S&T BANCORP, INC. 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%
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SOURCE S&T Bancorp, Inc.
