


Total Assets

$7,065,098


$6,943,053


$6,479,162









LIABILITIES







Deposits:







Noninterest-bearing demand

$1,300,707


$1,263,833


$1,212,231


Interest-bearing demand

631,652


638,300


619,617


Money market

985,723


936,461


643,795


Savings

1,032,864


1,050,131


1,047,871


Certificates of deposit

1,484,379


1,383,652


1,494,411


Total Deposits

5,435,325


5,272,377


5,017,925









Borrowings:







Securities sold under repurchase agreements

46,987


50,832


60,025


Short-term borrowings

610,000


660,000


355,000


Long-term borrowings

14,118


14,713


116,468


Junior subordinated debt securities

45,619


45,619


45,619


Total Borrowings

716,724


771,164


577,112


Other liabilities

57,869


57,556


73,324


Total Liabilities

6,209,918


6,101,097


5,668,361









SHAREHOLDERS' EQUITY







Total Shareholders' Equity

855,180


841,956


810,801


Total Liabilities and Shareholders' Equity

$7,065,098


$6,943,053


$6,479,162









Capitalization Ratios







Shareholders' equity / assets

12.10%


12.13%


12.51%


Tangible common equity / tangible assets (4)

8.28%


8.23%


8.33%


Tier 1 leverage ratio

8.92%


8.98%


8.98%


Common equity tier 1 capital

10.16%


10.04%


9.74%


Risk-based capital - tier 1

10.52%


10.39%


10.11%


Risk-based capital - total

12.02%


11.86%


11.57%


 


 

S&T Bancorp, Inc.
Consolidated Selected Financial Data
Unaudited




2017


2016


2016



First


Fourth


First


(dollars in thousands)

Quarter


Quarter


Quarter


Net Interest Margin (FTE) (QTD Averages)







ASSETS







Interest-bearing deposits with banks

$66,173

0.85%

$43,023

0.45%

$48,159

0.54%

Securities available-for-sale, at fair value

697,327

2.44%

679,688

2.41%

666,719

2.44%

Loans held for sale

2,211

4.44%

8,959

4.33%

27,485

7.32%

Commercial real estate

2,524,859

4.25%

2,457,985

4.12%

2,195,381

4.16%

Commercial and industrial

1,413,801

4.16%

1,371,092

4.05%

1,307,352

3.92%

Commercial construction

454,886

3.70%

426,245

3.66%

397,010

3.76%

Total Commercial Loans

4,393,546

4.16%

4,255,322

4.06%

3,899,743

4.04%

Residential mortgage

699,849

4.05%

692,937

4.06%

639,362

4.15%

Home equity

480,411

4.14%

485,107

3.91%

468,833

4.17%

Installment and other consumer

68,164

6.49%

64,192

6.47%

75,378

6.07%

Consumer construction

5,374

3.67%

6,557

4.05%

8,474

4.22%

Total Consumer Loans

1,253,798

4.22%

1,248,793

4.13%

1,192,047

4.28%

Total portfolio loans

5,647,344

4.18%

5,504,115

4.07%

5,091,790

4.09%

Total loans

5,649,555

4.18%

5,513,074

4.07%

5,119,275

4.11%

Federal Home Loan Bank and other restricted stock

32,690

4.68%

26,149

4.56%

22,592

4.72%

Total Interest-earning Assets

6,445,745

3.96%

6,261,934

3.87%

5,856,745

3.89%

Noninterest-earning assets

511,125


524,653


520,018


Total Assets

$6,956,870


$6,786,587


$6,376,763









LIABILITIES AND SHAREHOLDERS' EQUITY







Interest-bearing demand

$633,232

0.18%

$655,894

0.18%

$626,493

0.14%

Money market

938,014

0.61%

905,715

0.51%

628,154

0.32%

Savings

1,041,647

0.21%

1,033,297

0.20%

1,061,117

0.18%

Certificates of deposit

1,403,796

0.91%

1,424,606

0.92%

1,425,140

0.86%

Total interest-bearing deposits

4,016,689

0.54%

4,019,512

0.52%

3,740,904

0.46%

Securities sold under repurchase agreements

48,896

0.01%

42,570

0.01%

64,303

0.01%

Short-term borrowings

671,784

0.84%

500,890

0.68%

329,389

0.62%

Long-term borrowings

14,362

2.91%

14,957

2.85%

116,705

0.95%

Junior subordinated debt securities

45,619

3.45%

45,619

3.33%

45,619

2.99%

Total borrowings

780,661

0.98%

604,036

0.89%

556,016

0.82%

Total interest-bearing liabilities

4,797,350

0.61%

4,623,548

0.57%

4,296,920

0.50%

Noninterest-bearing liabilities

1,309,401


1,322,415


1,277,019


Shareholders' equity

850,119


840,624


802,824


Total Liabilities and Shareholders' Equity

$6,956,870


$6,786,587


$6,376,763









Net Interest Margin (5)


3.50%


3.45%


3.53%

 

 


S&T Bancorp, Inc.
Consolidated Selected Financial Data
Unaudited




2017


2016


2016



First


Fourth


First


(dollars in thousands)

Quarter


Quarter


Quarter


Nonperforming Loans (NPL)







Commercial loans:


% NPL


% NPL


% NPL

Commercial real estate

$8,617

0.33%

$16,172

0.65%

$15,244

0.67%

Commercial and industrial

21,879

1.54%

8,071

0.58%

14,209

1.07%

Commercial construction

3,758

0.83%

4,927

1.08%

9,993

2.63%

Total Nonperforming Commercial Loans

34,254

0.76%

29,170

0.67%

39,446

0.99%

Consumer loans:







Residential mortgage

8,218

1.17%

9,918

1.41%

9,012

1.39%

Home equity

3,484

0.73%

3,439

0.71%

3,267

0.70%

Installment and other consumer

36

0.05%

108

0.16%

109

0.14%

Total Nonperforming Consumer Loans

11,738

0.93%

13,465

1.07%

12,388

1.03%

Total Nonperforming Loans

$45,992

0.80%

$42,635

0.76%

$51,834

1.00%





2017


2016


2016



First


Fourth


First


(dollars in thousands)

Quarter


Quarter


Quarter


Loan Charge-offs







Charge-offs

$2,942


$6,938


$3,628


Recoveries

(800)


(333)


(814)


Net Loan Charge-offs

$2,142


$6,605


$2,814









Net Loan Charge-offs







Commercial loans:







Commercial real estate

$312


$1,276


($307)


Commercial and industrial

528


3,433


2,491


Commercial construction

388


768


(2)


Total Commercial Loan Charge-offs

1,228


5,477


2,182


Consumer loans:







Residential mortgage

481


722


18


Home equity

183


26


121


Installment and other consumer

258


453


564


Consumer construction

(8)


(73)


(71)


Total Consumer Loan Charge-offs

914


1,128


632


Total Net Loan Charge-offs

$2,142


$6,605


$2,814






2017


2016


2016



First


Fourth


First



Quarter


Quarter


Quarter


Asset Quality Data







Nonperforming loans

$45,992


$42,635


$51,834


Assets acquired through foreclosure or repossession

873


679


297


Nonperforming assets

46,865


43,314


52,131


Troubled debt restructurings (nonperforming)

10,324


11,598


9,291


Troubled debt restructurings (performing)

13,086


13,423


22,761


Total troubled debt restructurings

23,410


25,021


32,052


Nonperforming loans / loans

0.80%


0.76%


1.00%


Nonperforming assets / loans plus OREO

0.81%


0.77%


1.00%


Allowance for loan losses / total portfolio loans

0.97%


0.94%


0.97%


Allowance for loan losses / nonperforming loans

121%


124%


97%


Net loan charge-offs (recoveries)

$2,142


$6,605


$2,814


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

0.15%


0.48%


0.22%



 

 

S&T Bancorp, Inc.
Consolidated Selected Financial Data
Unaudited


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



2017


2016


2016



First


Fourth


First



Quarter


Quarter


Quarter









(1) Tangible Book Value (non-GAAP)







 Total shareholders' equity

$855,180


$841,956


$810,801


 Less: goodwill and other intangible assets

(296,222)


(296,581)


(297,737)


Tax effect of other intangible assets

1,593


1,719


2,123


 Tangible common equity (non-GAAP)

$560,551


$547,094


$515,187


 Common shares outstanding

34,981


34,913


34,901


 Tangible book value (non-GAAP)

$16.02


$15.67


$14.76









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







  Net income (annualized)

$73,762


$70,254


$64,724


  Plus: amortization of intangibles (annualized)

1,453


1,480


1,843


  Tax effect of amortization of intangibles (annualized)

(509)


(518)


(645)


  Net income before amortization of intangibles (annualized)

74,706


71,216


65,922









  Average total shareholders' equity

850,119


840,624


802,824


  Less: average goodwill and other intangible assets

(296,416)


(296,784)


(298,036)


  Tax effect of average goodwill and other intangible assets

1,661


1,790


2,207


  Average tangible equity (non-GAAP)

$555,364


$545,630


$506,995


  Return on average tangible equity (non-GAAP)

13.45%


13.05%


13.00%









(3) Efficiency Ratio (non-GAAP)







Noninterest expense

$36,808


$35,625


38,416









Net interest income per consolidated statements of net income

53,878


52,458


49,637


Less: securities (gains) losses, net

(370)


?


?


Plus: taxable equivalent adjustment

1,871


1,789


1,722


Net interest income (FTE) (non-GAAP)

55,379


54,247


51,359


Noninterest income

12,996


12,922


15,817


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

68,375


67,169


67,176


Efficiency ratio (non-GAAP)

53.83%


53.04%


57.19%









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







 Total shareholders' equity

$855,180


$841,956


$810,801


 Less: goodwill and other intangible assets

(296,222)


(296,581)


(297,737)


 Tax effect of goodwill and other intangible assets

1,593


1,719


2,123


 Tangible common equity (non-GAAP)

560,551


547,094


515,187









 Total assets

7,065,098


6,943,053


6,479,162


 Less: goodwill and other intangible assets

(296,222)


(296,581)


(297,737)


 Tax effect of goodwill and other intangible assets

1,593


1,719


2,123


 Tangible assets (non-GAAP)

$6,770,469


$6,648,191


$6,183,548


 Tangible common equity to tangible assets (non-GAAP)

8.28%


8.23%


8.33%









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







 Interest income

$61,150


$59,096


$55,019


 Less: interest expense

(7,272)


(6,638)


(5,382)


 Net interest income per consolidated statements of net income

53,878


52,458


49,637


 Plus: taxable equivalent adjustment

1,871


1,789


1,722


 Net interest income (FTE) (non-GAAP)

55,749


54,247


51,359


 Net interest income (FTE) (annualized)

226,093


215,809


206,565


 Average earning assets

$6,445,745


$6,261,934


$5,856,745


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

3.50%


3.45%


3.53%











 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/st-bancorp-inc-announces-first-quarter-2017-results-300442422.html

SOURCE S&T Bancorp, Inc.

Copyright 2014 PR Newswire. All Rights Reserved


Page: 1


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