INDIANA, Pa., April 21, 2022 /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 $29.1 million, or $0.74 per diluted share, for the first quarter of 2022 compared to net income of $22.5 million, or $0.57 per diluted share, for the fourth quarter of 2021 and net income of $31.9 million, or $0.81 per diluted share, for the first quarter of 2021.

First Quarter of 2022 Highlights:

• Return on average assets (ROA) of 1.25%, return on average equity (ROE) of 9.88% and return on average tangible equity (ROTE) (non-GAAP) of 14.61%.
• Pre-provision net revenue to average assets (PPNR) (non-GAAP) of 1.52%.
• Strong consumer loan growth of $38.6 million, or 9.8% annualized, compared to December 31, 2021.
• Total deposits remain stable with an improvement in the overall deposit mix to lower costing products compared to December 31, 2021.
• Nonperforming assets decreased $20.1 million, or 25%, compared to December 31, 2021.
• Net loan recoveries of $2.0 million drove a negative provision for credit losses of $0.5 million for the first quarter of 2022.
• S&T Bank was named highest in overall customer satisfaction with retail banking in the Pennsylvania region according to J.D. Power 2022 U.S. Retail Banking Satisfaction Study.^*
• S&T's Board of Directors approved a $0.01 per share, or 3.4%, increase in the quarterly cash dividend to $0.30 per share compared to a $0.29 per share dividend declared in the prior quarter and a $0.02, or  7.1 percent, increase compared to the same period in the prior year.

"There is a lot to be proud of at S&T this quarter including our recognition by J.D. Power as the highest in overall customer satisfaction with retail banking in the Pennsylvania region. We are honored that our customers have great confidence and trust in us," said Chris McComish, chief executive officer. "During the quarter, we saw meaningful improvement in our credit quality, strong growth in our consumer loan portfolio and a better net interest margin with an improved outlook."

Net Interest Income

Net interest income decreased $0.7 million to $67.7 million for the first quarter of 2022 compared to $68.4 million for the fourth quarter of 2021. Net interest income related to Paycheck Protection Program (PPP) loans decreased $1.4 million to $1.7 million for the first quarter of 2022 compared to $3.1 million in the fourth quarter of 2021. Net interest income, excluding PPP, increased by $0.7 million compared to the prior quarter, in part due to higher average loans excluding PPP of $54.1 million compared to the prior quarter. Net interest margin on a fully taxable equivalent basis (NIM) (FTE) (non-GAAP) increased 4 basis points to 3.16% compared to 3.12% in the prior quarter. The increase in NIM (FTE) (non-GAAP) was primarily due to an improved asset mix and higher loan and securities yields offset by lower PPP.

Asset Quality

Asset quality improved with a $20.1 million, or 25%, decrease in nonperforming assets compared to December 31, 2021. The decrease primarily related to the sale of an other real estate owned (OREO) property which reduced nonperforming assets by $6.3 million, the return to accrual of $4.6 million of hotel loans due to improved operating performance and the pay-off of a $4.2 million commercial and industrial (C&I) nonperforming loan. Nonperforming assets to total loans plus OREO was 0.85% at March 31, 2022 compared to 1.13% at December 31, 2021. Net loan recoveries were $2.0 million for the first quarter of 2022 compared to net loan charge-offs of $17.7 million in the fourth quarter of 2021. The net recoveries primarily related to a $2.5 million recovery on a C&I relationship during the first quarter of 2022. The provision for credit losses was negative $0.5 million for the first quarter of 2022 compared to $7.1 million in the fourth quarter of 2021. The negative provision was mainly due to the recovery for the first quarter of 2022. The allowance for credit losses was 1.43% of total portfolio loans as of March 31, 2022 compared to 1.41% at December 31, 2021.

Noninterest Income and Expense

Noninterest income decreased $0.9 million to $15.2 million in the first quarter of 2022 compared to $16.1 million in the fourth quarter of 2021. Other income decreased $0.9 million primarily related to an unfavorable market valuation for a deferred compensation plan. Mortgage banking income decreased $0.5 million due to decreased activity with rising interest rates. Offsetting these decreases was an increase in debit and credit card fees of $0.6 million related to higher debit card activity. Noninterest expense decreased $2.8 million to $47.4 million for the first quarter of 2022 mainly due to a decrease of $3.4 million in salaries and employee benefits related to higher incentives in the fourth quarter of 2021. Other expense increased $0.5 million related to higher OREO expense compared to the fourth quarter of 2021.

Financial Condition

Total assets were $9.4 billion at March 31, 2022 compared to $9.5 billion at December 31, 2021. Securities increased $117.4 million compared to December 31, 2021 due to cash being redeployed to higher yielding assets. Total portfolio loans excluding PPP increased by $10.3 million compared to December 31, 2021. The consumer loan portfolio grew $38.6 million, or 9.8% annualized, with growth in all consumer categories compared to December 31, 2021. Total deposits remain stable with an improvement in the overall deposit mix to lower costing products compared to December 31, 2021. S&T continues to maintain a strong regulatory capital position with all capital ratios above the well-capitalized thresholds of federal bank regulatory agencies.

Dividend

S&T's Board of Directors approved a $0.01 per share, or 3.4%, increase in the quarterly cash dividend to $0.30 per share on April 18, 2022. This dividend compares to a $0.28 per share dividend declared in the same period in the prior year. The dividend is payable May 19, 2022 to shareholders of record on May 5, 2022.

Conference Call

S&T will host its first quarter 2022 earnings conference call live over the Internet at 1:00 p.m. ET on Thursday, April 21, 2022. To access the webcast, go to S&T's webpage at www.stbancorp.com and click on "Events & Presentations." Select "1st Quarter 2022 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 April 28, 2022, by dialing 1.877.481.4010; the Conference ID is 44915.

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

S&T Bancorp, Inc. is a $9.4 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 established in 1902 and operates in five markets including Western Pennsylvania, Eastern Pennsylvania, Northeast Ohio, Central Ohio, and Upstate New York. S&T Bank recently received the highest ranking in customer satisfaction for retail banking in the Pennsylvania region by J.D. Power.  For more information visit stbancorp.com or stbank.com. Follow us on Facebook, Instagram and LinkedIn.

^*S&T Bank received the highest score in Pennsylvania in the J.D. Power 2022 U.S. Retail Banking Satisfaction Study of customers' satisfaction with their primary bank. Visit jdpower.com/awards for more details.

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", "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; the transition from LIBOR as a reference rate; 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; 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, 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; our ability to successfully manage our CEO transition; 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; our participation in the Paycheck Protection Program; 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, 2021, 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.

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SOURCE S&T Bancorp, Inc.