S&T Bancorp, Inc. :STBA-US: Earnings Analysis: Q4, 2016 By the Numbers : January 30, 2017

S&T Bancorp, Inc. reports financial results for the quarter ended December 31, 2016.

We analyze the earnings along side the following peers of S&T Bancorp, Inc. – Bryn Mawr Bank Corporation, F.N.B. Corporation, First Commonwealth Financial Corporation, M&T Bank Corporation and Citizens & Northern Corporation (BMTC-US, FNB-US, FCF-US, MTB-US and CZNC-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 65.38 million, Net Earnings of USD 17.66 million.
  • Net interest income margins widened from 78.89% to 80.24% compared to the same period last year.
  • Net loan assets changed 11.63% compared to same period last year and 3.62% from previous period, total deposits changed 8.12% compared to same period last year and 2.47% from previous period.
  • Earnings grew despite decline in operating margins and pre-tax margins compared to same period last year.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2016-12-31 2016-09-30 2016-06-30 2016-03-31 2015-12-31
Relevant Numbers (Quarterly)
Revenues (mil) 65.38 64.79 62.15 65.16 61.97
Revenue Growth (%YOY) 5.5 4.52 0.03 24.8 25.75
Earnings (mil) 17.66 20.51 17 16.05 17.35
Earnings Growth (%YOY) 1.8 10.56 -6.13 25.51 20.08
Net Margin (%) 27.01 31.66 27.35 24.64 27.99
EPS 0.51 0.59 0.49 0.46 0.5
Return on Equity (%) 8.41 9.86 8.31 8.01 8.78
Return on Assets (%) 1.03 1.23 1.03 1 1.11

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Market Share Versus Profits

Revenues History
Earnings History

STBA-US‘s change in revenue this period compared to the same period last year of 5.50% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that STBA-US is holding onto its market share. Also, for comparison purposes, revenues changed by 0.92% and earnings by -13.91% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s earnings growth was influenced by the year-on-year improvement in net interest income margins from 78.89% to 80.24%. However, the company’s loan loss provisions have prevented it from fully capitalizing on these net interest income margin improvements. STBA-US‘s net interest income after provisions margin showed no improvement. Loan loss provisions as a percentage of net interest income were 10.65% this period, and 8.01% a year ago.

Net Interest Income Margin Versus Loan Loss Provisions Margin

Quadrant label definitions. Hover to know more

High Risk; High Reward Loans, Risky Loan Portfolio, Conservative Loan Portfolio, Safer Loan Portfolio
Net Interest Income Margin History
Loan Loss Provisions Margin History

Net Loans and Total Deposits

A financial institution’s core operations represented by Net Interest Income and Net Interest Income after Provisions are dependent on both the growth and quality of its deposits as well as the growth and quality of its loans. A firm could boost its interest income in the short-term by just increasing its loan assets with less concern about their quality – but this would eventually lead to greater loan loss provisions. Similarly a drive to increase deposits could result in higher interest expenses and eventually effect the firm’s equity. It is thus important to understand net interest income performance in context to loan loss provisions, loan assets and deposits.

Loan Assets Growth Rate History (Qtr YOY)
Total Deposits Growth Rate History (Qtr YOY)

The firm’s improvement in net interest income margins was influenced by both the relative increase in the levels of net loan assets and the level of total deposits as a percentage of equity. On an absolute basis, net loan assets changed 11.63% compared to the same period last year and 3.62% from the previous period. Total deposits changed 8.12% compared to the same period last year and 2.47% from the previous period.


Despite a decline in operating’s margins as well as a decline in pretax margins, the company’s earnings rose.

EBIT Margin History
PreTax Margin History
EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables

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Company Profile

S&T Bancorp, Inc. is a bank holding company. The company through its subsidiaries, S&T Bank, 9th Street Holdings, Inc. and STBA Capital Trust I offers financial services and insurance solutions for both business and individual clients. It operates through three segments: Community Banking, Wealth Management and Insurance. The Community Banking segment offers services, which include accepting time and demand accounts, originating commercial and consumer loans and providing letters of credit and credit card services. The Wealth Management segment offers discount brokerage services, services as executor and trustee under wills and deeds, guardian and custodian of employee benefits and other trust and brokerage services, as well as a registered investment advisor that manages private investment accounts for individuals and institutions. The Insurance segment includes a full-service insurance agency offering commercial property and casualty insurance, group life and health coverage, employee benefit solutions and personal insurance lines. S&T Bancorp was founded on March 17, 1983 and is headquartered in Indiana, PA.

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