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S&T BANCORP INC (STBA)·Q3 2025 Earnings Summary

Executive Summary

  • EPS of $0.91 rose 9.6% YoY and 9.6% QoQ, a beat versus S&P Global consensus of $0.86; “Operating revenue” dynamics were mixed with net interest income up 3.0% QoQ and noninterest income relatively flat, while S&P’s revenue actual of $100.2M missed consensus of $103.0M. EPS beat; revenue miss. Values retrieved from S&P Global* *
  • Net interest margin (FTE) expanded 5 bps to 3.93%, and efficiency ratio improved to 54.41% on lower salaries/benefits and professional services, providing a clean quality-of-earnings setup .
  • Credit moved off a very low base: NPAs increased to $49.6M (0.62%), net charge-offs rose to 0.12% annualized; management emphasized issues concentrated in “two CRE credits and one C&I credit” with resolution plans underway and no broad sector/geography concern .
  • Balance sheet growth was muted: loans +$46.6M (2.33% annualized), deposits +$1.0M (0.05% annualized); DDA averaged +$50M QoQ and represents 28% of total deposits, supporting margin expansion .
  • Board approved a dividend increase to $0.36 per share (5.9% YoY), and management reiterated a first-half 2026 path to crossing $10B assets, with mid-single digit loan growth targeted for Q4 2025; $50M buyback authorization in place .

What Went Well and What Went Wrong

What Went Well

  • Margin and PPNR expansion: NIM (FTE) up 5 bps to 3.93%; PPNR/Average Assets up 16 bps to 1.89%, with CFO citing CD repricing and higher average DDA balances as key drivers .
  • Operating discipline: Efficiency ratio improved to 54.41% on lower incentives/medical and reduced consulting spend; management guided expenses to ~$57–$58M for coming quarters .
  • Capital strength and shareholder returns: TCE/TA rose to 11.65%; buyback authorization of $50M and dividend increased to $0.36 per share. “This capital level gives us a lot of flexibility around acquisitions as well as share buyback opportunities,” CEO said .

What Went Wrong

  • Credit normalization: NPAs increased to 0.62% of loans plus OREO, and net charge-offs rose to 0.12%; management attributed rise to two CRE credits and one C&I credit—idiosyncratic, with specific reserves established .
  • Loan growth below recent trend: QoQ loan growth of $46.6M (2.33% annualized) was “a little lighter” due to higher payoffs and C&I exits; Q4 guide moderated to mid-single-digit growth .
  • S&P revenue miss: While net interest income climbed, S&P revenue actual missed consensus; competitive CD pricing pressure noted post Fed cut, a potential near-term headwind for deposit costs and margin trajectory . Values retrieved from S&P Global*

Financial Results

EPS and Revenue vs Prior Periods and Consensus

MetricQ3 2024Q2 2025Q3 2025
Diluted EPS ($)$0.85 $0.83 $0.91
EPS Consensus Mean ($)*$0.81$0.81$0.86
EPS OutcomeBeat*Beat*Beat*
Revenue Actual ($USD Millions)*$96.81$98.10$100.21
Revenue Consensus ($USD Millions)*$99.09$99.05$103.01
Revenue OutcomeMiss*Miss*Miss*

Values retrieved from S&P Global*

Operating Revenue Components and Margins

MetricQ3 2024Q2 2025Q3 2025
Net Interest Income ($USD Millions)$84.48 $86.57 $89.24
Noninterest Income ($USD Millions)$11.88 $13.50 $13.76
NIM (FTE) (%)3.82% 3.88% 3.93%
Efficiency Ratio (FTE) (%)55.88% 57.73% 54.41%
ROA (%)1.35% 1.32% 1.42%
ROE (%)9.58% 8.91% 9.48%
ROTE (%) (non-GAAP)13.35% 12.12% 12.81%

Loans and Deposits (Period-End)

Balance ($USD Millions)Q3 2024Q2 2025Q3 2025
Total Portfolio Loans$7,689.05 $7,934.43 $7,981.01
Total Deposits$7,654.84 $7,920.92 $7,921.94
DDA % of Total Deposits——28%

Asset Quality KPIs

MetricQ3 2024Q2 2025Q3 2025
NPAs ($USD Millions)$31.89 $21.31 $49.63
NPAs / Loans + OREO (%)0.41% 0.27% 0.62%
Net Charge-offs ($USD Millions)$2.14 $1.16 $2.41
NCOs (annualized) / Avg Loans (%)0.11% 0.06% 0.12%
ACL / Total Portfolio Loans (%)1.36% 1.24% 1.23%

Segment Loan Breakdown (Period-End)

Segment ($USD Millions)Q3 2024Q2 2025Q3 2025
Commercial Real Estate$3,327.90 $3,520.29 $3,653.79
Commercial & Industrial$1,548.17 $1,512.03 $1,466.08
Commercial Construction$386.51 $397.79 $320.19
Residential Mortgage$1,612.63 $1,678.99 $1,700.64
Home Equity$645.97 $681.14 $698.89

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Loan GrowthQ4 2025Mid-to-high single-digit discussed earlier quarters (per analyst reference) Mid-single digit growth guided by President Lowered
Expense Run RateNext several quarters—~$57–$58M per quarter (CFO) Maintained clarity
Net Interest Margin (FTE)Next ~3 quarters—“Relatively stable,” mitigated by funding mix and CD repricing (CFO) Maintained
Asset ThresholdCrossing $10B“Clear path” to >$10B in coming quarters (CEO) First half of 2026 (CFO) Timed
DividendQ4 2025 payable Nov 28, 2025$0.34 prior quarter $0.36 per share (+5.88% YoY) Raised
Share RepurchaseOngoing—$50M authorization in place Maintained capacity

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Deposit franchise/mixStrong customer deposit growth ($134.7M in Q1), DDA support; deposits +$28.0M in Q2 DDA is 28% of deposits; average DDA +$50M QoQ; competition post Fed cut noted Stable-to-improving mix; competitive pressure rising
NIM trajectoryNIM (FTE) increased 4 bps in Q1; +7 bps in Q2 NIM (FTE) +5 bps to 3.93%; expected relatively stable for next ~3 quarters Improving then stabilizing
Credit/NPAsQ1/Q2 NPAs decreased to ~0.27–0.29%; negative provisioning in Q1 NPAs rise to 0.62% from very low base; specific issues in 2 CRE and 1 C&I; resolution plans Normalizing off low base
Loan growth/pipelinesQ1/Q2 loans +$93M and +$98M; CRE construction conversions growing QoQ loans +$46.6M; CRE +$133.5M; C&I -$46M; Q4 guided mid-single-digit Moderating near term
AI/technology initiatives—“Leveraging artificial intelligence” to streamline processes, improve productivity (CFO) Emerging focus
Macro/regulatoryQ1 securities repositioning; strong capital Budget impasses (U.S./PA) noted; watch Durbin at >$10B ($6–$7M impact); capital ratios robust Macro uncertainty; prepared

Management Commentary

  • CEO: “Our results reflect improving revenue gains supported by net interest margin expansion… We continue to build robust capital levels which provide us financial flexibility for future growth.”
  • CEO: “We have a very clear path to $10 billion and above through organic growth in the coming quarters.”
  • CFO: “Net interest margin expanded by five basis points… mostly due to CD repricings and the higher average DDA balances of $50 million.”
  • President: “The increase [in NPAs] was primarily a result of two CRE credits and one C&I credit that migrated during the quarter… we established additional specific reserve of $2.7 million.”

Q&A Highlights

  • Loan growth moderation: Paydowns higher QoQ; Q4 loan growth guided mid-single digit; C&I declines include credits exited; CRE pipelines strongest in five quarters .
  • Margin outlook and betas: Margin expected “relatively stable” over next ~3 quarters; CD repricing and funding mix support; competitive pressure heightened post Fed cut; deposit betas managed via exception pricing .
  • Asset threshold: Crossing $10B targeted for first half of 2026; monitoring potential regulatory relief; Durbin impact estimated at $6–$7M .
  • Capital deployment: $50M buyback authorization; willingness to consider repurchases amid bank stock downdraft .
  • M&A appetite and geography: Focus on deposit franchises; Mid-Atlantic through Ohio; priorities include funding mix, C&I/small business capabilities .

Estimates Context

  • EPS: Q3 2025 actual $0.91 vs consensus $0.86 → Beat; Q2 2025: $0.83 vs $0.81 → Beat; Q1 2025: $0.87 vs $0.75 → Beat. Values retrieved from S&P Global*
  • Revenue: Q3 2025 actual $100.2M vs consensus $103.0M → Miss; Q2 2025: $98.1M vs $99.1M → Miss; Q1 2025: $96.8M vs $96.4M → Slight Beat. Values retrieved from S&P Global*
MetricQ1 2025Q2 2025Q3 2025Q4 2025 (Next)
EPS Consensus Mean ($)*0.750.810.860.88
EPS Actual ($)*0.870.830.91—
Revenue Consensus ($USD Millions)*96.4099.05103.01103.46
Revenue Actual ($USD Millions)*96.7998.10100.21—

Values retrieved from S&P Global*

Where estimates may need to adjust:

  • Revenue expectations may temper near term given competitive deposit pricing and moderated loan growth, while margin stability and expense discipline support EPS durability .

Key Takeaways for Investors

  • Quality-of-earnings: Margin expansion and lower expenses drove an EPS beat despite a revenue miss; efficiency ratio improvement signals operating leverage .
  • Credit normalization watch: NPAs and NCOs increased off a low base, tied to specific credits; management has reserves and resolution plans—monitor subsequent quarters for stabilization .
  • Near-term growth lane: Q4 loan growth guided mid-single digit with strong CRE pipelines; C&I rebuild depends on recruiting and macro clarity (budget impasses) .
  • Deposits/margin: DDA at 28% and CD repricing underpin margin; watch competitive intensity post Fed cuts for deposit cost trajectory .
  • Capital flexibility: TCE/TA at 11.65%, CET1 14.75%, $50M buyback authorization, and dividend increase to $0.36 create optionality for returns/M&A .
  • Regulatory threshold: Plan to cross $10B in H1’26; Durbin impact ($6–$7M) manageable amid efficiency discipline; could be a stock narrative driver as timeline firms .
  • Trading setup: EPS beats with margin stability and dividend/buyback support vs revenue pressure and credit normalization; catalysts include Q4 loan growth delivery, NPAs trajectory, and deposit cost behavior .