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

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April 20, 2017 7:30 AM EDT

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.


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