S&T Bancorp, Inc. Announces Earnings17 January 2006
S&T Bancorp, Inc. (Nasdaq: STBA) today announced earnings for the fourth quarter and the year ended December 31, 2005. Diluted earnings per share for the fourth quarter of 2005 was $0.55 per share compared to $0.54 per share in the fourth quarter of 2004. Net income for the fourth quarter of 2005 was $14.6 million compared to $14.6 million in the comparable period one year ago.
For the year ended December 31, 2005, diluted earnings per share increased 7 percent to $2.18 from $2.03 in 2004, and net income increased 7 percent to $58.2 million from $54.4 million in 2004. Return on average assets and return on average equity for 2005 were 1.90 percent and 16.57 percent, respectively, compared to 1.83 percent and 16.07 percent in 2004.
James C. Miller, chairman and chief executive officer, commented, "I am very pleased with our 2005 performance and the continued progress we are making implementing our relationship banking strategies. All areas of the bank performed well this year, but particularly notable in our performance for 2005 is the success in commercial lending, core deposit growth and fee revenues."
Earning assets have increased $180.6 million over the past 12 months, primarily driven by a $174.7 million or 10 percent increase in commercial lending, and a $29.4 million or 5 percent increase in consumer and residential mortgage loans. Investment securities declined $23.6 million during the same period as an asset liability management strategy to reduce borrowing levels, balance sheet leverage and the potential interest rate risks of a flattening yield curve. Deposits increased $242.6 million or 11 percent. Miller noted, "Core deposit growth is an important success factor for S&T. We are seeing continued success in deepening customer relationships with S&T through deposit products such as our Greenplan savings account, free checking, on-line banking and corporate cash management services."
Net interest income, on a fully taxable equivalent basis, increased approximately $0.8 million or 3 percent for the quarter, and $5.2 million or 5 percent for the 12 months of 2005 as compared to the same periods of 2004. Net interest margin on a fully taxable equivalent basis was 4.03 percent, 3.97 percent and 4.05 percent for the third quarter, fourth quarter and full year of 2005. For the same periods of 2004, the net margin was 3.96 percent, 4.05 percent and 3.99 percent, respectively.
Noninterest income for the fourth quarter of 2005, excluding gains on the sale of investment securities, increased $0.8 million or 10 percent, as compared to the same period last year, primarily due to a strong performance in insurance, mortgage banking and debit/credit card activities. Year-to-date noninterest income, excluding gains on the sale of investment securities, increased $3.7 million or 13 percent. Deposit fees, wealth management, mortgage banking, insurance, letters of credit, lending and cash management activities all had strong performances for the full year.
Realized equity security gains for the fourth quarter and year-to-date 2005 were $1.2 million and $5.0 million, respectively. Realized equity security gains for the fourth quarter and full year 2004 were $1.1 million and $5.4 million. Market value and unrealized gains in the equity securities portfolios at December 31, 2005 were $65.1 million and $19.7 million, respectively, as compared to $74.6 million and $27.7 million at December 31, 2004.
Noninterest expense increased for the fourth quarter and full year 2005 by $0.5 million and $2.5 million, respectively, as compared to the same periods of 2004. The primary factors in the full year increase is a $1.9 million increase in salaries and benefits and a $1.3 million increase in occupancy, equipment and data processing expenses. Salary and benefits expenses reflect the impact of normal merit increases and the addition of 12 average full-time equivalent staff to accommodate business expansion. Occupancy, equipment and data processing expense increases for the 2005 year-to-date period were affected by several facility restructurings which included the loss on the sale of an obsolete branch building, the donation of two branches to local municipalities, the write-off of leasehold improvements in a vacated leased office, as well as the addition of 5 new branches. The efficiency ratio, which measures noninterest expense to core revenue, was 43 percent in the fourth quarter of 2005, as compared to 43 percent in the fourth quarter of 2004. The efficiency ratio for the year ended December 31, 2005 was 42 percent as compared to 43 percent last year.
Asset quality continued to be an area of focus. Nonperforming assets totaled $14.9 million or 0.47 percent of total assets at December 31, 2005 as compared to $10.3 million or 0.33 percent at September 30, 2005 and $8.4 million or 0.28 percent at December 31, 2004. The increase in nonperforming assets during the fourth quarter of 2005 is primarily attributable to a $4.6 million commercial real estate loan classified as nonperforming and a $2.4 million residential development property acquired through foreclosure. The allowance for loan losses was $36.6 million at December 31, 2005 as compared to $34.3 million at December 31, 2004. The ratio of the allowance for loan losses compared to total loans is 1.47 percent at December 31, 2005 and 1.50 percent at December 31, 2004.
Net loan charge-offs for the full year 2005 were $1.7 million or 0.07 percent of average loans on an annualized basis compared to $1.6 million or 0.07 percent for 2004. 2004 net loan charge-offs were affected by two significant troubled commercial loan relationships that were satisfactorily resolved during the fourth quarter of 2004, resulting in net recoveries of $2.6 million for the quarter.
In the fourth quarter of 2005, S&T recorded a provision for loan losses of $1.5 million as compared to a negative provision of $0.5 million in the fourth quarter of 2004. Year-to-date 2005, the provision for loan losses was $5.0 million as compared to $4.4 million for the year ended December 31, 2004. 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 trends in asset quality. Miller added, "Asset quality is a cardinal commitment at S&T, and we continue to be very aggressive in dealing with potential problem loans. This is especially important in dealing with potential problems in our commercial loan portfolio 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 $0.29 per share on December 19, 2005. The dividend is payable on January 25, 2006 to shareholders of record as of December 30, 2005. This dividend represents a 7 percent increase over the $0.27 per share quarterly dividend declared a year ago and a 3 percent projected yield utilizing the December 31, 2005 closing market price of $36.82. The S&T Board of Directors also authorized a stock buyback program on December 20, 2004 of up to one million shares, or approximately 4 percent of shares outstanding. During 2005, S&T repurchased 660,400 shares under this program at an average cost of $35.09 per share. The remaining shares authorized under this program expired at December 31, 2005. On December 19, 2005, the S&T Board of Directors authorized a new buyback program for 2006 of up to 1 million shares, or approximately 4 percent of shares outstanding.
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 $3.2 billion, S&T Bancorp, Inc. stock trades on the NASDAQ National 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, 2005
(Dollars in thousands, except per share data)
2004
March June September December
For the period: 1Q 2Q 3Q 4Q
Interest Income $35,596 $36,235 $37,726 $39,075
Interest Expense 9,506 9,542 10,549 11,287
Net Interest Income 26,090 26,693 27,177 27,788
Taxable Equivalent
Adjustment 920 923 927 936
Net Interest
Income (FTE) 27,010 27,616 28,104 28,724
Provision For Loan Losses 1,500 1,900 1,500 (500)
Net Interest Income
After Provisions (FTE) 25,510 25,716 26,604 29,224
Security Gains, Net 1,520 1,708 1,144 972
Service Charges and Fees 2,232 2,359 2,316 2,476
Wealth Management 1,517 1,525 1,471 1,688
Insurance 1,076 1,115 1,219 1,148
Other 2,048 2,474 1,814 2,380
Total Other Income 6,873 7,473 6,820 7,692
Salaries and Employee
Benefits 8,292 8,006 8,438 8,109
Occupancy and Equip.
Expense, Net 1,720 1,710 1,752 1,900
Data Processing Expense 999 975 956 1,036
FDIC Expense 73 74 72 70
Other 3,653 4,049 3,678 4,630
Total Other Expense 14,737 14,814 14,896 15,745
Income Before Taxes 19,166 20,083 19,672 22,143
Taxable Equivalent
Adjustment 920 923 927 936
Applicable Income Taxes 5,290 5,588 5,468 6,655
Net Income $12,956 $13,572 $13,277 $14,552
Per Common Share Data:
Shares Outstanding at
End of Period 26,619,399 26,261,769 26,513,869 26,600,395
Average Shares
Outstanding - Diluted 26,950,542 26,644,177 26,709,616 26,896,777
Net Income - Diluted $0.48 $0.51 $0.50 $0.54
Dividends Declared $0.26 $0.27 $0.27 $0.27
Book Value $12.74 $12.25 $12.77 $13.12
Market Value $30.06 $31.98 $35.71 $37.69
2005
March June September December
For the period: 1Q 2Q 3Q 4Q
Interest Income $39,466 $42,144 $44,035 $46,476
Interest Expense 12,148 13,780 15,595 17,991
Net Interest Income 27,318 28,364 28,440 28,485
Taxable Equivalent
Adjustment 975 1,002 1,024 1,041
Net Interest
Income (FTE) 28,293 29,366 29,464 29,526
Provision For Loan Losses 800 (300) 3,000 1,500
Net Interest Income
After Provisions (FTE) 27,493 29,666 26,464 28,026
Security Gains, Net 1,668 801 1,300 1,239
Service Charges and Fees 2,181 2,338 2,504 2,564
Wealth Management 1,643 1,831 1,760 1,743
Insurance 1,403 1,387 1,403 1,492
Other 2,191 2,948 2,473 2,699
Total Other Income 7,418 8,504 8,140 8,498
Salaries and Employee
Benefits 8,798 8,440 8,754 8,723
Occupancy and Equip.
Expense, Net 2,290 1,939 1,892 1,946
Data Processing Expense 1,035 1,092 1,046 1,117
FDIC Expense 74 75 71 72
Other 3,876 4,059 2,932 4,415
Total Other Expense 16,073 15,605 14,695 16,273
Income Before Taxes 20,506 23,366 21,209 21,490
Taxable Equivalent
Adjustment 975 1,002 1,024 1,041
Applicable Income Taxes 5,711 6,871 5,818 5,886
Net Income $13,820 $15,493 $14,367 $14,563
Per Common Share Data:
Shares Outstanding at
End of Period 26,584,029 26,200,529 26,364,095 26,270,730
Average Shares
Outstanding - Diluted 26,951,090 26,644,682 26,618,216 26,542,511
Net Income - Diluted $0.51 $0.58 $0.54 $0.55
Dividends Declared $0.28 $0.28 $0.28 $0.29
Book Value $13.06 $13.09 $13.35 $13.41
Market Value $35.40 $36.10 $37.80 $36.82
Year-to-date
December December
For the period: 2005 2004
Interest Income $172,122 $148,638
Interest Expense 59,514 40,890
Net Interest Income 112,608 107,748
Taxable Equivalent Adjustment 4,042 3,706
Net Interest Income (FTE) 116,650 111,454
Provision For Loan Losses 5,000 4,400
Net Interest Income
After Provisions (FTE) 111,650 107,054
Security Gains, Net 5,008 5,344
Service Charges and Fees 9,587 9,383
Wealth Management 6,977 6,201
Insurance 5,685 4,558
Other 10,311 8,716
Total Other Income 32,560 28,858
Salaries and Employee Benefits 34,715 32,845
Occupancy and Equip. Expense, Net 8,067 7,082
Data Processing Expense 4,290 3,966
FDIC Expense 293 289
Other 15,281 16,009
Total Other Expense 62,646 60,191
Income Before Taxes 86,572 81,065
Taxable Equivalent Adjustment 4,042 3,706
Applicable Income Taxes 24,287 23,001
Net Income $58,243 $54,358
Per Common Share Data:
Shares Outstanding at End of Period 26,270,730 26,600,395
Average Shares Outstanding - Diluted 26,688,148 26,799,451
Net Income - Diluted $2.18 $2.03
Dividends Declared $1.13 $1.07
Book Value $13.41 $13.12
Market Value $36.82 $37.69
S&T Bancorp, Inc.
Consolidated Selected Financial Data
December 31, 2005
(Dollars in thousands)
2004
March June September December
Asset Quality Data 1Q 2Q 3Q 4Q
Nonaccrual Loans and
Nonperforming Loans $12,465 $13,514 $15,895 $6,309
Assets acquired through
foreclosure or repossession 2,287 521 2,822 2,119
Nonperforming Assets 14,752 14,035 18,717 8,428
Allowance for Loan Losses 32,658 32,792 32,127 34,262
Nonperforming Loans/Loans 0.57% 0.60% 0.69% 0.28%
Allowance for Loan Losses/
Loans 1.50% 1.46% 1.40% 1.50%
Allowance for Loan Losses/
Nonperforming Loans 262% 243% 202% 543%
Net Loan Charge-offs
(Recoveries) 320 1,765 2,166 (2,635)
Net Loan Charge-offs
(Recoveries) (annualized)/
Average Loans 0.06% 0.32% 0.38% -0.46%
Balance Sheet (Period-End)
Assets $2,956,404 $3,006,203 $3,009,776 $2,989,034
Earning Assets 2,776,693 2,823,231 2,829,035 2,805,522
Securities 592,761 576,612 536,783 518,171
Loans, Gross 2,183,931 2,246,619 2,292,253 2,287,351
Total Deposits 1,977,330 1,976,340 2,079,182 2,176,263
Non-Interest Bearing
Deposits 382,110 376,471 416,748 415,812
NOW, Money Market &
Savings 756,965 742,582 772,783 896,395
CD's $100,000 and over 176,512 187,574 197,347 192,761
Other Time Deposits 661,743 669,713 692,304 671,295
Short-term borrowings 463,000 542,598 456,684 323,384
Long-term Debt 116,890 116,894 86,328 86,303
Shareholder's Equity 339,095 321,625 338,575 349,129
Balance Sheet (Daily Averages)
Assets $2,908,794 $2,979,134 $3,002,225 $3,000,134
Earning Assets 2,732,315 2,798,943 2,821,311 2,818,925
Securities 597,845 583,192 555,568 530,547
Loans, Gross 2,134,470 2,215,751 2,264,843 2,285,101
Deposits 1,955,025 1,982,751 2,040,251 2,116,041
Shareholder's Equity 341,835 330,474 333,545 347,105
2005
March June September December
Asset Quality Data 1Q 2Q 3Q 4Q
Nonaccrual Loans and
Nonperforming Loans $7,331 $5,944 $8,368 $11,166
Assets acquired through
foreclosure or repossession 1,536 945 1,908 3,712
Nonperforming Assets 8,867 6,889 10,276 14,878
Allowance for Loan Losses 34,339 33,525 36,093 36,572
Nonperforming Loans/Loans 0.32% 0.25% 0.35% 0.45%
Allowance for Loan Losses/
Loans 1.48% 1.40% 1.50% 1.47%
Allowance for Loan Losses/
Nonperforming Loans 468% 564% 431% 328%
Net Loan Charge-offs
(Recoveries) 723 (455) 432 1,021
Net Loan Charge-offs
(Recoveries) (annualized)/
Average Loans 0.13% -0.08% 0.07% 0.17%
Balance Sheet (Period-End)
Assets $3,027,881 $3,095,177 $3,104,433 $3,194,979
Earning Assets 2,841,330 2,900,582 2,909,863 2,986,081
Securities 522,631 509,985 499,545 494,575
Loans, Gross 2,318,699 2,390,598 2,410,318 2,491,506
Total Deposits 2,168,932 2,208,204 2,306,604 2,418,884
Non-Interest Bearing
Deposits 404,557 409,721 417,894 435,672
NOW, Money Market &
Savings 904,809 922,923 965,625 1,050,104
CD's $100,000 and over 187,010 201,076 210,024 206,666
Other Time Deposits 672,556 674,484 713,061 726,442
Short-term borrowings 399,846 410,362 314,467 287,829
Long-term Debt 61,115 81,080 83,860 83,776
Shareholder's Equity 347,279 342,852 351,983 352,421
Balance Sheet (Daily Averages)
Assets $2,998,237 $3,061,157 $3,090,488 $3,141,728
Earning Assets 2,813,642 2,869,845 2,897,199 2,947,840
Securities 518,872 516,704 504,806 495,676
Loans, Gross 2,294,699 2,353,141 2,381,551 2,452,165
Deposits 2,157,201 2,188,288 2,269,085 2,348,991
Shareholder's Equity 353,472 347,871 351,432 353,373
S&T Bancorp, Inc.
Consolidated Selected Financial Data
December 31, 2005
(Dollars in thousands, except per share data)
2004
March June September December
Profitability Ratios (annualized) 1Q 2Q 3Q 4Q
Return on Average Assets 1.79% 1.83% 1.76% 1.93%
Return on Average Shareholder's
Equity 15.24% 16.52% 15.84% 16.68%
Yield on Earning Assets (FTE) 5.39% 5.35% 5.46% 5.66%
Cost of Interest Bearing Funds 1.79% 1.74% 1.90% 2.06%
Net Interest Margin (FTE)(4) 3.98% 3.97% 3.96% 4.05%
Efficiency Ratio (FTE)(1) 43.49% 42.22% 42.66% 43.24%
Capitalization Ratios
Dividends Paid to Net Income 53.48% 51.06% 53.34% 49.20%
Shareholder's Equity to Assets
(Period End) 11.47% 10.70% 11.25% 11.68%
Leverage Ratio (2) 9.15% 8.80% 9.15% 9.51%
Risk Based Capital - Tier I (3) 10.55% 10.10% 10.44% 10.84%
Risk Based Capital - Tier II (3) 12.31% 11.78% 12.13% 12.58%
2005
March June September December
Profitability Ratios (annualized) 1Q 2Q 3Q 4Q
Return on Average Assets 1.87% 2.03% 1.84% 1.84%
Return on Average Shareholder's
Equity 15.86% 17.86% 16.22% 16.35%
Yield on Earning Assets (FTE) 5.84% 6.04% 6.18% 6.40%
Cost of Interest Bearing Funds 2.27% 2.46% 2.73% 3.07%
Net Interest Margin (FTE)(4) 4.08% 4.10% 4.03% 3.97%
Efficiency Ratio (FTE)(1) 45.01% 41.21% 39.08% 42.80%
Capitalization Ratios
Dividends Paid to Net Income 51.96% 48.16% 51.08% 50.69%
Shareholder's Equity to Assets
(Period End) 11.47% 11.08% 11.34% 11.03%
Leverage Ratio (2) 9.68% 9.27% 9.56% 9.50%
Risk Based Capital - Tier I (3) 10.86% 10.29% 10.73% 10.52%
Risk Based Capital - Tier II (3) 12.52% 11.89% 12.35% 12.09%
Year-to-
date
December December
Profitability Ratios (annualized) 2005 2004
Return on Average Assets 1.90% 1.83%
Return on Average Shareholder's
Equity 16.57% 16.07%
Yield on Earning Assets (FTE) 6.12% 5.47%
Cost of Interest Bearing Funds 2.64% 1.87%
Net Interest Margin (FTE)(4) 4.05% 3.99%
Efficiency Ratio (FTE)(1) 41.99% 42.90%
Capitalization Ratios
Dividends Paid to Net Income
Shareholder's Equity to Assets
(Period End)
Leverage Ratio (2)
Risk Based Capital - Tier I (3)
Risk Based Capital - Tier II (3)
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.
Source: prnewswire
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