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

Oct 29, 2013, 07:30 ET from S&T Bancorp, Inc.

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