INDIANA, Pa., April 21, 2015 /PRNewswire/ -- S&T Bancorp, Inc. (S&T) (NASDAQ: STBA), the holding company for S&T Bank with branch locations in 16 southwestern and southcentral Pennsylvania counties, and loan production offices in northeast and central Ohio, and western New York, announced today its first quarter 2015 earnings. First quarter earnings were $12.8 million, or $0.41 per diluted share, compared to fourth quarter of 2014 earnings of $14.5 million, or $0.49 per diluted share, and first quarter of 2014 earnings of $14.0 million, or $0.47 per diluted share.

New S&T Bancorp, Inc. logo

Highlights:

  • The merger with Integrity Bancshares, Inc. (Integrity) closed on March 4, 2015. The first quarter results included $2.3 million, or $0.05 per diluted share, of merger related expenses.
  • S&T now has $6.0 billion in assets and a market cap of approximately $1.0 billion.
  • Net loan charge-offs to average loans remained low at 0.10% for the first quarter of 2015 compared to 0.05% for the fourth quarter of 2014.
  • S&T declared an $0.18 per share dividend compared to $0.17 in the same period a year ago.

"We are pleased to have closed on our merger with Integrity during the first quarter," said Todd Brice, president and chief executive officer of S&T.  "This represents a significant milestone for our organization and begins our expansion efforts into southcentral Pennsylvania.  It is exciting to see two organizations with such talented teams come together and work as one high-performing financial institution."

Merger with Integrity Bancshares, Inc.

The merger between S&T and Integrity (merger) closed on March 4, 2015.  Integrity Bank became a wholly-owned subsidiary of S&T, expanding S&T's geographic footprint into southcentral Pennsylvania with eight branches in four counties. Integrity Bank will merge into S&T Bank in the second quarter of 2015.  After the bank merger, S&T Bank intends to operate bank branches in the markets currently served by Integrity Bank using the name "Integrity Bank - a division of S&T Bank". The merger was valued at $172 million and added approximately $789 million of loans and $722 million of deposits on March 4, 2015.  Integrity's results are included in S&T's consolidated financial statements since March 4, 2015.  Merger related expenses were approximately $2.3 million, or $0.05 per diluted share, for the first quarter of 2015.

Net Interest Income

Net interest income increased $2.2 million to $40.3 million compared to $38.1 million for the fourth quarter of 2014. The increase in net interest income primarily related to the merger.  Net interest margin on a fully taxable equivalent basis (FTE) increased 5 basis points to 3.48% compared to 3.43% in the fourth quarter of 2014.  Net interest margin was positively impacted by a $0.3 million special dividend received from the Federal Home Loan Bank of Pittsburgh. 

Asset Quality

Total nonperforming assets increased $6.8 million to $19.4 million, or 0.33% of total assets at March 31, 2015 compared to $12.6 million, or 0.25% of total assets at December 31, 2014. The increase was primarily due to the addition of $5.0 million of nonperforming loans at S&T Bank and $1.3 million of other real estate owned added from the merger. Net charge-offs for the first quarter of 2015 were $1.0 million compared to net charge-offs of $0.5 million in the fourth quarter of 2014. The provision for loan losses was $1.2 million for the first quarter of 2015 compared to $1.1 million for the fourth quarter of 2014. The allowance for loan losses for originated loans was $48.1 million, or 1.27% of total originated loans, compared to $47.9 million, or 1.27% of total originated loans, at December 31, 2014.  Integrity acquired loans were recorded at fair value on the acquisition date and have no associated allowance for loan losses at March 31, 2015.

Noninterest Income and Expense

Noninterest income increased $0.9 million to $12.1 million compared to $11.2 million for the fourth quarter of 2014. The increase in noninterest income was primarily due to higher insurance fees and the merger.  Insurance fees increased $0.5 million due to $0.4 million of annual profit sharing received from insurance carriers.  Integrity added $0.4 million in fees, primarily in mortgage banking.  Noninterest expense increased $3.9 million to $33.6 million compared to $29.7 million in the fourth quarter of 2014.  The increase was mainly due to higher merger related expenses of $1.6 million and $1.4 million of operating expenses for Integrity. 

Financial Condition

Total assets increased $1.0 billion to $6.0 billion at March 31, 2015 compared to $5.0 billion at December 31, 2014.  Total portfolio loans increased $815 million of which $789 million related to the merger.  Excluding the merger, total loans grew $26.3 million from December 31, 2014.  Total deposits increased $920 million which included $722 million related to the merger. Excluding the merger, total deposits grew $198 million from December 31, 2014.  S&T's capital ratios were impacted this quarter compared to the fourth quarter of 2014 due to the merger and new requirements under Basel III.  All capital ratios remain above the well-capitalized thresholds of federal bank regulatory agencies.

Dividend

The Board of Directors of S&T declared an $0.18 per share cash dividend at its regular meeting held on April 20, 2015.   The dividend is payable on May 21, 2015 to shareholders of record on May 7, 2015.

Conference Call

S&T will host its first quarter 2015 earnings conference call live over the Internet at 1:00 p.m. ET on Tuesday, April 21, 2015. To access the webcast, go to S&T's webpage at www.stbancorp.com and click on "Events & Presentations." Select "1st Quarter 2015 Conference Call" and follow the instructions. 

About S&T Bancorp, Inc. and S&T Bank:

S&T Bancorp, Inc. is a $6.0 billion bank holding company that is headquartered in Indiana, Pa. and trades on the NASDAQ Global Select Market under the symbol STBA. Its principal subsidiary, S&T Bank, was established in 1902 and operates in 16 counties across southwestern and southcentral Pennsylvania, with loan production offices in northeast and central Ohio, and western New York. For more information visit www.stbancorp.com  or www.stbank.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















2015


2014


2014



First


Fourth


First


(dollars in thousands, except per share data)

Quarter


Quarter


Quarter


INTEREST INCOME







Loans, including fees

$       39,927


$       37,797


$       35,649


Investment securities:







Taxable

2,383


2,353


1,900


Tax-exempt

1,020


985


929


Dividends

586


246


187


Total Interest Income

43,916


41,381


38,665









INTEREST EXPENSE







Deposits

3,007


2,662


2,510


Borrowings and junior subordinated debt securities

650


653


564


Total Interest Expense

3,657


3,315


3,074









NET INTEREST INCOME

40,259


38,066


35,591


Provision for loan losses

1,207


1,106


289


Net Interest Income After Provision for Loan Losses

39,052


36,960


35,302









NONINTEREST INCOME







Securities gains, net

-


-


1


Wealth management fees

2,923


2,795


2,955


Debit and credit card fees

2,715


2,645


2,502


Service charges on deposit accounts

2,583


2,677


2,509


Insurance fees

1,651


1,132


1,677


Mortgage banking

525


251


132


Other

1,687


1,720


1,640


Total Noninterest Income

12,084


11,220


11,416









NONINTEREST EXPENSE







Salaries and employee benefits

16,780


14,471


15,376


Net occupancy

2,588


1,993


2,230


Data processing

2,320


2,271


2,095


Furniture and equipment

1,226


1,460


1,271


Other taxes

842


543


631


Marketing

816


981


618


FDIC insurance

695


618


631


Professional services and legal

523


1,229


663


Merger related expenses

2,301


689


-


Other

5,530


5,465


5,399


Total Noninterest Expense

33,621


29,720


28,914









Income Before Taxes

17,515


18,460


17,804


Provision for income taxes

4,680


3,963


3,771









Net Income

$       12,835


$       14,497


$       14,033









Per Share Data: 







Shares outstanding at end of period

34,797,526


29,796,397


29,718,126


Average shares outstanding - diluted

31,260,948


29,718,321


29,698,047


Average shares outstanding - two-class method

31,343,849


29,796,397


29,735,031


Diluted earnings per share(1)

$0.41


$0.49


$0.47


Dividends declared per share

$0.18


$0.18


$0.16


Dividend yield (annualized)

2.54%


2.42%


2.70%


Dividends paid to net income

41.74%


36.87%


33.91%


Book value 

$21.91


$20.42


$19.64


Tangible book value(3)

$13.40


$14.46


$13.65


Market value

$28.38


$29.81


$23.70









Profitability Ratios (annualized)







Return on average assets

0.99%


1.17%


1.23%


Return on average tangible assets(4)

1.05%


1.22%


1.30%


Return on average shareholders' equity 

7.85%


9.38%


9.83%


Return on average tangible shareholders' equity(5)

11.80%


13.35%


14.41%









Efficiency ratio (FTE)(2)

62.57%


58.67%


59.83%


 

 

 

S&T Bancorp, Inc.






Consolidated Selected Financial Data






Unaudited













2015


2014


2014


First


Fourth


First

(dollars in thousands)

Quarter


Quarter


Quarter

ASSETS






Cash and due from banks, including interest-bearing deposits

$     124,737


$     109,580


$     185,303

Securities available-for-sale, at fair value

655,829


640,273


551,896

Loans held for sale

6,126


2,970


1,133

Commercial loans:






Commercial real estate

2,152,413


1,682,236


1,607,958

Commercial and industrial

1,211,053


994,138


884,870

Commercial construction

286,166


216,148


167,432

Total Commercial Loans

3,649,632


2,892,522


2,660,260

Consumer loans:






Residential mortgage

521,506


489,586


490,120

Home equity

442,396


418,563


410,695

Installment and other consumer

65,754


65,567


64,561

Consumer construction

4,410


2,508


2,260

Total Consumer Loans

1,034,066


976,224


967,636

Total portfolio loans

4,683,698


3,868,746


3,627,896

Allowance for loan losses

(48,106)


(47,911)


(46,616)

Total portfolio loans, net

4,635,592


3,820,835


3,581,280

Goodwill

290,617


175,820


175,820

Other assets

258,392


215,208


211,555

Total Assets

$  5,971,293


$  4,964,686


$  4,706,987







LIABILITIES






Deposits:






Noninterest-bearing demand

$  1,177,623


$  1,083,919


$  1,032,372

Interest-bearing demand

686,546


335,099


312,477

Money market

617,609


376,612


360,414

Savings

1,073,755


1,027,095


1,034,388

Certificates of deposit

1,272,998


1,086,117


1,128,630

Total Deposits

4,828,531


3,908,842


3,868,281







Securities sold under repurchase agreements

46,721


30,605


38,434

Short-term borrowings

199,573


290,000


100,000

Long-term borrowings

18,838


19,442


21,226

Junior subordinated debt securities

50,619


45,619


45,619

Other liabilities

64,753


61,789


49,776

Total Liabilities

5,209,035


4,356,297


4,123,336







SHAREHOLDERS' EQUITY






Total Shareholders' Equity

762,258


608,389


583,651

Total Liabilities and Shareholders' Equity

$  5,971,293


$  4,964,686


$  4,706,987







Capitalization Ratios






Shareholders' equity / assets

12.77%


12.25%


12.40%

Tangible common equity / tangible assets(6)

8.22%


9.00%


8.96%

Tier 1 leverage ratio

10.06%


9.80%


9.79%

Common equity tier 1 capital

9.82%


11.81%


11.86%

Risk-based capital - tier 1

10.22%


12.34%


12.43%

Risk-based capital - total

11.86%


14.27%


14.41%

 

 

 

S&T Bancorp, Inc.







Consolidated Selected Financial Data







Unaudited















2015


2014


2014


(dollars in thousands)

First


Fourth


First


Net Interest Margin (FTE) (QTD Averages)

Quarter


Quarter


Quarter


ASSETS







Loans

$  4,122,631

4.01%

$  3,845,351

3.98%

$  3,576,484

4.13%

Taxable investment securities

504,867

1.97%

488,257

1.99%

395,470

1.98%

Tax-exempt investment securities

142,194

4.41%

134,355

4.51%

121,464

4.71%

Federal Home Loan Bank and other restricted stock

15,427

12.66%

14,420

4.17%

13,391

2.70%

Interest-bearing deposits with banks

65,575

0.22%

79,814

0.27%

147,890

0.23%

Total Interest-earning Assets

4,850,694

3.78%

4,562,197

3.72%

4,254,699

3.82%








Noninterest-earning assets

421,132


373,068


377,462


Total Assets

$  5,271,826


$  4,935,265


$  4,632,161









LIABILITIES AND SHAREHOLDERS' EQUITY







Interest-bearing demand

$     432,009

0.08%

$     335,479

0.02%

$     313,420

0.02%

Money market

362,939

0.18%

299,732

0.17%

350,314

0.15%

Savings

1,052,347

0.16%

1,048,359

0.16%

1,014,205

0.16%

Certificates of deposit

991,542

0.87%

923,468

0.81%

910,716

0.81%

CDARS and brokered deposits

260,555

0.34%

233,650

0.36%

190,598

0.33%

Securities sold under repurchase agreements

40,039

0.01%

25,137

0.01%

36,596

0.01%

Short-term borrowings

236,440

0.32%

249,185

0.32%

127,778

0.31%

Long-term borrowings

19,086

3.01%

19,685

2.96%

21,466

3.06%

Junior subordinated debt securities

47,175

2.77%

45,619

2.67%

45,619

2.69%

Total Interest-bearing Liabilities

3,442,132

0.43%

3,180,314

0.41%

3,010,712

0.41%








Noninterest-bearing demand

1,101,795


1,091,638


989,799


Other liabilities

64,643


50,033


52,851


Shareholders' equity

663,256


613,280


578,799


Total Liabilities and Shareholders' Equity

$  5,271,826


$  4,935,265


$  4,632,161









Net Interest Margin (7)


3.48%


3.43%


3.51%

 

 

 

S&T Bancorp, Inc.







Consolidated Selected Financial Data







Unaudited















2015


2014


2014



First


Fourth


First


(dollars in thousands)

Quarter


Quarter


Quarter


Nonperforming Loans (NPL)







Commercial loans:


% NPL


% NPL


% NPL

Commercial real estate

$         8,386

0.39%

$         4,434

0.26%

$       10,265

0.64%

Commercial and industrial

3,550

0.29%

1,622

0.16%

3,181

0.36%

Commercial construction

1,973

0.69%

1,974

0.91%

1,976

1.18%

Total Nonperforming Commercial Loans

13,909

0.38%

8,030

0.28%

15,422

0.58%

Consumer loans:







Residential mortgage

2,226

0.43%

2,336

0.48%

2,948

0.60%

Home equity

1,986

0.45%

2,060

0.49%

2,630

0.64%

Installment and other consumer

13

0.02%

31

0.05%

22

0.03%

Consumer construction

-

-

-

-

-

-

Total Nonperforming Consumer Loans

4,225

0.41%

4,427

0.45%

5,600

0.58%

Total Nonperforming Loans

$       18,134

0.39%

$       12,457

0.32%

$       21,022

0.58%









2015


2014


2014



First


Fourth


First



Quarter


Quarter


Quarter


Asset Quality Data







Nonperforming loans

$       18,134


$       12,457


$       21,022


Assets acquired through foreclosure or repossession

1,294


166


343


Nonperforming assets

19,428


12,623


21,365


Troubled debt restructurings (nonaccruing)

9,916


5,436


9,269


Troubled debt restructurings (accruing)

36,423


36,983


36,059


Total troubled debt restructurings

46,339


42,419


45,328


Nonperforming loans / loans

0.39%


0.32%


0.58%


Nonperforming assets / loans plus OREO

0.41%


0.33%


0.59%


Allowance for loan losses / originated loans

1.27%


1.27%


1.28%


Allowance for loan losses / total loans

1.03%


1.24%


1.28%


Allowance for loan losses / nonperforming loans

265%


385%


222%


Net loan charge-offs

$         1,014


$             511


$             (72)


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

0.10%


0.05%


(0.01%)









 

 

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.








2015


2014


2014


First


Fourth


First


Quarter


Quarter


Quarter







(3)  Tangible Book Value (non-GAAP)






 Total shareholders' equity

$     762,258


$     608,389


$     583,651

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

(295,814)


(177,530)


(178,059)

 Tangible common equity (non-GAAP)

$     466,444


$     430,859


$     405,592

 Common shares outstanding

34,798


29,796


29,718

 Tangible book value (non-GAAP)

$         13.40


$         14.46


$         13.65







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






 Net income (annualized)

$       52,054


$       57,514


$       56,912

 Plus: amortization of intangibles net of tax (annualized)

917


659


833

 Net income before amortization of intangibles (annualized)

52,971


58,173


57,745







 Average total assets

5,271,826


4,935,265


4,632,161

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

(214,299)


(177,619)


(178,164)

 Average tangible assets (non-GAAP)

$  5,057,527


$  4,757,646


$  4,453,997

 Return on average tangible assets (non-GAAP)

1.05%


1.22%


1.30%







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






  Net income (annualized)

$       52,054


$       57,514


$       56,912

  Plus: amortization of intangibles net of tax (annualized)

917


659


833

  Net income before amortization of intangibles (annualized)

52,971


58,173


57,745







  Average total shareholders' equity

663,256


613,280


578,799

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

(214,299)


(177,619)


(178,164)

  Average tangible equity (non-GAAP)

$     448,957


$     435,661


$     400,635

  Return on average tangible equity (non-GAAP)

11.80%


13.35%


14.41%







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






 Total shareholders' equity

$     762,258


$     608,389


$     583,651

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

(295,814)


(177,530)


(178,059)

 Tangible common equity (non-GAAP)

466,444


430,859


405,592







 Total assets 

5,971,293


4,964,686


4,706,987

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

(295,814)


(177,530)


(178,059)

 Tangible assets (non-GAAP)

$  5,675,479


$  4,787,156


$  4,528,928

 Tangible common equity to tangible assets (non-GAAP)

8.22%


9.00%


8.96%







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






 Interest income

$       43,916


$       41,381


$       38,665

 Less: interest expense

(3,657)


(3,315)


(3,074)

 Net interest income per consolidated statements of net income

40,259


38,066


35,591

 Plus: taxable equivalent adjustment

1,392


1,371


1,323

 Net interest income (FTE) (non-GAAP)

41,651


39,437


36,914

 Net interest income (FTE) (annualized)

168,918


156,462


149,707

 Average earning assets

$  4,850,694


$  4,562,197


$  4,254,699

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

3.48%


3.43%


3.51%

 

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SOURCE S&T Bancorp, Inc.

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