S&T Bancorp(STBA) - 2025 Q1 - Quarterly Report

Financial Performance - Net income for the three months ended March 31, 2025, was $33.4 million, an increase of$2.2 million compared to $31.2 million for the same period in 2024, resulting in earnings per share of$0.87 versus $0.81[78]. - Noninterest income decreased by$2.4 million to $10.4 million for the three months ended March 31, 2025, mainly due to$2.3 million of realized losses from repositioning securities[81]. - The provision for income taxes increased by $0.4 million to$8.3 million for the three months ended March 31, 2025, with an effective tax rate of 19.9% compared to 20.2% for the same period in 2024[82]. Interest Income and Expenses - Net interest income remained relatively unchanged at $83.3 million for the three months ended March 31, 2025, compared to$83.5 million for the same period in 2024, with a net interest margin of 3.81% compared to 3.84%[79]. - Total interest and dividend income was $124.8 million for the three months ended March 31, 2025, down from$127.8 million in 2024, with interest expense decreasing from $44.3 million to$41.5 million[74]. - Interest income on an FTE basis decreased by $3.0 million for the three months ended March 31, 2025, primarily due to lower interest rates[88]. Credit Losses and Allowances - The provision for credit losses decreased by$5.6 million to negative $3.0 million for the three months ended March 31, 2025, primarily due to a lower level of allowance for credit losses (ACL) and a decrease in net loan charge-offs[80]. - The allowance for credit losses decreased to$99.0 million at the end of the period, reflecting net recoveries and charge-offs[109]. - Allowance for credit losses (ACL) decreased by $2.5 million to$99.0 million, or 1.26% of total portfolio loans, as of March 31, 2025, compared to 1.31% at December 31, 2024[111]. Asset and Equity Growth - Average shareholders' equity increased to $1.4 billion for the three months ended March 31, 2025, from$1.29 billion in 2024[75]. - Total shareholders' equity increased by $37.7 million to$1.4 billion at March 31, 2025, driven by net income of $33.4 million[100]. - The company reported assets of$9.7 billion as of March 31, 2025, operating primarily in Pennsylvania and Ohio[76]. Loans and Deposits - Average loans increased by $99.1 million for the three months ended March 31, 2025, compared to the same period in 2024[88]. - Customer deposits increased by$134.7 million to $7.7 billion at March 31, 2025, contributing to a reduction in higher-cost borrowings[99]. - Total deposits increased by$109.8 million, or 1.4%, to $7.89 billion at March 31, 2025, with customer deposits rising by$134.7 million, or 1.8%[114]. Borrowings and Liquidity - Total borrowings decreased by $55.0 million, or 22.0$195.3 million at March 31, 2025, primarily due to strong growth in customer deposits[100]. - The company had total uninsured deposits of $2.7 billion, or 33.9$923.1 million in highly liquid assets, resulting in a highly liquid assets to total assets ratio of 9.5%[124]. Capital Ratios - The leverage ratio improved to 12.09% at March 31, 2025, up from 11.98% at December 31, 2024, exceeding the regulatory guideline of 5.00%[125]. - The Common Equity Tier 1 ratio was 14.67% at March 31, 2025, compared to 14.58% at December 31, 2024, also above the regulatory guideline of 6.50%[125]. - The total capital to risk-weighted assets ratio was 16.57% at March 31, 2025, compared to 16.49% at December 31, 2024[126]. Strategic Priorities - Strategic priorities for 2025 include growing the deposit franchise, enhancing core profitability, and improving asset quality and talent engagement[77]. Market Risk and Sensitivity Analysis - The market risk stress test is performed at least annually to identify model assumptions that significantly impact pretax net interest income[133]. - Sensitivity analyses help identify which model assumptions have the greatest impact on pretax net interest income[133]. - EVE analyses indicate an improvement in the rates up scenarios and a decline in the rates down scenarios when comparing March 31, 2025, to December 31, 2024[132].