UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 ______________________________________

FORM 10-Q

______________________________________ 

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to                

Commission file number 0-12508

______________________________________ 

S&T BANCORP INC.

(Exact name of registrant as specified in its charter)

______________________________________ 

Pennsylvania			25-1434426
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification No.)
800 Philadelphia Street	Indiana	PA	15701
(Address of principal executive offices)			(zip code)

800-325-2265

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $2.50 par value	STBA	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. 

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Common Stock, $2.50 Par Value - 39,310,734 shares as of October 31, 2020

S&T BANCORP, INC. AND SUBSIDIARIES

INDEX

S&T BANCORP, INC. AND SUBSIDIARIES

		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets - September 30, 2020 and December 31, 2019	2
	Consolidated Statements of Comprehensive Income - Three and Nine Months Ended September 30, 2020 and 2019	3
	Consolidated Statements of Changes in Shareholders' Equity - Three and Nine Months Ended September 30, 2020 and 2019	4
	Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2020 and 2019	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	49
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	72
Item 4.	Controls and Procedures	74
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	74
Item 1A.	Risk Factors	74
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	75
Item 3.	Defaults Upon Senior Securities	76
Item 4.	Mine Safety Disclosures	77
Item 5.	Other Information	77
Item 6.	Exhibits	78
	Signatures	79

1

S&T BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30, 2020			December 31, 2019
(dollars in thousands, except per share data)	(Unaudited)			(Audited)
ASSETS
Cash and due from banks, including interest-bearing deposits of $235,953 and $124,491 at September 30, 2020 and December 31, 2019		$	308,489		$	197,823
Securities, at fair value		718,169			784,283
Loans held for sale		16,724			5,256
Portfolio loans, net of unearned income		7,394,868			7,137,152
Allowance for credit losses on loans		(120,998)			(62,224)
Portfolio loans, net		7,273,870			7,074,928
Bank owned life insurance		81,873			80,473
Premises and equipment, net		56,254			56,940
Federal Home Loan Bank and other restricted stock, at cost		15,777			22,977
Goodwill		373,417			371,621
Other intangible assets, net		9,265			10,919
Other assets		336,734			159,429
Total Assets		$	9,190,572		$	8,764,649
LIABILITIES
Deposits:
Noninterest-bearing demand		$	2,232,706		$	1,698,082
Interest-bearing demand		982,956			962,331
Money market		2,033,585			1,949,811
Savings		938,475			830,919
Certificates of deposit		1,446,096			1,595,433
Total Deposits		7,633,818			7,036,576
Securities sold under repurchase agreements		42,706			19,888
Short-term borrowings		83,000			281,319
Long-term borrowings		49,076			50,868
Junior subordinated debt securities		64,068			64,277
Other liabilities		175,789			119,723
Total Liabilities		8,048,457			7,572,651
SHAREHOLDERS’ EQUITY
Common stock ($2.50 par value) Authorized—50,000,000 shares Issued—41,449,444 shares at September 30, 2020 and December 31, 2019 Outstanding— 39,251,638 shares at September 30, 2020 and 39,560,304 shares at December 31, 2019		103,623			103,623
Additional paid-in capital		400,789			399,944
Retained earnings		698,351			761,083
Accumulated other comprehensive income (loss)		9,453			(11,670)
Treasury stock (2,197,806 shares at September 30, 2020 and 1,889,140 shares at December 31, 2019, at cost)		(70,101)			(60,982)
Total Shareholders’ Equity		1,142,115			1,191,998
Total Liabilities and Shareholders’ Equity		$	9,190,572		$	8,764,649

See Notes to Consolidated Financial Statements

2

S&T BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands, except per share data)	2020			2019			2020			2019
INTEREST AND DIVIDEND INCOME
Loans, including fees		$	72,263		$	75,080		$	229,812		$	223,200
Investment Securities:
Taxable		3,473			3,552			11,547			10,989
Tax-exempt		885			787			2,646			2,466
Dividends		227			394			911			1,373
Total Interest and Dividend Income		76,848			79,813			244,916			238,028
INTEREST EXPENSE
Deposits		6,626			16,207			31,191			47,243
Borrowings and junior subordinated debt securities		946			2,410			4,265			8,406
Total Interest Expense		7,572			18,617			35,456			55,649
NET INTEREST INCOME		69,276			61,196			209,460			182,379
Provision for credit losses		17,485			4,913			124,294			12,767
Net Interest Income After Provision for Credit Losses		51,791			56,283			85,166			169,612
NONINTEREST INCOME
Net gain on sale of securities		—			—			142			—
Debit and credit card		4,171			3,475			11,264			9,951
Mortgage banking		3,964			594			7,823			1,726
Service charges on deposit accounts		2,820			3,412			8,720			9,777
Wealth management		2,522			2,101			7,471			6,210
Commercial loan swap income		499			1,464			3,928			3,147
Other		2,507			2,017			4,762			6,515
Total Noninterest Income		16,483			13,063			44,110			37,326
NONINTEREST EXPENSE
Salaries and employee benefits		24,571			19,936			67,326			61,135
Data processing and information technology		4,218			3,681			11,671			10,327
Net occupancy		3,441			2,898			10,643			8,883
Furniture, equipment and software		2,440			2,090			7,965			6,621
Professional services and legal		1,911			1,054			4,890			3,382
FDIC insurance		1,900			(675)			3,718			536
Marketing		1,793			1,062			3,883			3,514
Other taxes		1,612			1,540			4,816			4,182
Merger related expenses		—			552			2,342			1,171
Other		6,360			5,529			20,861			17,187
Total Noninterest Expense		48,246			37,667			138,115			116,938
Income (Loss) Before Taxes		20,028			31,679			(8,839)			90,000
Income tax expense (benefit)		3,323			4,743			(5,703)			14,035
Net Income (Loss)		$	16,705		$	26,936		$	(3,136)		$	75,965
Earnings (loss) per share—basic		$	0.43		$	0.79		$	(0.08)		$	2.22
Earnings (loss) per share—diluted		$	0.43		$	0.79		$	(0.08)		$	2.21
Dividends declared per share		$	0.28		$	0.27		$	0.84		$	0.81
Comprehensive Income		$	16,926		$	29,142		$	17,967		$	91,759

See Notes to Consolidated Financial Statements

3

S&T BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited)

	For the three months ended September 30, 2019
(dollars in thousands, except share and per share data)	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Treasury Stock			Total
Balance at June 30, 2019		$	90,326		$	211,325		$	730,577		$	(9,519)		$	(57,756)		$	964,953
Net income for the three months ended September 30, 2019		—			—			26,936			—			—			26,936
Other comprehensive income, net of tax		—			—			—			2,206			—			2,206
Cash dividends declared ($0.27 per share)		—			—			(9,239)			—			—			(9,239)
Treasury stock issued for restricted stock awards (954 shares, net of forfeitures of 1,705 shares)		—			—			6			—			(30)			(24)
Common stock issuance cost		—			(125)			—			—			—			(125)
Repurchase of common stock (84,868 shares)		—			—			—			—			(3,100)			(3,100)
Recognition of restricted stock compensation expense		—			840			—			—			—			840
Balance at September 30, 2019		$	90,326		$	212,040		$	748,280		$	(7,313)		$	(60,886)		$	982,447
	For the three months ended September 30, 2020
(dollars in thousands, except share and per share data)	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Total
Balance at June 30, 2020		$	103,623		$	400,417		$	692,240		$	9,232		$	(69,735)		$	1,135,777
Net income for the three months ended September 30, 2020		—			—			16,705			—			—			16,705
Other comprehensive income, net of tax		—			—			—			221			—			221
Cash dividends declared ($0.28 per share)		—			—			(10,960)			—			—			(10,960)
Forfeitures of restricted stock awards (11,822 shares)		—			—			366			—			(366)			—
Repurchase of S&T Stock (0 shares)		—			—			—			—			—			—
Recognition of restricted stock compensation expense		—			372			—			—			—			372
Balance at September 30, 2020		$	103,623		$	400,789		$	698,351		$	9,453		$	(70,101)		$	1,142,115

4

S&T BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited)

	For the nine months ended September 30, 2019
(dollars in thousands, except share and per share data)	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Treasury Stock			Total
Balance at January 1, 2019		$	90,326		$	210,345		$	701,819		$	(23,107)		$	(43,622)		$	935,761
Net income for the nine months ended September 30, 2019		—			—			75,965			—			—			75,965
Other comprehensive income, net of tax		—			—			—			15,794			—			15,794
Impact of new lease standard		—			—			167			—			—			167
Cash dividends declared ($0.81 per share)		—			—			(27,798)			—			—			(27,798)
Treasury stock issued for restricted stock awards (84,010 shares, net of forfeitures of 52,457 shares)		—			—			(1,873)			—			958			(915)
Common stock issuance cost		—			(125)			—			—			—			(125)
Repurchase of common stock (470,708 shares)		—			—			—			—			(18,222)			(18,222)
Recognition of restricted stock compensation expense		—			1,820			—			—			—			1,820
Balance at September 30, 2019		$	90,326		$	212,040		$	748,280		$	(7,313)		$	(60,886)		$	982,447
	For the nine months ended September 30, 2020
(dollars in thousands, except share and per share data)	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total
Balance at January 1, 2020		$	103,623		$	399,944		$	761,083		$	(11,670)		$	(60,982)		$	1,191,998
Net loss for the nine months ended September 30, 2020		—			—			(3,136)			—			—			(3,136)
Other comprehensive income, net of tax		—			—			—			21,123			—			21,123
Adoption of accounting standard - credit losses		—			—			(22,590)			—			—			(22,590)
Cash dividends declared ($0.84 per share)		—			—			(32,972)			—			—			(32,972)
Treasury stock issued for restricted stock awards (147,034 shares, net of forfeitures of