Q2 2024 S&T Bancorp Inc Earnings Call Transcript
Key Points
- S&T Bancorp Inc (STBA) reported a net income of $34 million, equating to $0.89 per share, up $0.08 from Q1.
- Return metrics were strong with a 15% ROTCE and a PPNR of 1.82%, while the efficiency ratio was below 55% at 54.94%.
- Net interest margin (NIM) improved to 3.85%, driven by solid customer deposit growth and a favorable mix shift in deposits.
- Credit quality remains stable to improving, with a 12% quarter-over-quarter decline in criticized and classified assets.
- Customer deposit growth was robust, with more than $150 million in the quarter, allowing a reduction in wholesale deposits and borrowings by $85 million.
- Allowance for credit losses grew by $1.3 million, representing a modest increase from 1.37% to 1.38% of total loans.
- Higher-than-normal medical expenses were experienced, particularly in Q2, impacting non-interest expenses.
- The competitive environment for deposits remains challenging, with customers still being rate-sensitive.
- Non-interest income improvements were primarily due to seasonal changes and a one-time gain from Visa Class B-1 shares, which may not be sustainable.
- The company has significant exposure to floating rate loans, which could lead to net interest margin compression if the Federal Reserve cuts rates.
Welcome to the S&T Bancorp second-quarter 2024 conference call. (Operator Instructions)
Now I would like to turn the call over to Chief Financial Officer, Mark Kochvar. Please go ahead.
Thank you, and good afternoon, everyone. Thanks for participating in today's earnings call. Before beginning the presentation, I want to take time to refer you to our statement about forward-looking statements and risk factors. This statement provides the cautionary language required by the Securities Exchange Commission for forward-looking statements that may be included in this presentation.
Copy of the second quarter 2024 earnings release as well as this earnings supplement slide deck can be obtained by clicking on the materials button in the lower-right section of your screen. This will open up a panel right where you can download these items. You can also obtain a copy of these materials by visiting our Investor Relations website at stbancorp.com.
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