Earnings call transcript Q1 2023

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Operator

Welcome to the S&T Bancorp First Quarter 2023 Conference Call. After the management remarks, there will be a question-and-answer session.

Now I’d like to turn the call over to Chief Financial Officer, Mark Kochvar. Please go ahead, sir.

Mark Kochvar

All right. you. Thank thank in and conference for you afternoon today’s participating call. Good

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take this for Before required Securities time in statement beginning be by forward-looking risk two. the on and forward-looking and may which statements I included the This the want statement about to you provides statements to presentation, that refer presentation. our is page Commission factors, Exchange to cautionary language

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Chris and With S&T’s me Antolik, McComish, today S&T’s President. are CEO; Dave

over now like Chris. the to call I’d turn to

Chris McComish

I on analysts call forward thank today. questions. and with on your will the certainly three. with I Mark, good we and us all here being to you the appreciate page everybody. you, I Thank afternoon, for my want being us begin look remarks to

information front to a take our that additional estate opportunity exposure. previous wanted end you on today franchise, provide may in commercial our remarks to our more as be in our real occurred as has deposit I our mention In light will to well early little we mid-March, the in than presentation all longer that quarters. of industry around some since to

around transparency clarity is performance. Our increased goal to financial and provide our

leadership one transpired the at our at not the the with of the But since that through only we a without from February end team us, active goes saying was here that March quarter S&T, that as for a early March employees. XXth. undertook all work us It for very

future focusing financial employee customer As for on our last forward how the shareholders. you the chapter guide of long-term our financial performance for S&T’s months performance. that XX company the deliver Defining months XX the that run our will results drivers and and the may values the spent vision people to clarifying sustainable we emphasizing and recall, next purpose we

talent our all four financial deposit of employees. already we We this lot between our shareholders. do drivers communities shared in as enhancing and that our work we underpinned a over franchise; time our things; employee This shared our the shared values our and around future strategic focus tactical focused these define team, core and that and quality; health and our one, by underpinned employees, drivers future, X,XXX our on of discussions built center Within spent around strong by and asset center they engagement. in with customers, our profitability; execution

sooner did our engagement It of with To sessions. XXth in XX ensure spent end because purpose, forward actually we face-to-face people X,XXX we employees drivers Xth been values of around the no and days timelier, this XX the have but through effective March and performance, February our couldn’t events different these began. communication of work all finish of at March

in our It customers. focus employees, forward centered stability, people all team around provided for a our customers, and safety well as ensuring and cry as rallying on our soundness confident, eyes our the of

other but provided to drivers performance. XXth perfect We why. our weeks The have more our ensure understand and to believe know probably our employees responsibility critically, March of that as our deposit only last as since behind our franchise the we around do, why employees leaders what focus the four help our is not the

That’s row throw quarter, of you as three, also a the in we metrics, into second We word But and defined net summary earnings is there in could of strong here in more $X, X.XX%. that just with will solid. dive Dave turning to Return and of see of the PPNR the XX.XX% million. detail. income $X.XX. here performance, $XX a page quarter of for Speaking with under over an can had ROTCE a Mark earnings

Expenses remained basis to on of a an later. of and recovery where around more right time will of with points well benefit the controlled X XX%, down leading basis efficiency to NIM at net point ratio spend we recovery X.XX% a XX

good X% driven very They over of of under that Turning million consumer to say primarily level loan our pipelines and the commercial growth to did I representative the made feel of have of our including page the We of have we commitment attraction months the quarter, $XX segment, in growth number a book will we four. in show consumer for our with about just the that seen are growth. into company. loan business. of that talent the we within are highest the that

at in declines as decrease billion. million was in $X.X $XX On quarter a then quarter, increases and early ended the showed the right just quarter actually went but on. the deposits There of in side, January deposit the the occurred at

in of that the We all our five you side balance that, to all and within This newer a what on and light an provided deposit environment actually think quarter happened is give of details the that external we here. sheet. environments the idea page to the slide you was of the are very important to

Again, this granular between customers, and mix we deposit very deposits to do business, XXX,XXX XX-XX well-diversified nature. personal emphasize want in to almost base

numbers uninsured You the see there.

is you the March XXX occurred the in saw little a that growth that represents early trends, line Within month. the -- that uninsured events the $XXX municipal and see, million we collateralized number over green as of The about can deposits.

the we call early by great a really -- and on of on our the that happening the had that others and very through want I available done lot our and was beginning media, around social them. to soundness to we ourselves this with Monday want safety understand to and do in organized marketplace, do outreach them teams they work helping options have of interaction, what employees I was proactive customers where the face-to-face that recognize institution

the feel since we March every we growth focus that of seen proud -- are and XXth. have continue day we We

I I to details. stop a am there. it to will Mark provide turn more lot over going to

Mark Kochvar

Great. just Thanks, which the revenue impacted shows $XXX,XXX compared six Chris. income, that decreased negatively days, interest which over quarter to million. with $X.X Slide fewer by and fourth net was two by

Loan interest net cost deposits, X.XX%. and quarter at basis quarter. including The of improved margin by essentially DDA, the basis this to deposits XX to -- fourth was XX points increased rate compared flat points X.XX% the by yields total

increased as the decline while basis compared deposits points basis by loans by XX deposits and XX fourth Interest-bearing increased liabilities some points quarter, increase in in in to borrowings. the additional the costing resulted

big been past has and of half portfolio About over tied year. our interest income to driver we short-term net rates, interest the of is net had margin the improvement loan which a have that

increase We to loan for nominal has from customers some additional rates have year-to-date pressure inverted in an the yields. on which curve, seen fixed preference new due put some

ALCO $XXX As and rate cuts, the to strategy margin interest with income floating receive-fixed in hedged of loan protect part event concentration we swaps. the rate net million of our have of Fed

that the evaluate impacts on loans. depend of right to how rate continue will and and environment the We deposits of hedging, both interest which rate sensitivity level

margin on this the side. quarter net pressure Most interest liability came the of

level customer anticipated. As rates higher of interest than in like we seeking most of a experienced the high industry, we

bit than are expected. margin we past interest believe peak We earlier we a net

of net As you some March rate from net margin million bottom for do the of full see brings the interest in portfolio. the interest can $XXX firming of the than lower near-term HELOC chart expect April left, the on the our month as repricing the margin lagged We was the quarter.

There deposit in mix outflows. further Fed are is and a net hikes of we in and May possibility have some experiencing changes rate moderation deposit and

NIM approximately basis XX couple for X to quarters. expect quarter of We compression of per points the points next basis

the the will Next, migration aggregated more a graph how quarter changes. one the on provide by the it The level. point top shows types. of type The during on quarter. bottom at point much changes moved another seven, the graph shows slide is customer or This quarterly from deposit first little to we deposit detail

ground. example, other within from moving DDA overall, on $XXX Of million. $XX types that top decline, the from decline new That’s inflows is and to the outflows $XX from for the to bank. So funds and That’s million graph. net accounts, the customers difference from bottom closed decrease we million two, and net bank. DDA the the DDA deposit The the saw the is between DD and

is insurance coverage the we how the product, for DDA, within which Now what classify migration $XX went to our $XX IntraFi the which million customers. provides FDIC that additional NOW, is million DDA of

types the Separately, we came million top bottom which graph. were bank. million of $XXX from total graph, on That’s deposit up that’s the CDs, other $XXX

of new addition is Here, new the million existing from CD $XX and customers. the net difference funds both

a first well-diversified relies and foremost, liquidity, base. Our on deposit

you bonds the eight, capacity newly the funding supplement can slide Federal the at that that, funding we Loan the Federal of implemented through Pittsburgh that BTLF already Federal to labeled Home and turn is and Reserve Bank at pledged as see split collateral have The Federal Borrower-In-Custody or window program loans par. as to Reserve Reserve. you between BIC, access facilities here If accepts to

Federal none. have the than programs of capacity uninsured two of we cover the we using which we funding our $X.X FHLB capacity, more these Reserve, Between availability, approximately have enough from to billion Including deposits. are

on asset quality. provide will details Next, Dave some additional

Dave Antolik

direct could including for million this $X.X presented total attention Mark, loss the was result quarter. influencing customer to the largest Great. slide am good $X.X experienced that page, have Offsetting event your on recovery a we $X.X starting note quarter, asset a million nine, strategic everyone. sale net side this million $X.X million in the result of QX. I of I we the charges to was results reported that of successfully If were executed. the that our a related we The Thank we and a fraud quality charge during recovery recovery where for the you, afternoon, right-hand XXXX.

million, $X.X $X.X C&I by increased that this result relationship million a a quarter, was the established primarily for during loans reserve Non-performing specific of migrated account. as one

in a the specific of We for of you the I increased ratings changes that uncertainty and credit overall On macroeconomic changes impacted as left in QX the mentioned, quantitative QX. along as bridge in reserve will million well a losses that in of page, the increase environment. side that result and see growth reserve $X.XX risk segment the allowance component, the the a reflects between the qualitative as the with detailed reserve

X.XX%. result, X.XX% to of overall increased total from total our a As loans allowance

Turning to page XX.

continue CRE our We pay attention to significant to exposures.

our of We as total have a loans of a loans, percentage sub-mix total percentage exposure. analysis an you and CRE as of our depicted CRE office -- for sub-segments

eight next this million. of portfolio size the loan average XX% is average the very quarters in our environment. modest well this $X.X depicted, reflected This position LTV of current is in the a maturities As and diverse portfolio. Furthermore, over

drill central Next to exposure. district deeper non-central business portfolio versus into our we office identify business district

you risk next four out that our matures of months desire is and will strategy within can keep largest our XXXX. will this also only the segment our of non-CBD occur very exposures in As in exposure see, office to point granular. reflecting QX this I one office XX% and that XX of

As income part operating net test to we management stress current stressed the property portfolio regularly practices, future our each to issues. environment identify reflect assumptions in of potential order and rate to apply

to Turning page XX.

months. see will million size entire an maturing a reflecting average CRE presentation CRE portfolio in very entire portfolio, with a XX the XX% approximately with portfolio of the granular You the $X.X of next for

we in mention stress highly reflect terms our desire that of will that healthcare as segments note impacted pandemic. reflect relationships will monitor and as tighter I adjust the that our keep needed these and these test actively also concentration of to we maturities risk the were on I appetite. and more management update to limits level hotel higher results our credit and strategic by the segments

loan balances, have The have projects standards. completed we natural we our replacement contraction shifted as not rates making With a economic construction and new have deals challenging current reduced. and regard anticipate relaxed to factors our are underwriting

We attention contingencies. reserves like to things close are paying and

projects and That majority loans. review complete, issues that a XX% are recently that are us. our behind and labor approximately availability the those the review completed identified material of construction on We of average largest

to dig of I will now the Mark some turn over non-interest income the program to into issues. back

Mark Kochvar

in million in compared the to up for Dave. first gain Thanks, a by quarter. the This XX, million That the an related the fourth. $X.X Right. sale of OREO decreased the other non-interest slide on quarter On item. to primarily fourth property $X income line in shows

we portfolio Mortgage contributing to the had banking flat was growth in almost the to fourth our as to essentially all loan compared that quarter that to the production go of continues category.

$XX.X range. fee outlook is to million quarter million in Our the $XX

is controlled we which across fourth invest X to the which infrastructure. promotional just is $XXX,XXX marketing, and remain the On points expense compared to the seasonal assessment, XX% basis slide variance the up in FDIC some to $XX well being by related largest quarter, XX, expectations and were expenses quarterly million activity. range board as $XX our the just Efficiency in ratio people and million over increased

some of favor about runs extension well-structured XX% past seen the has detail the portfolio, have the assets. mix by year. which only XX additional and Slide evidenced We our on over products we nominal total as by mix of duration securities

our sale. of for are securities classified All as available

covers our and million the manageable strong related levels. earnings securities So portfolio given $XX.X AOCI capital the very entire is and

the rates, improved the to the term which due capital quarter. seen earnings Those lower can levels decreased TCE slide XX. compared and to fourth AOCI quarterly be on

ratios ample excess environment for levels. regulatory strong well Our and with capital the capital are positioned

Our economic opportunities, will performance the outlook our $XX.X remaining financial has price look on authorization and stock. and depending buyback we and million of conditions, our for

you like for instructions provide to asking the questions. much this Operator back I’d time. over the Thank to call to turn very at

Operator

with first Thank you. [Operator Daniel will take Raymond We James. question Tamayo Instructions] from our

Your open. line is

Daniel Tamayo

Thanks. afternoon, Hey. everyone. Good

Mark Kochvar

Daniel. Hi,

Chris McComish

Hi, Daniel.

Daniel Tamayo

Maybe balance starting first sheet. on the

deposits growth be or to and loan think -- then are How to the over deposit you so, guys before, side? buckets have little see do are thinking getting things there is the expect you to XXX%. have here. going funding and So know last deposit more about but a ratio quarters been growth five what are over relative difficult there the you be down obviously, able growing where loan come back you deposits, do to you I

Mark Kochvar

I is Mark. side. Hi, start deposit off Dan. on This will the

levels, seems we to firming so Just especially failures, a recently, in have of since we have slowed. experienced bank seen that just last deposit the some month in of XXXX some runoff the the and or actually the during

we think declined are has there. So The here requests we near of exception bottom in April. level the

encouraged we So that. by are

we Category-wise, continue. to migration would expect the

see deposits higher. possibly and from overall to expect trend to around CDs. expect deposit we level into some would categories that would we additional bit a the start the So movement turn core of But of little

Dave growth We but near we talk are here. growth, will about to least I at be over the huge not expecting loan bottom that would it expectations. to turn

Dave Antolik

Thanks, Mark. Yeah.

growth QX, to and noted There happening comfortable. would about QX where that’s we the QX is some CRE I macroeconomic with environment deals concentrated we are loan if are So think or regard and with growth that’s in in everything in in loan micro to size expect similar we in getting and comments. relatively is my challenge prepared

be there there. will a So challenge

a have helped we have the that us expand said, being added That of number pipeline. bankers

our Again, We concept as business well. making of things in strong are really granular. banking keeping efforts with segment that

an are risky basis. that deals on more aggregate less and So smaller perhaps nature in

the remainder So consistent with low-to-mid low quarter last talked the we of number be single would that -- about single-digit year.

Chris McComish

are to is banking in our our addition team continue within management enhance we -- we as business, both that business, as things commercial our our leadership to for our bankers, customers. other in we core treasury and Daniel, the branch-based well business doing

a of there’s for franchise. on activity are treasury tied services importance and lot our of demand -- there this enhanced seeing to And out focus, the back the deposit meaningful all management we based

be in body it important continue are an an to and continue will to that we work to going for of emphasize. us So part that of area

Daniel Tamayo

of NSF And impact question, outlook us from remind be a the be be Terrific. that I on margin the second fee felt? the you income. Can a will Okay. when removal the maybe expecting else just will all for just clarifying let fees. bit someone what little to that I lower that and Thanks quarter color. was question tackle will

Mark Kochvar

So number is about annual the $X million.

quarter would So about just for the that be $XXX,XXX.

Daniel Tamayo

that And be second will quarter? the fully in Okay. felt

Chris McComish

those right Xst We changes of -- Yeah. the made were April. at

Daniel Tamayo

for for Terrific. answers. questions All the back. I Thanks step -- will right.

Chris McComish

Sure.

Mark Kochvar

Thank you.

Operator

Next Perito to with we Michael will KBW. go

is line Your open.

Michael Perito

the for guys. taking Thanks questions. Hey,

Dave Antolik

Mike. Hi,

Mark Kochvar

Hi, Mike.

Michael Perito

though the of remains CD new growth like ton guys? loan the CDs CD that point are extraordinary where environment how the the a credit around impacted I speaking, mean, is generally pretty of is be guys high there didn’t just where to norm -- growth pretty the and on some -- didn’t on It see start second the and things cost CD from this impact and remix I here? is like a it quarter make felt uncertain month. are alarm seems continuing really the we -- kind you wonder sustainable growth going Obviously, get but you the up to as share just of appetite day-to-day, has a kind the in if and could for even incremental funding of lion’s the here the does

Mark Kochvar

so deposit book first. within slowed slowed say -- really just we it will the I I really far, part mean, yet. has hasn’t the not migration

seeing the are migration We CDs. still that to

We side are -- on that FDIC huge as product, comes impact with much a to from none doesn’t minimal really not seeing protected the increase costs. us funding business DDA in migration typically that’s some either impact it some the margin or but

loan side... the On

Dave Antolik

Yeah.

in we sufficient that and have to growth. low-to-mid do I single-digit what are think do projecting in we liquidity should of terms funding to order

treasury can, having the Our the focus deposits those and to allow emphasis us. deposits we efficiently those and they as making investments and will that make on as safeguard capture entire those the customers them management sure deploy on those in we bankers relationship, manage help to are can

right to focusing banker, XX the and years of balance on a commercial we it’s and investing the relationship as that, deposit continue said, as results positive been making opportunity that gathering and and there. switch really the on focused we to If side Chris in the asset relationship now. the growth you And building see think about sheet have that is we a maintaining are last

Mark Kochvar

see some is quarter. portfolio, We in into we probably increase on have That an the the the quarter both worth borrowing second XX so. as impact That quarter-over-quarter, has on big pretty have fourth on pretty move seen first. average We did did or margin. and good -- stabilized that basis a especially basis to a a about points

So stable million, stayed that million a $XXX and $XXX has half we around relatively month are so. or of for last the borrowing at

second of change we some quarter, So into that deposit same the go we rates impact assuming don’t expect as hold. those

So deposit shifting book, on the to so be larger deposits less the but to shifting is the side of would which increased subject hit. little a within borrowings, cost we bit from from a

Chris McComish

And growth this our this add Mike, of strategy Yeah. and on a other is The customers. will in thing built is is Chris. only CDs taking is of lot care I our philosophy

to So very protect options that’s those base are source of the some other the we we everything potentially from with of proactive customer are looking coming that’s and them and sure dollars and our institutions. grow much this for that relationships who can are making we engagement is proactively growth doing

marketplace strategically market much point. This not out rates attract around built of is the very aggressive with mass and dollars. in to are sort affected marketing it’s been We this that’s customer to relationships

go paid when rates and built dividends have us. answers quickly and that, internally where know to to things like with seems employees and have that processes they for We help get need

Michael Perito

able of NIM fully we as before the going like probably a remix think helpful. give But of down some NIM into from of maybe the in the function all are about NIM that it us indication some are us then, of that the mean, And this impact bleeding and start indication, maybe a little of environment? to for give or I is able we Mark, maybe right, end down baking some like, the March That’s that, something obviously as you towards was quarter, where the you to here.

Mark Kochvar

Right.

income So box am bottom very the of very, on interest six, of high a the major we that non-interest net is income the there’s where left-hand page -- slide, on margin. on we interest showed sorry, components the net level the I corner, had kind

X.XX%. was the of was quarter, that March, that the for for month So full X.XX%,

the -- So point, margin your we decrease have have seen we in rate... to some

Michael Perito

I that. fair. Sorry, Yeah. That’s missed No.

Mark Kochvar

Okay.

Michael Perito

you. Thank

Chris McComish

this looked have have, We Mike. issue. longer at a than No you lot

Michael Perito

No. No. extremely -- some the helpful. I There slides aside. are lapse of new

level the detail. So thanks for incorporating of

or guys new follow-up, question portfolio? if you reviews any done for you Just can a more share that book, of as they normal mean, kind appraisals me. I XX% than morning had are valuations. are been geographies. any CRE of have last And downward Have say of similar whatnot broad-based of seeing on in kind -- this markets to kind XX% so a kind you or office maybe I you on the terms anything of doing in movements you any mean, somewhat broad competitor We earlier across their commentary as

add any there Just curious have you similar? that’s if you guys that color could

Dave Antolik

Yeah.

to to is slide as Mike, will million. portfolio the detail size that it extremely around referring average see what as So XX, is we you there $X.X and could much provide tried we is granular. The

as We LTVs $XX take the the the XX we then And well on million XX exposures over a valuation, next months. what’s over outstandings. and only XX% at hard four months did maturing look as the current most to are current have at based

will chart the see you amount maturities. of dollar that shows So there a

think given So pretty think is we the the that current well environment. -- we positioned portfolio the

is think business limited central very also risk. have district there exposure we where more We

So we into have dug deeply it.

spot both what a market higher stress as -- segments call go target to we we stress testing current and this potential segment rates, testing able where today. these to into spent of rate impact rollover tenancy are do based current lot on and the if reviews certain is the a were as that We it’s we deals risk, digging well a NOIs of of to time

Chris McComish

right, see the bridge in LTV. the on Mike, the down bottom And so that -- you

be So appraisal the that most we based current the LTV upon would that have.

Michael Perito

Got it.

right. All Okay.

appraisal… those and So

Chris McComish

detail… Let me

Michael Perito

are Sorry, those appraisals? go I mean, ahead. how recent

Chris McComish

be clear, may me let the most origination. current Mike, at

Dave Antolik

Right.

a -- recent we performed in it haven’t this. if wouldn’t we So appraisal, be included

Michael Perito

in value? guys last where directionally valuation in sense just first have do a the there’s have appraisals in quarter. know the no Got kind it. broadly instance to this. impact of the had you -- you -- to of guys kind way the capture any But the was what I Do of to And proper

Dave Antolik

directionally, because has I have become and challenging, exact more Yeah. because from seen cap you underwriting give but can’t are particularly am values up. percentage, speaking much mean, rates deals are I deals that down an we new I equity something required two were it to higher. or were a higher finance XX ago, than is and rates months, from seven lower construction today the purchase perspective ago, values a months, years when significantly eight was significantly months

Michael Perito

Yeah. Does that feel or XX that days though, to XX is days, heavy? reasonable still

Dave Antolik

a that Yeah. our our valuation. doesn’t markets, feel heavy of Mike. for bit Ohio, Northeast and where same feel urban of I lot Columbus, even Pittsburgh, of necessarily is mean, the more in areas It feels little impact a the because always some terms in exposure it

and fact the the of don’t the get highs are don’t we are But get rates are down. the values we up, matter necessarily So is, rates lows. cap up,

Chris McComish

that non-CBD the why that’s the a out CBD in split of to and suburban smaller of wanted some us we and reasons the And versus gains more environment pieces. one comfort

Michael Perito

Yeah. I Got all guys. Great, appreciate the Thank you. really color. it.

Mark Kochvar

Thanks, Mike.

Chris McComish

Mike. Thanks,

Operator

Navas D.A. Next we to Manuel Davidson. go will with

is now line open. Your

Manuel Navas

afternoon. Does the quarter? raise impact -- next Hey. NIM Good contemplate NIM the does how guide the May guide

Mark Kochvar

bit on the help couple from will mean would get month that. of potentially that. expect -- We I two it you little a comes a

it help the to be another might So that we get quarter. XX, the assuming X versus closer

Manuel Navas

you deposit betas, little than bit previously? through-the-cycle Okay. updated have on And of targeting then a are do historical kind you better an thought

Mark Kochvar

on be I higher little think points we little better had mix are we to have. -- still going to XX than starting that cycle, than from mean still going but to we a bit, better they probably, and bit we anywhere think the thought, that think X mix better points prior originally ending there’s the still are the I based Yeah. a still

Manuel Navas

Okay.

past, think come kind go at. in As you some is and the for on that you there kind the point, been term, potential where XXX that? of there at think to have range, about the NIM rates longer change Is back settle picture what structural In down the any could can to of you hedging, thoughts big just long-term? do

Mark Kochvar

settle I the down, think will short And end I additional if the if Yeah. we short-term of lower. but pressure higher, think we substantially curve rates moved can experience

the range, below probably mid-X%s So see down, X% then the -- I significant think the Fed to and this closer see on certainly we X%. closer a if depending in if if is to we we will how stay point, But it’s status something far X% that goes. rate

Manuel Navas

With there some had, funds, Okay. was and deposits exits closures, migrate didn’t the deposit were using reason of folks is for consistent or there associated have exited, flows that it closures it? just mainly it you account just that there were with or the was any if

Mark Kochvar

think rest was were don’t a the closures that a balance. change I But of factor. amount. It of was most customers the huge certainly just existing changing their net

has plus decreased. the of net of just and So lot in there’s all that a minus

we of rate on normal deposit in the side. kind the the significant increases haven’t seen So closure

Manuel Navas

-- you even any the it helpful. be product what’s it, up just can color kind really a of and in signed talk you more helpful? base defend like, And color beyond would bit is have used how give there IntraFi you That’s little helped deposit

Dave Antolik

Yeah.

a uninsured opportunities expand that retitle led coverage. of and just having the about Chris simply list in on calling to events as that together to out when conversation get occurred with product retitling, of XXth, March mentioned, So, the a we particularly those we our those comprehensive in order to largest there because put deposits that depositors, beyond largest, kind have have front particularly were

And understand from NOW the starting mentioned, immediate that They and an balances. customers. are now into we to deposits in Mark they as product, have didn’t are to wanted we So, showing reaction move the product. onboard up or

provide who to order in us helped really it’s were So concerned. for customers protection those

growth So that category as in I further well. would anticipate

Manuel Navas

Okay.

Chris McComish

lots value it’s conversation they that’s around how point, Dave’s to customers are works. conversations an it. of with large Really education and our it proactive we the And having be approaching how important to

team a the of far say a customers I that work reacted so way. received have transition have We and been in But it’s treasury measured positively. professionals would management with the

Manuel Navas

it. appreciate Thank you. Okay. All helpful. right. This is I very

Mark Kochvar

Thanks.

Operator

Okay.

Next with we will to go Stephens. Breese Matthew

is open. line Your

Matthew Breese

Hi. Good afternoon.

Chris McComish

Matt. Hey,

Mark Kochvar

Hi, Matt.

Matthew Breese

wanted to CECL? on macro Could contemplated up Obviously, a quarter. there I reserve. some this sense that First, bit are give little assumptions under the you overall just of the us a touch for

Mark Kochvar

Yeah.

there’s in the the the CRE there different one Index So impacted was some things reserve reserve this additional in that that us The led of lot quarter. that that indices a and follow -- portfolio, to biggest impacts was for portfolio. deterioration that some is for CRE there. go Pricing our of One we that, items

also bit that look little some at we added C&I reserve is ISM Another on of one some that deterioration -- the a the There there Index. was book. and

also at beyond what then risk weakness we have where identified in don’t added just some we captured reserve those can healthcare because those that portfolios. And we we potential segments think just of C&I, in quantify the we the through of like have some have areas like that certain their some we where seen look is

Matthew Breese

the was the I commercial what What -- index say was for estate? did to you sorry, am use real

Mark Kochvar

a estate It’s Index, called the index. commercial real price CoStar it’s

Matthew Breese

Understood.

curious sort to credit, exposed the quarter any is second and the And credit. a if third of you on as you had a expect mentioned your for specific that or more asset what million $X.X in kind am I reserve on was and aside little bit mentioned in charge-off just had comments the Okay. you you happened provide do release then a well, in could what here? quarter color there class of set that

Dave Antolik

adequately are we think we reserved. Well,

will start that Western reserve that a But Pennsylvania. this was that, in originated manufacturing of with account. involved account C&I out it’s placed We specific on having

Matthew Breese

Okay. Got it.

then going real and And page commercial Okay. XX estate. back to maybe

million level a was of the quarter You of there of probably, XX% office I on average am this this to assuming with show for call quarter LTV. is mid-XXs kind some second the matured $XX based office just of a that and LTV. there’s year, maturing low it,

So they today? two-part to question. indication that have from changed, XXXX One, change rates you the us And what updated loans assuming reevaluated, in how underwritten cap these being the to the give you some had and the is of when LTV? time rates are original cap XXXX, were have changed indicated reappraised could then

Dave Antolik

Yeah.

it have remain but to of there’s significant What still is flow making our fits rollover sure is we place really within issues secondary ratios cash adjustment LTV on underwrite, tenant that that that the are in focused So coverage occurred. the and in we no kind standards. how

I the where or product who is, had being Mike folks on But have think, looks mean refinance issues tenant these is, haven’t creditworthiness to the asked able of project earlier, it depends the elsewhere. what tenant. like, or as rewrite QX, through we XX% extend I the the to-date, underlying range. it’s the

you or off look that LTV five-year schedule, think portfolio. mature but I and It’s schedule. maturing again speaks along Also, maturity XX-year of granular the into our maybe nature the So or that a of a amortization typically if are at a that those a relatively XX-year portfolio. amortization coming are longer to five-year amortization,

build time But season project in levels had are reappraise. for what borrowers is order issue construction been higher looking impacting maturity where values. equity. issues have running are that’s not leverage with or production terms and a new we issues to to purchase that in things project, are They into Again, at we has really the for into us undertake to of the major running getting a where

Matthew Breese

Right.

underwriting Okay. and rate in cap And you terms of loans what at are yeah? new office

Dave Antolik

off cap the get to rate Matt, the have head, you top on don’t I I of to want back my that. Yeah.

Matthew Breese

taking leave That’s will Thanks my questions. all there. had. I for Okay. it I

Dave Antolik

Yeah.

Chris McComish

you. Thank

Operator

Chris we all closing or now I this those the at questions have the additional to Well, will for time. are over McComish back Chief Executive call any turn remarks. Officer,

Chris McComish

engagement. interest wanted quarter the are that for we everybody We environment QX. in additional your forward the you. And thanks we transparency of Okay. to to Thanks. about good in. look We light Again, and to feel provide

very much. you thank So

Operator

call. conference today’s concludes This

You disconnect. may now

S&T Bancorp (STBA) 20 Apr 232023 Q1 Earnings call transcript