PR Newswire | Oct 22, 2020 07:31AM EDT

10/22 06:30 CDT

S&T Bancorp, Inc. Announces Third Quarter 2020 Results INDIANA, Pa., Oct. 22, 2020

INDIANA, Pa., Oct. 22, 2020 /PRNewswire/ -- S&T Bancorp, Inc. (S&T) (NASDAQ: STBA), the holding company for S&T Bank, with operations in five markets including Western Pennsylvania, Eastern Pennsylvania, Northeast Ohio, Central Ohio and Upstate New York, announced net income of $16.7 million, or $0.43 per diluted share, for the third quarter of 2020 compared to a net loss of ($33.1) million, or ($0.85) per diluted share, for the second quarter of 2020, and net income of $26.9 million, or $0.79 per diluted share, for the third quarter of 2019. The net loss in the second quarter of 2020 was due to a customer fraud resulting from a check kiting scheme which reduced net income by $46.3 million, or $1.19 per diluted share. S&T continues to pursue all available sources of recovery to mitigate the loss.

Third Quarter of 2020 Highlights

* Return on average assets (ROA) was 0.72%, return on average equity (ROE) was 5.80% and return on average tangible equity (ROTE) (non-GAAP) was 8.96%. Pre-tax pre-provision to average assets (non-GAAP) was 1.61%. * Net interest margin (FTE) (non-GAAP) was stable at 3.29% compared to 3.31% for the second quarter of 2020. * Portfolio loans decreased $153.7 million compared to June 30, 2020. * Deposits decreased $234.1 million to $7.6 billion at September 30, 2020 due to the pay down of $269.0 million of brokered deposits during the third quarter. * Mortgage banking revenue increased $1.3 million compared to the second quarter due to continued strong refinance activity. * The allowance for credit losses to total portfolio loans was 1.64% at September 30, 2020 compared to 1.52% at June 30, 2020. Excluding PPP loans, the allowance for credit losses to total portfolio loans was 1.77% at September 30, 2020 compared to 1.64% at June 30, 2020. * S&T's Board of Directors declared a $0.28 per share dividend which was consistent with the $0.28 per share dividend declared in the same period in the prior year.

We continue to navigate through this difficult environment related to the COVID-19 pandemic," said Todd Brice, Chief Executive Officer. "I have every confidence in the S&T team to work through these difficult times, and I am impressed by their strong resilience and desire to help our customers and communities."

Net Interest Income

Net interest income decreased $0.8 million to $69.3 million for the third quarter of 2020 compared to $70.1 million for the second quarter of 2020. The decrease in net interest income was primarily due to lower loan balances as lower yields on loans were mostly offset by decreased rates on deposits. Average loans decreased $154.2 million compared to the second quarter of 2020. Net interest margin on a fully taxable equivalent basis (FTE) (non-GAAP) was stable at 3.29% for the third quarter of 2020 compared to 3.31% in the second quarter of 2020. Loan rates decreased 13 basis points to 3.87% and total interest-bearing deposit costs decreased 19 basis points to 0.48%.

Asset Quality

The provision for credit losses was $17.5 million for the third quarter of 2020 compared to $86.8 million in the second quarter of 2020. The customer fraud that resulted in a $58.7 million charge-off to the bank had a significant impact on the provision for credit losses during the second quarter of 2020. Net loan charge-offs were $12.9 million for the third quarter of 2020 compared to $68.1 million in the second quarter of 2020. During the third quarter, a $21.3 million CRE relationship, which was placed on nonaccrual in the first quarter of 2020, was charged down by $10.0 million leaving a remaining outstanding balance of $11.3 million. The relationship experienced continued deterioration as a result of the COVID-19 pandemic. Total nonperforming loans decreased $6.0 million to $84.1 million, or 1.13% of total loans, at September 30, 2020 compared to $90.1 million, or 1.19% of total loans at June 30, 2020. The allowance for credit losses was 1.64% of total portfolio loans as of September 30, 2020 compared to 1.52% at June 30, 2020. Excluding PPP loans, the allowance for credit losses was 1.77% of total portfolio loans at September 30, 2020 compared to 1.64% at June 30, 2020. The impact of the COVID-19 pandemic on our hotel loan portfolio and a $6.2 million increase in specific reserves contributed to the higher allowance for credit losses at September 30, 2020 compared to June 30, 2020.

Noninterest Income and Expense

Noninterest income increased $1.3 million to $16.5 million in the third quarter of 2020 compared to $15.2 million in the second quarter of 2020. Mortgage banking income increased $1.3 million compared to the second quarter of 2020 due to continued strong refinance activity. Both debit and credit card fees and service charges on deposit accounts increased due to improved customer activity compared to the second quarter of 2020.

Noninterest expense increased $4.8 million to $48.3 million for the third quarter of 2020 compared to $43.5 million in the second quarter of 2020. Salaries and employee benefits increased $3.2 million due to lower deferred origination costs related to PPP loans, higher pension costs due to an increase in retirements and a return to more normal medical costs compared to the second quarter of 2020. FDIC insurance increased $0.9 million due to the impact of recent results on certain components of the assessment calculation. Marketing expense increased $0.8 million due to the timing of marketing initiatives and the redesign of our website.

Financial Condition

Total assets decreased $283.7 million to $9.2 billion at September 30, 2020 compared to $9.5 billion at June 30, 2020. Portfolio loans decreased $153.7 million compared to June 30, 2020 as loan originations continue to be impacted by the COVID-19 pandemic. The securities portfolio declined $86.2 million compared to June 30, 2020 mainly due to short term investments maturing in conjunction with our planned reduction of $269 million in brokered deposits. The decrease in brokered deposits resulted in a decline in total deposits of $234.1 million to $7.6 billion at September 30, 2020 compared to $7.9 billion at June 30, 2020. Customer deposits, which increased significantly during the second quarter of 2020, remained relatively unchanged in the third quarter despite decreases in deposit rates.

All regulatory capital ratios increased at September 30, 2020 compared to June 30, 2020. S&T continues to maintain a strong capital position with all capital ratios above the well-capitalized thresholds of federal bank regulatory agencies.

Dividend

The Board of Directors of S&T declared a $0.28 per share cash dividend on October 19, 2020. This is unchanged from the same period in the prior year. The dividend is payable November 19, 2020 to shareholders of record on November 5, 2020.

Conference Call

S&T will host its third quarter 2020 earnings conference call live over the Internet at 1:00 p.m. ET on Thursday, October 22, 2020. To access the webcast, go to S&T's webpage at www.stbancorp.com and click on "Events & Presentations." Select "3rd Quarter 2020 Earnings Conference Call" and follow the instructions. After the live presentation, the webcast will be archived on this website for at least 90 days. A replay of the call will also be available until October 29, 2020, by dialing 1.877.481.4010; the Conference ID is 37817.

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

S&T Bancorp, Inc. is a $9.2 billion bank holding company that is headquartered in Indiana, Pennsylvania and trades on the NASDAQ Global Select Market under the symbol STBA. Its principal subsidiary, S&T Bank, was recently ranked #1 in customer satisfaction with retail banking in the Mid-Atlantic including best in communication and advice by J.D. Power. Established in 1902, S&T Bank operates in five markets including Western Pennsylvania, Eastern Pennsylvania, Northeast Ohio, Central Ohio, and Upstate New York. For more information visit stbancorp.com or stbank.com. Follow us on Facebook, Instagram, and LinkedIn.

This information contains or incorporates statements that we believe are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to our financial condition, results of operations, plans, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, financial position, and other matters regarding or affecting S&T and its future business and operations. Forward-looking statements are typically identified by words or phrases such as "will likely result", "expect", "anticipate", "estimate", "forecast", "project", "intend", " believe", "assume", "strategy", "trend", "plan", "outlook", "outcome", "continue", "remain", "potential", "opportunity", "believe", "comfortable", "current", "position", "maintain", "sustain", "seek", "achieve" and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. The matters discussed in these forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward-looking statements depending on a variety of uncertainties or other factors including, but not limited to: credit losses and the credit risk of our commercial and consumer loan products; changes in the level of charge-offs and changes in estimates of the adequacy of the allowance for credit losses; cyber-security concerns; rapid technological developments and changes; operational risks or risk management failures by us or critical third parties, including fraud risk; our ability to manage our reputational risks; sensitivity to the interest rate environment including a prolonged period of low interest rates, a rapid increase in interest rates or a change in the shape of the yield curve; a change in spreads on interest-earning assets and interest-bearing liabilities; regulatory supervision and oversight, including changes in regulatory capital requirements and our ability to address those requirements; unanticipated changes in our liquidity position; changes in accounting policies, practices, or guidance, for example, our adoption of CECL; legislation affecting the financial services industry as a whole, and S&T, in particular; the outcome of pending and future litigation and governmental proceedings; increasing price and product/service competition; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; managing our internal growth and acquisitions; the possibility that the anticipated benefits from acquisitions, including DNB, cannot be fully realized in a timely manner or at all, or that integrating the acquired operations will be more difficult, disruptive or costly than anticipated; containing costs and expenses; reliance on significant customer relationships; an interruption or cessation of an important service by a third-party provider; our ability to attract and retain talented executives and employees; general economic or business conditions, including the strength of regional economic conditions in our market area; the duration and severity of the coronavirus ("COVID-19") pandemic, both in our principal area of operations and nationally, including the ultimate impact of the pandemic on the economy generally and on our operations; deterioration of the housing market and reduced demand for mortgages; deterioration in the overall macroeconomic conditions or the state of the banking industry that could warrant further analysis of the carrying value of goodwill and could result in an adjustment to its carrying value resulting in a non-cash charge to net income; the stability of our core deposit base and access to contingency funding; re-emergence of turbulence in significant portions of the global financial and real estate markets that could impact our performance, both directly, by affecting our revenues and the value of our assets and liabilities, and indirectly, by affecting the economy generally and access to capital in the amounts, at the times and on the terms required to support our future businesses.

Many of these factors, as well as other factors, are described in our Annual Report on Form 10-K for the year ended December 31, 2019, including Part I, Item 1A-"Risk Factors" and any of our subsequent filings with the SEC. Forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. We caution you not to unduly rely on forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited



2020 2020 2019

Third Second Third

(dollars in thousands, except per share Quarter Quarter Quarter data)

INTEREST AND DIVIDEND INCOME

Loans, including fees $72,263 $75,498 $75,080

Investment securities:

Taxable 3,473 3,791 3,552

Tax-exempt 885 959 787

Dividends 227 231 394

Total Interest and Dividend Income 76,848 80,479 79,813



INTEREST EXPENSE

Deposits 6,626 9,227 16,207

Borrowings and junior subordinated debt 946 1,104 2,410 securities

Total Interest Expense 7,572 10,331 18,617



NET INTEREST INCOME 69,276 70,148 61,196

Provision for credit losses 17,485 86,759 4,913

Net Interest Income (Loss) After 51,791 (16,611) 56,283 Provision for Credit Losses



NONINTEREST INCOME

Net gain on sale of securities - 142 -

Debit and credit card 4,171 3,612 3,475

Mortgage banking 3,964 2,623 594

Service charges on deposit accounts 2,820 2,342 3,412

Wealth management 2,522 2,586 2,101

Commercial loan swap income 499 945 1,464

Other 2,507 2,974 2,017

Total Noninterest Income 16,483 15,224 13,063



NONINTEREST EXPENSE

Salaries and employee benefits 24,571 21,419 19,936

Data processing and information 4,218 3,585 3,681 technology

Net occupancy 3,441 3,437 2,898

Furniture, equipment and software 2,440 3,006 2,090

Professional services and legal 1,911 1,932 1,054

FDIC insurance 1,900 1,048 (675)

Marketing 1,793 979 1,062

Other taxes 1,612 1,604 1,540

Merger related expense - - 552

Other 6,360 6,468 5,529

Total Noninterest Expense 48,246 43,478 37,667

Income (Loss) Before Taxes 20,028 (44,865) 31,679

Income tax expense (benefit) 3,323 (11,793) 4,743

Net Income (Loss) $16,705 ($33,072) $26,936



Per Share Data

Shares outstanding at end of period 39,251,63839,253,46034,244,719

Average shares outstanding - diluted 39,020,81139,013,16134,277,270

Diluted earnings (loss) per share $0.43 ($0.85) $0.79

Dividends declared per share $0.28 $0.28 $0.27

Dividend yield (annualized) 6.33% 4.78% 2.96%

Dividends paid to net income 65.61% NM 34.30%

Book value $29.10 $28.93 $28.69

Tangible book value ^(1) $19.40 $19.22 $20.25

Market value $17.69 $23.45 $36.53

Profitability Ratios (Annualized)

Return on average assets 0.72% (1.41%) 1.45%

Return on average shareholders' equity 5.80% (11.17%) 10.97%

Return on average tangible shareholders'8.96% (16.19%) 15.69% equity ^(2)

Efficiency ratio (FTE) ^(3) 55.75% 50.51% 50.09%

NM - Not Meaningful

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited



Nine Months Ended September 30,

(dollars in thousands, except per share data) 2020 2019

INTEREST INCOME

Loans, including fees $229,812 $223,200

Investment securities:

Taxable 11,547 10,989

Tax-exempt 2,646 2,466

Dividends 911 1,373

Total Interest and Dividend Income 244,916 238,028



INTEREST EXPENSE

Deposits 31,191 47,243

Borrowings and junior subordinated debt securities 4,265 8,406

Total Interest Expense 35,456 55,649



NET INTEREST INCOME 209,460 182,379

Provision for credit losses 124,294 12,767

Net Interest Income After Provision for Credit Losses85,166 169,612



NONINTEREST INCOME

Net gain on sale of securities 142 -

Debit and credit card 11,264 9,951

Mortgage banking 7,823 1,726

Service charges on deposit accounts 8,720 9,777

Wealth management 7,471 6,210

Commercial swap fee income 3,928 3,147

Other 4,762 6,515

Total Noninterest Income 44,110 37,326



NONINTEREST EXPENSE

Salaries and employee benefits 67,326 61,135

Data processing and information technology 11,671 10,327

Net occupancy 10,643 8,883

Furniture, equipment and software 7,965 6,621

Professional services and legal 4,890 3,382

FDIC insurance 3,718 536

Marketing 3,883 3,514

Other taxes 4,816 4,182

Merger related expense 2,342 1,171

Other 20,861 17,187

Total Noninterest Expense 138,115 116,938



(Loss) Income Before Taxes (8,839) 90,000

Income tax (benefit) expense (5,703) 14,035



Net (Loss) Income ($3,136) $75,965



Per Share Data

Average shares outstanding - diluted 39,101,309 34,407,732

Diluted (loss) earnings per share ($0.08) $2.21

Dividends declared per share $0.84 $0.81

Dividends paid to net income NM 36.59%



Profitability Ratios (annualized)

Return on average assets (0.05%) 1.40%

Return on average shareholders' equity (0.36%) 10.61%

Return on average tangible shareholders' equity ^(6) (0.27%) 15.30%

Efficiency ratio (FTE) ^(7) 53.06% 52.54%

NM - Not Meaningful

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited



2020 2020 2019

Third Second Third

(dollars in thousands) Quarter Quarter Quarter

ASSETS

Cash and due from banks, including $308,489 $351,365 $173,609 interest-bearing deposits

Securities, at fair value 718,169 804,366 669,226

Loans held for sale 16,724 14,259 8,371

Commercial loans:

Commercial real estate 3,290,138 3,345,513 2,922,197

Commercial and industrial 2,042,467 2,140,355 1,626,854

Commercial construction 477,429 459,264 314,813

Total Commercial Loans 5,810,034 5,945,132 4,863,864

Consumer loans:

Residential mortgage 950,887 971,023 770,882

Home equity 537,869 539,519 475,024

Installment and other consumer 80,735 79,816 74,460

Consumer construction 15,343 13,068 11,535

Total Consumer Loans 1,584,834 1,603,426 1,331,901

Total Portfolio Loans 7,394,868 7,548,558 6,195,765

Allowance for credit losses (120,998) (114,609) (62,115)

Total Portfolio Loans, Net 7,273,870 7,433,949 6,133,650

Federal Home Loan Bank and other 15,777 15,151 25,397 restricted stock, at cost

Goodwill 373,417 373,289 287,446

Other assets 484,126 481,917 274,292

Total Assets $9,190,572$9,474,296$7,571,991



LIABILITIES

Deposits:

Noninterest-bearing demand $2,232,706$2,250,958$1,490,409

Interest-bearing demand 982,956 1,055,261 751,881

Money market 2,033,585 2,121,588 1,660,569

Savings 938,475 916,268 753,464

Certificates of deposit 1,446,096 1,523,841 1,326,369

Total Deposits 7,633,818 7,867,916 5,982,692



Borrowings:

Securities sold under repurchase 42,706 92,159 13,925 agreements

Short-term borrowings 83,000 84,541 370,000

Long-term borrowings 49,076 49,489 69,156

Junior subordinated debt securities 64,068 64,053 45,619

Total Borrowings 238,850 290,242 498,700

Other liabilities 175,789 180,361 108,152

Total Liabilities 8,048,457 8,338,519 6,589,544



SHAREHOLDERS' EQUITY

Total Shareholders' Equity 1,142,115 1,135,777 982,447

Total Liabilities and Shareholders' $9,190,572$9,474,296$7,571,991Equity



Capitalization Ratios

Shareholders' equity / assets 12.43% 11.99% 12.97%

Tangible common equity / tangible assets8.64% 8.30% 9.52% ^(4)

Tier 1 leverage ratio 9.11% 8.89% 10.20%

Common equity tier 1 capital 11.05% 10.70% 11.17%

Risk-based capital - tier 1 11.46% 11.10% 11.49%

Risk-based capital - total 13.18% 12.74% 12.92%

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited



2020 2020 2019

Third Second Third

(dollars in thousands) Quarter Quarter Quarter

Net Interest Margin (FTE) (QTD Averages)

ASSETS

Interest-bearing deposits $213,051 0.11%$163,019 0.08%$53,725 2.32%with banks

Securities, at fair value 759,094 2.41%785,229 2.56%661,752 2.59%

Loans held for sale 4,432 3.09%9,931 3.08%2,712 3.98%

Commercial real estate 3,322,656 4.02%3,389,616 4.23%2,922,767 4.89%

Commercial and industrial 2,107,750 3.45%2,200,148 3.61%1,566,369 5.06%

Commercial construction 469,214 3.43%430,912 3.75%282,175 5.14%

Total Commercial Loans 5,899,620 3.77%6,020,676 3.97%4,771,311 4.96%

Residential mortgage 954,861 4.33%976,916 4.20%753,649 4.41%

Home equity 536,735 3.73%543,770 3.69%469,567 5.36%

Installment and other 79,649 6.47%79,944 6.34%72,606 7.10%consumer

Consumer construction 14,475 4.32%12,758 4.58%11,056 5.39%

Total Consumer Loans 1,585,720 4.24%1,613,388 4.14%1,306,878 4.91%

Total Portfolio Loans 7,485,340 3.87%7,634,064 4.00%6,078,189 4.95%

Total Loans 7,489,772 3.87%7,643,995 4.00%6,080,901 4.95%

Federal Home Loan Bank and15,157 5.11%19,709 3.75%19,981 7.00%other restricted stock

Total Interest-earning 8,477,074 3.65%8,611,952 3.80%6,816,359 4.70%Assets

Noninterest-earning assets815,930 817,767 538,514

Total Assets $9,293,004 $9,429,719 $7,354,873



LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing demand $967,735 0.18%$1,033,9050.24%$655,735 0.72%

Money market 2,074,862 0.33%2,076,483 0.50%1,709,248 1.83%

Savings 923,208 0.07%887,357 0.07%749,287 0.24%

Certificates of deposit 1,486,016 1.16%1,560,885 1.51%1,345,474 1.97%

Total Interest-bearing 5,451,821 0.48%5,558,630 0.67%4,459,744 1.44%Deposits

Securities sold under 64,000 0.25%85,302 0.25%14,030 0.73%repurchase agreements

Short-term borrowings 84,310 0.38%178,273 0.38%218,799 2.47%

Long-term borrowings 49,269 2.52%49,774 2.53%69,421 2.68%

Junior subordinated debt 64,057 3.19%64,044 3.58%45,619 4.82%securities

Total Borrowings 261,636 1.44%377,393 1.18%347,869 2.75%

Total Interest-bearing 5,713,457 0.53%5,936,023 0.70%4,807,613 1.54%Liabilities

Noninterest-bearing 2,433,665 2,302,676 1,573,549 liabilities

Shareholders' equity 1,145,882 1,191,020 973,711

Total Liabilities and $9,293,004 $9,429,719 $7,354,873 Shareholders' Equity



Net Interest Margin ^(5) 3.29% 3.31% 3.62%



S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited



Nine Months Ended September 30,

(dollars in thousands) 2020 2019

Net Interest Margin (FTE) (YTD Averages)

ASSETS

Interest-bearing deposits with banks $158,771 0.38%$52,421 2.38%

Securities, at fair value 776,995 2.50%671,727 2.65%

Loans held for sale 5,407 3.17%1,693 4.11%

Commercial real estate 3,373,466 4.33%2,907,792 4.97%

Commercial and industrial 2,020,179 3.82%1,544,962 5.14%

Commercial construction 428,977 3.91%258,239 5.28%

Total Commercial Loans 5,822,622 4.12%4,710,993 5.04%

Residential mortgage 974,144 4.24%736,972 4.43%

Home equity 540,220 4.09%466,936 5.41%

Installment and other consumer 79,757 6.60%71,021 7.17%

Consumer construction 12,587 4.49%10,517 5.63%

Total Consumer Loans 1,606,708 4.31%1,285,446 4.95%

Total Portfolio Loans 7,429,330 4.16%5,996,439 5.02%

Total Loans 7,434,737 4.16%5,998,132 5.02%

Federal Home Loan Bank and other restricted stock19,473 5.38%21,848 7.55%

Total Interest-earning Assets 8,389,976 3.94%6,744,128 4.77%

Noninterest-earning assets 772,404 526,788

Total Assets $9,162,380 $7,270,916



LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing demand $981,174 0.33%$584,280 0.54%

Money market 2,048,466 0.69%1,658,187 1.88%

Savings 880,673 0.12%760,128 0.25%

Certificates of deposit 1,549,177 1.50%1,389,658 1.94%

Total Interest-bearing deposits 5,459,490 0.76%4,392,253 1.44%

Securities sold under repurchase agreements 60,045 0.30%17,812 0.63%

Short-term borrowings 182,623 1.02%259,947 2.65%

Long-term borrowings 50,292 2.52%69,886 2.79%

Junior subordinated debt securities 64,099 3.72%45,619 5.02%

Total Borrowings 357,059 1.60%393,264 2.86%

Total Interest-bearing Liabilities 5,816,549 0.81%4,785,517 1.55%

Noninterest-bearing liabilities 2,170,447 1,528,573

Shareholders' equity 1,175,384 956,826

Total Liabilities and Shareholders' Equity $9,162,380 $7,270,916



Net Interest Margin ^(8) 3.37% 3.67%

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited



2020 2020 2019

Third Second Third

(dollars in thousands) Quarter Quarter Quarter

Nonperforming Loans (NPL)

Commercial loans: % NPL % NPL % NPL

Commercial real estate $52,8051.60%$61,6431.84%$33,7401.15%

Commercial and industrial 12,498 0.61%8,484 0.40%4,206 0.26%

Commercial construction 1,504 0.31%1,504 0.33%1,143 0.36%

Total Nonperforming Commercial 66,807 1.15%71,631 1.20%39,089 0.80%Loans

Consumer loans:

Residential mortgage 13,018 1.37%14,649 1.51%7,384 0.96%

Home equity 4,106 0.76%3,814 0.71%3,492 0.74%

Installment and other consumer 141 0.17%19 0.02%18 0.02%

Total Nonperforming Consumer 17,265 1.08%18,482 1.14%10,894 0.81%Loans

Total Nonperforming Loans $84,0721.13%$90,1131.19%$49,9830.81%





2020 2020 2019

Third Second Third

(dollars in thousands) Quarter Quarter Quarter

Loan Charge-offs (Recoveries)

Charge-offs $13,667 $68,304 $4,700

Recoveries (754) (231) (423)

Net Loan Charge-offs $12,913 $68,072 $4,277 (Recoveries)



Net Loan Charge-offs (Recoveries)

Commercial loans:

Customer fraud $- $58,671 $-

Commercial real estate 10,963 5,588 2,298

Commercial and industrial 1,267 3,060 1,257

Commercial construction (1) (19) (1)

Total Commercial Loan 12,229 67,300 3,554 Charge-offs (Recoveries)

Consumer loans:

Residential mortgage 274 74 289

Home equity 204 16 13

Installment and other consumer 206 682 421

Total Consumer Loan Charge-offs 684 772 723

Total Net Loan Charge-offs $12,913 $68,072 $4,277 (Recoveries)

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited



Nine Months Ended September 30,

(dollars in thousands) 2020 2019

Loan Charge-offs (Recoveries)

Charge-offs $93,415 $13,391

Recoveries (1,273) (1,743)

Net Loan Charge-offs (Recoveries) $92,142 $11,648



Net Loan Charge-offs (Recoveries)

Commercial loans:

Customer fraud $58,671 $-

Commercial real estate 16,979 2,699

Commercial and industrial 14,592 7,661

Commercial construction (22) (4)

Total Commercial Loan Charge-offs/ 90,220 10,356 (Recoveries)

Consumer loans:

Residential mortgage 367 251

Home equity 301 51

Installment and other consumer 1,254 1,072

Consumer construction - (82)

Total Consumer Loan Charge-offs 1,922 1,292

Total Net Loan Charge-offs (Recoveries) $92,142 $11,648

2020 2020 2019

Third Second Third

(dollars in thousands) Quarter Quarter Quarter

Asset Quality Data

Nonperforming loans $84,072$90,113$49,983

OREO 2,317 2,740 1,724

Nonperforming assets 86,389 92,853 51,707

Troubled debt restructurings (nonaccruing) 18,648 31,755 14,496

Troubled debt restructurings (accruing) 18,478 15,536 38,434

Total troubled debt restructurings 37,126 47,291 52,930

Nonperforming loans / total loans 1.13% 1.19% 0.81%

Nonperforming assets / total loans plus OREO 1.17% 1.23% 0.83%

Allowance for credit losses / total portfolio 1.64% 1.52% 1.00% loans

Allowance for credit losses / nonperforming 144% 127% 124% loans

Net loan charge-offs (recoveries) $12,913$68,072$4,277

Net loan charge-offs (recoveries)(annualized) / 0.69% 3.58% 0.28% average loans

Nine Months Ended September 30,

(dollars in thousands) 2020 2019

Asset Quality Data

Net loan charge-offs (recoveries) $92,142 $11,648

Net loan charge-offs (recoveries)(annualized) / average loans1.66% 0.26%

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited



Definitions and Reconciliation of GAAP to Non-GAAP Financial Measures:



2020 2020 2019

Third Second Third

Quarter Quarter Quarter



^(1) Tangible Book Value (non-GAAP)

Total shareholders' equity $1,142,115$1,135,777$982,447

Less: goodwill and other (382,681) (383,032) (289,538) intangible assets

Tax effect of other intangible 1,946 2,046 439 assets

Tangible common equity (non-GAAP) $761,380 $754,791 $693,348

Common shares outstanding 39,252 39,263 34,245

Tangible book value (non-GAAP) $19.40 $19.22 $20.25



^(2) Return on Average Tangible Shareholders' Equity (non-GAAP)

Net (loss) income (annualized) $66,455 ($133,016)$106,865

Plus: amortization of 2,619 2,623 647 intangibles (annualized)

Tax effect of amortization of (550) (551) (136) intangibles (annualized)

Net (loss) income before amortization of intangibles $68,524 ($130,944)$107,376 (annualized)



Average total shareholders' equity $1,145,882$1,191,020$973,711

Less: average goodwill and (382,780) (384,197) (289,622) other intangible assets

Tax effect of average goodwill 1,999 2,116 457 and other intangible assets

Average tangible equity (non-GAAP) $765,101 $808,939 $684,546

Return on average tangible 8.96% (16.19%) 15.69% shareholders' equity (non-GAAP)



^(3) Efficiency Ratio (non-GAAP)

Noninterest expense $48,246 $43,478 $37,667

Less: merger related expenses - - -

Noninterest expense excluding $48,246 $43,478 $37,667 nonrecurring items



Net interest income per consolidated $69,276 $70,148 $61,196 statements of net income

Less: net (gains) losses on sale - (142) - of securities

Plus: taxable equivalent 780 847 934 adjustment

Net interest income (FTE) (non-GAAP) $70,056 $70,853 $62,130

Noninterest income 16,483 15,224 13,063

Net interest income (FTE) (non-GAAP) $86,539 $86,077 $75,193 plus noninterest income

Efficiency ratio (non-GAAP) 55.75% 50.51% 50.09%



^(4) Tangible Common Equity / Tangible Assets (non-GAAP)

Total shareholders' equity $1,142,115$1,135,777$982,447

Less: goodwill and other (382,681) (383,032) (289,538) intangible assets

Tax effect of goodwill and other1,946 2,046 439 intangible assets

Tangible common equity (non-GAAP) $761,380 $754,791 $693,348



Total assets $9,190,572$9,474,296$7,571,991

Less: goodwill and other (382,681) (383,032) (289,538) intangible assets

Tax effect of goodwill and other1,946 2,046 439 intangible assets

Tangible assets (non-GAAP) $8,809,837$9,093,310$7,282,892

Tangible common equity to tangible 8.64% 8.30% 9.52% assets (non-GAAP)



^(5) Net Interest Margin Rate (FTE) (non-GAAP)

Interest income $76,848 $80,479 $79,813

Less: interest expense 7,572 10,331 (18,617)

Net interest income per consolidated $69,276 $70,148 $61,196 statements of net income

Plus: taxable equivalent 780 847 934 adjustment

Net interest income (FTE) (non-GAAP) $70,056 $70,995 $62,130

Net interest income (FTE) $278,701 $285,540 $246,494 (annualized)

Average earning assets $8,477,074$8,611,952$6,816,359

Net interest margin - (FTE) 3.29% 3.31% 3.62% (non-GAAP)

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited



Definitions and Reconciliation of GAAP to Non-GAAP Financial Measures - continued:



2020

Third

Quarter



PTPP / Average Assets (non-GAAP)

Income before taxes $20,028

Plus: Provision for credit losses 17,485

Total 37,513

Total (annualized) (non-GAAP) $149,237

Average assets $9,293,004

PTPP / Average Assets (non-GAAP) 1.61%



Nine Months Ended September 30,

2020 2019



^(6) Return on Average Tangible Shareholders' Equity (non-GAAP)

Net (loss) income (annualized) ($4,189) $101,564

Plus: amortization of intangibles 2,595 680 (annualized)

Tax effect of amortization of (545) (143) intangibles (annualized)

Net (loss) income before amortization of intangibles ($2,140) $102,101 (annualized)



Average total shareholders' equity $1,175,384 $956,826

Less: average goodwill and other (383,000) (289,786) intangible assets

Tax effect of average goodwill and 2,116 491 other intangible assets

Average tangible equity (non-GAAP) $794,500 $667,531

Return on average tangible equity (0.27%) 15.30% (non-GAAP)



^(7) Efficiency Ratio (non-GAAP)

Noninterest expense $138,115 $116,938

Less: merger related expenses (2,342) -

Noninterest expense excluding $135,773 $116,938 nonrecurring items



Net interest income per consolidated $209,460 $182,379 statements of net income

Less: net (gains) losses on sale (142) - of securities

Plus: taxable equivalent 2,477 2,854 adjustment

Net interest income (FTE) (non-GAAP) $211,795 $185,233

Noninterest income 44,110 37,326

Net interest income (FTE) (non-GAAP) $255,905 $222,559 plus noninterest income

Efficiency ratio (non-GAAP) 53.06% 52.54%



^(8) Net Interest Margin Rate (FTE) (non-GAAP)

Interest income $244,916 $238,028

Less: interest expense 35,456 (55,649)

Net interest income per consolidated 209,460 182,379 statements of net income

Plus: taxable equivalent adjustment 2,477 2,854

Net interest income (FTE) (non-GAAP) $211,937 $185,233

Net interest income (FTE) $283,098 $247,656 (annualized)

Average earning assets $8,389,976 $6,744,127

Net interest margin - (FTE) 3.37% 3.67% (non-GAAP)

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited



The following profitability metrics for the nine months ended September 30, 2020 are adjusted to exclude a $58.7 million loss related to a customer fraud.



2020

Nine Months Ended September 30,



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

Net loss ($3,136)

Provision for credit losses 58,671

Tax effect (12,321)

Net income excluding fraud $43,214



Net income excluding fraud (annualized) $57,724

Plus: amortization of intangibles (annualized) 2,595

Tax effect of amortization of intangibles (annualized) (545)

Net income before amortization of intangibles (annualized) $59,774



Average total shareholders' equity $1,175,384

Less: average goodwill and other intangible assets (383,000)

Tax effect of average goodwill and other intangible assets 2,116

Average tangible equity (non-GAAP) $794,500

Return on average tangible shareholders' equity (non-GAAP) 7.52%



Return on Average Assets (non-GAAP)

Net income excluding fraud (annualized) $57,724

Average total assets 9,162,380

Return on average assets (non-GAAP) 0.63%



Return on Average Equity (non-GAAP)

Net income excluding fraud (annualized) $57,724

Average total shareholders' equity 1,175,384

Return on average assets (non-GAAP) 4.91%

View original content to download multimedia: http://www.prnewswire.com/news-releases/st-bancorp-inc-announces-third-quarter-2020-results-301157627.html

SOURCE S&T Bancorp, Inc.