S&T Bancorp, Inc. Announces Earnings
INDIANA, Pa. S&T Bancorp, Inc.
(Nasdaq: STBA) today announced earnings for the fourth quarter and the year
ended December 31, 2007. Diluted earnings per share for the fourth quarter of
2007 were $0.54 per share compared to $0.52 per share in the fourth quarter of
2006. Net income for the fourth quarter of 2007 was $13.3 million compared to
$13.2 million in the comparable period one year ago.
For the year ended December 31, 2007, diluted earnings per share increased
10 percent to $2.26 from $2.06 in 2006, and net income increased 5 percent to
$56.1 million from $53.3 million in 2006. Return on average assets and return
on average equity for 2007 were 1.68 percent and 16.97 percent, respectively,
compared to 1.64 percent and 15.37 percent in 2006. James C. Miller, chairman and chief executive officer, commented, "I am
very pleased with our 2007 performance. I also believe strongly that we are
well positioned to take advantage of strategic opportunities that will be
presented in 2008 as a result of the current market disruptions and our
upcoming merger with Irwin Bank. While we are mindful of the difficult
environment, we also see great possibilities to enhance our market share and
strengthen our franchise value in the western Pennsylvania markets where we do
business." Earning assets increased $60.7 million over the past 12 months, primarily
driven by an $81.4 million or 4 percent increase in commercial lending, and a
$49.2 million or 8 percent increase in consumer and residential mortgage
loans. Investment securities declined $70.0 million during the same period
due to an asset liability management strategy to reduce borrowing levels,
balance sheet leverage and the potential interest rate risks of a flattening
and sometimes inverted yield curve. Deposits increased $56.5 million or 2
percent during 2007. Todd Brice, S&T's president and chief operating officer,
noted, "Good core deposit and loan growth are important indicators of S&T's
success in growing our business through our relationship banking strategies
which continue to differentiate us in the market." Net interest income, on a fully taxable equivalent basis, increased
approximately $1.9 million or 7 percent for the quarter, and increased $3.5
million or 3 percent for the 12 months of 2007 as compared to the same periods
of 2006. Net interest margin on a fully taxable equivalent basis was 3.86
percent, 3.94 percent and 3.87 percent for the third quarter, fourth quarter
and full year of 2007, respectively. For the same periods of 2006, the net
margin on a fully taxable equivalent basis was 3.87 percent, 3.80 percent and
3.86 percent, respectively. Noninterest income for the fourth quarter of 2007, excluding gains on the
sale of investment securities, increased $0.3 million, as compared to the same
period last year primarily driven by merchant, debit card, insurance and
brokerage activities. Year-to-date noninterest income, excluding gains on the
sale of investment securities, increased $1.9 million or 5 percent to $36.8
million. Included in the year-to-date noninterest income is $1.2 million
resulting from the reclassification of investment securities held in the
deferred compensation plan trust to a trading classification from available
for sale classification. Other increases included $0.8 million for merchant
and debit card revenue and $0.6 million for insurance, offset by reduced
revenues in retail related fees in 2007 and a $0.4 million accrual adjustment
for wealth management fees in 2006. Realized equity security gains for the fourth quarter and year-to-date
2007 were $0.6 million and $3.8 million, respectively. Realized equity
security gains for the fourth quarter and full year 2006 were $1.2 million and
$5.5 million, respectively. Market value and unrealized gains in the equity
securities portfolios at December 31, 2007 were $41.3 million and $7.5
million, respectively, as compared to $55.3 million and $16.1 million at
December 31, 2006. As an ongoing strategic initiative, S&T has been reducing
the size of the equity portfolios over the past three years and allocating
resources and associated capital to more core banking related activities. Noninterest expense increased for the fourth quarter and year-to-date 2007
by $1.0 million and $4.2 million, respectively, as compared to the same
periods of 2006. The primary factors in the full year increase are a $2.8
million increase in salaries, benefits and incentives, and a $1.2 million
increase in occupancy, equipment and data processing expenses. Salary and
benefits expense increases reflect the impact of normal merit increases and
earnings per share growth related incentive programs. Occupancy, equipment and data processing expense increases for the 2007
year-to-date period were affected by several facility restructurings, which
included the closing of four branches, the addition of three new branches and
expanded operational and administrative facilities. The efficiency ratio,
which measures noninterest expense to core revenue, was 47 percent at December
31, 2007 as compared to 45 percent last year. Nonperforming assets totaled $17.3 million or 0.51 percent of total assets
at December 31, 2007 as compared to $15.3 million or 0.46 percent at September
30, 2007 and $20.4 million or 0.61 percent at December 31, 2006. The
allowance for loan losses was $34.3 million at December 31, 2007 as compared
to $33.2 million at December 31, 2006. The ratio of the allowance for loan
losses compared to total loans was 1.23 percent at December 31, 2007 and 1.25
percent at December 31, 2006. Net loan charge-offs for the full year 2007 were $4.7 million or 0.17
percent of average loans as compared to $12.7 million or 0.49 percent for 2006
and $1.7 million or 0.07 percent in 2005. Net loan charge-offs for 2006 were
affected by three significant troubled commercial loan relationships that
comprised $11.4 million of the total net charge-offs for 2006. Two of those
troubled credits have combined remaining loan balances of $5.5 million and are
believed to be adequately collateralized. In the fourth quarter of 2007, S&T recorded a provision for loan losses of
$1.2 million as compared to a provision for loan losses of $0.8 million in the
fourth quarter of 2006. Year-to-date 2007, the provision for loan losses was
$5.8 million as compared to $9.4 million for the year ended December 31, 2006.
The provision for loan losses, which is based upon management's detailed
quarterly analysis of the adequacy of the allowance for loan losses, is
directionally consistent with the trends in asset quality. Todd Brice noted,
"2006 was an unusually difficult year for asset quality. I am pleased that
our asset quality has returned to more normal levels and that we have no sub-
prime loan issues in our loan or investment portfolios. We continue to be
very aggressive in dealing with potential problem loans. This is especially
important for commercial relationships since these loans tend to be larger
and, by their nature, may take longer to resolve." S&T Bancorp, Inc. declared a common stock quarterly cash dividend of $0.31
per share on December 17, 2007. The dividend is payable on January 25, 2008
to shareholders of record as of December 31, 2007. This dividend represents a
3 percent increase over the $0.30 per share quarterly dividend declared a year
ago and a 4 percent projected yield utilizing the December 31, 2007 closing
market price of $27.64. 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 971,400 shares at an
average price of $32.74. Headquartered in Indiana, PA, S&T Bancorp, Inc. operates 46 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 System 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, change 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
December 31, 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
2007
March June September December
For the period: 1Q 2Q 3Q 4Q
Interest Income $52,934 $54,274 $54,761 $53,637
Interest Expense 24,725 25,321 25,485 23,636
Net Interest Income 28,209 28,953 29,276 30,001
Taxable Equivalent
Adjustment 1,186 1,216 1,170 1,156
Net Interest Income (FTE) 29,395 30,169 30,446 31,157
Provision For Loan Losses 2,178 1,305 1,142 1,187
Net Interest Income
After Provisions (FTE) 27,217 28,864 29,304 29,970
Security Gains, Net 1,656 481 1,129 579
Service Charges and Fees 2,343 2,529 2,605 2,647
Wealth Management 1,855 1,978 1,751 1,886
Insurance 1,894 1,792 1,874 1,726
Other 2,424 2,744 4,270 2,443
Total Noninterest Income 8,516 9,043 10,500 8,702
Salaries and Employee
Benefits 9,934 10,073 9,910 10,470
Occupancy and Equip.
Expense, Net 2,261 2,447 2,423 2,452
Data Processing Expense 1,234 1,301 1,179 1,166
FDIC Expense 76 77 74 75
Other 4,084 4,163 4,543 5,518
Total Noninterest Expense 17,589 18,061 18,129 19,681
Income Before Taxes 19,800 20,327 22,804 19,570
Taxable Equivalent
Adjustment 1,186 1,216 1,170 1,156
Applicable Income Taxes 5,316 5,235 5,973 5,103
Net Income $13,298 $13,876 $15,661 $13,311
Per Common Share Data:
Shares Outstanding at End
of Period 24,897,787 24,468,671 24,543,177 24,551,087
Average Shares Outstanding
- Diluted 25,389,584 24,847,410 24,690,735 24,677,720
Net Income - Diluted $0.52 $0.56 $0.63 $0.54
Dividends Declared $0.30 $0.30 $0.30 $0.31
Book Value $13.16 $12.98 $13.36 $13.73
Market Value $33.04 $32.90 $32.09 $27.64
Year-to-date
December December
For the period: 2007 2006
Interest Income $215,605 $204,702
Interest Expense 99,167 91,584
Net Interest Income 116,438 113,118
Taxable Equivalent Adjustment 4,727 4,504
Net Interest Income (FTE) 121,165 117,622
Provision For Loan Losses 5,812 9,380
Net Interest Income
After Provisions (FTE) 115,353 108,242
Security Gains, Net 3,844 5,481
Service Charges and Fees 10,124 10,412
Wealth Management 7,470 7,862
Insurance 7,285 6,637
Other 11,882 9,998
Total Noninterest Income 36,761 34,909
Salaries and Employee Benefits 40,387 37,601
Occupancy and Equip. Expense, Net 9,583 8,398
Data Processing Expense 4,880 4,852
FDIC Expense 302 302
Other 18,308 18,126
Total Noninterest Expense 73,460 69,279
Income Before Taxes 82,498 79,353
Taxable Equivalent Adjustment 4,727 4,504
Applicable Income Taxes 21,627 21,513
Net Income $56,144 $53,336
Per Common Share Data:
Shares Outstanding at End of Period 24,551,087 25,361,274
Average Shares Outstanding - Diluted 24,888,574 25,940,352
Net Income - Diluted $2.26 $2.06
Dividends Declared $1.21 $1.17
Book Value $13.73 $13.37
Market Value $27.64 $34.67
S&T Bancorp, Inc.
Consolidated Selected Financial Data
December 31, 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
(Recoveries) 670 4,528 7,210 324
Net Loan Charge-offs
(Recoveries) (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
2007
March June September December
Asset Quality Data 1Q 2Q 3Q 4Q
Nonaccrual Loans and
Nonperforming Loans $19,854 $14,944 $14,445 $16,798
Assets acquired through
foreclosure or repossession 606 610 869 488
Nonperforming Assets 20,460 15,554 15,314 17,286
Allowance for Loan Losses 35,319 35,808 34,144 34,345
Nonperforming Loans /
Loans 0.73% 0.54% 0.52% 0.60%
Allowance for Loan
Losses / Loans 1.29% 1.31% 1.24% 1.23%
Allowance for Loan
Losses / Nonperforming Loans 178% 240% 236% 204%
Net Loan Charge-offs
(Recoveries) 78 817 2,806 986
Net Loan Charge-offs
(Recoveries) (annualized) /
Average Loans 0.01% 0.12% 0.41% 0.14%
Balance Sheet (Period-End)
Assets $3,376,560 $3,382,057 $3,361,746 $3,420,757
Earning Assets 3,146,934 3,141,844 3,126,714 3,169,594
Securities 412,384 398,612 375,151 372,655
Loans, Gross 2,734,550 2,743,232 2,751,564 2,796,939
Total Deposits 2,576,887 2,624,495 2,620,176 2,621,825
Non-Interest Bearing
Deposits 445,176 449,623 452,140 462,387
NOW, Money Market &
Savings 1,209,702 1,237,280 1,234,494 1,243,061
CD's $100,000 and over 259,390 258,311 250,011 249,643
Other Time Deposits 662,619 679,281 683,531 666,734
Short-term borrowings 169,552 144,342 125,809 180,258
Long-term Debt 246,715 246,487 236,255 226,021
Shareholder's Equity 327,710 317,707 327,863 337,092
Balance Sheet (Daily
Averages)
Assets $3,328,405 $3,358,606 $3,352,830 $3,359,832
Earning Assets 3,108,328 3,134,253 3,127,103 3,137,967
Securities 420,645 403,351 384,405 370,100
Loans, Gross 2,687,564 2,730,618 2,740,458 2,767,615
Deposits 2,550,819 2,578,878 2,623,770 2,620,448
Shareholder's Equity 339,168 325,966 324,124 333,880
S&T Bancorp, Inc.
Consolidated Selected Financial Data
December 31, 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%
2007
March June September December
Profitability Ratios (annualized) 1Q 2Q 3Q 4Q
Return on Average Assets 1.62% 1.66% 1.85% 1.57%
Return on Average Shareholder's
Equity 15.90% 17.07% 19.17% 15.82%
Yield on Earning Assets (FTE) 7.06% 7.10% 7.10% 6.93%
Cost of Interest Bearing Funds 4.00% 4.01% 3.99% 3.70%
Net Interest Margin (FTE) (4) 3.84% 3.86% 3.86% 3.94%
Efficiency Ratio (FTE) (1) 46.40% 46.06% 44.28% 49.38%
Capitalization Ratios
Dividends Paid to Net Income 57.21% 53.92% 46.86% 55.31%
Shareholder's Equity to Assets
(Period End) 9.71% 9.39% 9.75% 9.85%
Leverage Ratio (2) 8.38% 8.06% 8.38% 8.57%
Risk Based Capital - Tier I (3) 9.23% 8.94% 9.35% 9.50%
Risk Based Capital - Tier II (3) 11.45% 11.15% 11.50% 11.64%
Year-to-date
December December
Profitability Ratios (annualized) 2007 2006
Return on Average Assets 1.68% 1.64%
Return on Average Shareholder's Equity 16.97% 15.37%
Yield on Earning Assets (FTE) 7.05% 6.87%
Cost of Interest Bearing Funds 3.92% 3.75%
Net Interest Margin (FTE) (4) 3.87% 3.86%
Efficiency Ratio (FTE) (1) 46.52% 45.42%
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.
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