S&T Bancorp, Inc.

We are about to begin. Good day, ladies and gentlemen, and welcome to your S&T Bancorp, Inc. Third Quarter Earnings Conference Call. Our lines have been placed in 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, Mark Kochbar. Sir, the floor is yours.

Thank you. Good afternoon, everyone, and 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. This statement provides the cautionary language required by the Securities Exchange Commission for forward-looking statements that may be included in this presentation. A copy of the third quarter earnings release can be obtained by clicking on the press release link on your screen or by visiting our investor relations website at www.stvancorp.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, third quarter 2020 earnings conference call, click on the third quarter 2020 earnings supplement. With me today are Todd Rice, CEO of S&T, and Dave Antola, S&T's president. I'd now like to turn the program over to Todd who will begin today's presentation.

Well, thank you, Mark, and good afternoon, everybody. We appreciate you taking time to join us for our third quarter earnings update. As announced in our press release this morning, we've reported net income of $16.7 million, or 43 cents per share, compared to $26.9 million, or 79 cents per share, in the third quarter of 2019. Operating metrics for the quarter included a return on asset of 0.72%, a return on equity of 5.8% and a return on casual common equity of 8.96%, and a pre-tax, pre-provisioned number of $37.5 million, or 1.61% of average assets. Results this quarter continue to be impacted by the effects that COVID-19 is having on the overall economy. For the quarter, loans contracted by $154 million as economic uncertainty is still causing customers and businesses to pay down debt. and they're being very cautious on credit requests. Our deposits also decreased by $234 million. We made a strategic decision to let $269 million of brokered CDs run off, but our customer deposits were up $29 million and we also saw a nice shift in the mix with an increase in DDA accounts of $121 million and a reduction in higher cost CDs of $92 million. Mortgage banking was a bright spot, generating $3.9 million in fees for the quarter, which was a $1.3 million increase over the second quarter of this year. On the credit front, we did record a provision of $17.5 million, which increased the allowance to $121 million, or 1.77%. So total loans, excluding PPP, versus an allowance of $150 million in Q2, or 1.64%. percent of total loans excluding PPP. Charges for the quarter totaled $12.9 million, which included a $10 million charge on a CRE property whose tenant has ceased operations for the time due to COVID. Loan deferral at the end of the quarter declined significantly from $1.36 billion at 20 percent of loans to $350 million at 5 percent of loans The hotel portfolio comprises about $230 million, or 65% of the overall deferral balances. Customers whose deferral periods have expired or gone back to contractual payments of principal and interest, so we are seeing a nice lift on that. We also increased specific reserves by $6.2 million for the quarter, and these were impacted primarily by two credits. Our $2.9 million is associated with the C&I credit. whose operations have been impacted by COVID. The company is still operational, and they are current on their payments, but we are negotiating a restructuring agreement on their debt. $3.4 million is associated with the real estate related to the check cutting customer that we disclosed last quarter. We did identify additional liens against the property. We have signed a stocking horse agreement, and the auction process will begin in a few days, and we expect to have a final agreement in place in Q4. And finally, I'm pleased to report that our Board of Directors has declared a dividend of $0.28 payable November 19, 2020 to shareholders of record on November 5, 2020. I want to thank you for your continued support of S&P Bancorp. And now I'd like to turn the program to our President, David Antoli.