S&T Bancorp (STBA) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $34.4 million ($0.89 per share), nearly flat year-over-year and up from Q1, with ROA at 1.45%, ROE at 10.61%, and ROTE at 15.01%.

• Customer deposit growth was $155.1 million (8.63% annualized), offset by a $75.1 million decline in brokered deposits, resulting in total deposit growth of $80.0 million for the quarter.

• Asset quality remained strong with nonperforming assets at $35.0 million (0.45% of total loans plus OREO), and allowance for credit losses at $106.2 million (1.38% of loans).

• Noninterest income included a $3.0 million gain from Visa Class B-1 shares and a $3.2 million loss from securities repositioning.

• Noninterest expense decreased $0.9 million to $53.6 million, mainly due to timing of expenses.

Financial highlights

• Net interest margin (NIM, FTE, non-GAAP) increased to 3.85% from 3.84% in Q1 2024, with net interest income rising slightly to $83.6 million.

• Efficiency ratio (FTE, non-GAAP) improved to 54.94% in Q2 2024.

• Total assets reached $9.6 billion at June 30, 2024, with portfolio loans stable at $7.7 billion.

• Allowance for credit losses was $106.2 million (1.38% of loans), with net loan recoveries of $0.4 million in Q2 2024.

• Tangible common equity to tangible assets (non-GAAP) was 10.21% at June 30, 2024.

Outlook and guidance

• Management remains focused on deposit franchise, core profitability, asset quality, and talent, with no material changes to previously disclosed risk factors.

• Forward-looking statements highlight risks from credit losses, interest rate changes, regulatory shifts, and macroeconomic conditions.

• NIM is expected to remain near current levels, with minor compression possible if the Fed cuts rates.

• Loan growth for Q3 is projected in the low single digits, primarily from consumer and retail mortgage, with commercial growth expected to pick up in Q4.

• Fee income is expected to run at approximately $13 million per quarter for the remainder of 2024.