STBA - Earnings call transcript Q4 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the S&T Bancorp Fourth Quarter and Full Year 2024 Conference Call. [Operator Instructions].

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

Mark Kochvar

Great. and everyone. much, very you good afternoon, Thank Thank participating in call. today's earnings you for

presentation, earnings take that of risk obtained want fourth you beginning Commission slide release A required I Before the copy and Securities clicking to full included provides quarter XXXX as supplement button be items. cautionary year this statement Exchange screen. This Materials in forward-looking right by deck as the presentation. the a will statement can lower open forward-looking to where right, download about time section be statements by you the your the well This on and these statements earnings the factors. for the up language may our and in on refer to can panel of this

can by materials of also at visiting our copy obtain stbancorp.com. You Relations website these a Investor

McComish, President. to to and today CEO; Dave are me S&T's Chris. the Chris turn Antolik, With like S&T's call now I'd over

Christopher McComish

you, We want analysts the to we questions. to forward on afternoon, for being being and thank call. everybody. I look welcome, Thank appreciate with us the you your here and and really good Mark,

to listening commitment our want and should employees, I always, These are what results. call. results engagement others leadership be proud. also yours drives you our As is and to team shareholders and and thank very your To the employees, these financial

very to environment would a XXXX. discuss I we minutes well. like S&T wrap take Overall, exceptionally in discuss dynamic specifically, QX a Before up and few XXXX navigated to

levels capital. earnings while produced we financial building in straight delivering to share Following and record X years per results, of excellent of returns record $X.XX

the have as Energage efforts and the without who, great American and the initiatives, of could are and made Banker talented X,XXX of our deposit significant. almost engaged, defined commitment industry. this None employees to loyal in asset like most and by quality customer we employees progress our some were the franchise S&T Additionally, happened grow of enhance on our organizations

give business into XXXX. and Our we performance, sheet levels capital great levels, as optimism strength activity us balance head

to Again, with turning net our QX. metrics X.XX% Now about income up our were from quarter. the fourth PPNR million XX.XX% $X.XX $XX ROA return in per [ slightly ROTCE remains excellent equated at quarter, our a share, and solid ], X.XX%. to The

our net in our net margin net at Our details versus our but a while also margin able very more and both provide slight X.XX% minutes. be declined showed interest interest income few Mark strong. on QX, net contraction remained will slightly, to income interest interest

we deeply and Asset to of here are in quality touch as to on continued improve declining or in had dive pipeline. loan growth going our is pickup few minutes. more He'll ACL, seeing also a another the meaningful in quarter we Dave improving

under was Moving the Page just also in X. production to very loan growth quarter higher the X% quarter. were the quarter. for because in new of Loan strong Payoffs

$XX on million for on this However, contribution consecutive the quality side, growth our customer than X% the and of growth page. annualized, of some to deposit asset deposit the meaningful deposit is produced this a the improvements see company. you Notably, more quarter provided over growth of sixth

XX% overall we performance broad-based, growing DDA of NOW are of strong pleased DDA with very and particularly level balances. was a total growth deposit our with to While balances

let XXXX. capital, the provide over statement to will Mark how and Dave, In quality, and more we and a he'll book that again feel navigated minute, color on reiterate I'm going but loan about and good all credit to in the talk the turn we me it more income then about

results record feel at strong, very very confident XXXX. capital and levels. said, and Earnings look strong, about I we are were metrics good, As are levels pipelines

bit little it turn to talk a balance sheet. about more So with going I'm that, to the over to Dave

Dave Antolik

Great. and our growth both QX. afternoon, annualized. of experienced the on sheet totaling for commercial everyone. X.X% in solid Continuing with We Thank you, X Chris, discussion balance loan and good Slide consumer loans,

our QX X quarter and years. experience levels recent originations We quarter for X loan commercial production strongest of higher on fully to expect was a in Focusing those than quarters quarter for XXXX at minute, in X years. continue in

banking We've bankers to been XX% We've and teams pipelines segments, of additions, the and past year. in in and Banking renewed and These leading results. expanded confidence business our impacting along doubling pipelines with are positively seen expanded our both recruiting customer demand commercial year-over-year. Commercial Business our actively Business a those Commercial increased and by

higher Chris in growth, quarters improvement our to as several and on profile experienced earlier credits, allowed successfully quality exited we QX payoffs in most led to than in continued asset the Pressuring has mentioned, were bankers, importantly, our more growth. focus as XXXX as which

to growth to year full Much residential our Turning strategy loans. the residential on consumer driven and better mortgage focus franchise deposit with it of and our align was the our mortgage activities. and branch supporting communities. network our We've refined quarters by

outcome, mortgage growth As equity XXXX expect our and be mortgage, and an in our to residential home more products. has in we balanced consumer reduced pipeline between residential

quality Turning to Slide on asset X.

continue We see to improvement QX. in

of remain nonperforming credit loans. results NPAs are XX a $X basis allowance including at assets for points low factors, of almost loans. Our relatively in of declined decline million. and $X from by Influencing declined X.XX% X.XX% several total million total losses to these

continued during fifth total, We C&C This our XXXX. consecutive and XX% C&C loans declines declined And in the assets declines. in represents by in of also saw the quarter. criticized of XX% quarter classified

compared $XXX,XXX In for million quarter addition, a charge-off net to $X.X QX. in we net saw a of recovery the

confidence, mentioned anticipate for now previously the growth high XXXX. and half we hiring, growth year customer in Mark. full first over mid-single-digit turn customer to pipelines, of XXXX of call demand and in improvement mid-single-digit the the the with I'll Finally,

Mark Kochvar

Great. Dave. Thanks,

of quarter. our those expectations. net in million quarter Here on basis decrease of margin income $X.X third line net X.XX%, to a fourth about with at interest X last the points rate interest with are down Slide X, compared from quarter, in Both

Our income replacements rate net quarter fourth by declined repricing offset basis in supported the short were in basis borrowing move yield compared point the as average a have third. about from relatively exception to points deposit repricing, CD and driven cumulatively of quarter, million quarter to a response non-maturity with the fourth past normal liability XX the security net restructurings per now we interest book a mostly the points interest approximately basis combined yields in beginning million XX XX in $X a improving by by done earning and Fed This amounts we by decline interest-bearing $XXX totaling was rates. The and decline in and of asset income costs lower funds of margin over XXXX. interest normal quarters, bond also X and by into better the net

and especially the the Looking points the fixed with margin fixed materialize net of swap even to and in net quarter, duration move XXXX. curve, rate, a cuts lower. ahead, price mostly steeper of received should that within and loan we mid-X.XX% Fed We area hold interest exceptions will Support for the believe rate interest billion stability improving favorable we rate at million net a margin bottom couple implement expectations. first current level cut in $XXX an in repricing of the from portfolio later from the the manage the and securities first mature 'XX reduced short cuts that that are non-maturity $X.X ladder comes half interest CD ability basis in margin ARM short rates beginning to deposit if given a anticipate will rate our

our better translate A we should more stable into with the asset combined quarter net growth rate, second 'XX. growth interest move of income interest net margin into outlook as

of in fourth executed which quarter, a This slide, as earn $X.X back of about $XX securities million an just $X.X X million, with million one we next was declined the third we I On by a about the took about years. repositioning. noninterest income, mentioned, loss

noninterest rate $XX to approximately core million income per Our run remains quarter. million $XX

noninterest due of to processing third. level to and quarter Pennsylvania expense. due And which incentives. is overall timing capital. unchanged compared decline the is are the Expenses in Data increase based state fourth Next, tax, the technology were the investments. some taxes relates Slide lower higher to other in on to of Salaries benefits our X,

overall We compared X% expenses 'XX invest to to in continue in we by approximately customer our as experience. to expect increase and our XXXX capacity production

rate quarterly run and closer half. a to back $XX the first per approximately expect $XX the in million the of of million quarter in We million to year half $XX

points ratio slightly decreased finally, XX, basis AOCI X the quarter by higher capital. rates. impact And due this of to The Slide TCE on

regulatory as and us to or inorganic well TCE enable and the us will opportunities for very position organic advantage arise. they of take environment growth levels Our capital

back call for At over questions. provide the much. asking time, this very to you like operator I'd the turn to instructions to Thank

Operator

line first Raymond Your [Operator Daniel Tamayo Instructions] the from of of question comes James.

Daniel Tamayo

It you, bullish, pretty we of here. for Chris, loan one Maybe half year on as growth get the looks back into the outlook. the especially

full good mid-single going mid- ending single -- the you're to starting for I high the high guess last So and that and I'm Does year, sorry, you're that these months? year? that hirings given half move we the back to a think towards single-digit you've in is XX run of forward, digit if kind the digit mean year. as mid-single made starting the you're digit to And about over of level all year the be rate

Dave Antolik

you're Dave. describing this accurately. Dan, I'll Yes. that it yes, question. But is take

As going in of good follow anticipate was year, through a the growth. year to size to last our customer-facing the we loan we growth business with not into trajectory. we come year. hire of And year, and that had both first And banking, banking into last add the staffs, terms one that our double quarter pipeline commercial we

about feel that. we So better much

what about and the We confidence we're much in demand also our from feel of in hearing terms economy. better customers

those us more confidence improvements of to quality we've asset ability things that grow a top at fact pace. combined So our give had all in the rapid that these on significant

Christopher McComish

good combine that that today, we loyalty with that given following a that. feel the this in proactively, more sitting been more and the Dan, we're This foundation have environment very for and we X Chris. have company that people to years just the under we've much build growth. reputation is that to where effort about in. it's past the the as We're add our the a base, reflection market we're from and I'll of time many we employee spending and

Daniel Tamayo

That's terrific. now a been over through certainly guys you Maybe a to XXXX. That's for positive switching story for while credit.

Curious continue think normalized of We basis numbers classified of criticized if bottom a going would particular we bank, more where see net down. we're kind the profile as and about be and forward? think credit new there charge-offs think you the those to you a come to on close

Dave Antolik

again, Yes. Dan. It's Dave

give don't I the know our hard back we forecast. worked we is think, first, as we've growth. And improvements ensure charges are achieve to so difficult to we to asset quality accelerate job that that

So don't is we be being are would or 'XX C&C industry that growth. of charges we in And X.XX% lead loan years concern down of particular of would matter in XXXX. any the see from fact nearly anticipate support or to that ago, to outsized in that provisioning segment us X% total to gives that the assets All said, our X loans.

we about So where are. we feel good

going room our there's lot. improvement certainly, the relative feel mean peer the to achieved area, right? at not to but like our to not there you nearing repeat C&C -- XXXX, bottom, I Is in for what if able in to that we goals we're be we I a yes, in relative XXXX. look go, group, to think room we're C&C's,

Daniel Tamayo

reserves Yes. stable-ish fair of be to say pretty going you ] from And around for perspective, likely [ that, a Is guys. seems loans that's to a level like it forward? XXX Understood. fair

Mark Kochvar

Yes.

you you some still could basis, additional as the extent Dave we're 'XX, on mentioned that although still the but on still talked qualitative could percent that on out, see You further if we in dollar you to so the loan Depending work in the there's economy see how see could within metrics saw, could, higher. some lower that there, decrease that the some come see basis. be probably model not dollars in and could a improvement a the of Dave but growth successful go about, that could

Operator

Motta Kelly next of KBW. Your question the comes from line of

Kelly Motta

just of pipeline, on and with really or wondering, Happy if kind It stand, the call. additional given of pick like outlook holding there's need brought are teams Or add the feel like on here? the at talent Wondering you've firm the you opportunities got are looking if kind ahead, I'm up -- throughout producers you potential be your to growth outlook acceleration and that? with you just how story, what here? you and ahead, trends the you're sounds to your encouraging year. the the organic where

Dave Antolik

recruit Yes. the teams, 'XX to Kelly through We're like in those 'XX grow terms of to may planning continue year, the to addition. look XX%

we that we in have the do certainly bankers. do the story given that there's tell market that, think I prospective and to and to our have room opportunity strength to

So we'll add continue customer-facing in staff to to XXXX.

Christopher McComish

Kelly, Chris. that. I'll it's And add to

again, X is this years, for you, the doing foundation building past of back over If been we've growth. kind go what

added opportunistic. as that a good call So not attention our we, back to in that we much last management, stand, look we where turned continue audit, of more company are has continue AML, foundation decision about a to the ago. employees teams will need we been earlier finance, and our employees firm the of kind and billion company, as and it, we total, towards cross today to credit, really those had We in and than Vast revenue-facing very to over be BSA, functions, control we lot customer-facing to have grow, feel XX-ish our to had foundation all the employees made so X employees. risk in we $XX year that we XXX-ish majority of more of years

Kelly Motta

a it thawing it. bit. And like may out then feels be Got That's helpful. M&A

Just wondering positioning kind on give update pace if here of how you us and [indiscernible]? an of potentially the and conversations could you're

Christopher McComish

again, But this we the big just of in of go week record that way. has that loyalty know one that asset company we're deploying reputation engagement growth. today, from customer The the this our Yes, our need have we have we the form and employee in capital It company And I industry the a believe discussions levels partner back resources talk. good positioned within a we're from of got and of to we we in very environment. lots marketplace, from very both organic will the we well company. and be and believe conferences obviously in in the smart have, we capital what

becoming looking we're the at more opportunistic I right forward think So, to active. are those becoming and -- things time, being it's

Operator

line of the Navas from comes question Next Davidson. Manuel of D.A.

Sharanjit Cheema

Manuel. for on Sharanjit, is This

for So wanted to a mentioned I stable first a my talk X.XX%. so about -- bit you little question, around NIM

more in rate change the there that are And so how -- if does like year? cuts

Mark Kochvar

that do expectations, deeper We rates, stack, based opportunities see think match mean, get into we to us I Yes. with we into reprices whatever current relatively from the rate deposit on stable the the cuts more lower deposit some book. additional on our we with Fed even keep for think we additional of if there's can margin -- Fed. end we the happens as the short have

place. from neutralize think sheet lot We've to we a bit good at So we're more done little a changes. the a balance rate

to if perspective So we're expect from rates much so a as as continue pressure don't that that be to down. go spot there better at we

Sharanjit Cheema

versus And of cost a from Fed for coming perceived And quarter in deposit you? there how little December is the cuts prior first bit the then December is cut? cuts the cut

Mark Kochvar

quarter-over-quarter Yes, on there's of should based similar we the made we've the just timings still bit well. -- But deposit overhang influenced as basis timing our little cuts a of already on cuts. a those

some we'll there. benefit see So

It repricing. smaller first but the the the million the quarter, that's $XXX changing One well other into year. first quarter things repricing is more quarter the fourth started CD move per of we the of in is first in degree month much a over of impactful year, half as the to we're

from So we'll activity. impact that have a much better

Sharanjit Cheema

the that the first really Awesome. quarter. pipelines coming your were strong then mentioned into And -- you

loans price yield pricing and those or for coming on competition? on the thoughts And so what is

Dave Antolik

in be coming It's additional terms the not In customer pricing. and similar being will through to added growth what more us we -- of pricing saw The really in that we've demand. bankers QX. is the the aggressive

Operator

Stephens question comes Breese Inc. of next Matthew Your the of line from

Matthew Breese

for you The more it's love general a ones there. of has on the something optimism? and from the that about pipeline couple answered. your that? me. think Can A or the been driving kind bit stable geography-specific? customers. talk kind a quick environment and What's optimism you Would said outlook more hear A of little you lot of Do to just optimism

Christopher McComish

think industry geographic Yes, it's I don't necessarily specific. or specific

to to happen you clear you were interest be can waiting time were customers think if their started things. those rates. more rates, the things -- the as people based as more was upon in far see able if I of confidence things. those say, what back go as interest noticed and this to, of year, short-term become execution relative going to we There and there last interest was planful direction, all in to And inflation as sorts to rates direction

customers. variable equation in last one for So the our

And and also around getting I on provided, clarity election some simply where think, because the the then clarity tailwinds things just had through stood. people having some general environment

was it tone that's geography. the within to just kind So general base. specific or wasn't any It customer industry of -- overall any our

Matthew Breese

that get barring Fed And NIM. room expect NIM it. to kind there's towards upward costs or the expect I'm do the still stands trajectory, -- reprice XXXX? outlook of of know X of I stay But the as deposit we as as entering what I XXXX, be the for lower. then of look that? the assets and like just anything cuts, near-term that kind this fixed the exit end anything outside the year, to where curious, we of you Barring X some on understand your you reprice again, get an end margin Got of do towards kind

Mark Kochvar

some And there's possibility Right. of that.

has the from an end deposit pricing kind as Dave us of result. biggest the growth delta comes a for at that it we I down as competitiveness higher the the And to one variable do have, of day, the think expectations. mentioned, loan of end

to in that implement to to franchise. the we've things pace keep So order done to that, we're going continue with deposit the have on

that could that break depending environment deposit. involve of general on and other institutions the Some and just how

little leaving be growth a fund room deposit can need more So that sure we we're -- appropriately. on make bit for that to potentially aggressive to the side

a competitive deposits. little bit potential a how on their think to a change of or do So little I perhaps bit on better is depending below environment that there's that in

Matthew Breese

What on is growth Maybe you can versus help for NII then. me expectation NII your in 'XX? out 'XX

Mark Kochvar

-- that year. QX of over a relatively it's probably see probably single-digit think is modest We in the We in still starting the relatively low but the change. still pickup course It's it's flat. should QX, percent

Matthew Breese

Understood.

Mark Kochvar

Year-over-year.

Matthew Breese

I'm you, year-over-year, what say? sorry, mean to I didn't you to were cut going

Mark Kochvar

saying were over the because just down I'm Yes, year-over-year coming of we XXXX. course

have make on we year-over-year So up a back that to of kind basis.

Operator

ahead. [Operator Instructions] at further for turn remarks. Please the questions would over go this like Officer, no now Executive There Chris time. I are to McComish call to Chief closing

Christopher McComish

thank of your your a Great. Okay. earlier, for your I said season for been, you busy Well, know company you, dialogue. I interest in and all we time. and certainly appreciate earnings the as it's all

everybody So you. Thank I has hope afternoon. great a

Operator

thank concludes We that for conference disconnect participating, gentlemen, and your you Ladies your that lines. call. and ask please

S&T Bancorp (STBA) 30 Jan 252024 Q4 Earnings call transcript