S&T Bancorp, Inc. Announces First Quarter Earnings and Declares First Quarter Dividend

23 Apr, 2013, 08:00 ET from S&T Bancorp, Inc.

INDIANA, Pa., April 23, 2013 /PRNewswire/ -- S&T Bancorp, Inc. (S&T) (NASDAQ: STBA) has announced its first quarter earnings.  Net income for the first quarter of 2013 was $12.3 million, or $0.41 per diluted share, compared to the fourth quarter of 2012 net income of $9.5 million, or $0.32 per diluted share, and the first quarter of 2012 net income of $3.5 million, or $0.12 per diluted share. 

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First Quarter Highlights:

  • Loan demand improved with average loans increasing $72.1 million, or 2%, from the prior quarter.
  • Nonperforming Assets (NPAs) decreased $9.0 million, or 16%, from the prior quarter and $21.0 million, or 31%, from the first quarter of 2012. 
  • A $3.1 million gain was recognized related to the sale of the merchant card servicing business.
  • Results for the first quarter included approximately $0.8 million of one-time merger integration costs.  
  • S&T declared a $0.15 per share dividend for the first quarter.

"The first quarter was a positive start to 2013 demonstrating our ability to execute on our key strategic initiatives of loan growth and improving asset quality," said Todd Brice, president and chief executive officer of S&T.  "Loan demand is improving as evidenced by the increase in loans during the quarter.  Asset quality trends continue to be positive with NPAs at the lowest level since 2008."

Net Interest Income Net interest income decreased $0.6 million to $33.7 million compared to $34.3 million in the fourth quarter of 2012 due to the low interest rate environment.  Net interest income was impacted by two fewer days in the first quarter compared to the fourth quarter of 2012.   Average loan balances increased $72.1 million from the prior quarter, but this combined with lower funding costs was not sufficient to offset the decline in earning asset yields resulting in a two basis point decline in the net interest margin rate on a fully taxable equivalent basis (FTE) from 3.51% to 3.49%.  

Asset Quality Asset quality continues to improve with a 16% decrease in nonperforming loans (NPLs) to $46.3 million compared to $55.0 million in the prior quarter.  New NPL formation decreased to $2.3 million during the first quarter which was down significantly from approximately $6.0 million in each of the prior two quarters. Substandard and special mention loans also decreased $47.8 million, or 14%, to $289.3 million from $337.1 million.  Net charge-offs for the first quarter of 2013 were $2.9 million compared to net charge-offs of $4.0 million in the fourth quarter of 2012.  Included in the $2.9 million of net charge-offs was $2.0 million for loans that had previously established specific reserves.  The allowance for loan losses (ALL) remained relatively unchanged at $45.9 million, or 1.36% of total loans, compared to $46.5 million, or 1.38% of total loans, at December 31, 2012. 

Noninterest Income and Expense Noninterest income increased $3.2 million from the prior quarter to $14.8 million primarily due to a gain on the sale of our merchant card servicing business. In conjunction with the sale of the merchant card servicing business, we entered into a marketing and sales alliance agreement.  This agreement is for an initial term of ten years and provides us with a share of future revenue. The $0.6 million increase in insurance fees related to $0.4 million of annual profit sharing that we received from our insurance carriers and normal seasonal fluctuations with policy renewals. 

Noninterest expense increased $1.9 million from the prior quarter to $31.6 million, primarily due to increased salaries and employee benefit expenses of $1.7 million. Included in the increase was approximately $1.2 million of seasonal or timing items, such as an increase in payroll taxes.  Other increases in salaries and employee benefits included $0.2 million related to our annual merit increase and $0.3 million of payroll incentives due to increased loan production and a strong performance in other business lines. 

The first quarter of 2013 included $0.8 million of one-time merger related expenses, primarily within data processing for the system conversion of Gateway Bank.  Included in other noninterest expense is an increase of $0.9 million related to the reserve for unfunded commitments due to an increase in construction commitments from the prior quarter.  During the first quarter two branches were closed resulting in $0.3 million of one-time expense.  Offsetting these items in other noninterest expense was an $0.8 million decline in losses on OREO properties compared to the fourth quarter of 2012.      

Financial Condition Assets were $4.5 billion at March 31, 2013 compared to December 31, 2012.  Portfolio loans increased $35.4 million from December 31, 2012, primarily in our commercial real estate, commercial and industrial and residential mortgage portfolios. Total deposits remained unchanged at $3.6 billion at both March 31, 2013 and December 31, 2012.  S&T's capital ratios increased from the prior quarter due to earnings retention.  All capital ratios are significantly above the well-capitalized thresholds of federal bank regulatory agencies.

Dividend The Board of Directors of S&T declared a $0.15 per share cash dividend at its regular meeting held April 22, 2013.  The dividend is payable May 24, 2013 to shareholders of record on May 9, 2013.  This dividend compares to a common stock dividend of $0.15 per share for the fourth quarter of 2012.

Conference Call S&T will host its first quarter 2013 earnings conference call live over the Internet at 1:00 p.m. ET on Tuesday, April 23, 2013.  To access the webcast, go to S&T's webpage at www.stbancorp.com and click on "Events & Presentations."  Select "1st Quarter 2013 Conference Call" and follow the instructions. 

About S&T Bancorp, Inc. Headquartered in Indiana, PA, S&T operates offices within Allegheny, Armstrong, Blair, Butler, Cambria, Clarion, Clearfield, Indiana, Jefferson, Washington and Westmoreland counties.  With assets of $4.5 billion, S&T stock trades on the NASDAQ Global Select Market System under the symbol STBA.  For more information, visit 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, 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 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

2013

2012

2012

First

Fourth

First

(in thousands, except per share data)

Quarter

Quarter

Quarter

INTEREST INCOME

Loans, including fees

$35,045

$36,127

$36,337

Investment securities:

Taxable

1,863

1,884

1,944

Tax-exempt

833

801

753

Dividends

102

108

106

Total Interest Income

37,843

38,920

39,140

INTEREST EXPENSE

Deposits

3,202

3,612

4,751

Borrowings and junior subordinated debt securities

972

1,017

1,068

Total Interest Expense

4,174

4,629

5,819

NET INTEREST INCOME

33,669

34,291

33,321

Provision for loan losses

2,307

4,215

9,272

Net interest income after provision for loan losses

31,362

30,076

24,049

NONINTEREST INCOME

Gain on sale of merchant card servicing business 

3,093

-

-

Wealth management fees

2,576

2,415

2,419

Debit and credit card fees

2,451

2,662

2,667

Service charges on deposit accounts

2,448

2,585

2,408

Insurance fees

1,775

1,190

1,691

Mortgage banking

482

704

671

Securities gains, net

2

-

840

Other

1,979

2,009

2,373

Total Noninterest Income

14,806

11,565

13,069

NONINTEREST EXPENSE

Salaries and employee benefits

16,067

14,323

16,472

Data processing

2,664

2,172

3,240

Net occupancy

2,169

2,011

1,784

Furniture and equipment

1,308

1,401

1,238

Other taxes

999

667

774

Professional services and legal

974

1,111

1,900

FDIC assessment

776

762

608

Marketing

689

1,146

742

Other

5,970

6,124

6,025

Total Noninterest Expense

31,616

29,717

32,783

Income Before Taxes

14,552

11,924

4,335

Provision for income taxes

2,222

2,400

855

Net Income Available to Common Shareholders

$12,330

$9,524

$3,480

Per Common Share Data: 

Shares outstanding at end of period

29,724,721

29,732,209

28,873,043

Average shares outstanding - diluted

29,674,406

29,659,999

28,272,568

Diluted earnings per common share(1)

$0.41

$0.32

$0.12

Dividends declared per common share

$0.15

$0.15

$0.15

Dividend yield (annualized)

3.24%

3.32%

2.77%

Dividends paid to net income

36.17%

46.83%

121.26%

Common book value 

$18.32

$18.08

$17.47

Tangible common book value(2)

$12.24

$11.98

$11.32

Market value

$18.54

$18.07

$21.69

Profitability Ratios (Annualized)

Common return on average assets

1.12%

0.86%

0.34%

Common return on average tangible assets(3)

1.17%

0.90%

0.35%

Common return on average common equity 

9.25%

7.05%

2.82%

Common return on average tangible common equity(4)

13.91%

10.65%

4.31%

Efficiency ratio (FTE)(5)

63.68%

63.29%

70.23%

 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

(in thousands)

2013

2012

2012

First

Fourth

First

Quarter

Quarter

Quarter

ASSETS

Cash and due from banks, including interest-bearing deposits

$261,124

$337,711

$386,640

Securities available-for-sale, at fair value

469,418

452,266

363,151

Loans held for sale

2,580

22,499

3,663

Consumer loans:

Residential mortgage

442,705

427,303

382,884

Home equity

416,524

431,335

441,648

Installment and other consumer

68,773

73,875

82,223

Construction

3,105

2,437

2,211

Total consumer loans

931,107

934,950

908,966

Commercial loans:

Commercial real estate

1,479,796

1,452,133

1,416,663

Commercial and industrial

806,205

791,396

703,112

Construction

164,874

168,143

169,039

Total commercial loans

2,450,875

2,411,672

2,288,814

Allowance for loan losses

(45,936)

(46,484)

(47,827)

Total portfolio loans, net

3,336,046

3,300,138

3,149,953

Goodwill

175,820

175,733

171,395

Other assets

234,875

238,355

256,173

Total Assets

$4,479,863

$4,526,702

$4,330,975

LIABILITIES

Deposits:

Noninterest-bearing demand

$951,050

$960,980

$860,108

Interest-bearing demand

304,667

316,760

306,400

Money market

326,489

361,233

291,245

Savings

993,472

965,571

882,675

Certificates of deposit

1,062,886

1,033,884

1,181,927

Total Deposits

3,638,564

3,638,428

3,522,355

Securities sold under repurchase agreements

64,358

62,582

40,638

Short-term borrowings

50,000

75,000

75,000

Long-term borrowings

23,535

34,101

31,426

Junior subordinated debt securities

90,619

90,619

90,619

Other liabilities

68,173

88,550

66,519

Total Liabilities

3,935,249

3,989,280

3,826,557

SHAREHOLDERS' EQUITY

Total Shareholders' Equity

544,614

537,422

504,418

Total Liabilities and Shareholders' Equity

$4,479,863

$4,526,702

$4,330,975

Capitalization Ratios

Common equity / assets

12.16%

11.87%

11.65%

Tangible common equity / tangible assets(6)

8.46%

8.20%

7.87%

Tier 1 leverage ratio

9.42%

9.31%

9.20%

Risk-based capital - tier 1

12.20%

11.98%

11.62%

Risk-based capital - total

15.60%

15.39%

15.14%

 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

(in thousands)

2013

2012

2012

First

Fourth

First

Quarter

Quarter

Quarter

Net Interest Margin (FTE) (QTD Averages)(7)

Assets

  Interest-bearing deposits with banks

$210,628

0.23%

$267,719

0.29%

$231,241

0.20%

  Securities/other

478,248

2.65%

445,059

2.76%

381,550

3.29%

  Loans

3,358,099

4.32%

3,286,039

4.44%

3,135,517

4.74%

     Total Interest-earning Assets

4,046,975

3.91%

3,998,817

3.97%

3,748,308

4.31%

  Noninterest-earning assets

401,396

411,078

395,577

Total Assets

$4,448,371

$4,409,895

$4,143,885

Liabilities and Shareholders' Equity

  NOW/money market/savings

$1,622,229

0.16%

$1,614,444

0.19%

$1,401,848

0.18%

  Certificates of deposit

1,043,147

1.00%

1,058,308

1.06%

1,132,687

1.46%

  Borrowed funds < 1 year

124,449

0.19%

61,588

0.16%

112,944

0.20%

  Borrowed funds > 1 year

120,104

3.08%

124,947

3.15%

122,214

3.32%

     Total Interest-bearing Liabilities

2,909,929

0.58%

2,859,287

0.64%

2,769,693

0.84%

Noninterest-bearing Liabilities and Shareholders' Equity

  Demand deposits

925,301

929,575

809,464

  Shareholders' equity/other

613,141

621,033

564,728

     Total Noninterest-bearing Liabilities and Shareholders' Equity

1,538,442

1,550,608

1,374,192

Total Liabilities and Shareholders' Equity

$4,448,371

$4,409,895

$4,143,885

Net Interest Margin

3.49%

3.51%

3.69%

2013

2012

2012

First

Fourth

First

Quarter

Quarter

Quarter

Nonperforming Loans (NPL)

Consumer loans:

% NPL

% NPL

% NPL

Residential mortgage

$5,643

1.27%

$7,278

1.70%

$8,260

2.16%

Home equity

4,022

0.97%

3,653

0.85%

3,490

0.79%

Installment and other consumer

21

0.03%

40

0.05%

27

0.03%

Construction

218

7.02%

218

8.95%

181

8.19%

Total Nonperforming Consumer Loans

9,904

1.06%

$11,189

1.20%

11,958

1.32%

Commercial loans:

Commercial real estate

25,836

1.75%

30,556

2.10%

32,816

2.32%

Commercial and industrial

5,380

0.67%

6,435

0.81%

8,269

1.18%

Construction

5,170

3.14%

6,778

4.03%

11,460

6.78%

Total Nonperforming Commercial Loans

36,386

1.48%

43,769

1.81%

52,545

2.30%

Total Nonperforming Loans

$46,290

1.37%

$54,958

1.63%

$64,503

2.01%

2013

2012

2012

First

Fourth

First

Quarter

Quarter

Quarter

Asset Quality Data

Nonperforming loans

$46,290

$54,958

$64,503

Assets acquired through foreclosure or repossession

627

911

3,371

Nonperforming assets

46,917

55,869

67,874

Troubled debt restructurings (nonaccrual)

14,776

18,940

22,963

Troubled debt restructurings (accruing)

41,423

41,521

41,189

Total troubled debt restructurings

56,199

60,461

64,152

Nonperforming loans / loans

1.37%

1.63%

2.01%

Nonperforming assets / loans plus OREO

1.39%

1.66%

2.12%

Allowance for loan losses / loans

1.36%

1.38%

1.49%

Allowance for loan losses / nonperforming loans

99%

85%

74%

Net loan charge-offs

2,854

4,011

10,286

Net loan charge-offs (annualized) / average loans

0.34%

0.49%

1.32%

 

 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

(in thousands)

2013

2012

2012

First

Fourth

First

Quarter

Quarter

Quarter

Definitions and Reconciliation of GAAP to

      Non-GAAP Financial Measures:

(1)  Diluted earnings per common share under the two-class method is determined on the net income reported on the income

statement less earnings allocated to participating securities.

(2)  Tangible Common Book Value

     Common book value (GAAP basis)

$18.32

$18.08

$17.47

     Effect of excluding intangible assets

(6.08)

(6.10)

(6.15)

     Tangible common book value

$12.24

$11.98

$11.32

(3)  Common Return on Average Tangible Assets

     Common return on average assets (GAAP basis)

1.12%

0.86%

0.34%

     Effect of excluding intangible assets

0.05%

0.04%

0.01%

     Common return on average tangible assets

1.17%

0.90%

0.35%

(4)  Common Return on Average Tangible Common Equity

     Common return on average common equity (GAAP basis)

9.25%

7.05%

2.82%

     Effect of excluding intangible assets

4.66%

3.60%

1.49%

     Common return on average tangible common equity

13.91%

10.65%

4.31%

(5)  Noninterest expense divided by noninterest income plus net interest income, on a fully taxable equivalent (FTE) basis.

(6)  Tangible Common Equity / Tangible Assets

     Common equity / assets(GAAP basis)

12.16%

11.87%

11.65%

     Effect of excluding intangible assets

-3.70%

-3.67%

-3.78%

     Tangible common equity / tangible assets

8.46%

8.20%

7.87%

(7)  Net interest income (annualized) rate

3.79%

3.86%

4.19%

    Taxable equivalent adjustment

0.12%

0.11%

0.12%

    Net Interest Income Rate (FTE)

3.91%

3.97%

4.31%

    Net interest margin rate

3.37%

3.40%

3.57%

    Taxable equivalent adjustment

0.12%

0.11%

0.12%

    Net Interest Margin Rate (FTE)

3.49%

3.51%

3.69%

 

 

SOURCE S&T Bancorp, Inc.



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