PR Newswire | Jul 30, 2020 07:31AM EDT

Quarter Dividend

07/30 06:30 CDT

S&T Bancorp, Inc. Announces Second Quarter 2020 Results and Declares Second Quarter Dividend INDIANA, Pa., July 30, 2020

INDIANA, Pa., July 30, 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 a net loss of ($33.1) million, or ($0.85) per diluted share, for the second quarter of 2020 compared to net income of $13.2 million, or $0.34 per diluted share, for the first quarter of 2020, and $26.1 million, or $0.76 per diluted share, for the second quarter of 2019.

A loss of $58.7 million was recognized during the second quarter of 2020 related to a previously disclosed customer fraud resulting from a check kiting scheme. This fraud loss reduced net income by $46.3 million, or $1.19 per diluted share, resulting in a net loss for the second quarter of 2020. S&T continues to pursue all available sources of recovery to mitigate the loss.

"While we are very disappointed in the loss that we experienced this quarter related to the fraudulent activities of a single business customer, we are a resilient company with 118 years of history overcoming all manner of challenges. I am confident we will emerge from this situation as strong, if not stronger, than before," said Todd Brice, Chief Executive Officer. "The personalized assistance given to our customers who are experiencing financial hardships as a result of COVID-19 is a direct reflection of the integral role we play in the communities where we operate. As we move forward, we will continue to be a source of strength for our customers and our employees."

Impact and Response to the COVID-19 Pandemic

As we navigate through these uncertain times, our focus remains on the health and safety of our employees and the customers and communities that we serve. We continue to support our customers through the potential financial hardships that have arisen through this crisis, including:

* Providing consumer and homeowner needs-based loan assistance with payment deferrals for 1,071 loans totaling $123.0 million * Providing commercial and business needs-based loan assistance with payment deferrals for 1,289 loans totaling $1.3 billion * Originating SBA Paycheck Protection Program (PPP) loans of $547.6 million

Second Quarter of 2020 Highlights

* Return on average assets (ROA) was (1.41%), return on average equity (ROE) was (11.17%) and return on average tangible equity (ROTE) (non-GAAP) was (16.19%). Excluding the loss from the customer fraud ROA (non-GAAP) was 0.57%, ROE (non-GAAP) was 4.48% and ROTE (non-GAAP) was 6.86%. * Portfolio loans increased $301.8 million compared to the first quarter of 2020. Excluding the PPP portfolio, loans decreased $245.8 million. * With an influx of funds from PPP loans and stimulus payments, along with the heightened liquidity concerns of customers, deposits increased $810.0 million to $7.9 billion at June 30, 2020 compared to $7.1 billion at March 31, 2020. * Net interest margin (FTE) (non-GAAP) was 3.31% compared to 3.53% for the first quarter of 2020. * The allowance for credit losses to total portfolio loans was 1.52% at June 30, 2020 compared to 1.34% at March 31, 2020. Excluding the PPP loans, the allowance for credit losses to total portfolio loans was 1.64% at June 30, 2020. * S&T's Board of Directors declared a $0.28 per share dividend. This is an increase of 3.7% compared to a dividend of $0.27 per share declared in the same period in the prior year.

"While we faced many challenges during the quarter given the uncertain environment, I couldn't be prouder of the incredible work that our employees have done for our customers," said Todd Brice. "A testament to our employees was the recent announcement that S&T Bank was ranked #1 in customer satisfaction with retail banking in the Mid-Atlantic, including best in communication and advice, by J.D. Power which is a reflection of the confidence and trust our customers have in our great employees at S&T Bank."

Net Interest Income

Net interest income was $70.1 million for the second quarter of 2020 compared to $70.0 million for the first quarter of 2020. Average loans increased $474.2 million mainly due to loans from the PPP of $449.3 million compared to the first quarter of 2020. Net interest margin on a fully taxable equivalent basis (FTE) (non-GAAP) declined 22 basis points to 3.31% for the second quarter of 2020 from 3.53% in the first quarter of 2020 primarily due to decreases in short-term rates. Loan rates decreased 64 basis points to 4.00% and total interest-bearing deposit costs decreased 48 basis points to 0.67%.

Asset Quality

The customer fraud that resulted in a $58.7 million loss to the bank had a significant impact on asset quality during the second quarter of 2020. The customer also had a $15.1 million lending relationship which was charged down by $4.2 million leaving a new nonperforming loan of $10.9 million in the second quarter of 2020. Net loan charge-offs were $68.1 million for the second quarter of 2020 compared to $11.2 million in the first quarter of 2020. Excluding the fraud, net loan charge-offs were $9.4 million for the second quarter of 2020. The provision for credit losses increased $66.7 million to $86.8 million in the second quarter of 2020 compared to $20.1 million in the first quarter of 2020. Total nonperforming loans increased $16.3 million to $90.1 million, or 1.19% of total loans, at June 30, 2020 compared to $73.8 million, or 1.02% of total loans at March 31, 2020. The uncertainty around the economic environment due to the COVID-19 pandemic contributed to the higher allowance for credit losses of 1.52% of total portfolio loans as of June 30, 2020 compared to 1.34% at March 31, 2020. Excluding the PPP loans, the allowance for credit losses to total portfolio loans was 1.64%.

Noninterest Income and Expense

Noninterest income increased $2.8 million to $15.2 million in the second quarter of 2020 compared to $12.4 million in the first quarter of 2020. Other noninterest income increased by $3.7 million primarily due to the increase in the fair value of the assets in a nonqualified benefit plan of $2.1 million and an increase in the fair value of equity securities of $1.9 million. Mortgage banking income improved during the quarter by $1.4 million due to increased refinancing activity. These increases were offset by a decrease in service charges on deposit accounts of $1.2 million and commercial loan swap income of $1.5 million due to lower activity as a result of the COVID-19 pandemic.

Noninterest expense decreased $2.9 million to $43.5 million for the second quarter of 2020 compared to $46.4 million in the first quarter of 2020. The decrease in noninterest expense was mainly due to merger expenses of $2.3 million in the first quarter of 2020. Other expense decreased $1.6 million related to historic tax credits of $1.2 million in the first quarter of 2020. Professional services and legal increased $0.9 million mainly due to higher legal expense compared to the first quarter of 2020.

Financial Condition

Total assets increased $468.8 million to $9.5 billion at June 30, 2020 compared to $9.0 billion at March 31, 2020. Portfolio loans increased $301.8 million, which included $547.6 million of loans from the PPP, compared to March 31, 2020. Excluding the PPP portfolio, loans decreased $245.8 million due to decreased activity related to the COVID-19 pandemic. Deposits increased $810.0 million to $7.9 billion at June 30, 2020 compared to $7.1 billion at March 31, 2020. The increase in deposits relates largely to customer PPP loans and stimulus payments along with customers conservatively holding cash deposits in these uncertain times.

All regulatory risk-based capital ratios declined at June 30, 2020 compared to March 31, 2020, except for total capital, due to a decrease in retained earnings offset in part by a reduction in risk weighted assets. 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 July 27, 2020. This is an increase of 3.7% compared to a dividend of $0.27 per share declared in the same period in the prior year. The dividend is payable August 27, 2020 to shareholders of record on August 13, 2020.

Conference Call

S&T will host its second quarter 2020 earnings conference call live over the Internet at 1:00 p.m. ET on Thursday, July 30, 2020. To access the webcast, go to S&T's webpage at www.stbancorp.com and click on "Events & Presentations." Select "2nd 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 August 6, 2020, by dialing 1.877.481.4010; the Conference ID is 35499.

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

S&T Bancorp, Inc. is a $9.5 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 quarterly report on Form 10-Q 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

Second First Second

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

INTEREST AND DIVIDEND INCOME

Loans, including fees $75,498 $82,051 $74,728

Investment securities:

Taxable 3,791 4,282 3,647

Tax-exempt 959 803 834

Dividends 231 453 415

Total Interest and Dividend Income 80,479 87,589 79,624



INTEREST EXPENSE

Deposits 9,227 15,338 16,055

Borrowings and junior subordinated debt 1,104 2,215 2,742 securities

Total Interest Expense 10,331 17,553 18,797



NET INTEREST INCOME 70,148 70,036 60,827

Provision for credit losses 86,759 20,050 2,205

Net Interest (Loss) Income After (16,611) 49,986 58,622 Provision for Credit Losses



NONINTEREST INCOME

Net gain on sale of securities 142 - -

Debit and credit card 3,612 3,482 3,501

Mortgage banking 2,623 1,236 637

Wealth management 2,586 2,362 2,062

Service charges on deposit accounts 2,342 3,558 3,212

Commercial loan swap income 945 2,484 1,102

Other 2,974 (719) 2,387

Total Noninterest Income 15,224 12,403 12,901



NONINTEREST EXPENSE

Salaries and employee benefits 21,419 21,335 20,290

Data processing and information 3,585 3,868 3,414 technology

Net occupancy 3,437 3,765 2,949

Furniture, equipment and software 3,006 2,519 2,301

Professional services and legal 1,932 1,048 1,145

Other taxes 1,604 1,600 1,456

FDIC insurance 1,048 770 695

Marketing 979 1,111 1,310

Merger related expense - 2,342 618

Other 6,468 8,033 6,174

Total Noninterest Expense 43,478 46,391 40,352

(Loss) Income Before Taxes (44,865) 15,998 31,171

Income tax (benefit) expense (11,793) 2,767 5,070

Net (Loss) Income ($33,072) $13,231 $26,101



Per Share Data

Shares outstanding at end of period 39,263,46039,125,42534,330,338

Average shares outstanding - diluted 39,013,16139,325,93834,201,448

Diluted (loss) earnings per share ($0.85) $0.34 $0.76

Dividends declared per share $0.28 $0.28 $0.27

Dividend yield (annualized) 4.78% 4.10% 2.88%

Dividends paid to net income NM 83.52% 35.41%

Book value $28.93 $30.06 $28.11

Tangible book value ^(1) $19.22 $20.29 $19.68

Market value $23.45 $27.32 $37.48

Profitability Ratios (Annualized)

Return on average assets (1.41%) 0.61% 1.44%

Return on average shareholders' equity (11.17%) 4.47% 11.00%

Return on average tangible shareholders'(16.19%) 6.82% 15.89% equity ^(2)

Efficiency ratio (FTE) ^(3) 50.51% 52.89% 54.03%

NM - Not Meaningful

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

Six Months Ended June 30,

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

INTEREST INCOME

Loans, including fees $157,549 $148,120

Investment securities:

Taxable 8,074 7,437

Tax-exempt 1,762 1,679

Dividends 684 978

Total Interest and Dividend Income 168,069 158,214



INTEREST EXPENSE

Deposits 24,565 31,036

Borrowings and junior subordinated debt securities 3,320 5,995

Total Interest Expense 27,885 37,031



NET INTEREST INCOME 140,184 121,183

Provision for credit losses 106,809 7,854

Net Interest Income After Provision for Credit Losses33,375 113,329



NONINTEREST INCOME

Net gain on sale of securities 142 -

Debit and credit card 7,093 6,476

Mortgage banking 3,859 1,131

Wealth management 4,949 4,109

Service charges on deposit accounts 5,900 6,365

Commercial swap fee income 3,429 1,683

Other 2,255 4,499

Total Noninterest Income 27,627 24,263



NONINTEREST EXPENSE

Salaries and employee benefits 42,754 41,199

Data processing and information technology 7,453 6,646

Net occupancy 7,202 5,986

Furniture, equipment and software 5,525 4,531

Professional services and legal 2,980 2,329

Other taxes 3,205 2,641

FDIC insurance 1,818 1,211

Marketing 2,090 2,452

Merger related expense 2,342 618

Other 14,501 11,658

Total Noninterest Expense 89,869 79,271



(Loss) Income Before Taxes (28,867) 58,321

Income tax (benefit) expense (9,026) 9,292



Net (Loss) Income ($19,841) $49,029



Per Share Data

Average shares outstanding - diluted 39,142,351 34,369,756

Diluted (loss) earnings per share ($0.51) $1.43

Dividends declared per share $0.56 $0.54

Dividends paid to net income NM 37.85%



Profitability Ratios (annualized)

Return on average assets (0.44%) 1.37%

Return on average shareholders' equity (3.35%) 10.43%

Return on average tangible shareholders' equity ^(6) (4.68%) 15.09%

Efficiency ratio (FTE) ^(7) 51.68% 53.37%

NM - Not Meaningful

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

2020 2020 2019

Second First Second

(dollars in thousands) Quarter Quarter Quarter

ASSETS

Cash and due from banks, including $351,365 $187,684 $122,876 interest-bearing deposits

Securities, at fair value 804,366 799,532 668,588

Loans held for sale 14,259 7,309 8,135

Commercial loans:

Commercial real estate 3,345,513 3,442,495 2,906,895

Commercial and industrial 2,140,355 1,781,402 1,559,727

Commercial construction 459,264 396,518 267,203

Total Commercial Loans 5,945,132 5,620,415 4,733,825

Consumer loans:

Residential mortgage 971,023 988,816 751,355

Home equity 539,519 544,405 464,195

Installment and other consumer 79,816 79,887 72,041

Consumer construction 13,068 13,222 11,784

Total Consumer Loans 1,603,426 1,626,330 1,299,375

Total Portfolio Loans 7,548,558 7,246,745 6,033,200

Allowance for credit losses (114,609) (96,850) (61,479)

Total Portfolio Loans, Net 7,433,949 7,149,895 5,971,721

Federal Home Loan Bank and other 15,151 28,253 22,491 restricted stock, at cost

Goodwill 373,289 374,270 287,446

Other assets 481,917 458,553 253,348

Total Assets $9,474,296$9,005,496$7,334,605



LIABILITIES

Deposits:

Noninterest-bearing demand $2,250,958$1,702,960$1,462,386

Interest-bearing demand 1,055,261 962,937 549,663

Money market 2,121,588 1,967,692 1,742,334

Savings 916,268 836,237 754,062

Certificates of deposit 1,523,841 1,588,053 1,348,255

Total Deposits 7,867,916 7,057,879 5,856,700



Borrowings:

Securities sold under repurchase 92,159 69,644 14,154 agreements

Short-term borrowings 84,541 410,240 295,000

Long-term borrowings 49,489 50,180 69,791

Junior subordinated debt securities 64,053 64,038 45,619

Total Borrowings 290,242 594,102 424,564

Other liabilities 180,361 177,264 88,388

Total Liabilities 8,338,519 7,829,245 6,369,652



SHAREHOLDERS' EQUITY

Total Shareholders' Equity 1,135,777 1,176,251 964,953

Total Liabilities and Shareholders' $9,474,296$9,005,496$7,334,605Equity



Capitalization Ratios

Shareholders' equity / assets 11.99% 13.06% 13.16%

Tangible common equity / tangible 8.30% 9.21% 9.59% assets ^(4)

Tier 1 leverage ratio 8.89% 10.03% 10.12%

Common equity tier 1 capital 10.70% 10.93% 11.35%

Risk-based capital - tier 1 11.10% 11.32% 11.68%

Risk-based capital - total 12.74% 12.73% 13.15%

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

2020 2020 2019

Second First Second

(dollars in thousands) Quarter Quarter Quarter

Net Interest Margin (FTE) (QTD Averages)

ASSETS

Interest-bearing deposits$163,019 0.08%$99,646 1.42%$49,949 2.19%with banks

Securities, at fair value785,229 2.56%786,858 2.54%673,117 2.66%

Loans held for sale 9,931 3.08%1,867 3.76%1,452 4.44%

Commercial real estate 3,389,616 4.23%3,408,684 4.73%2,895,146 5.01%

Commercial and industrial2,200,148 3.61%1,751,678 4.53%1,559,222 5.17%

Commercial construction 430,912 3.75%386,363 4.68%242,192 5.37%

Total Commercial Loans 6,020,676 3.97%5,546,725 4.66%4,696,560 5.08%

Residential mortgage 976,916 4.20%990,866 4.18%734,372 4.50%

Home equity 543,770 3.69%540,193 4.84%463,480 5.42%

Installment and other 79,944 6.34%79,680 7.01%71,319 7.23%consumer

Consumer construction 12,758 4.58%10,508 4.61%11,014 5.41%

Total Consumer Loans 1,613,388 4.14%1,621,247 4.54%1,280,185 4.99%

Total Portfolio Loans 7,634,064 4.00%7,167,972 4.64%5,976,745 5.06%

Total Loans 7,643,995 4.00%7,169,839 4.64%5,978,197 5.06%

Federal Home Loan Bank and other restricted 19,709 3.75%23,601 6.90%21,141 6.97%stock

Total Interest-earning 8,611,952 3.80%8,079,944 4.40%6,722,404 4.81%Assets

Noninterest-earning 817,767 687,382 523,636 assets

Total Assets $9,429,719 $8,767,326 $7,246,040



LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing demand $1,033,9050.24%$942,030 0.59%$550,200 0.46%

Money market 2,076,483 0.50%1,993,764 1.27%1,695,349 1.93%

Savings 887,357 0.07%830,985 0.23%760,743 0.26%

Certificates of deposit 1,560,885 1.51%1,601,324 1.80%1,389,968 1.95%

Total Interest-bearing 5,558,630 0.67%5,368,103 1.15%4,396,260 1.46%Deposits

Securities sold under 85,302 0.25%30,790 0.56%16,337 0.69%repurchase agreements

Short-term borrowings 178,273 0.38%286,365 1.61%242,759 2.71%

Long-term borrowings 49,774 2.53%51,845 2.52%70,049 2.86%

Junior subordinated debt 64,044 3.58%64,195 4.40%45,619 5.03%securities

Total Borrowings 377,393 1.18%433,195 2.06%374,764 2.94%

Total Interest-bearing 5,936,023 0.70%5,801,298 1.22%4,771,024 1.58%Liabilities

Noninterest-bearing 2,302,676 1,776,453 1,523,676 liabilities

Shareholders' equity 1,191,020 1,189,575 951,340

Total Liabilities and $9,429,719 $8,767,326 $7,246,040 Shareholders' Equity



Net Interest Margin ^(5) 3.31% 3.53% 3.68%

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

Six Months Ended June 30,

(dollars in thousands) 2020 2019

Net Interest Margin (FTE) (YTD Averages)

ASSETS

Interest-bearing deposits with banks $131,332 0.59%$51,758 2.42%

Securities, at fair value 786,043 2.55%676,797 2.67%

Loans held for sale 5,899 3.19%1,175 4.29%

Commercial real estate 3,399,150 4.48%2,900,181 5.01%

Commercial and industrial 1,975,913 4.02%1,534,080 5.18%

Commercial construction 408,638 4.19%246,073 5.37%

Total Commercial Loans 5,783,701 4.30%4,680,334 5.09%

Residential mortgage 983,891 4.19%728,495 4.44%

Home equity 541,981 4.26%465,598 5.43%

Installment and other consumer 79,812 6.67%70,215 7.20%

Consumer construction 11,633 4.59%10,244 5.77%

Total Consumer Loans 1,617,317 4.34%1,274,552 4.96%

Total Portfolio Loans 7,401,018 4.31%5,954,886 5.06%

Total Loans 7,406,917 4.31%5,956,061 5.06%

Federal Home Loan Bank and other restricted stock21,655 5.47%22,797 7.79%

Total Interest-earning Assets 8,345,947 4.09%6,707,413 4.81%

Noninterest-earning assets 752,576 521,082

Total Assets $9,098,523 $7,228,495



LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing demand $987,968 0.41%$547,960 0.44%

Money market 2,035,124 0.88%1,632,234 1.91%

Savings 859,171 0.15%765,638 0.25%

Certificates of deposit 1,581,104 1.66%1,412,117 1.92%

Total Interest-bearing deposits 5,463,367 0.90%4,357,949 1.44%

Securities sold under repurchase agreements 58,046 0.33%19,735 0.59%

Short-term borrowings 232,319 1.14%280,862 2.72%

Long-term borrowings 50,809 2.53%70,122 2.85%

Junior subordinated debt securities 64,120 3.99%45,619 5.12%

Total Borrowings 405,294 1.65%416,338 2.90%

Total Interest-bearing Liabilities 5,868,661 0.96%4,774,287 1.56%

Noninterest-bearing liabilities 2,039,565 1,505,964

Shareholders' equity 1,190,297 948,244

Total Liabilities and Shareholders' Equity $9,098,523 $7,228,495



Net Interest Margin ^(8) 3.42% 3.70%

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

2020 2020 2019

Second First Second

(dollars in thousands) Quarter Quarter Quarter

Nonperforming Loans (NPL)

Commercial loans: % NPL % NPL % NPL

Commercial real estate $61,6431.84%$50,508 1.47%$28,783 0.99%

Commercial and industrial 8,484 0.40%9,081 0.51%4,130 0.26%

Commercial construction 1,504 0.33%571 0.14%1,226 0.46%

Total Nonperforming 71,631 1.20%60,160 1.07%34,139 0.72%Commercial Loans

Consumer loans:

Residential mortgage 14,649 1.51%10,582 1.07%6,782 0.90%

Home equity 3,814 0.71%2,797 0.51%4,081 0.88%

Installment and other 19 0.02%258 0.32%25 0.03%consumer

Total Nonperforming Consumer 18,482 1.14%13,637 0.83%10,888 0.83%Loans

Total Nonperforming Loans $90,1131.19%$73,797 1.02%$45,027 0.75%



2020 2020 2019

Second First Second

(dollars in thousands) Quarter Quarter Quarter

Loan Charge-offs (Recoveries)

Charge-offs $68,304 $11,445 $2,667

Recoveries (231) (289) (532)

Net Loan Charge-offs $68,072 $11,156 $2,135 (Recoveries)



Net Loan Charge-offs (Recoveries)

Commercial loans:

Customer fraud $58,671 $- $-

Commercial real estate 5,588 428 522

Commercial and industrial 3,060 10,265 1,344

Commercial construction (19) (2) (2)

Total Commercial Loan 67,300 10,691 1,864 Charge-offs (Recoveries)

Consumer loans:

Residential mortgage 74 19 (154)

Home equity 16 80 57

Installment and other 682 366 368 consumer

Total Consumer Loan 772 465 271 Charge-offs

Total Net Loan Charge-offs $68,072 $11,156 $2,135 (Recoveries)



Six Months Ended June 30,

(dollars in thousands) 2020 2019

Loan Charge-offs (Recoveries)

Charge-offs $79,749 $8,691

Recoveries (520) (1,320)

Net Loan Charge-offs $79,229 $7,371 (Recoveries)



Net Loan Charge-offs (Recoveries)

Commercial loans:

Customer fraud $58,671 $-

Commercial real estate 6,016 401

Commercial and industrial 13,325 6,403

Commercial construction (21) (3)

Total Commercial Loan 77,991 6,801 Charge-offs/(Recoveries)

Consumer loans:

Residential mortgage 93 (38)

Home equity 97 39

Installment and other 1,048 651 consumer

Consumer construction - (82)

Total Consumer Loan 1,238 570 Charge-offs

Total Net Loan Charge-offs $79,229 $7,371 (Recoveries)

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited



2020 2020 2019

Second First Second

(dollars in thousands) Quarter Quarter Quarter

Asset Quality Data

Nonperforming loans $90,113$73,797 $45,027

OREO 2,740 3,389 1,495

Nonperforming assets 92,853 77,186 46,522

Troubled debt restructurings 31,755 36,054 9,943 (nonaccruing)

Troubled debt restructurings (accruing)15,536 15,189 20,690

Total troubled debt restructurings 47,291 51,243 30,633

Nonperforming loans / loans 1.19% 1.02% 0.75%

Nonperforming assets / loans plus OREO 1.23% 1.06% 0.77%

Allowance for credit losses / total 1.52% 1.34% 1.02% portfolio loans

Allowance for credit losses / 127% 131% 137% nonperforming loans

Net loan charge-offs (recoveries) $68,072$11,156 $2,135

Net loan charge-offs (recoveries) 3.58% 0.63% 0.14% (annualized) / average loans



Six Months Ended June 30,

(dollars in thousands) 2020 2019

Asset Quality Data

Net loan charge-offs (recoveries) $79,229 $7,371

Net loan charge-offs (recoveries) 2.15% 0.25% (annualized) / average loans

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited



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



2020 2020 2019

Second First Second

Quarter Quarter Quarter



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

Total shareholders' equity $1,135,777$1,176,251$964,953

Less: goodwill and other (383,032) (384,557) (289,701) intangible assets

Tax effect of other intangible 2,046 2,160 474 assets

Tangible common equity (non-GAAP) $754,791 $793,854 $675,726

Common shares outstanding 39,263 39,125 34,330

Tangible book value (non-GAAP) $19.22 $20.29 $19.68



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

Net (loss) income (annualized) ($133,016)$53,216 $104,689

Plus: amortization of 2,623 2,542 654 intangibles (annualized)

Tax effect of amortization of (551) (534) (137) intangibles (annualized)

Net (loss) income before amortization of intangibles ($130,944)$55,224 $105,206 (annualized)



Average total shareholders' equity $1,191,020$1,189,575$951,340

Less: average goodwill and (384,197) (382,025) (289,784) other intangible assets

Tax effect of average goodwill 2,116 2,235 491 and other intangible assets

Average tangible equity (non-GAAP) $808,939 $809,785 $662,047

Return on average tangible (16.19%) 6.82% 15.89% shareholders' equity (non-GAAP)



^(3) Efficiency Ratio (non-GAAP)

Noninterest expense $43,478 $46,391 $40,352

Less: merger related expenses - (2,342) 618

Noninterest expense excluding $43,478 $44,049 $40,352 nonrecurring items



Net interest income per consolidated $70,148 $70,036 $60,827 statements of net income

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

Plus: taxable equivalent 847 849 958 adjustment

Net interest income (FTE) (non-GAAP) $70,853 $70,885 $61,785

Noninterest income 15,224 12,403 12,901

Net interest income (FTE) (non-GAAP) $86,077 $83,288 $74,686 plus noninterest income

Efficiency ratio (non-GAAP) 50.51% 52.89% 54.03%



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

Total shareholders' equity $1,135,777$1,176,251$964,953

Less: goodwill and other (383,032) (384,557) (289,701) intangible assets

Tax effect of goodwill and other2,046 2,160 474 intangible assets

Tangible common equity (non-GAAP) $754,791 $793,854 $675,726



Total assets $9,474,296$9,005,496$7,334,605

Less: goodwill and other (383,032) (384,557) (289,701) intangible assets

Tax effect of goodwill and other2,046 2,160 474 intangible assets

Tangible assets (non-GAAP) $9,093,310$8,623,099$7,045,378

Tangible common equity to tangible 8.30% 9.21% 9.59% assets (non-GAAP)



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

Interest income $80,479 $87,589 $79,624

Less: interest expense 10,331 17,553 18,797

Net interest income per consolidated $70,148 $70,036 $60,827 statements of net income

Plus: taxable equivalent 847 849 958 adjustment

Net interest income (FTE) (non-GAAP) $70,995 $70,885 $61,785

Net interest income (FTE) $285,540 $285,098 $247,819 (annualized)

Average earning assets $8,611,952$8,079,944$6,722,404

Net interest margin - (FTE) 3.31% 3.53% 3.68% (non-GAAP)

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited



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



Six Months Ended June 30,

2020 2019



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

Net (loss) income (annualized) ($39,900) $98,870

Plus: amortization of intangibles (annualized) 2,582 697

Tax effect of amortization of intangibles (annualized)(542) (146)

Net (loss) income before amortization of intangibles ($37,860) $99,421 (annualized)



Average total shareholders' equity $1,190,297 $948,244

Less: average goodwill and other intangible assets (383,111) (289,869)

Tax effect of average goodwill and other intangible 2,176 509 assets

Average tangible equity (non-GAAP) $809,362 $658,884

Return on average tangible equity (non-GAAP) (4.68%) 15.09%



^(7) Efficiency Ratio (non-GAAP)

Noninterest expense $89,869 $79,271

Less: merger related expenses (2,342) (618)

Noninterest expense excluding nonrecurring items $87,527 $78,653



Net interest income per consolidated statements of net $140,184 $121,183 income

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

Plus: taxable equivalent adjustment 1,697 1,919

Net interest income (FTE) (non-GAAP) $141,739 $123,102

Noninterest income 27,627 24,263

Net interest income (FTE) (non-GAAP) plus noninterest $169,366 $147,365 income

Efficiency ratio (non-GAAP) 51.68% 53.37%



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

Interest income $168,069 $158,214

Less: interest expense 27,885 37,031

Net interest income per consolidated statements of net 140,184 121,183 income

Plus: taxable equivalent adjustment 1,697 1,919

Net interest income (FTE) (non-GAAP) $141,881 $123,102

Net interest income (FTE) (annualized) $285,321 $248,244

Average earning assets $8,345,947 $6,707,413

Net interest margin - (FTE) (non-GAAP) 3.42% 3.70%

S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited



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

2020 2020

Second Six Months

Quarter Ended June 30,



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

Net loss ($33,072) ($19,841)

Provision for credit losses 58,671 58,671

Tax effect (12,321) (12,321)

Net income excluding fraud $13,278 $26,509



Net income excluding fraud (annualized) $53,404 $53,309

Plus: amortization of intangibles (annualized) 2,623 2,582

Tax effect of amortization of intangibles (551) (542) (annualized)

Net income before amortization of intangibles $55,476 $55,349 (annualized)



Average total shareholders' equity $1,191,020$1,190,297

Less: average goodwill and other intangible assets (384,197) (383,111)

Tax effect of average goodwill and other intangible 2,116 2,176 assets

Average tangible equity (non-GAAP) $808,939 $809,362

Return on average tangible shareholders' equity 6.86% 6.84% (non-GAAP)



Return on Average Assets (non-GAAP)

Net income excluding fraud (annualized) $53,404 $53,309

Average total assets 9,429,719 9,098,523

Return on average assets (non-GAAP) 0.57% 0.59%



Return on Average Equity (non-GAAP)

Net income excluding fraud (annualized) $53,404 $53,309

Average total shareholders' equity 1,191,020 1,190,297

Return on average assets (non-GAAP) 4.48% 4.48%

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SOURCE S&T Bancorp, Inc.