INDIANA, Pa., July 17 S&T Bancorp, Inc.
(Nasdaq: STBA, News) today announced net income of $13.9 million or $0.56 diluted
earnings per share for the second quarter of 2007, compared to $11.2 million
of net income and $0.43 diluted earnings per share for the second quarter
ended June 30, 2006.For the six months ended June 30, 2007, net income totaled $27.2 million,
and diluted earnings per share was $1.08, as compared to $25.5 million of net
income and $0.97 diluted earnings per share for the six months ended June 30,
2006, representing a 7 percent and an 11 percent increase, respectively.
Annualized return on average equity for the six months ended June 30, 2007
was 16.81 percent as compared to 14.62 percent in the year ago period and
15.37 percent for the full year 2006. Year-to-date annualized return on
average assets through June 30, 2007 was 1.64 percent compared with 1.58
percent in the first half of 2006 and 1.64 percent for the full year 2006.
James C. Miller, chairman and chief executive officer, commented, "We are
pleased with our overall financial performance this quarter and for the first
six months of 2007. Our staff worked very hard to do what was necessary to
stabilize our net interest margin in a persistently difficult rate
environment. Positive loan and core deposit growth were particularly important
contributors to our performance. Our staff is also doing a very good job of
working through the credit problems we encountered last year. We have seen
significant improvement in nonperforming loan classifications, and net
charge-offs for 2007 are well below historical averages."
Nonperforming assets totaled $15.6 million or 0.46 percent of total assets
at June 30, 2007 as compared to $20.5 million or 0.61 percent at March 31,
2007 and $20.4 million or 0.61 percent at December 31, 2006. Net loan
charge-offs on an annualized basis for the first six months of 2007 were $0.9
million or 0.07 percent of average loans compared to $5.2 million or 0.41
percent for the first six months of 2006.
The allowance for loan losses at June 30, 2007 was $35.8 million or 1.31
percent of total loans, as compared to $35.3 million or 1.29 percent at
March 31, 2007 and $33.2 million or 1.25 percent at December 31, 2006.
Included in the allowance for loan losses at June 30, 2007 is $3.4 million of
specific reserves for impaired loans. For the six months ended June 30, 2007,
the provision for loan losses was $3.5 million as compared to $7.2 million for
the six months ended June 30, 2006. The provision, which is based upon
management's detailed quarterly analysis of the adequacy of the allowance for
loan losses, is directionally consistent with the changes in asset quality and
the improvement in net charge-offs and nonaccrual loans.
Net interest income on a fully taxable equivalent basis for the second
quarter of 2007 was $30.2 million, an increase of $0.9 million or 3 percent,
as compared to $29.2 million for the same period of 2006. Net interest income
on a fully taxable equivalent basis for the six months ended June 30, 2007 was
$59.6 million, a $1.2 million or 2 percent increase, compared to $58.4 million
for the six months ended June 30, 2006. The net interest margin, on a fully
taxable equivalent basis, was 3.86 percent, 3.84 percent and 3.85 percent for
the second quarter, first quarter and six months ended June 30, 2007,
respectively. For the same periods in 2006, the net interest margin was 3.82
percent, 3.94 percent and 3.88 percent, respectively.
Earning assets have increased $62.0 million over the past 12 months,
primarily driven by a $72.2 million or 4 percent increase in commercial
lending and a $46.6 million or 8 percent increase in consumer lending. During
that 12-month period, commercial construction and real estate loans decreased
$1.6 million, and commercial and industrial loans increased $73.8 million.
Investment securities were reduced over the same 12-month period by $56.8
million as the risk reward opportunities for leveraging activities have been
significantly reduced by a flat and inverted yield curve. Deposits increased
$127.6 million or 5 percent over the same period.
Todd Brice, president and chief operating officer, commented, "Our
relationship banking strategy continues to be the driving force behind our
growth. Providing ancillary services to our traditional loan and deposit
customers, such as wealth management, cash management, insurance and other
related products, has strengthened those relationships and contributes
significantly to our overall revenues. Growing core deposit funding to support
our lending growth also is an important component of that strategy.
Continuing to expand our physical franchise in newer markets such as Altoona,
O'Hara Township and the Squirrel Hill area of Pittsburgh is proving to be very
helpful in gathering core deposits and expanding the S&T brand in general."
Noninterest income, excluding net security gains, decreased $0.2 million
to $17.6 million for the six-month period ended June 30, 2007, as compared to
$17.8 million for the same year ago period. The primary causes of this
relatively flat performance were reduced deposit service charges and a $0.4
million accrual methodology change for wealth management that increased
revenue in the first quarter of 2006. Fee revenues from insurance and
debit/credit card activities increased $0.4 million and $0.2 million,
respectively, for the six-month period ending June 30, 2007 as compared to the
same period of 2006.
Net equity investment security gains for the first half of 2007 were $2.1
million, a $0.9 million decrease from the same period of 2006 due to less
market opportunities and de-emphasis of this portfolio as a core revenue
source. The equity securities portfolio has a market value of $44.9 million
and net unrealized gains of $10.4 million as of June 30, 2007, as compared to
$58.5 million and $17.8 million, respectively, at June 30, 2006.
Noninterest expense increased $1.4 million or 4 percent to $35.6 million
for the first six months of 2007, as compared to $34.2 million for the 2006
period. The increase is related to the effect of year-end merit increases,
higher incentive accruals now that plans are primarily earnings per share
based, and higher medical plan expenses. Full-time equivalent staff decreased
by 10 to 792 primarily as a result of productivity initiatives in retail.
Occupancy and equipment expense increased $0.7 million during the six-month
period as a result of several facility remodelings and additions that occurred
during the last 12 months. Also affecting noninterest expense comparisons of
2007 and 2006 is a $0.4 million reduction in the reserve for unfunded
commitments in 2007 and a $0.7 million write-down established in 2006 on a
commercial property acquired through foreclosure. The efficiency ratio, which
measures noninterest expense to noninterest income, excluding net security
gains, plus net interest income on a fully taxable equivalent basis, was 46
percent and 45 percent for the six-month periods ended June 30, 2007 and 2006,
respectively.
S&T Bancorp, Inc. declared a common stock quarterly dividend of $0.30 per
share on June 18, 2007 which is payable on July 25, 2007 to shareholders of
record as of June 29, 2007. This dividend represents a 3.4 percent increase
over the $0.29 per share quarterly dividend declared a year ago and a 3.6
percent projected annual yield utilizing the June 30, 2007 closing market
price of $32.90. The S&T Bancorp, Inc. Board of Directors authorized stock
buyback programs in 2005 and 2006 of one million shares each, or approximately
4 percent of shares outstanding in each year. On June 18, 2007, the S&T
Bancorp, Inc. Board of Directors authorized an additional buyback program of
one million shares until June 30, 2008. During 2006, S&T repurchased 1,031,700
shares through these programs at an average cost of $34.19 per share. During
2007, S&T has repurchased 951,400 shares at an average price of $32.74.
Headquartered in Indiana, Pa., S&T Bancorp, Inc. operates 50 offices
within Allegheny, Armstrong, Blair, Butler, Cambria, Clarion, Clearfield,
Indiana, Jefferson and Westmoreland counties. With assets of $3.4 billion, S&T
Bancorp, Inc. stock trades on the NASDAQ Global Select Market under the symbol
STBA.
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, changes in interest rates, deposit flows, loan demand, asset
quality, including real estate and other collateral values, and competition.
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
June 30, 2007
(Dollars in thousands, except per share data)
2006
March June September December
For the period: 1Q 2Q 3Q 4Q
Interest Income $47,884 $50,957 $53,028 $52,833
Interest Expense 19,810 22,830 24,186 24,758
Net Interest Income 28,074 28,127 28,842 28,075
Taxable Equivalent
Adjustment 1,068 1,117 1,146 1,173
Net Interest Income
(FTE) 29,142 29,244 29,988 29,248
Provision For Loan Losses 1,500 5,700 1,352 828
Net Interest Income
After Provisions
(FTE) 27,642 23,544 28,636 28,420
Security Gains, Net 1,809 1,244 1,210 1,218
Service Charges and Fees 2,452 2,657 2,666 2,637
Wealth Management 2,223 2,058 1,854 1,726
Insurance 1,738 1,572 1,759 1,569
Other 2,261 2,803 2,432 2,502
Total Noninterest
Income 8,674 9,090 8,711 8,434
Salaries and Employee
Benefits 9,512 9,004 8,618 10,467
Occupancy and Equip.
Expense, Net 2,087 1,962 2,194 2,155
Data Processing Expense 1,164 1,249 1,186 1,253
FDIC Expense 75 75 77 75
Other 4,101 4,983 4,264 4,777
Total Noninterest
Expense 16,939 17,273 16,339 18,727
Income Before Taxes 21,186 16,605 22,218 19,345
Taxable Equivalent
Adjustment 1,068 1,117 1,146 1,173
Applicable Income Taxes 5,881 4,251 6,408 4,973
Net Income $14,237 $11,237 $14,664 $13,199
Per Common Share Data:
Shares Outstanding at End
of Period 26,083,980 25,690,880 25,303,774 25,361,274
Average Shares Outstanding
- Diluted 26,448,765 26,038,892 25,753,722 25,530,984
Net Income - Diluted $0.54 $0.43 $0.57 $0.52
Dividends Declared $0.29 $0.29 $0.29 $0.30
Book Value $13.41 $13.14 $13.24 $13.37
Market Value $36.58 $33.23 $32.50 $34.67
S&T Bancorp, Inc.
Consolidated Selected Financial Data
June 30, 2007
(Dollars in thousands, except per share data)
2007 Six months ended
March June June June
For the period: 1Q 2Q 2007 2006
Interest Income $52,934 $54,274 $107,208 $98,841
Interest Expense 24,725 25,321 50,047 42,640
Net Interest Income 28,209 28,953 57,161 56,201
Taxable Equivalent
Adjustment 1,186 1,216 2,402 2,185
Net Interest Income
(FTE) 29,395 30,169 59,563 58,386
Provision For Loan Losses 2,178 1,305 3,483 7,200
Net Interest Income
After Provisions
(FTE) 27,217 28,864 56,080 51,186
Security Gains, Net 1,656 481 2,136 3,053
Service Charges and Fees 2,343 2,529 4,871 5,109
Wealth Management 1,855 1,978 3,833 4,281
Insurance 1,894 1,792 3,686 3,310
Other 2,424 2,744 5,169 5,065
Total Noninterest
Income 8,516 9,043 17,559 17,765
Salaries and Employee
Benefits 9,934 10,073 20,006 18,516
Occupancy and Equip.
Expense, Net 2,261 2,447 4,708 4,049
Data Processing Expense 1,234 1,301 2,535 2,413
FDIC Expense 76 77 153 150
Other 4,084 4,163 8,246 9,085
Total Noninterest
Expense 17,589 18,061 35,648 34,213
Income Before Taxes 19,800 20,327 40,127 37,791
Taxable Equivalent
Adjustment 1,186 1,216 2,402 2,185
Applicable Income Taxes 5,316 5,235 10,552 10,132
Net Income $13,298 $13,876 $27,173 $25,474
Per Common Share Data:
Shares Outstanding at End
of Period 24,897,787 24,468,671 24,468,671 25,690,880
Average Shares Outstanding
- Diluted 25,389,584 24,847,410 25,117,043 26,242,794
Net Income - Diluted $0.52 $0.56 $1.08 $0.97
Dividends Declared $0.30 $0.30 $0.60 $0.58
Book Value $13.16 $12.98 $12.98 $13.14
Market Value $33.04 $32.90 $32.90 $33.23
S&T Bancorp, Inc.
Consolidated Selected Financial Data
June 30, 2007
(Dollars in thousands)
2006
March June September December
Asset Quality Data 1Q 2Q 3Q 4Q
Nonaccrual Loans and
Nonperforming Loans $13,063 $21,824 $15,058 $19,852
Assets acquired through
foreclosure or
repossession 3,084 2,725 2,633 523
Nonperforming Assets 16,147 24,549 17,691 20,375
Allowance for Loan Losses 37,402 38,575 32,717 33,220
Nonperforming Loans / Loans 0.51% 0.83% 0.58% 0.74%
Allowance for Loan Losses /
Loans 1.47% 1.47% 1.25% 1.25%
Allowance for Loan Losses /
Nonperforming Loans 286% 177% 217% 167%
Net Loan Charge-offs 670 4,528 7,210 324
Net Loan Charge-offs
(annualized) / Average
Loans
0.11% 0.70% 1.09% 0.05%
Balance Sheet (Period-End)
Assets $3,250,246 $3,301,896 $3,278,710 $3,338,543
Earning Assets 3,031,270 3,079,808 3,048,744 3,108,898
Securities 482,453 455,367 431,490 442,607
Loans, Gross 2,548,817 2,624,441 2,617,254 2,666,291
Total Deposits 2,470,151 2,496,909 2,536,092 2,565,306
Non-Interest Bearing
Deposits 417,315 442,203 429,547 448,453
NOW, Money Market &
Savings 1,136,810 1,169,278 1,201,254 1,195,640
CD's $100,000 and over 200,055 203,966 249,070 261,646
Other Time Deposits 715,972 681,462 656,221 659,567
Short-term borrowings 204,487 234,232 162,351 188,021
Long-term Debt 171,635 186,427 186,217 196,941
Shareholder's Equity 349,896 337,598 335,011 339,051
Balance Sheet (Daily Averages)
Assets $3,205,843 $3,282,972 $3,285,807 $3,270,151
Earning Assets 2,999,871 3,070,286 3,070,573 3,055,082
Securities 485,935 469,472 453,128 428,556
Loans, Gross 2,513,936 2,600,814 2,617,445 2,619,029
Deposits 2,424,946 2,494,841 2,518,761 2,572,123
Shareholder's Equity 356,341 346,351 343,176 342,303
S&T Bancorp, Inc.
Consolidated Selected Financial Data
June 30, 2007
(Dollars in thousands)
2007
March June
Asset Quality Data 1Q 2Q
Nonaccrual Loans and Nonperforming
Loans $19,854 $14,944
Assets acquired through foreclosure
or repossession 606 610
Nonperforming Assets 20,460 15,554
Allowance for Loan Losses 35,319 35,808
Nonperforming Loans / Loans 0.73% 0.54%
Allowance for Loan Losses / Loans 1.29% 1.31%
Allowance for Loan Losses /
Nonperforming Loans 178% 240%
Net Loan Charge-offs 78 817
Net Loan Charge-offs (annualized) /
Average Loans
0.01% 0.12%
Balance Sheet (Period-End)
Assets $3,376,560 $3,382,057
Earning Assets 3,146,934 3,141,844
Securities 412,384 398,612
Loans, Gross 2,734,550 2,743,232
Total Deposits 2,576,887 2,624,495
Non-Interest Bearing Deposits 445,176 449,623
NOW, Money Market & Savings 1,209,702 1,237,280
CD's $100,000 and over 259,390 258,311
Other Time Deposits 662,619 679,281
Short-term borrowings 169,552 144,342
Long-term Debt 246,715 246,487
Shareholder's Equity 327,710 317,707
Balance Sheet (Daily Averages)
Assets $3,328,405 $3,358,606
Earning Assets 3,108,328 3,134,253
Securities 420,645 403,351
Loans, Gross 2,687,564 2,730,618
Deposits 2,550,819 2,578,878
Shareholder's Equity 339,168 325,966
S&T Bancorp, Inc.
Consolidated Selected Financial Data
June 30, 2007
(Dollars in thousands, except per share data)
2006
March June September December
Profitability Ratios (annualized) 1Q 2Q 3Q 4Q
Return on Average Assets 1.80% 1.37% 1.77% 1.60%
Return on Average Shareholder's Equity 16.20% 13.01% 16.95% 15.30%
Yield on Earning Assets (FTE) 6.62% 6.81% 7.00% 7.02%
Cost of Interest Bearing Funds 3.37% 3.71% 3.90% 4.01%
Net Interest Margin (FTE)(4) 3.94% 3.82% 3.87% 3.80%
Efficiency Ratio (FTE)(1) 44.79% 45.06% 42.22% 49.70%
Capitalization Ratios
Dividends Paid to Net Income 53.53% 67.41% 50.81% 56.06%
Shareholder's Equity to Assets
(Period End) 10.77% 10.22% 10.22% 10.16%
Leverage Ratio (2) 9.28% 8.75% 8.57% 8.82%
Risk Based Capital - Tier I (3) 10.30% 9.78% 9.65% 9.66%
Risk Based Capital - Tier II (3) 11.86% 11.32% 11.94% 11.91%
S&T Bancorp, Inc.
Consolidated Selected Financial Data
June 30, 2007
(Dollars in thousands, except per share data)
2007 Year-to-date
March June June June
Profitability Ratios (annualized) 1Q 2Q 2007 2006
Return on Average Assets 1.62% 1.66% 1.64% 1.58%
Return on Average Shareholder's Equity 15.90% 17.07% 16.81% 14.62%
Yield on Earning Assets (FTE) 7.06% 7.10% 7.08% 6.72%
Cost of Interest Bearing Funds 4.00% 4.01% 4.00% 3.54%
Net Interest Margin (FTE)(4) 3.84% 3.86% 3.85% 3.88%
Efficiency Ratio (FTE)(1) 46.40% 46.06% 46.22% 44.93%
Capitalization Ratios
Dividends Paid to Net Income 57.21% 53.92%
Shareholder's Equity to Assets
(Period End) 9.71% 9.39%
Leverage Ratio (2) 8.38% 8.06%
Risk Based Capital - Tier I (3) 9.23% 8.94%
Risk Based Capital - Tier II (3) 11.45% 11.15%
Definitions:
(1) Recurring non-interest expense divided by recurring non-interest
income plus net interest income, on a fully taxable equivalent basis.
(2) Equity less goodwill to total assets and allowance for loan losses.
(3) Effective October 1, 1998, banking regulators require financial
institutions to include 45% of the pretax net unrealized holding
gains on available for sale equity securities in Tier 2 capital.
(4) Net interest income, on a fully taxable equivalent basis, annualized
divided by quarter-to-date average earning assets.
