S&T BANCORP, INC. INDIANA, Pa., April 21, 2015 /PRNewswire/ -- S&T Bancorp, Inc. (S&T) (NASDAQ: STBA), the holding company for S&T Bank with branch locations in 16 southwestern and southcentral Pennsylvania counties, and loan production offices in northeast and central Ohio, and western New York, announced today its first quarter 2015 earnings. First quarter earnings were $12.8 million, or $0.41 per diluted share, compared to fourth quarter of 2014 earnings of $14.5 million, or $0.49 per diluted share, and first quarter of 2014 earnings of $14.0 million, or $0.47 per diluted share.
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Highlights:
-- The merger with Integrity Bancshares, Inc. (Integrity) closed on March
4, 2015. The first quarter results included $2.3 million, or $0.05 per
diluted share, of merger related expenses.
-- S&T now has $6.0 billion in assets and a market cap of approximately
$1.0 billion.
-- Net loan charge-offs to average loans remained low at 0.10% for the
first quarter of 2015 compared to 0.05% for the fourth quarter of 2014.
-- S&T declared an $0.18 per share dividend compared to $0.17 in the same
period a year ago.
"We are pleased to have closed on our merger with Integrity during the first quarter," said Todd Brice, president and chief executive officer of S&T. "This represents a significant milestone for our organization and begins our expansion efforts into southcentral Pennsylvania. It is exciting to see two organizations with such talented teams come together and work as one high-performing financial institution."
Merger with Integrity Bancshares, Inc.
The merger between S&T and Integrity (merger) closed on March 4, 2015. Integrity Bank became a wholly-owned subsidiary of S&T, expanding S&T's geographic footprint into southcentral Pennsylvania with eight branches in four counties. Integrity Bank will merge into S&T Bank in the second quarter of 2015. After the bank merger, S&T Bank intends to operate bank branches in the markets currently served by Integrity Bank using the name "Integrity Bank - a division of S&T Bank". The merger was valued at $172 million and added approximately $789 million of loans and $722 million of deposits on March 4, 2015. Integrity's results are included in S&T's consolidated financial statements since March 4, 2015. Merger related expenses were approximately $2.3 million, or $0.05 per diluted share, for the first quarter of 2015.
Net Interest Income
Net interest income increased $2.2 million to $40.3 million compared to $38.1 million for the fourth quarter of 2014. The increase in net interest income primarily related to the merger. Net interest margin on a fully taxable equivalent basis (FTE) increased 5 basis points to 3.48% compared to 3.43% in the fourth quarter of 2014. Net interest margin was positively impacted by a $0.3 million special dividend received from the Federal Home Loan Bank of Pittsburgh.
Asset Quality
Total nonperforming assets increased $6.8 million to $19.4 million, or 0.33% of total assets at March 31, 2015 compared to $12.6 million, or 0.25% of total assets at December 31, 2014. The increase was primarily due to the addition of $5.0 million of nonperforming loans at S&T Bank and $1.3 million of other real estate owned added from the merger. Net charge-offs for the first quarter of 2015 were $1.0 million compared to net charge-offs of $0.5 million in the fourth quarter of 2014. The provision for loan losses was $1.2 million for the first quarter of 2015 compared to $1.1 million for the fourth quarter of 2014. The allowance for loan losses for originated loans was $48.1 million, or 1.27% of total originated loans, compared to $47.9 million, or 1.27% of total originated loans, at December 31, 2014. Integrity acquired loans were recorded at fair value on the acquisition date and have no associated allowance for loan losses at March 31, 2015.
Noninterest Income and Expense
Noninterest income increased $0.9 million to $12.1 million compared to $11.2 million for the fourth quarter of 2014. The increase in noninterest income was primarily due to higher insurance fees and the merger. Insurance fees increased $0.5 million due to $0.4 million of annual profit sharing received from insurance carriers. Integrity added $0.4 million in fees, primarily in mortgage banking. Noninterest expense increased $3.9 million to $33.6 million compared to $29.7 million in the fourth quarter of 2014. The increase was mainly due to higher merger related expenses of $1.6 million and $1.4 million of operating expenses for Integrity.
Financial Condition
Total assets increased $1.0 billion to $6.0 billion at March 31, 2015 compared to $5.0 billion at December 31, 2014. Total portfolio loans increased $815 million of which $789 million related to the merger. Excluding the merger, total loans grew $26.3 million from December 31, 2014. Total deposits increased $920 million which included $722 million related to the merger. Excluding the merger, total deposits grew $198 million from December 31, 2014. S&T's capital ratios were impacted this quarter compared to the fourth quarter of 2014 due to the merger and new requirements under Basel III. All capital ratios remain above the well-capitalized thresholds of federal bank regulatory agencies.
Dividend
The Board of Directors of S&T declared an $0.18 per share cash dividend at its regular meeting held on April 20, 2015. The dividend is payable on May 21, 2015 to shareholders of record on May 7, 2015.
Conference Call
S&T will host its first quarter 2015 earnings conference call live over the Internet at 1:00 p.m. ET on Tuesday, April 21, 2015. To access the webcast, go to S&T's webpage at www.stbancorp.com and click on "Events & Presentations." Select "1st Quarter 2015 Conference Call" and follow the instructions.
About S&T Bancorp, Inc. and S&T Bank:
S&T Bancorp, Inc. is a $6.0 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 in 16 counties across southwestern and southcentral Pennsylvania, with loan production offices in northeast and central Ohio, and western New York. For more information visit www.stbancorp.com or www.stbank.com.
This information may contain forward-looking statements regarding future financial performance which are not historical facts and which involve risks and uncertainties. Actual results and performance could differ materially from those anticipated by these forward-looking statements. Factors that could cause such a difference include, but are not limited to, general economic conditions, change in interest rates, deposit flows, loan demand, and asset quality, including real estate and other collateral values and competition. In addition to the results of operations presented in accordance with Generally Accepted Accounting Principles (GAAP), S&T management uses and this press release contains or references, certain non-GAAP financial measures, such as net interest income on a fully taxable equivalent basis. S&T believes these non-GAAP financial measures provide information useful to investors in understanding our underlying operational performance and our business and performance trends as they facilitate comparisons with the performance of others in the financial services industry. Although S&T believes that these non-GAAP financial measures enhance investors' understanding of S&T's business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. A reconciliation of these non-GAAP financial measures is presented in the attached selected financial data spreadsheet. This information should be read in conjunction with the audited financial statements and analysis as presented in the Annual Report on Form 10-K for S&T Bancorp, Inc. and subsidiaries.
S&T Bancorp,
Inc.
Consolidated
Selected
Financial
Data
Unaudited
2015 2014 2014
----
First Fourth First
(dollars in
thousands,
except per
share data) Quarter Quarter Quarter
------- ------- -------
INTEREST
INCOME
Loans,
including
fees $39,927 $37,797 $35,649
Investment
securities:
Taxable 2,383 2,353 1,900
Tax-exempt 1,020 985 929
Dividends 586 246 187
Total
Interest
Income 43,916 41,381 38,665
------ ------ ------
INTEREST
EXPENSE
Deposits 3,007 2,662 2,510
Borrowings
and junior
subordinated
debt
securities 650 653 564
Total
Interest
Expense 3,657 3,315 3,074
----- ----- -----
NET INTEREST
INCOME 40,259 38,066 35,591
Provision
for loan
losses 1,207 1,106 289
Net Interest
Income
After
Provision
for Loan
Losses 39,052 36,960 35,302
------ ------ ------
NONINTEREST
INCOME
Securities
gains, net - - 1
Wealth
management
fees 2,923 2,795 2,955
Debit and
credit card
fees 2,715 2,645 2,502
Service
charges on
deposit
accounts 2,583 2,677 2,509
Insurance
fees 1,651 1,132 1,677
Mortgage
banking 525 251 132
Other 1,687 1,720 1,640
Total
Noninterest
Income 12,084 11,220 11,416
------ ------ ------
NONINTEREST
EXPENSE
Salaries and
employee
benefits 16,780 14,471 15,376
Net
occupancy 2,588 1,993 2,230
Data
processing 2,320 2,271 2,095
Furniture
and
equipment 1,226 1,460 1,271
Other taxes 842 543 631
Marketing 816 981 618
FDIC
insurance 695 618 631
Professional
services and
legal 523 1,229 663
Merger
related
expenses 2,301 689 -
Other 5,530 5,465 5,399
Total
Noninterest
Expense 33,621 29,720 28,914
------ ------ ------
Income
Before
Taxes 17,515 18,460 17,804
Provision
for income
taxes 4,680 3,963 3,771
----- ----- -----
Net Income $12,835 $14,497 $14,033
======= ======= =======
Per Share
Data:
Shares
outstanding
at end of
period 34,797,526 29,796,397 29,718,126
Average
shares
outstanding
-diluted 31,260,948 29,718,321 29,698,047
Average
shares
outstanding
- two-
class
method 31,343,849 29,796,397 29,735,031
Diluted
earnings
per
share(1) $0.41 $0.49 $0.47
Dividends
declared
per share $0.18 $0.18 $0.16
Dividend
yield
(annualized) 2.54% 2.42% 2.70%
Dividends
paid to net
income 41.74% 36.87% 33.91%
Book value $21.91 $20.42 $19.64
Tangible
book
value(3) $13.40 $14.46 $13.65
Market value $28.38 $29.81 $23.70
Profitability
Ratios
(annualized)
-------------
Return on
average
assets 0.99% 1.17% 1.23%
Return on
average
tangible
assets(4) 1.05% 1.22% 1.30%
Return on
average
shareholders'
equity 7.85% 9.38% 9.83%
Return on
average
tangible
shareholders'
equity(5) 11.80% 13.35% 14.41%
Efficiency
ratio
(FTE)(2) 62.57% 58.67% 59.83%
S&T Bancorp,
Inc.
Consolidated
Selected
Financial Data
Unaudited
2015 2014 2014
----
First Fourth First
(dollars in
thousands) Quarter Quarter Quarter
------- ------- -------
ASSETS
Cash and due
from banks,
including
interest-
bearing
deposits $124,737 $109,580 $185,303
Securities
available-
for-sale, at
fair value 655,829 640,273 551,896
Loans held for
sale 6,126 2,970 1,133
Commercial
loans:
Commercial real
estate 2,152,413 1,682,236 1,607,958
Commercial and
industrial 1,211,053 994,138 884,870
Commercial
construction 286,166 216,148 167,432
Total
Commercial
Loans 3,649,632 2,892,522 2,660,260
Consumer loans:
Residential
mortgage 521,506 489,586 490,120
Home equity 442,396 418,563 410,695
Installment and
other consumer 65,754 65,567 64,561
Consumer
construction 4,410 2,508 2,260
Total Consumer
Loans 1,034,066 976,224 967,636
Total portfolio
loans 4,683,698 3,868,746 3,627,896
Allowance for
loan losses (48,106) (47,911) (46,616)
Total portfolio
loans, net 4,635,592 3,820,835 3,581,280
Goodwill 290,617 175,820 175,820
Other assets 258,392 215,208 211,555
Total Assets $5,971,293 $4,964,686 $4,706,987
========== ========== ==========
LIABILITIES
Deposits:
Noninterest-
bearing demand $1,177,623 $1,083,919 $1,032,372
Interest-
bearing demand 686,546 335,099 312,477
Money market 617,609 376,612 360,414
Savings 1,073,755 1,027,095 1,034,388
Certificates of
deposit 1,272,998 1,086,117 1,128,630
Total Deposits 4,828,531 3,908,842 3,868,281
Securities sold
under
repurchase
agreements 46,721 30,605 38,434
Short-term
borrowings 199,573 290,000 100,000
Long-term
borrowings 18,838 19,442 21,226
Junior
subordinated
debt
securities 50,619 45,619 45,619
Other
liabilities 64,753 61,789 49,776
Total
Liabilities 5,209,035 4,356,297 4,123,336
SHAREHOLDERS'
EQUITY
Total
Shareholders'
Equity 762,258 608,389 583,651
------- ------- -------
Total
Liabilities
and
Shareholders'
Equity $5,971,293 $4,964,686 $4,706,987
========== ========== ==========
Capitalization
Ratios
--------------
Shareholders'
equity /
assets 12.77% 12.25% 12.40%
Tangible common
equity /
tangible
assets(6) 8.22% 9.00% 8.96%
Tier 1 leverage
ratio 10.06% 9.80% 9.79%
Common equity
tier 1 capital 9.82% 11.81% 11.86%
Risk-based
capital -
tier 1 10.22% 12.34% 12.43%
Risk-based
capital -
total 11.86% 14.27% 14.41%
S&T Bancorp, Inc.
Consolidated Selected Financial Data
Unaudited
2015 2014 2014
----
(dollars in thousands) First Fourth First
Net Interest Margin (FTE) (QTD Averages) Quarter Quarter Quarter
--------------------------------------- ------- ------- -------
ASSETS
Loans $4,122,631 4.01% $3,845,351 3.98% $3,576,484 4.13%
Taxable investment securities 504,867 1.97% 488,257 1.99% 395,470 1.98%
Tax-exempt investment securities 142,194 4.41% 134,355 4.51% 121,464 4.71%
Federal Home Loan Bank and other restricted stock 15,427 12.66% 14,420 4.17% 13,391 2.70%
Interest-bearing deposits with banks 65,575 0.22% 79,814 0.27% 147,890 0.23%
Total Interest-earning Assets 4,850,694 3.78% 4,562,197 3.72% 4,254,699 3.82%
Noninterest-earning assets 421,132 373,068 377,462
Total Assets $5,271,826 $4,935,265 $4,632,161
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing demand $432,009 0.08% $335,479 0.02% $313,420 0.02%
Money market 362,939 0.18% 299,732 0.17% 350,314 0.15%
Savings 1,052,347 0.16% 1,048,359 0.16% 1,014,205 0.16%
Certificates of deposit 991,542 0.87% 923,468 0.81% 910,716 0.81%
CDARS and brokered deposits 260,555 0.34% 233,650 0.36% 190,598 0.33%
Securities sold under repurchase agreements 40,039 0.01% 25,137 0.01% 36,596 0.01%
Short-term borrowings 236,440 0.32% 249,185 0.32% 127,778 0.31%
Long-term borrowings 19,086 3.01% 19,685 2.96% 21,466 3.06%
Junior subordinated debt securities 47,175 2.77% 45,619 2.67% 45,619 2.69%
Total Interest-bearing Liabilities 3,442,132 0.43% 3,180,314 0.41% 3,010,712 0.41%
Noninterest-bearing demand 1,101,795 1,091,638 989,799
Other liabilities 64,643 50,033 52,851
Shareholders' equity 663,256 613,280 578,799
Total Liabilities and Shareholders' Equity $5,271,826 $4,935,265 $4,632,161
========== ========== ==========
Net Interest Margin (7) 3.48% 3.43% 3.51%
S&T Bancorp, Inc.
Consolidated Selected Financial Data
Unaudited
2015 2014 2014
----
First Fourth First
(dollars in thousands) Quarter Quarter Quarter
------- ------- -------
Nonperforming Loans (NPL)
------------------------
Commercial loans: % NPL % NPL % NPL
----- ----- -----
Commercial real estate $8,386 0.39% $4,434 0.26% $10,265 0.64%
Commercial and industrial 3,550 0.29% 1,622 0.16% 3,181 0.36%
Commercial construction 1,973 0.69% 1,974 0.91% 1,976 1.18%
Total Nonperforming Commercial Loans 13,909 0.38% 8,030 0.28% 15,422 0.58%
Consumer loans:
Residential mortgage 2,226 0.43% 2,336 0.48% 2,948 0.60%
Home equity 1,986 0.45% 2,060 0.49% 2,630 0.64%
Installment and other consumer 13 0.02% 31 0.05% 22 0.03%
Consumer construction - - - - - -
Total Nonperforming Consumer Loans 4,225 0.41% 4,427 0.45% 5,600 0.58%
----- ----- -----
Total Nonperforming Loans $18,134 0.39% $12,457 0.32% $21,022 0.58%
======= ======= =======
2015 2014 2014
----
First Fourth First
Quarter Quarter Quarter
------- ------- -------
Asset Quality Data
------------------
Nonperforming loans $18,134 $12,457 $21,022
Assets acquired through foreclosure or repossession 1,294 166 343
Nonperforming assets 19,428 12,623 21,365
Troubled debt restructurings (nonaccruing) 9,916 5,436 9,269
Troubled debt restructurings (accruing) 36,423 36,983 36,059
Total troubled debt restructurings 46,339 42,419 45,328
Nonperforming loans / loans 0.39% 0.32% 0.58%
Nonperforming assets / loans plus OREO 0.41% 0.33% 0.59%
Allowance for loan losses / originated loans 1.27% 1.27% 1.28%
Allowance for loan losses / total loans 1.03% 1.24% 1.28%
Allowance for loan losses / nonperforming loans 265% 385% 222%
Net loan charge-offs $1,014 $511 $(72)
Net loan charge-offs (recoveries)(annualized) / average loans 0.10% 0.05% (0.01%)
S&T Bancorp, Inc.
Consolidated Selected Financial Data
Unaudited
Definitions and Reconciliation of GAAP to Non-GAAP Financial Measures:
----------------------------------------------------------------------
(1) Diluted earnings per share under the two-class method is determined on the net income reported on the income
statement less earnings allocated to participating securities.
(2) Noninterest expense divided by noninterest income plus net interest income, on a fully taxable equivalent (FTE) basis.
2015 2014 2014
First Fourth First
Quarter Quarter Quarter
------- ------- -------
(3) Tangible Book Value (non-GAAP)
Total shareholders' equity $762,258 $608,389 $583,651
Less: goodwill and other intangible assets, (295,814) (177,530) (178,059)
net of deferred tax liability
---
Tangible common equity (non-GAAP) $466,444 $430,859 $405,592
Common shares outstanding 34,798 29,796 29,718
Tangible book value (non-GAAP) $13.40 $14.46 $13.65
(4) Return on Average Tangible Assets (non-GAAP)
Net income (annualized) $52,054 $57,514 $56,912
Plus: amortization of intangibles net of tax (annualized) 917 659 833
--- --- ---
Net income before amortization of intangibles (annualized) 52,971 58,173 57,745
Average total assets 5,271,826 4,935,265 4,632,161
Less: average goodwill and other intangibles, (214,299) (177,619) (178,164)
net of deferred tax liability
---
Average tangible assets (non-GAAP) $5,057,527 $4,757,646 $4,453,997
Return on average tangible assets (non-GAAP) 1.05% 1.22% 1.30%
(5) Return on Average Tangible Shareholders' Equity (non-GAAP)
Net income (annualized) $52,054 $57,514 $56,912
Plus: amortization of intangibles net of tax (annualized) 917 659 833
--- --- ---
Net income before amortization of intangibles (annualized) 52,971 58,173 57,745
Average total shareholders' equity 663,256 613,280 578,799
Less: average goodwill and other intangibles, (214,299) (177,619) (178,164)
net of deferred tax liability
---
Average tangible equity (non-GAAP) $448,957 $435,661 $400,635
Return on average tangible equity (non-GAAP) 11.80% 13.35% 14.41%
(6) Tangible Common Equity / Tangible Assets (non-GAAP)
Total shareholders' equity $762,258 $608,389 $583,651
Less: goodwill and other intangible assets, (295,814) (177,530) (178,059)
net of deferred tax liability
---
Tangible common equity (non-GAAP) 466,444 430,859 405,592
Total assets 5,971,293 4,964,686 4,706,987
Less: goodwill and other intangible assets, (295,814) (177,530) (178,059)
net of deferred tax liability
---
Tangible assets (non-GAAP) $5,675,479 $4,787,156 $4,528,928
Tangible common equity to tangible assets (non-GAAP) 8.22% 9.00% 8.96%
(7) Net Interest Margin Rate (FTE) (non-GAAP)
Interest income $43,916 $41,381 $38,665
Less: interest expense (3,657) (3,315) (3,074)
------ ------ ------
Net interest income per consolidated statements of net income 40,259 38,066 35,591
Plus: taxable equivalent adjustment 1,392 1,371 1,323
----- ----- -----
Net interest income (FTE) (non-GAAP) 41,651 39,437 36,914
Net interest income (FTE) (annualized) 168,918 156,462 149,707
Average earning assets $4,850,694 $4,562,197 $4,254,699
Net interest margin - (FTE) (non-GAAP) 3.48% 3.43% 3.51%
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