S&T Bancorp, Inc. Announces First Quarter 2014 Results and Declares an Increased Dividend

29 Apr, 2014, 07:30 ET from S&T Bancorp, Inc.

INDIANA, Pa., April 29, 2014 /PRNewswire/ -- S&T Bancorp, Inc. (S&T) (NASDAQ: STBA) has announced its first quarter 2014 earnings.  Net income increased 18% to $14.0 million with diluted earnings per share of $0.47 compared to the fourth quarter of 2013 net income of $11.9 million and diluted earnings per share of $0.40.  Net income increased 14% compared to the first quarter of 2013 net income of $12.3 million and diluted earnings per share of $0.41

First Quarter Highlights:

  • Loan growth was strong with a $61.7 million, or 7.0% annualized, increase in portfolio loans compared to December 31, 2013.
  • Market expansion continues with the opening of a loan production office in Central Ohio and the hiring of two community bankers in State College, Pennsylvania.     
  • Asset quality was excellent with a net recovery for the first quarter of 2014 and a decrease in nonperforming assets.
  • Expenses remain well controlled due to various efficiency initiatives implemented in 2013.
  • S&T's Board of Directors approved a 6.3% increase in the quarterly cash dividend to $0.17 per share, the second increase in the quarterly dividend over the past year. 

"Our financial performance this quarter is a continuation of the focused execution of our strategic initiatives by our team members.  Solid organic loan growth, expense discipline and improvement in our asset quality metrics will continue to be a focus in 2014," said Todd Brice, president and chief executive officer of S&T. "In addition, we are excited to announce our expansion into two key markets, Central Ohio and State College, Pennsylvania, where we have recruited bankers with long tenures and deep ties to these markets."

Net Interest Income Net interest income was relatively unchanged at $35.6 million compared to $35.7 million in the fourth quarter of 2013.  Net interest income was impacted by two fewer days in the first quarter compared to the fourth quarter of 2013, however, this decrease was offset by strong loan growth and prepayment fees. Compared to the same period last year, loan growth has driven net interest income higher by 5.7%.  Net interest margin (FTE) has been stable at 3.51% in the first quarter of 2014, 3.52% in the fourth quarter of 2013 and 3.49% in the first quarter of 2013.

Asset Quality Asset quality remains excellent. Total nonperforming loans were 0.58% of total loans at March 31, 2014 compared to 0.63% of total loans at December 31, 2013.  During the first quarter of 2014, there was a net recovery of $0.1 million compared to a net charge-off of $3.3 million in the fourth quarter of 2013. The provision for loan losses decreased to $0.3 million in the first quarter of 2014 compared to $1.6 million in the fourth quarter of 2013. The allowance for loan losses was $46.6 million, or 1.28% of total loans, compared to $46.3 million, or 1.30% of total loans, at December 31, 2013.

Noninterest Income and Expense Noninterest income increased $0.1 million to $11.4 million compared to $11.3 million in the fourth quarter of 2013 due to higher wealth management and insurance fees offset by a decrease in mortgage banking.  Wealth management fees increased $0.4 million, or 15.7%, from the prior quarter due to brokerage activity, fee schedule changes and higher assets under management. Insurance fees increased $0.6 million due to $0.4 million of annual profit sharing that we received from our insurance carriers, normal seasonal fluctuations with policy renewals and higher revenue related to our credit insurance products.  Mortgage banking income decreased by $0.3 million compared to the prior quarter due to seasonal declines in volume.

Expenses remain well controlled as a result of various efficiency initiatives implemented during 2013.  Adjusting for $1.1 million of one-time expenses in the first quarter of 2013, noninterest expense decreased by over 5% in the first quarter of 2014.  Noninterest expense decreased $0.5 million to $28.9 million compared to $29.4 million in the fourth quarter of 2013. Professional services and legal fees decreased $0.4 million and marketing expense decreased $0.2 million compared to the prior quarter due to the timing of services and marketing campaigns.

Financial Condition Total assets increased $173.8 million to $4.7 billion at March 31, 2014 compared to $4.5 billion at December 31, 2013. Loan growth was strong representing our seventh consecutive quarter of growth with an increase of $61.7 million, or 7.0% annualized, in total portfolio loans. Commercial loans grew $66.4 million, or 10.4% annualized, during the quarter, primarily due to growth in the commercial and industrial and construction portfolios.  Total deposits increased $196.0 million compared to December 31, 2013 with growth coming primarily in core deposits.  S&T's risk-based capital ratios increased this quarter due to retained earnings growth outpacing loan growth.  All capital ratios remain significantly above the well-capitalized thresholds of federal bank regulatory agencies.

Dividend The Board of Directors of S&T declared a $0.17 per share cash dividend at its regular meeting held April 28, 2014, representing a 6.3% increase over the prior quarter cash dividend of $0.16 per share and a 13.3% increase over the quarterly dividend a year ago.  The dividend is payable May 29, 2014 to shareholders of record on May 15, 2014. 

"The increase in the quarterly dividend is a reflection of the Board's confidence in management's ability to continue to produce solid earnings in the future while maintaining a strong capital position," said Charles Urtin, chairman of the S&T Bancorp, Inc. Board of Directors.  "Our focus remains on providing a competitive return to the shareholders of S&T Bancorp."

Conference Call S&T will host its first quarter 2014 earnings conference call live over the Internet at 1:00 p.m. Eastern Time on Tuesday, April 29, 2014. To access the webcast, go to S&T's webpage at www.stbancorp.com and click on "Events & Presentations." Select "1st Quarter 2014 Conference Call" and follow the instructions.

Annual Meeting  S&T will hold its Annual Meeting on May 19, 2014, at 10:00 a.m. Eastern Time, at the S&T Training and Support Center, located at 355 North Fifth Street, Indiana, Pennsylvania 15701.

About S&T Bancorp, Inc. Headquartered in Indiana, PA, S&T Bancorp, Inc. operates offices within Allegheny, Armstrong, Blair, Butler, Cambria, Centre, Clarion, Clearfield, Indiana, Jefferson, Washington and Westmoreland counties, as well as loan production offices in Northeast and Central Ohio. With assets of $4.7 billion, S&T Bancorp, Inc. stock trades on the NASDAQ Global Select Market under the symbol STBA.  For more information, visit http://www.stbancorp.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

2014

2013

2013

First

Fourth

First

(dollars in thousands, except per share data)

Quarter

Quarter

Quarter

INTEREST INCOME

Loans, including fees

$       35,649

$       35,949

$       35,045

Investment Securities:

Taxable

1,983

1,847

1,863

Tax-exempt

929

888

833

Dividends

104

95

102

Total Interest Income

38,665

38,779

37,843

INTEREST EXPENSE

Deposits

2,510

2,536

3,202

Borrowings and junior subordinated debt securities

564

589

972

Total Interest Expense

3,074

3,125

4,174

NET INTEREST INCOME

35,591

35,654

33,669

Provision for loan losses

289

1,562

2,307

Net Interest Income After Provision for Loan Losses

35,302

34,092

31,362

NONINTEREST INCOME

Securities gains, net

1

-

2

Wealth management fees

2,955

2,553

2,576

Service charges on deposit accounts

2,509

2,744

2,448

Debit and credit card fees

2,502

2,566

2,451

Insurance fees

1,677

1,092

1,775

Mortgage banking

132

465

482

Gain on sale of merchant card servicing business

-

-

3,093

Other

1,640

1,892

1,979

Total Noninterest Income

11,416

11,312

14,806

NONINTEREST EXPENSE

Salaries and employee benefits

15,376

15,201

16,067

Net occupancy

2,230

1,986

2,169

Data processing

2,095

2,083

2,664

Furniture and equipment

1,271

1,260

1,308

Professional services and legal

663

1,045

974

Other taxes

631

790

999

FDIC insurance

631

660

776

Marketing

618

841

689

Other

5,399

5,581

5,970

Total Noninterest Expense

28,914

29,447

31,616

Income Before Taxes

17,804

15,957

14,552

Provision for income taxes

3,771

4,098

2,222

Net Income

$       14,033

$       11,859

$       12,330

Per Share Data: 

Shares outstanding at end of period

29,718,126

29,737,725

29,724,721

Average shares outstanding - diluted

29,698,047

29,691,844

29,674,406

Average shares outstanding - two-class method

29,735,031

29,737,725

29,729,702

Diluted earnings per share(1)

$0.47

$0.40

$0.41

Dividends declared per share

$0.16

$0.16

$0.15

Dividend yield (annualized)

2.70%

2.53%

3.24%

Dividends paid to net income

33.91%

40.12%

36.17%

Book value 

$19.64

$19.21

$18.32

Tangible book value(5)

$13.65

$13.22

$12.30

Market value

$23.70

$25.31

$18.54

Profitability Ratios (Annualized)

Return on average assets

1.23%

1.03%

1.12%

Return on average tangible assets(3)

1.30%

1.10%

1.20%

Return on average shareholders' equity 

9.83%

8.40%

9.25%

Return on average tangible shareholders' equity(4)

14.41%

12.58%

14.16%

Efficiency ratio (FTE)(2)

59.83%

61.04%

63.68%

 

 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

2014

2013

2013

First

Fourth

First

(dollars in thousands)

Quarter

Quarter

Quarter

ASSETS

Cash and due from banks, including interest-bearing deposits

$     185,303

$     108,356

$     261,124

Securities available-for-sale, at fair value

551,896

509,425

469,418

Loans held for sale

1,133

2,136

2,580

Commercial loans:

Commercial real estate

1,607,958

1,607,756

1,479,796

Commercial and industrial

884,870

842,449

806,205

Commercial construction

167,432

143,675

164,874

Total Commercial Loans

2,660,260

2,593,880

2,450,875

Consumer loans:

Residential mortgage

490,120

487,092

442,705

Home equity

410,695

414,195

416,524

Installment and other consumer

64,561

67,883

68,773

Consumer construction

2,260

3,149

3,105

Total Consumer Loans

967,636

972,319

931,107

Total portfolio loans

3,627,896

3,566,199

3,381,982

Allowance for loan losses

(46,616)

(46,255)

(45,936)

Total portfolio loans, net

3,581,280

3,519,944

3,336,046

Goodwill

175,820

175,820

175,820

Other assets

211,555

217,509

234,875

Total Assets

$  4,706,987

$  4,533,190

$  4,479,863

LIABILITIES

Deposits:

Noninterest-bearing demand

$  1,032,372

$     992,779

$     951,050

Interest-bearing demand

312,477

312,790

304,667

Money market

360,414

281,403

326,489

Savings

1,034,388

994,805

993,472

Certificates of deposit

1,128,630

1,090,531

1,062,886

Total Deposits

3,868,281

3,672,308

3,638,564

Securities sold under repurchase agreements

38,434

33,847

64,358

Short-term borrowings

100,000

140,000

50,000

Long-term borrowings

21,226

21,810

23,535

Junior subordinated debt securities

45,619

45,619

90,619

Other liabilities

49,776

48,300

68,173

Total Liabilities

4,123,336

3,961,884

3,935,249

SHAREHOLDERS' EQUITY

Total Shareholders' Equity

583,651

571,306

544,614

Total Liabilities and Shareholders' Equity

$  4,706,987

$  4,533,190

$  4,479,863

Capitalization Ratios

Shareholders' equity / assets

12.40%

12.60%

12.16%

Tangible common equity / tangible assets(6)

8.96%

9.03%

8.50%

Tier 1 leverage ratio

9.79%

9.75%

9.42%

Risk-based capital - tier 1

12.43%

12.37%

12.20%

Risk-based capital - total

14.41%

14.36%

15.60%

 

 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

2014

2013

2013

(dollars in thousands)

First

Fourth

First

Net Interest Margin (FTE) (QTD Averages)

Quarter

Quarter

Quarter

ASSETS

Loans

$  3,576,484

4.13%

$  3,537,426

4.12%

$  3,358,099

4.32%

Interest-bearing deposits with banks

147,890

0.23%

113,662

0.28%

210,628

0.23%

Taxable investment securities

395,470

1.97%

386,177

1.91%

353,390

2.11%

Tax-exempt investment securities

121,464

4.71%

114,301

4.78%

110,438

4.64%

Federal Home Loan Bank and other restricted stock

13,391

2.70%

14,021

1.41%

14,420

0.52%

Total Interest-earning Assets

4,254,699

3.81%

4,165,587

3.82%

4,046,975

3.91%

Noninterest-earning assets

377,462

385,448

401,396

Total Assets

$  4,632,161

$  4,551,036

$  4,448,371

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing demand

$     313,420

0.02%

$     313,942

0.02%

$     310,161

0.02%

Money market

350,314

0.15%

290,159

0.13%

338,246

0.15%

Savings

1,014,205

0.16%

1,009,515

0.15%

973,822

0.21%

Certificates of deposit

910,716

0.81%

935,590

0.81%

1,011,930

1.02%

CDARs and brokered deposits

190,598

0.33%

139,927

0.32%

31,217

0.23%

Securities sold under repurchase agreements

36,596

0.01%

26,384

0.01%

63,338

0.17%

Short-term borrowings

127,778

0.31%

146,957

0.30%

61,111

0.22%

Long-term borrowings

21,466

3.06%

22,043

3.00%

29,485

3.18%

Junior subordinated debt securities

45,619

2.69%

45,619

2.70%

90,619

3.05%

Total Interest-bearing Liabilities

3,010,712

0.41%

2,930,135

0.42%

2,909,929

0.58%

Noninterest-bearing demand

989,799

993,653

925,301

Other liabilities

52,851

67,451

72,715

Shareholders' equity

578,799

559,797

540,426

Total Liabilities and Shareholders' Equity

$  4,632,161

$  4,551,036

$  4,448,371

Net Interest Margin (7)

3.51%

3.52%

3.49%

 

 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

2014

2013

2013

First

Fourth

First

(dollars in thousands)

Quarter

Quarter

Quarter

Nonperforming Loans (NPL)

Commercial loans:

% NPL

% NPL

% NPL

Commercial real estate

$       10,265

0.64%

$       10,750

0.67%

$       25,836

1.75%

Commercial and industrial

3,181

0.36%

3,296

0.39%

5,380

0.67%

Commercial construction

1,976

1.18%

2,742

1.91%

5,170

3.14%

Total Nonperforming Commercial Loans

15,422

0.58%

16,788

0.65%

36,386

1.48%

Consumer loans:

Residential mortgage

2,948

0.60%

3,338

0.69%

5,643

1.27%

Home equity

2,630

0.64%

2,291

0.55%

4,022

0.97%

Installment and other consumer

22

0.03%

37

0.05%

21

0.03%

Consumer construction

-

-

-

-

218

7.02%

Total Nonperforming Consumer Loans

5,600

0.58%

5,666

0.58%

9,904

1.06%

Total Nonperforming Loans

$       21,022

0.58%

$       22,454

0.63%

$       46,290

1.37%

2014

2013

2013

First

Fourth

First

Quarter

Quarter

Quarter

Asset Quality Data

Nonperforming loans

$       21,022

$       22,454

46,290

Assets acquired through foreclosure or repossession

343

410

627

Nonperforming assets

21,365

22,864

46,917

Troubled debt restructurings (nonaccruing)

9,269

10,067

14,776

Troubled debt restructurings (accruing)

36,059

39,229

41,423

Total troubled debt restructurings

45,328

49,296

56,199

Nonperforming loans / loans

0.58%

0.63%

1.37%

Nonperforming assets / loans plus OREO

0.59%

0.64%

1.39%

Allowance for loan losses / loans

1.28%

1.30%

1.36%

Allowance for loan losses / nonperforming loans

222%

206%

99%

Net loan (recoveries) charge-offs

(72)

3,290

2,855

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

(0.01%)

0.37%

0.34%

 

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.

2014

2013

2013

First

Fourth

First

Quarter

Quarter

Quarter

(3)  Return on Average Tangible Assets (non-GAAP)

    Net income (annualized)

$       56,912

$       47,049

$       50,005

    Plus: amortization of intangibles net of tax (annualized)

833

950

1,137

    Net income before amortization of intangibles (annualized)

57,745

47,999

51,142

    Average total assets

4,632,161

4,551,036

4,448,371

    Less:  average goodwill and other intangibles,            net of deferred tax liability

(178,164)

(178,380)

(179,159)

    Average tangible assets (non-GAAP)

4,453,997

4,372,656

4,269,212

    Return on average tangible assets (non-GAAP)

1.30%

1.10%

1.20%

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

    Net income (annualized)

$       56,912

$       47,049

$       50,005

    Plus: amortization of intangibles net of tax (annualized)

833

950

1,137

    Net income before amortization of intangibles (annualized)

57,745

$       47,999

$       51,142

    Average total shareholders' equity

578,799

559,797

540,427

    Less: average goodwill and other intangibles,            net of deferred tax liability

(178,164)

(178,380)

(179,159)

    Average tangible equity (non-GAAP)

400,635

381,417

361,268

    Return on average tangible equity (non-GAAP)

14.41%

12.58%

14.16%

(5)  Tangible Book Value (non-GAAP)

     Total shareholders' equity

$     583,651

$     571,306

$     544,614

     Less: goodwill and other intangible assets,          net of deferred tax liability

(178,059)

(178,264)

(179,018)

     Tangible equity (non-GAAP)

405,592

393,042

365,596

     Common shares outstanding

29,718

29,738

29,725

     Tangible book value at year end (non-GAAP)

$         13.65

$         13.22

$         12.30

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

     Total shareholders' equity

$     583,651

$     571,306

$     544,614

     Less: goodwill and other intangible assets,           net of deferred tax liability

(178,059)

(178,264)

(179,018)

     Tangible equity (non-GAAP)

405,592

393,042

365,596

     Total assets 

4,706,987

4,533,190

4,479,863

     Less: goodwill and other intangible assets,

          net of deferred tax liability

(178,059)

(178,264)

(179,018)

     Tangible assets (non-GAAP)

4,528,928

4,354,926

4,300,845

     Tangible equity to tangible assets (non-GAAP)

8.96%

9.03%

8.50%

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

    Interest income

$       38,665

$       38,779

$       37,843

    Less: interest expense

(3,074)

(3,125)

(4,174)

    Net interest income

35,591

35,654

33,669

    Plus: taxable equivalent adjustment

1,323

1,280

1,172

    Net interest income (FTE) (non-GAAP)

36,914

36,934

34,841

    Net interest income (FTE) (annualized)

149,708

146,532

141,300

    Average earning assets

4,254,699

4,165,587

4,046,975

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

3.51%

3.52%

3.49%

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SOURCE S&T Bancorp, Inc.



RELATED LINKS

http://www.stbancorp.com