S&T Bancorp(STBA) - 2025 Q2 - Quarterly Results

S&T Bancorp, Inc. Second Quarter 2025 Results This report presents S&T Bancorp's Q2 2025 financial results, covering performance, statements, and non-GAAP measures Performance Overview S&T Bancorp reported Q2 2025 net income of $31.9 million, driven by increased net interest income and improved asset quality Second Quarter 2025 Financial Highlights Key financial results and performance ratios for Q2 2025 show net income, EPS, and asset quality metrics Q2 2025 Key Financial Results | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Income | $31.9 million | $33.4 million | $34.4 million | | Diluted EPS | $0.83 | $0.87 | $0.89 | Q2 2025 Key Performance Ratios | Ratio | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Return on average assets (ROA) | 1.32% | 1.41% | | Return on average equity (ROE) | 8.91% | 9.67% | | Return on average tangible equity (ROTE) (non-GAAP) | 12.12% | 13.29% | | Pre-provision net revenue to average assets (PPNR) (non-GAAP) | 1.73% | 1.73% | - Total portfolio loans increased by $98.1 million (5.02% annualized) and total deposits grew by $28.0 million (1.42% annualized) compared to the previous quarter[5] - Nonperforming assets improved, decreasing by $1.1 million to $21.3 million, representing 0.27% of total loans plus OREO[5] Net Interest Income Net interest income increased due to asset growth and favorable repricing, despite lower liability costs Net Interest Income and Margin (QoQ) | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $86.6 million | $83.3 million | +$3.3 million (3.90%) | | NIM (FTE) (non-GAAP) | 3.88% | 3.81% | +7 bps | - The growth in net interest income was driven by a $112.5 million increase in average interest-earning assets and favorable asset repricing[4] - Total interest-bearing liability costs decreased by 3 basis points to 2.84%, primarily due to the repricing of certificates of deposits[4] Asset Quality Asset quality remained strong with a decrease in nonperforming assets and a slight increase in credit loss provision - The allowance for credit losses (ACL) stood at $98.6 million, or 1.24% of total portfolio loans, at the end of Q2 2025, a slight decrease from 1.26% in Q1 2025[6] - The provision for credit losses was $2.0 million for Q2 2025, compared to a negative provision of $3.0 million in Q1 2025, which was influenced by net recoveries and a decrease in specific reserves[6] - Net charge-offs were $1.2 million (0.06% of average loans) in Q2 2025, compared to net recoveries in the prior quarter[6] Noninterest Income and Expense Noninterest income increased due to prior period losses, while expenses rose from higher salaries and benefits - Noninterest income increased by $3.1 million to $13.5 million in Q2 2025, primarily because Q1 2025 included a $2.3 million realized loss from securities repositioning[7] - Total noninterest expense rose by $3.0 million to $58.1 million, mainly due to a $3.1 million increase in salaries and employee benefits from annual merit increases, higher incentives, and medical costs[7] Financial Condition Total assets and loans grew, deposit mix shifted, and capital ratios remained strong, exceeding well-capitalized thresholds - Total assets grew to $9.8 billion at June 30, 2025, from $9.7 billion at March 31, 2025[8] - Loan growth was driven by increases in commercial real estate (+$58.0 million) and consumer loans (+$30.8 million)[8] - Deposit mix shifted, with increases in noninterest-bearing demand, money market, and CDs, offset by decreases in interest-bearing demand and savings accounts[8] - The company maintains a strong regulatory capital position, with all capital ratios exceeding the well-capitalized thresholds[9] Consolidated Financial Statements (Unaudited) Unaudited financial statements show Q2 net income of $31.9 million, asset growth to $9.8 billion, and strong asset quality Statements of Income Income statements detail quarterly and six-month financial performance, including net interest income and net income Quarterly Income Statement Highlights (in thousands) | Line Item | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $86,572 | $83,323 | $83,594 | | Provision for credit losses | $1,974 | ($3,040) | $422 | | Total Noninterest Income | $13,500 | $10,429 | $13,305 | | Total Noninterest Expense | $58,114 | $55,091 | $53,608 | | Net Income | $31,900 | $33,401 | $34,371 | Six Months Ended June 30 Income Statement Highlights (in thousands) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Net Interest Income | $169,895 | $167,071 | | Provision for credit losses | ($1,066) | $3,049 | | Total Noninterest Income | $23,929 | $26,135 | | Total Noninterest Expense | $113,205 | $108,128 | | Net Income | $65,301 | $65,610 | Balance Sheets Balance sheets show asset and deposit growth, loan portfolio expansion, and strong capitalization ratios Balance Sheet Highlights (in thousands) | Line Item | June 30, 2025 | Mar 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Total Portfolio Loans | $7,934,434 | $7,836,349 | $7,713,570 | | Total Assets | $9,810,069 | $9,718,276 | $9,635,462 | | Total Deposits | $7,920,920 | $7,892,933 | $7,680,336 | | Total Shareholders' Equity | $1,445,493 | $1,418,034 | $1,321,443 | Capitalization Ratios | Ratio | June 30, 2025 | Mar 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Shareholders' equity / assets | 14.73% | 14.59% | 13.71% | | Common equity tier 1 capital | 14.59% | 14.67% | 13.89% | | Risk-based capital - total | 16.48% | 16.57% | 15.79% | Net Interest Margin Analysis Net interest margin analysis details quarterly and year-to-date trends in asset yields and liability costs Quarterly Net Interest Margin (FTE) Breakdown | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Yield on Interest-earning Assets | 5.76% | 5.70% | 5.91% | | Cost of Interest-bearing Liabilities | 2.84% | 2.87% | 3.10% | | Net Interest Margin (FTE) | 3.88% | 3.81% | 3.85% | - For the six months ended June 30, the Net Interest Margin (FTE) was stable at 3.84% for both 2025 and 2024[20] Asset Quality Details Detailed asset quality metrics show improvements in nonaccrual loans and changes in net charge-offs Asset Quality Ratios | Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Nonaccrual loans / total loans | 0.27% | 0.29% | 0.45% | | Allowance for credit losses / total portfolio loans | 1.24% | 1.26% | 1.38% | | Net loan charge-offs (annualized) / avg loans | 0.06% | (0.00%) | (0.02%) | - Total nonaccrual loans decreased to $21.3 million in Q2 2025 from $22.3 million in Q1 2025 and $34.9 million in Q2 2024[21][22] - The company experienced net loan charge-offs of $1.2 million in Q2 2025, compared to net recoveries of $27 thousand in Q1 2025 and $388 thousand in Q2 2024[21] Non-GAAP Financial Measures Non-GAAP financial measures provide insights into operational performance, with detailed reconciliations for key metrics like ROTE and PPNR - Management uses non-GAAP measures to provide investors with a clearer understanding of underlying operational performance and business trends[15] - Key non-GAAP measures include: tangible book value, return on average tangible shareholder's equity, PPNR to average assets, efficiency ratio, tangible common equity to tangible assets, and net interest margin on an FTE basis[15] Reconciliation of Efficiency Ratio (non-GAAP) for Q2 2025 (in thousands) | Item | Amount | | :--- | :--- | | Noninterest expense | $58,114 | | Net interest income (FTE) | $87,162 | | Noninterest income (adjusted) | $13,500 | | Total Revenue (adjusted) | $100,662 | | Efficiency Ratio (non-GAAP) | 57.73% | Supplementary Information Supplementary information includes company overview, conference call details, and forward-looking statements outlining various risks and uncertainties Company Overview and Conference Call Company overview details S&T Bancorp's operations and announces the Q2 2025 earnings conference call - S&T Bancorp, Inc. is a $9.8 billion bank holding company headquartered in Indiana, Pennsylvania, with its principal subsidiary, S&T Bank, operating in Pennsylvania and Ohio[11] - The company will host its second quarter 2025 earnings conference call via webcast at 1:00 p.m. ET on Thursday, July 24, 2025[10] Forward-Looking Statements Forward-looking statements discuss potential risks and uncertainties affecting future financial performance, cautioning against undue reliance - The report contains forward-looking statements regarding financial condition, results of operations, and business strategy, which are subject to various risks and uncertainties[12] - Key risk factors mentioned include credit losses, interest rate sensitivity, cybersecurity concerns, regulatory changes, and general economic conditions[12][13] - Readers are cautioned not to place undue reliance on these statements, as they are based on information available at the time and are not guarantees of future performance[14]