2014

S&T Bancorp, Inc. Announces Third Quarter Earnings and Declares an Increased Dividend

INDIANA, Pa., Oct. 29, 2013 /PRNewswire/ -- S&T Bancorp, Inc. (S&T) (NASDAQ: STBA) has announced its third quarter earnings. Net income for the third quarter of 2013 was $12.2 million, or $0.41 per diluted share, compared to the second quarter of 2013 net income of $14.1 million, or $0.47 per diluted share, and the third quarter of 2012 net income of $12.6 million, or $0.43 per diluted share.

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

Third Quarter Highlights

  • Total average loans increased $57.5 million, or 1.7%, from the prior quarter.
  • Net interest income increased $0.7 million and net interest margin (FTE) was stable at 3.50%.
  • Asset quality continued to improve with a decrease in nonperforming assets (NPAs) of $1.4 million, or 3.7%, from the prior quarter and $30.7 million, or 45%, from the third quarter of 2012.
  • S&T's Board of Directors approved a 6.7% increase in the quarterly cash dividend to $0.16 per share.

"Our quarterly results reflect another strong quarter of performance with solid loan growth, continued asset quality improvement and an increase in net interest income," said Todd Brice, president and chief executive officer of S&T. "We are also pleased to announce the increase in our quarterly cash dividend which is a reflection of S&T's strong earnings and capital position."

Net Interest Income
Net interest income increased $0.7 million, or 2.0%, to $35.3 million compared to $34.6 million in the prior quarter. Net interest margin on a fully taxable equivalent basis (FTE) decreased one basis point to 3.50% compared to 3.51% in the second quarter of 2013. Both net interest income and net interest margin (FTE) were positively impacted by an improvement in funding costs during the third quarter of 2013. The improvement in funding costs was primarily due to the repayment of $45.0 million of subordinated debt late in the second quarter of 2013 which was replaced with lower costing short-term borrowings. Additionally, maturities of higher costing certificates of deposits shifted to lower costing deposits. Interest income remained unchanged as the positive impact from a $50.8 million increase in average earning assets was offset by a decrease in the earning asset rate of 7 basis points to 3.82% compared to 3.89% in the prior quarter.

Asset Quality
Asset quality continues to improve. Total nonperforming loans (NPLs) were $36.4 million, or 1.04%, of total loans at September 30, 2013, which represents a 3.9% decrease from $37.9 million, or 1.10%, of total loans at June 30, 2013.  Special mention and substandard loans also decreased $46.4 million, or 17%, to $222.3 million from $268.7 million at June 30, 2013. Net charge-offs for the third quarter of 2013 were $1.5 million compared to net charge-offs of $0.9 million in the second quarter of 2013. The provision for loan losses was $3.4 million in the third quarter of 2013 compared to $1.0 million in the second quarter of 2013 primarily due to an increase of $3.1 million in specific reserves. The allowance for loan losses (ALL) increased slightly to $48.0 million, or 1.37% of total loans, compared to $46.1 million, or 1.34% of total loans, at June 30, 2013.

Noninterest Income and Expense
Noninterest income decreased $0.4 million to $12.5 million compared to $12.9 million in the second quarter of 2013. Mortgage banking income decreased $0.6 million primarily due to the increase in interest rates that occurred in the second quarter of 2013. Debit and credit card fees decreased $0.4 million due to a decrease in merchant revenue. Service charges on deposit accounts increased $0.3 million due to changes in certain deposits fees implemented late in the second quarter of 2013. Other income increased $0.4 million primarily related to interest rate swap fees from our commercial customers.

Noninterest expense decreased $0.4 million, or 1.6%, to $27.9 million compared to $28.4 million in the second quarter of 2013. There were no significant changes to expense categories from the prior quarter. The third quarter results reflect the benefit of expense control initiatives implemented in the first half of 2013.

Financial Condition
Total assets increased to $4.6 billion at September 30, 2013 compared to $4.5 billion at June 30, 2013 and $4.4 billion at September 30, 2012. Loan growth was strong during the quarter with an increase of $68.1 million, or 2.0%, in total portfolio loans. Commercial loans grew $52.3 million, or 2.1%, during the quarter, due to strong growth in the commercial real estate portfolio. Consumer loans increased $15.8 million during the quarter with the majority of the growth in residential mortgages of $13.7 million, or 3.0%. Total deposit balances increased $45.6 million, or 1.2%, compared to June 30, 2013. The deposit mix improved with an increase in demand deposit accounts of $53.8 million, or 4.3%, from June 30, 2013. S&T's risk-based capital ratios are down slightly this quarter as loan and commitment growth outpaced increased capital from retained earnings. 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 $0.16 per share cash dividend at its regular meeting held October 28, 2013, representing a 6.7% increase over the prior quarter cash dividend of $0.15 per share. The dividend is payable on November 29, 2013 to shareholders of record on November 15, 2013.

Conference Call
S&T will host its third quarter 2013 earnings conference call live over the Internet at 1:00 p.m. ET on Tuesday, October 29, 2013. To access the webcast, go to S&T's webpage at www.stbancorp.com and click on "Events & Presentations." Select "3rd 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 northeast Ohio. With assets of $4.6 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 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














2013


2013


2012



Third


Second


Third


(in thousands, except per share data)

Quarter


Quarter


Quarter


INTEREST INCOME







Loans, including fees

$35,733


$35,765


$36,121


Investment securities:







Taxable

1,889


1,879


1,829


Tax-exempt

865


815


788


Dividends

94


94


82


Total Interest Income

38,581


38,553


38,820









INTEREST EXPENSE







Deposits

2,717


2,951


3,958


Borrowings and junior subordinated debt securities

590


1,006


1,067


Total Interest Expense

3,307


3,957


5,025









NET INTEREST INCOME

35,274


34,596


33,795


Provision for loan losses

3,419


1,023


2,305


Net interest income after provision for loan losses

31,855


33,573


31,490









NONINTEREST INCOME







Securities gains, net

3


-


2,170


Service charges on deposit accounts

2,801


2,495


2,567


Debit and credit card fees

2,764


3,150


2,966


Wealth management fees

2,747


2,820


2,397


Insurance fees

1,738


1,643


1,731


Mortgage banking

265


911


797


Other

2,224


1,848


2,118


Total Noninterest Income

12,542


12,867


14,746









NONINTEREST EXPENSE







Salaries and employee benefits

14,910


14,725


14,819


Data processing

2,137


2,137


2,012


Net occupancy

1,910


1,958


1,978


Furniture and equipment

1,084


1,230


1,414


Other taxes

1,039


915


982


Professional services and legal

996


1,171


1,440


FDIC assessment

629


707


838


Marketing

607


793


759


Other

4,631


4,750


6,776


Total Noninterest Expense

27,943


28,386


31,018









Income Before Taxes

16,454


18,054


15,218


Provision for income taxes

4,207


3,951


2,623









Net Income

$12,247


$14,103


$12,595









Per Share Data: 







Shares outstanding at end of period

29,738,305


29,738,305


29,733,592


Average shares outstanding - diluted

29,685,600


29,677,876


29,277,232


Average shares outstanding - two-class method

29,738,305


29,729,012


29,360,990


Diluted earnings per share(1)

$0.41


$0.47


$0.43


Dividends declared per share

$0.15


$0.15


$0.15


Dividend yield (annualized)

2.48%


3.06%


3.41%


Dividends paid to net income

36.42%


31.61%


34.47%


Book value 

$18.68


$18.39


$17.97


Tangible book value(2)

$12.63


$12.33


$11.86


Market value

$24.22


$19.60


$17.61









Profitability Ratios (Annualized)







Return on average assets

1.07%


1.26%


1.15%


Return on average tangible assets(3)

1.12%


1.31%


1.19%


Return on average shareholders' equity 

8.86%


10.36%


9.56%


Return on average tangible shareholders' equity(4)

13.19%


15.47%


14.52%


Efficiency ratio (FTE)(5)

56.97%


58.37%


65.31%
















S&T Bancorp, Inc.






Consolidated Selected Financial Data






Unaudited















For the Nine Months Ended September 30,

(in thousands, except per share data)



2013


2012


INTEREST INCOME







Loans, including fees



$106,543


$109,054


Investment securities:







Taxable



5,631


5,660


Tax-exempt



2,513


2,319


Dividends



290


297


Total Interest Income



114,977


117,330









INTEREST EXPENSE







Deposits



8,870


13,184


Borrowings and junior subordinated debt securities



2,568


3,211


Total Interest Expense



11,438


16,395









NET INTEREST INCOME



103,539


100,935


Provision for loan losses



6,749


18,600


Net interest income after provision for loan losses



96,790


82,335









NONINTEREST INCOME







Securities gains, net



5


3,016


Debit and credit card fees



8,365


8,472


Wealth management fees



8,143


7,393


Service charges on deposit accounts



7,744


7,407


Insurance fees



5,156


4,941


Mortgage banking



1,658


2,174


Gain on sale of merchant card servicing business 



3,093


-


Other



6,051


6,944


Total Noninterest Income



40,215


40,347









NONINTEREST EXPENSE







Salaries and employee benefits



45,701


45,933


Data processing



6,938


7,448


Net occupancy



6,037


5,594


Furniture and equipment



3,623


3,861


Professional services and legal



3,141


4,548


Other taxes



2,953


2,533


FDIC assessment



2,112


2,164


Marketing



2,088


2,156


Other



15,352


18,909


Total Noninterest Expense



87,945


93,146









Income Before Taxes



49,060


29,536


Provision for income taxes



10,380


4,861









Net Income



$38,680


$24,675









Per Share Data: 







Average shares outstanding - diluted



29,679,778


28,774,196


Average shares outstanding - two-class method



29,732,371


28,865,822


Diluted earnings per share(1)



$1.30


$0.85


Dividends declared per share



$0.45


$0.45


Dividends paid to net income



34.59%


52.27%









Profitability Ratios (Annualized)







Return on average assets



1.15%


0.77%


Return on average tangible assets(3)



1.20%


0.80%


Return on average shareholders' equity 



9.49%


6.46%


Return on average tangible shareholders' equity(4)



14.19%


9.88%


Efficiency ratio (FTE)(5)



59.69%


65.76%
















S&T Bancorp, Inc.






Consolidated Selected Financial Data






Unaudited














2013


2013


2012



Third


Second


Third


(in thousands)

Quarter


Quarter


Quarter


ASSETS







Cash and due from banks, including interest-bearing deposits

$234,928


$247,432


$347,076


Securities available-for-sale, at fair value

488,162


479,821


414,644


Loans held for sale

3,695


3,185


3,188


Commercial loans:







Commercial real estate

1,567,814


1,501,491


1,438,526


Commercial and industrial

827,699


826,696


748,569


Construction

152,206


167,225


157,717


    Total commercial loans

2,547,719


2,495,412


2,344,812


Consumer loans:







Residential mortgage

477,141


463,446


409,967


Home equity

413,097


413,585


447,123


Installment and other consumer

69,043


67,983


75,157


Construction

4,335


2,807


2,098


    Total consumer loans

963,616


947,821


934,345


Total portfolio loans

3,511,335


3,443,233


3,279,157


  Allowance for loan losses

(47,983)


(46,105)


(46,279)


Total portfolio loans, net

3,463,352


3,397,128


3,232,878


Goodwill

175,820


175,820


175,733


Other assets

222,171


225,373


248,739


Total Assets

$4,588,128


$4,528,759


$4,422,258









LIABILITIES







Deposits:







Noninterest-bearing demand

$974,262


$947,747


$928,000


Interest-bearing demand

324,291


297,028


321,785


Money market

308,445


329,065


316,673


Savings

1,039,115


1,003,705


949,521


Certificates of deposit

1,048,090


1,071,083


1,078,427


Total Deposits

3,694,203


3,648,628


3,594,406









Securities sold under repurchase agreements

33,290


74,151


49,261


Short-term borrowings

175,000


125,000


25,000


Long-term borrowings

22,390


22,965


40,669


Junior subordinated debt securities

45,619


45,619


90,619


Other liabilities

62,198


65,544


88,061


Total Liabilities

4,032,700


3,981,907


3,888,016









SHAREHOLDERS' EQUITY







Total Shareholders' Equity

555,428


546,852


534,242


Total Liabilities and Shareholders' Equity

$4,588,128


$4,528,759


$4,422,258









Capitalization Ratios







Shareholders' equity / assets

12.11%


12.08%


12.08%


Tangible common equity / tangible assets(6)

8.52%


8.43%


8.32%


Tier 1 leverage ratio

9.61%


9.54%


9.27%


Risk-based capital - tier 1

12.26%


12.28%


12.01%


Risk-based capital - total

14.27%


14.30%


15.45%
















S&T Bancorp, Inc.






Consolidated Selected Financial Data






Unaudited














2013


2013


2012


(in thousands)

Third


Second


Third


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

Quarter


Quarter


Quarter


ASSETS







Loans

$3,476,914

4.16%

$3,419,393

4.28%

$3,226,219

4.52%

Taxable investment securities

378,678

1.98%

365,799

2.04%

289,519

2.36%

Tax-exempt investment securities

108,982

4.88%

106,194

4.73%

97,624

4.97%

Federal Home Loan Bank and other restricted stock

13,910

0.83%

12,420

0.31%

17,738

0.10%

Interest-bearing deposits with banks

162,381

0.27%

186,265

0.28%

329,985

0.28%

Total Interest-earning Assets

4,140,865

3.82%

4,090,071

3.89%

3,961,085

4.00%








Noninterest-earning assets

391,001


400,592


411,528


Total Assets

$4,531,866


$4,490,663


$4,372,613









LIABILITIES AND SHAREHOLDERS' EQUITY







Interest-bearing demand

$311,369

0.02%

$303,461

0.02%

$314,013

0.04%

Money market

323,671

0.14%

327,733

0.14%

321,312

0.17%

Savings

1,019,647

0.15%

1,001,258

0.18%

931,680

0.28%

Certificates of deposit

1,050,954

0.83%

1,047,868

0.91%

1,079,894

1.15%

Securities sold under repurchase agreements

59,390

0.09%

67,461

0.13%

54,090

0.18%

Short-term borrowings

127,174

0.28%

71,429

0.25%

40,699

0.29%

Long-term borrowings

22,625

3.01%

23,196

3.05%

34,892

3.18%

Junior subordinated debt securities

45,619

2.72%

82,817

3.70%

90,619

3.20%

Total Interest-bearing Liabilities

2,960,449

0.44%

2,925,223

0.54%

2,867,199

0.70%








Noninterest-bearing demand

955,337


946,862


903,949


Other liabilities

67,639


72,370


77,354


Shareholders' equity

548,441


546,208


524,111


Total Liabilities and Shareholders' Equity

$4,531,866


$4,490,663


$4,372,613









Net Interest Margin


3.50%


3.51%


3.50%










For the Nine Months Ended September 30,

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



2013


2012


ASSETS







Loans



$3,418,571

4.25%

$3,188,500

4.64%

Taxable investment securities



366,025

2.04%

280,781

2.62%

Tax-exempt investment securities



108,556

4.75%

91,930

5.18%

Federal Home Loan Bank and other restricted stock



13,582

0.56%

18,584

0.14%

Interest-bearing deposits with banks



186,248

0.26%

297,410

0.24%

Total Interest-earning Assets



4,092,982

3.87%

3,877,205

4.15%








Noninterest-earning assets



397,563


403,034


Total Assets



$4,490,545


$4,280,239









LIABILITIES AND SHAREHOLDERS' EQUITY







Interest-bearing demand



$308,335

0.02%

$303,550

0.05%

Money market



329,830

0.14%

299,242

0.17%

Savings



998,410

0.18%

883,629

0.26%

Certificates of deposit



1,047,351

0.91%

1,119,692

1.30%

Securities sold under repurchase agreements



63,382

0.13%

47,377

0.16%

Short-term borrowings



86,813

0.26%

62,315

0.26%

Long-term borrowings



25,077

3.09%

33,678

3.28%

Junior subordinated debt securities



72,853

3.23%

90,619

3.24%

Total Interest-bearing Liabilities



2,932,051

0.52%

2,840,102

0.77%








Noninterest-bearing demand



942,610


859,446


Other liabilities



70,829


70,732


Shareholders' equity



545,055


509,959


Total Liabilities and Shareholders' Equity



$4,490,545


$4,280,239









Net Interest Margin




3.50%


3.58%















S&T Bancorp, Inc.






Consolidated Selected Financial Data






Unaudited














2013


2013


2012



Third


Second


Third


(in thousands)

Quarter


Quarter


Quarter


Nonaccrual Loans (NPL)







Commercial loans:


% NPL


% NPL


% NPL

Commercial real estate

$16,479

1.05%

$20,732

1.38%

$32,828

2.28%

Commercial and industrial

3,897

0.47%

5,204

0.63%

6,851

0.92%

Construction

9,684

6.36%

4,775

2.86%

14,411

9.14%

   Total Nonaccrual Commercial Loans

30,060

1.18%

30,711

1.23%

54,090

2.31%

Consumer loans:







Residential mortgage

3,021

0.63%

3,465

0.75%

7,584

1.85%

Home equity

3,291

0.80%

3,674

0.89%

3,994

0.89%

Installment and other consumer

27

0.04%

33

0.05%

49

0.07%

Construction

-

-

-

-

399

19.02%

   Total Nonaccrual Consumer Loans

6,339

0.66%

7,172

0.76%

12,026

1.29%

Total Nonaccrual Loans

$36,399

1.04%

$37,883

1.10%

$66,116

2.02%









2013


2013


2012



Third


Second


Third



Quarter


Quarter


Quarter


Asset Quality Data







Nonaccrual loans

$36,399


$37,883


$66,116


Assets acquired through foreclosure or repossession

460


408


1,468


Nonperforming assets

36,859


38,291


67,584


Troubled debt restructurings (nonaccruing)

20,394


16,064


23,414


Troubled debt restructurings (accruing)

35,624


40,940


37,110


Total troubled debt restructurings

56,018


57,004


60,524


Nonaccrual loans / loans

1.04%


1.10%


2.01%


Nonperforming assets / loans plus OREO

1.05%


1.11%


2.06%


Allowance for loan losses / loans

1.37%


1.34%


1.41%


Allowance for loan losses / nonaccrual loans

132%


122%


70%


Net loan charge-offs

1,541


854


2,715


Net loan charge-offs (annualized) / average loans

0.18%


0.10%


0.33%











For the Nine Months Ended September 30,




2013


2012


Asset Quality Data







Net loan charge-offs



5,250


21,162


Net loan charge-offs (annualized) / average loans



0.21%


0.89%
















S&T Bancorp, Inc.







Consolidated Selected Financial Data







Unaudited















2013


2013


2012



Third


Second


Third



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)

$18.68


$18.39


$17.97


     Effect of excluding intangible assets

(6.05)


(6.06)


(6.11)


     Tangible book value

$12.63


$12.33


$11.86









(3)  Return on Average Tangible Assets







     Return on average assets (GAAP basis)

1.07%


1.26%


1.15%


     Effect of excluding intangible assets

0.05%


0.05%


0.04%


     Return on average tangible assets

1.12%


1.31%


1.19%









(4)  Return on Average Tangible Shareholders' Equity







     Return on average shareholders' equity (GAAP basis)

8.86%


10.36%


9.56%


     Effect of excluding intangible assets

4.33%


5.11%


4.96%


     Return on average tangible shareholders' equity

13.19%


15.47%


14.52%









(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)

12.11%


12.08%


12.08%


     Effect of excluding intangible assets

(3.59)%


(3.65)%


(3.76)%


     Tangible common equity / tangible assets

8.52%


8.43%


8.32%









(7) Interest Income Rate (FTE)







    Interest income (annualized) rate (GAAP basis)

3.70%


3.78%


3.89%


    Taxable equivalent adjustment

0.12%


0.11%


0.11%


    Interest income rate (FTE)

3.82%


3.89%


4.00%









    Net Interest Margin Rate (FTE)







    Net interest margin rate (GAAP basis)

3.38%


3.40%


3.38%


    Taxable equivalent adjustment

0.12%


0.11%


0.12%


    Net interest margin rate (FTE)

3.50%


3.51%


3.50%











For the Nine Months Ended September 30,




2013


2012


(3)  Return on Average Tangible Assets







     Return on average assets (GAAP basis)



1.15%


0.77%


     Effect of excluding intangible assets



0.05%


0.03%


     Return on average tangible assets



1.20%


0.80%









(4)  Return on Average Tangible Shareholders' Equity







     Return on average shareholders' equity (GAAP basis)



9.49%


6.46%


     Effect of excluding intangible assets



4.70%


3.42%


     Return on average tangible shareholders' equity



14.19%


9.88%









(7) Interest Income Rate (FTE)







    Interest income (annualized) rate (GAAP basis)



3.76%


4.03%


    Taxable equivalent adjustment



0.11%


0.12%


    Interest income rate (FTE)



3.87%


4.15%









    Net Interest Margin Rate (FTE)







    Net interest margin rate (GAAP basis)



3.38%


3.47%


    Taxable equivalent adjustment



0.12%


0.11%


    Net interest margin rate (FTE)



3.50%


3.58%


 

SOURCE S&T Bancorp, Inc.



RELATED LINKS
http://www.stbancorp.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.