S&T Bancorp(STBA) - 2024 Q4 - Annual Report

Financial Performance - Total interest and dividend income for 2024 was $515,872,000, an increase of 7.9% from$ 477,901,000 in 2023[164]. - Net income for 2024 was $131.3 million, a decrease of 9.3% from$ 144.8 million in 2023, with diluted earnings per share (EPS) at $3.41 compared to$ 3.74 in 2023[170]. - Noninterest income fell by $8.5 million to$ 49.1 million in 2024, primarily due to $7.9 million in realized losses from the repositioning of securities[173]. - Total noninterest expense increased by$ 8.6 million to $218.9 million in 2024, with salaries and employee benefits rising by$ 10.5 million due to merit increases and new talent acquisition[174]. - The efficiency ratio (non-GAAP) for 2024 was 55.99%, compared to 51.35% in 2023, indicating a decline in operational efficiency[174]. - Comprehensive income for 2024 was $145,174,000, down from$ 166,005,000 in 2023[272]. Interest Income and Expense - Net interest income on an FTE basis for 2024 was $337,512,000, a decrease of 4.1% from$ 351,960,000 in 2023[164]. - The total interest expense for 2024 was $181,066,000, compared to$ 128,491,000 in 2023, reflecting a significant increase[164]. - Interest income on an FTE basis increased by $38.1 million to$ 518.6 million in 2024 compared to $480.5 million in 2023, primarily due to higher interest rates on interest-earning assets[181]. - The net interest margin on an FTE basis for 2024 was 3.82%, down from 4.13% in 2023[164]. - Net interest income decreased by$ 14.6 million, or 4.18%, to $334.8 million in 2024, with a net interest margin (NIM) on a fully taxable equivalent (FTE) basis of 3.82%, down 31 basis points from 4.13% in 2023[171]. Credit Quality and Losses - The allowance for credit losses (ACL) is subject to significant estimation uncertainty, with a potential increase of approximately 75% under a severely adverse economic scenario[155]. - The provision for credit losses significantly decreased to$ 0.1 million in 2024 from $17.9 million in 2023, reflecting improved asset quality[172]. - Net loan charge-offs for 2024 were$ 8.3 million, or 0.11% of average loans, down from $13.2 million, or 0.18%, in 2023[186]. - The Allowance for Credit Losses (ACL) was$ 101.5 million, or 1.31% of total portfolio loans, at December 31, 2024, down from $108.0 million, or 1.41% in 2023, reflecting a$ 6.5 million decrease due to improved asset quality[230]. Assets and Liabilities - Total assets increased to $9.57 billion in 2024 from$ 9.28 billion in 2023[180]. - Average shareholders' equity increased to $1.33 billion in 2024 from$ 1.23 billion in 2023, reflecting growth in the company's capital base[170]. - Total deposits increased to $7,783,117 thousand in 2024, up from$ 7,521,769 thousand in 2023, representing a growth of approximately 3.5%[270]. - Customer deposits increased by $411.7 million, or 5.8%, to$ 7.6 billion at December 31, 2024, while brokered deposits decreased by $150.4 million, or 40.0%[193]. - Total borrowings decreased by$ 253.3 million, from $503.6 million in 2023 to$ 250.3 million in 2024[239]. Strategic Focus and Future Outlook - The company aims to focus on growing its deposit franchise, core profitability, asset quality, and talent engagement in its strategic priorities for 2025 and beyond[168]. - The bank's management continuously monitors the loan portfolio for potential and emerging risks related to inflation and interest rate changes[257]. - The company plans to monitor its loan strategy and may revert to selling more residential mortgages in the future[215]. Regulatory and Compliance - The leverage ratio stood at 11.98%, significantly above the regulatory guideline of 5.00%[251]. - Common Equity Tier 1 ratio was 14.58%, exceeding the regulatory guideline of 6.50%[251]. - The effective tax rate increased to 20.4% in 2024 from 19.0% in 2023, primarily due to the adoption of new accounting standards[175]. Impairment and Goodwill - Goodwill was tested for impairment as of October 1, 2024, and was concluded to be not impaired[160]. - The company did not recognize any impairment charges on the securities portfolio in 2024, 2023, or 2022, indicating stable credit quality[198].