S&T Bancorp Inc (STBA) Q3 2024 Earnings Call Highlights: Strong Deposit Growth Amidst ...

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In This Article:

  • Net Income: $33 million, equating to $0.85 per share.

  • Return on Tangible Equity (ROTE): 13.5%.

  • Return on Assets (ROA): 1.35%.

  • Pre-Provision Net Revenue (PPNR): 1.69%.

  • Net Interest Margin: 3.82%, a slight decline.

  • Customer Deposit Growth: Over $100 million, more than 5% annualized growth.

  • Reduction in Wholesale Deposits and Borrowings: $150 million combined.

  • Commercial Loan Balance Reduction: $76 million.

  • Allowance for Credit Losses: Declined by approximately $2 million, moving from 1.38% to 1.36% of total loans.

  • Non-Performing Assets: $31.9 million, or 41 basis points of total loans.

  • Charge-offs: $2.1 million for the quarter.

  • Net Interest Income: Improved by $900,000 compared to last quarter.

  • Non-Interest Income: Declined by $1.4 million quarter-over-quarter.

  • Non-Interest Expenses: Increased by $1.8 million in the third quarter.

  • Tangible Common Equity (TCE) Ratio: Increased by 64 basis points.

Release Date: October 17, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • S&T Bancorp Inc (NASDAQ:STBA) reported strong customer deposit growth of over $100 million in the quarter, producing more than 5% growth annualized.

  • The company demonstrated excellent return metrics with a 13.5% ROTE and 1.35% ROA.

  • Asset quality continues to improve with a decline in non-performing assets and a reduction in criticized and classified loans.

  • The company has built a significant amount of capital, providing optimism for future growth and stability.

  • S&T Bancorp Inc (NASDAQ:STBA) has a strong pipeline for loan growth in Q4, with an increase of over 50% quarter over quarter, particularly in commercial and consumer segments.

Negative Points

  • Net income of $33 million, equating to $0.85 per share, was down slightly from the previous quarter.

  • Net interest margin declined slightly to 3.82%, impacted by securities losses and a changing rate environment.

  • Loan balances reduced by nearly $25 million, primarily due to reduced commercial loan balances and increased payoffs.

  • Non-interest income declined by $1.4 million quarter-over-quarter, partly due to securities repositioning losses.

  • The company anticipates further net interest margin compression of 10 to 12 basis points due to expected rate cuts.

Q & A Highlights

Q: With non-performing assets (NPAs) down and net charge-offs slowing, what are your updated thoughts on a normalized cadence for net charge-offs or provisions going forward? A: David Antolik, President: The current quarter's charge-off levels are closer to what we consider normalized. As we return to loan growth, we expect to maintain provisions to support that growth. There's still room for improvement in criticized and classified assets, which may affect the allowance for credit losses (ACL) levels.

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