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

Jul 23, 2013, 07:30 ET from S&T Bancorp, Inc.

INDIANA, Pa., July 23, 2013 /PRNewswire/ -- S&T Bancorp, Inc. (S&T) (NASDAQ: STBA) has announced its second quarter earnings. Net income for the second quarter of 2013 increased to $14.1 million, or $0.47 per diluted share, compared to the first quarter of 2013 net income of $12.3 million, or $0.41 per diluted share, and the second quarter of 2012 net income of $8.6 million, or $0.30 per diluted share. 

(Logo: http://photos.prnewswire.com/prnh/20070917/NEM099LOGO )

Second Quarter Highlights

  • Loan growth was strong with average quarter-to-date loans increasing $61.3 million, or 1.8%, from the prior quarter.
  • Net interest income increased $0.9 million and net interest margin increased 2 basis points to 3.51% from the prior quarter.
  • Asset quality continued to improve with a decrease in nonperforming assets (NPAs) of $8.6 million, or 18%, from the prior quarter and $33.7 million, or 47%, from the second quarter of 2012. 
  • S&T declared a $0.15 per share dividend for the second quarter.

"We are pleased to report such positive results for the second quarter of 2013," said Todd Brice, president and chief executive officer of S&T. "The investments that we have made in expanding our sales teams are paying off as we are experiencing solid loan growth in both our commercial and consumer businesses as well as increases in our wealth management and retail banking revenues.  The second quarter also reflects the benefit of merger synergies and expense control initiatives." 

Net Interest Income Net interest income increased $0.9 million to $34.6 million compared to $33.7 million and net interest margin on a fully taxable equivalent basis (FTE) increased 2 basis points to 3.51% compared to 3.49% in the first quarter of 2013. Net interest income and net interest margin were positively impacted by $0.4 million, or 4 basis points, due to a $0.5 million interest recovery on a previously charged-off loan partially offset by $0.1 million of expenses related to the redemption of subordinated debt during the second quarter. The remaining $0.5 million increase in net interest income was driven by an increase of $61.3 million in average loans and lower funding costs during the second quarter.  

Asset Quality Asset quality trends continue to improve. Total nonperforming loans (NPLs) were $37.9 million, or 1.10% of total loans at June 30, 2013, which represents an 18% decrease from $46.3 million, or 1.37% of total loans, at March 31, 2013. Substandard and special mention loans also decreased $20.6 million, or 7%, to $268.7 million from $289.3 million at March 31, 2013. Net charge-offs for the second quarter of 2013 were $0.9 million compared to net charge-offs of $2.9 million in the first quarter of 2013. As a result of these improved asset quality metrics, the provision for loan losses was $1.0 million in the second quarter compared to $2.3 million in the first quarter of 2013. The allowance for loan losses (ALL) remained relatively unchanged at $46.1 million, or 1.34% of total loans, compared to $45.9 million, or 1.36% of total loans, at March 31, 2013. 

Noninterest Income and Expense Noninterest income decreased $1.9 million to $12.9 million compared to $14.8 million in the first quarter of 2013. The decrease was primarily due to a $3.1 million gain on the sale of the merchant card servicing business recognized in the first quarter. Debit and credit card fees increased $0.7 million from the prior quarter due to a $0.2 million increase in debit card fees and a $0.5 million increase related to the new merchant servicing agreement. Mortgage banking income increased $0.4 million in the second quarter due to the impact of increased interest rates on the valuation of mortgage servicing rights and mortgage commitments. Wealth Management fees increased $0.2 million from the prior quarter due to increased brokerage activity and higher assets under management.

Noninterest expense decreased $3.2 million to $28.4 million compared to $31.6 million in the first quarter of 2013 due to one-time expenses and seasonal items in the first quarter as well as expense control initiatives implemented in 2013. During the first quarter of 2013, total one-time expenses of $1.1 million were recognized that included merger integration costs of $0.8 million and branch closure costs of $0.3 million. Salaries and employee benefits decreased $1.3 million in part due to higher seasonal items in the first quarter, but also due to the benefits of branch consolidations and merger synergies. The decrease in other noninterest expense of $1.2 million related to a decrease in the reserve for unfunded commitments from the prior quarter.

Financial Condition Assets were $4.5 billion at both June 30, 2013 and March 31, 2013. Loan growth was strong during the second quarter of 2013 with an increase of $61.3 million, or 1.8%, in total portfolio loans. Commercial loans grew $44.5 million during the quarter with an increase in the commercial real estate (CRE) portfolio of $21.7 million, an increase of $20.5 million in the commercial and industrial (C&I) portfolio and an increase of $2.3 million in the commercial construction portfolio. The residential mortgage portfolio had a solid quarter with loan growth of $20.7 million. Total deposit balances remained relatively unchanged at $3.6 billion at both June 30, 2013 and March 31, 2013. 

The total risk-based capital ratio decreased by 130 basis points to 14.30% at June 30, 2013 from 15.60% at March 31, 2013. The decrease was due to the repayment of $45.0 million of subordinated debt during the second quarter. Tangible common equity to tangible assets (TCE ratio) decreased 3 basis points to 8.43% at June 30, 2013 compared to 8.46% at March 31, 2013. The TCE ratio was impacted by 17 basis points due to a decline in unrealized gains in the bond portfolio resulting from the increase in interest rates during the second quarter. 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 July 22, 2013. The dividend is payable August 23, 2013 to shareholders of record on August 8, 2013. This compares to a dividend of $0.15 per share for the first quarter of 2013.

Conference Call S&T will host its second quarter 2013 earnings conference call live over the Internet at 1:00 p.m. ET on Tuesday, July 23, 2013. To access the webcast, go to S&T's webpage at www.stbancorp.com and click on "Events & Presentations". Select "2nd 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 as well as a loan production office in Akron, Ohio. 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, 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 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

2013

2012

Second

First

Second

(in thousands, except per share data)

Quarter

Quarter

Quarter

INTEREST INCOME

Loans, including fees

$35,765

$35,045

$36,596

Investment securities:

Taxable

1,879

1,863

1,887

Tax-exempt

815

833

778

Dividends

94

102

109

Total Interest Income

38,553

37,843

39,370

INTEREST EXPENSE

Deposits

2,951

3,202

4,475

Borrowings and junior subordinated debt securities

1,006

972

1,076

Total Interest Expense

3,957

4,174

5,551

NET INTEREST INCOME

34,596

33,669

33,819

Provision for loan losses

1,023

2,307

7,023

Net interest income after provision for loan losses

33,573

31,362

26,796

NONINTEREST INCOME

Securities gains, net

-

2

6

Debit and credit card fees

3,150

2,451

2,839

Wealth management fees

2,820

2,576

2,577

Service charges on deposit accounts

2,495

2,448

2,432

Insurance fees

1,643

1,775

1,519

Mortgage banking

911

482

705

Gain on sale of merchant card servicing business 

-

3,093

-

Other

1,848

1,979

2,453

Total Noninterest Income

12,867

14,806

12,531

NONINTEREST EXPENSE

Salaries and employee benefits

14,725

16,067

14,641

Data processing

2,137

2,664

2,195

Net occupancy

1,958

2,169

1,832

Furniture and equipment

1,230

1,308

1,209

Professional services and legal

1,171

974

1,208

Other taxes

915

999

777

Marketing

793

689

655

FDIC assessment

707

776

719

Other

4,750

5,970

6,108

Total Noninterest Expense

28,386

31,616

29,344

Income Before Taxes

18,054

14,552

9,983

Provision for income taxes

3,951

2,222

1,383

Net Income

$14,103

$12,330

$8,600

Per Share Data: 

Shares outstanding at end of period

29,738,305

29,724,721

28,935,689

Average shares outstanding - diluted

29,677,876

29,674,406

28,810,754

Average shares outstanding - two-class method

29,729,012

29,729,702

28,914,729

Diluted earnings per share(1)

$0.47

$0.41

$0.30

Dividends declared per share

$0.15

$0.15

$0.15

Dividend yield (annualized)

3.06%

3.24%

3.25%

Dividends paid to net income

31.61%

36.17%

50.43%

Book value 

$18.39

$18.32

$17.65

Tangible book value(2)

$12.33

$12.24

$11.52

Market value

$19.60

$18.54

$18.47

Profitability Ratios (Annualized)

Return on average assets

1.26%

1.12%

0.80%

Return on average tangible assets(3)

1.31%

1.17%

0.83%

Return on average shareholders' equity 

10.36%

9.25%

6.80%

Return on average tangible shareholders' equity(4)

15.47%

13.91%

10.44%

Efficiency ratio (FTE)(5)

58.37%

63.68%

61.81%

 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

For the Six Months Ended June 30,

(in thousands, except per share data)

2013

2012

INTEREST INCOME

Loans, including fees

$70,810

$72,933

Investment securities:

Taxable

3,742

3,831

Tax-exempt

1,648

1,531

Dividends

196

215

Total Interest Income

76,396

78,510

INTEREST EXPENSE

Deposits

6,153

9,226

Borrowings and junior subordinated debt securities

1,978

2,144

Total Interest Expense

8,131

11,370

NET INTEREST INCOME

68,265

67,140

Provision for loan losses

3,330

16,296

Net interest income after provision for loan losses

64,935

50,844

NONINTEREST INCOME

Securities gains, net

2

846

Debit and credit card fees

5,601

5,506

Wealth management fees

5,396

4,996

Service charges on deposit accounts

4,943

4,841

Insurance fees

3,418

3,210

Mortgage banking

1,393

1,376

Gain on sale of merchant card servicing business 

3,093

-

Other

3,827

4,826

Total Noninterest Income

27,673

25,601

NONINTEREST EXPENSE

Salaries and employee benefits

30,792

31,113

Data processing

4,801

5,436

Net occupancy

4,127

3,616

Furniture and equipment

2,538

2,447

Professional services and legal

2,145

3,108

Other taxes

1,914

1,551

Marketing

1,482

1,397

FDIC assessment

1,483

1,327

Other

10,720

12,132

Total Noninterest Expense

60,002

62,127

Income Before Taxes

32,606

14,318

Provision for income taxes

6,173

2,238

Net Income

$26,433

$12,080

Per Share Data: 

Average shares outstanding - diluted

29,679,144

28,515,803

Average shares outstanding - two-class method

29,729,355

28,615,517

Diluted earnings per share(1)

$0.89

$0.42

Dividends declared per share

$0.30

$0.30

Dividends paid to net income

33.74%

70.83%

Profitability Ratios (Annualized)

Return on average assets

1.19%

0.57%

Return on average tangible assets(3)

1.24%

0.60%

Return on average shareholders' equity 

9.81%

4.83%

Return on average tangible shareholders' equity(4)

14.70%

7.41%

Efficiency ratio (FTE)(5)

61.05%

65.99%

 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

(in thousands)

2013

2013

2012

Second

First

Second

Quarter

Quarter

Quarter

ASSETS

Cash and due from banks, including interest-bearing deposits

$247,432

$261,124

$403,244

Securities available-for-sale, at fair value

479,821

469,418

368,486

Loans held for sale

3,185

2,580

2,275

Consumer loans:

Residential mortgage

463,446

442,705

398,412

Home equity

413,585

416,524

434,329

Installment and other consumer

67,983

68,773

78,768

Construction

2,807

3,105

2,208

Total consumer loans

947,821

931,107

913,717

Commercial loans:

Commercial real estate

1,501,491

1,479,796

1,401,751

Commercial and industrial

826,696

806,205

717,107

Construction

167,225

164,874

162,872

Total commercial loans

2,495,412

2,450,875

2,281,730

Total portfolio loans

3,443,233

3,381,982

3,195,447

Allowance for loan losses

(46,105)

(45,936)

(46,689)

Total portfolio loans, net

3,397,128

3,336,046

3,148,758

Goodwill

175,820

175,820

171,457

Other assets

225,373

234,875

253,172

Total Assets

$4,528,759

$4,479,863

$4,347,392

LIABILITIES

Deposits:

Noninterest-bearing demand

$947,747

$951,050

$887,442

Interest-bearing demand

297,028

304,667

314,519

Money market

329,065

326,489

305,523

Savings

1,003,705

993,472

911,963

Certificates of deposit

1,071,083

1,062,886

1,098,526

Total Deposits

3,648,628

3,638,564

3,517,973

Securities sold under repurchase agreements

74,151

64,358

46,740

Short-term borrowings

125,000

50,000

75,000

Long-term borrowings

22,965

23,535

35,218

Junior subordinated debt securities

45,619

90,619

90,619

Other liabilities

65,544

68,173

71,266

Total Liabilities

3,981,907

3,935,249

3,836,816

SHAREHOLDERS' EQUITY

Total Shareholders' Equity

546,852

544,614

510,576

Total Liabilities and Shareholders' Equity

$4,528,759

$4,479,863

$4,347,392

Capitalization Ratios

Shareholders' equity / assets

12.08%

12.16%

11.74%

Tangible common equity / tangible assets(6)

8.43%

8.46%

7.99%

Tier 1 leverage ratio

9.54%

9.42%

8.94%

Risk-based capital - tier 1

12.28%

12.20%

11.82%

Risk-based capital - total

14.30%

15.60%

15.33%

 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

(in thousands)

2013

2013

2012

Second

First

Second

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

Quarter

Quarter

Quarter

ASSETS

Loans

$3,419,393

4.28%

$3,358,099

4.32%

$3,203,349

4.67%

Taxable investment securities

365,799

2.04%

353,390

2.11%

277,677

2.66%

Tax-exempt investment securities

106,194

4.73%

110,438

4.64%

90,625

5.28%

Federal Home Loan Bank and other restricted stock

12,420

0.31%

14,420

0.52%

19,003

0.10%

Interest-bearing deposits with banks

186,265

0.28%

210,628

0.23%

330,647

0.22%

Total Interest-earning Assets

4,090,071

3.89%

4,046,975

3.91%

3,921,301

4.14%

Noninterest-earning assets

400,592

401,396

404,124

Total Assets

$4,490,663

$4,448,371

$4,325,425

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing demand

$303,461

0.02%

$310,161

0.02%

$303,535

0.07%

Money market

327,733

0.14%

338,246

0.15%

297,555

0.18%

Savings

1,001,258

0.18%

973,822

0.21%

888,434

0.28%

Certificates of deposit

1,047,868

0.91%

1,043,147

1.00%

1,146,931

1.28%

Securities sold under repurchase agreements

67,461

0.13%

63,338

0.17%

50,353

0.16%

Short-term borrowings

71,429

0.25%

61,111

0.22%

71,154

0.26%

Long-term borrowings

23,196

3.05%

29,485

3.18%

34,534

3.25%

Junior subordinated debt securities

82,817

3.70%

90,619

3.05%

90,619

3.23%

Total Interest-bearing Liabilities

2,925,223

0.54%

2,909,929

0.58%

2,883,115

0.77%

Noninterest-bearing demand

946,862

925,301

864,437

Other liabilities

72,370

72,714

69,167

Shareholders' equity

546,208

540,427

508,706

Total Liabilities and Shareholders' Equity

$4,490,663

$4,448,371

$4,325,425

Net Yield on Interest-earning Assets

3.51%

3.49%

3.57%

For the Six Months Ended June 30,

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

2013

2012

ASSETS

Loans

$3,388,915

4.30%

$3,169,433

4.70%

Taxable investment securities

359,622

2.07%

276,360

2.76%

Tax-exempt investment securities

108,310

4.68%

89,057

5.29%

Federal Home Loan Bank and other restricted stock

13,415

0.42%

19,011

0.15%

Interest-bearing deposits with banks

198,379

0.25%

280,944

0.21%

Total Interest-earning Assets

4,068,641

3.90%

3,834,805

4.22%

Noninterest-earning assets

400,901

399,850

Total Assets

$4,469,542

$4,234,655

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing demand

$306,792

0.02%

$298,261

0.06%

Money market

332,961

0.14%

288,086

0.17%

Savings

987,616

0.19%

859,339

0.25%

Certificates of deposit

1,045,521

0.95%

1,139,809

1.37%

Securities sold under repurchase agreements

65,411

0.15%

43,983

0.15%

Short-term borrowings

66,298

0.24%

73,242

0.25%

Long-term borrowings

26,323

3.12%

33,065

3.34%

Junior subordinated debt securities

86,696

3.36%

90,619

3.25%

Total Interest-bearing Liabilities

2,917,618

0.56%

2,826,404

0.81%

Noninterest-bearing demand

936,141

836,950

Other liabilities

72,450

68,496

Shareholders' equity

543,333

502,805

Total Liabilities and Shareholders' Equity

$4,469,542

$4,234,655

Net Yield on Interest-earning Assets

3.50%

3.63%

 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

(in thousands)

2013

2013

2012

Second

First

Second

Quarter

Quarter

Quarter

Nonaccrual Loans (NPL)

Consumer loans:

% NPL

% NPL

% NPL

Residential mortgage

$3,465

0.75%

$5,643

1.27%

$8,964

2.25%

Home equity

3,674

0.89%

4,022

0.97%

3,397

0.78%

Installment and other consumer

33

0.05%

21

0.03%

41

0.05%

Construction

-

0.00%

218

7.02%

399

18.07%

Total Nonaccrual Consumer Loans

7,172

0.76%

9,904

1.06%

12,801

1.40%

Commercial loans:

Commercial real estate

20,732

1.38%

25,836

1.75%

35,916

2.56%

Commercial and industrial

5,204

0.63%

5,380

0.67%

6,750

0.94%

Construction

4,775

2.86%

5,170

3.14%

13,646

8.38%

Total Nonaccrual Commercial Loans

30,711

1.23%

36,386

1.48%

56,312

2.47%

Total Nonaccrual Loans

$37,883

1.10%

$46,290

1.37%

$69,113

2.16%

2013

2013

2012

Second

First

Second

Quarter

Quarter

Quarter

Asset Quality Data

Nonaccrual loans

$37,883

$46,290

$69,113

Assets acquired through foreclosure or repossession

408

627

2,920

Nonperforming assets

38,291

46,917

72,033

Troubled debt restructurings (nonaccruing)

16,064

14,776

25,246

Troubled debt restructurings (accruing)

40,940

41,423

37,540

Total troubled debt restructurings

57,004

56,199

62,786

Nonaccrual loans / loans

1.10%

1.37%

2.16%

Nonperforming assets / loans plus OREO

1.11%

1.39%

2.25%

Allowance for loan losses / loans

1.34%

1.36%

1.46%

Allowance for loan losses / nonaccrual loans

122%

99%

68%

Net loan charge-offs

854

2,855

8,162

Net loan charge-offs (annualized) / average loans

0.10%

0.34%

1.02%

For the Six Months Ended June 30,

2013

2012

Asset Quality Data

Net loan charge-offs

3,708

18,448

Net loan charge-offs (annualized) / average loans

0.22%

1.17%

 

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

2013

2013

2012

Second

First

Second

Quarter

Quarter

Quarter

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)

Tangible Book Value

           Book value (GAAP basis)

$18.39

$18.32

$17.65

           Effect of excluding intangible assets

(6.06)

(6.08)

(6.13)

           Tangible book value

$12.33

$12.24

$11.52

(3)

Return on Average Tangible Assets

           Return on average assets (GAAP basis)

1.26%

1.12%

0.80%

           Effect of excluding intangible assets

0.05%

0.05%

0.03%

           Return on average tangible assets

1.31%

1.17%

0.83%

(4)

Return on Average Tangible Shareholders' Equity

           Return on average shareholders' equity (GAAP basis)

10.36%

9.25%

6.80%

           Effect of excluding intangible assets

5.11%

4.66%

3.64%

           Return on average tangible shareholders' equity

15.47%

13.91%

10.44%

(5)

Noninterest expense divided by noninterest income plus net interest income, on a fully

taxable equivalent (FTE) basis.

(6)

Tangible Common Equity / Tangible Assets

           Shareholders' equity / assets(GAAP basis)

12.08%

12.16%

11.74%

           Effect of excluding intangible assets

(3.65)%

(3.70)%

(3.75)%

           Tangible common equity / tangible assets

8.43%

8.46%

7.99%

(7)

Net Interest Income Rate (FTE)

           Net interest income (annualized) rate (GAAP basis)

3.78%

3.79%

4.02%

           Taxable equivalent adjustment

0.11%

0.12%

0.12%

           Net Interest Income Rate (FTE)

3.89%

3.91%

4.14%

           Net Interest Margin Rate (FTE)

           Net interest margin rate (GAAP basis)

3.40%

3.37%

3.45%

           Taxable equivalent adjustment

0.11%

0.12%

0.12%

           Net Interest Margin Rate (FTE)

3.51%

3.49%

3.57%

For the Six Months Ended June 30,

2013

2012

(3)

Return on Average Tangible Assets

           Return on average assets (GAAP basis)

1.19%

0.57%

           Effect of excluding intangible assets

0.05%

0.03%

           Return on average tangible assets

1.24%

0.60%

(4)

 Return on Average Tangible Shareholders' Equity

            Return on average shareholders' equity (GAAP basis)

9.81%

4.83%

            Effect of excluding intangible assets

4.89%

2.58%

            Return on average tangible shareholders' equity

14.70%

7.41%

(7)

Net Interest Income Rate (FTE)

           Net interest income (annualized) rate (GAAP basis)

3.78%

4.10%

           Taxable equivalent adjustment

0.12%

0.12%

           Net Interest Income Rate (FTE)

3.90%

4.22%

           Net Interest Margin Rate (FTE)

           Net interest margin rate (GAAP basis)

3.38%

3.51%

           Taxable equivalent adjustment

0.12%

0.12%

           Net Interest Margin Rate (FTE)

3.50%

3.63%

 

 

SOURCE S&T Bancorp, Inc.



RELATED LINKS

http://www.stbancorp.com