S&T Bancorp, Inc.

Good day, ladies and gentlemen, and welcome to the S&T Bancorp first quarter 2020 earnings conference call. All lines have been placed on a listen-only mode, and the floor will be open for your questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to your host for today, Mr. Mark Hochbar, Chief Financial Officer. Sir, the floor is yours.

All right. Thank you very much, and good afternoon, everyone. Thank you for participating in today's conference call. Before beginning the presentation, I want to take time to refer you to our statement about forward-looking statements and risk factors, which is on the screen in front of you. The statement provides the cautionary language required by the Securities and Exchange Commission for forward-looking statements that may be included in this presentation. A copy of the first quarter 2020 earnings release can be obtained by clicking on the press release link on your screen or by visiting our investor relations website at www.stbankcorp.com. We will be reviewing an earnings supplement slide deck as part of this presentation. You can obtain a copy of those slides on our website under events and presentations, first quarter 2020 earnings conference call. Click on the first quarter 2020 earnings supplement. I would now like to introduce Ty Brice, S&T's chief executive officer, who will begin today's presentation.

Well, thank you, Mark, and good afternoon, everybody. I hope that you're all staying safe and healthy through these unprecedented times. COVID-19 has impacted operations in our economies in unprecedented ways, so we've expanded our presentation this quarter to provide some granularity on the loan portfolio as well as some of our customer assistance programs that we've implemented. For the quarter, we're reporting net income of $13.2 million, or $0.34 per share, which included $2.3 million, or $0.05 per share, of merger-related expenses. in the quarter that were associated with the DMV transaction that we consummated last year. So core earnings for the quarter were $0.39 per share, which translates into a 70 basis point return on average assets, 5.13% return on equity, 7.79% return on tangible equity. Managing expenses continued to be a strategic focus. Our efficiency ratio for the quarter was 52.89%, and will continue to be a focus moving forward. We did elect to adopt CECL as of January 1st, and the uncertainty around COVID-19 resulted in a $20 million provision expense in Q1 compared to $2.2 million in the fourth quarter. So now our allowance for credit losses stands at $96.9 million, or 1.34% of loans, versus .87% last quarter. Pre-COVID, we were seeing nice growth in all of our lines of business across all of our five regional markets. The DMV conversion went extremely well, and then we were experiencing nice activity in southeastern Pennsylvania. For the quarter, portfolio loans increased to $109.6 million, or 6.2% annualized, and was distributed across commercial real estate, C&I, and construction categories. Our COVID... Next slide, Mark. The COVID-19 response was focused on four stakeholders. First were employees, and then customer and business... business customers, and finally our communities. Protecting the health and well-being of our employees and customers were the initial concern, so working from home, rotating schedules, splitting our operational staffs between multiple facilities, bonus pay for people that were coming into the office, picking up some childcare expenses, and a number of other initiatives that we did to really just try and make sure our employees were safe and healthy. So next we focus on customer assistance program for consumers and businesses, which entail needs-based loan payment deferrals, SBA PPP lending, extended solution center hours, and encouraging the use of online and mobile solutions. And finally, we're committed to supporting our communities that have done so through contributions to food banks and our regional medical provider. Before I turn it over to our president, Dave Antolik, I want to share some very exciting news. We have been recognized by J.G. Power as the best retail bank in the Mid-Atlantic region. It truly is an honor to receive this designation, and it really is a reflection of the confidence and trust that our customers have placed in ST Bank. We've been serving our communities for 118 years through good times, challenging times, economic downturns, and national disasters, and today we bring that same commitment to help our clients navigate the COVID-19 pandemic. Common shares, totaling $411,430, were repurchased during the first quarter of 2020. at a total cost of $12.6 million for an average of $30.52 per share. And at the impact of the COVID-19 pandemic spread, we did suspend repurchase activity in mid-March. And finally, I'm pleased to announce that our Board of Directors approved a $0.28 per share dividend for shareholders of record on May 19th. It was payable on June 2nd, 2020. This is an increase of 3.7% compared to the dividend of $0.27 per share. starting the same period last year. I want to thank you for your continued support of S&P Bancorp, and I would like to turn the program over to our president, Dave Antoli.