Monday, S&T Bancorp Inc. (STBA), a holding company for the S&T Bank, reported a sharp decline in profit for the third quarter, reflecting higher provision for loan losses, increased Federal Deposit Insurance Corp., or FDIC, premiums and other-than-temporary impairments for equity investments. However, earnings for the quarter came in well ahead of Street estimates.
The Indiana, Pennsylvania-based company's net income available to common shareholders for the third quarter plunged to $7.71 million or $0.28 per share from $15.70 million or $0.57 per share in the prior-year quarter.
On average, eight analysts polled by Thomson Reuters expected the company to earn $0.15 per share for the quarter. Analysts' estimate typically excludes one-time charges and gains.
Net interest income for the quarter decreased to $29.73 million from $34.40 million in the year-ago quarter, while non-interest income slipped to $10.28 million from $10.60 million last year. Analysts expected revenue of $51.16 million for the quarter.
Net interest margin for the quarter contracted to 3.94% from 4.07% in the year-earlier quarter.
Provision for loan losses for the quarter was $8.38 million, an increase from $6.16 million in the same quarter last year.
The company's net loan charge-offs as a percent of average loans on an annualized basis for the quarter were 0.62%, compared to 0.20% last year.
Interest expense for the quarter was $18.24 million, compared to $11.48 million last year. Including the FDIC special assessment charge, total non-interest expense for the quarter increased 11% to $24.84 million from $22.34 million in the same quarter a year ago.
Net investment security losses for the quarter were $2.1 million, owing to an other-than-temporary impairment charge for seven equity holdings. As at September 30, the equity securities portfolio has a market value of $12.9 million and net unrealized losses of $0.2 million.
At September 30, 2009, total gross loans were $3.45 billion, compared to $3.58 billion at September 30, 2008. Total deposits were $3.28 billion, compared to $3.13 billion, while total assets were $4.21 billion, compared to $4.35 billion last year.
For the nine-month period, net loss available to common shareholders was $5.61 million or $0.20 per share, compared to net income available to common shareholders of $44.40 million or $1.71 per share in the same period last year. Net interest income for nine months declined to $51.50 million from $99.80 million in the same period last year.
Provision for loan losses for the period increased significantly to $61.95 million from $7.32 million in the year-ago period.
S&T Bancorp also declared a quarterly dividend of $0.15 per share payable on October 23, 2009 to shareholders of record as of the close of business on September 30, 2009.
STBA is trading at $14.18, up 40.54 or 3.96% on the Nasdaq.
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