Stock to watch: S&T Bancorp Inc. (NASDAQ:STBA)

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S&T Bancorp Inc. (NASDAQ:STBA) stock lost over 1.2% on April 20th, 2018 (as of 10:57 AM GMT-4; Source: Google finance).

The group witnessed a fall in their loans and deposit portfolios during the first quarter of 2018 due to tough conditions on the back of higher than normal payoffs in their commercial as well as consumer portfolios.

On the  other hand, in their underwriting pipelines they intend to meet their overall growth objectives for the year. The group would continue to focus on protecting their net interest margin via a better spreads on new loan originations and letting some higher costing deposits runoff. As a result, their net interest margin expanded by 1 basis point to 3.59% despite FTE adjustment impact from a lower statutory tax rate.

Their OREO category rose by $2.5 million, driven by to two properties which were bought for branch locations in York, PA. The group also made a management decision not to build new locations in that market and are currently marketing the properties for sale. The permanent CRE portfolio rose by $75 million while their construction balances fell $60 million leading to a net growth of $15 million.

To combat the loans and deposits pressure, the group Controlled expenses which fell $720,000 with major part coming from the sale of majority interest in their Evergreen Insurance division and a state college branch. Overall, credit metrics was solid but Total delinquency fell to 0.53% while the group did had net recoveries for the quarter of $184,000. Non-performing loans fell by $2.6 million or 10.9% which currently stand at $21.3 million or 0.37% of the total loans.

The group reports a record net income of $26.2 million or $0.75 per share which is a 44% rise against the first quarter of 2017 leading to $18.2 million or $0.52 per share. Performance metrics were also very strong with an ROA of 1.51%, return on equity of 11.92%, return on tangible common equity of 17.83% and an efficiency ratio of 50.35%.

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