S&T Bancorp’s second quarter results were met with a negative market reaction, despite the company surpassing Wall Street’s revenue and profit expectations. According to CEO Christopher J. McComish, the quarter benefited from balance sheet repositioning and a focus on asset quality, helping the company drive consistent net interest income and maintain a healthy deposit mix. Net interest margin expanded and loan growth was led by commercial real estate and home equity, while expenses were affected by higher incentive accruals and merit increases. Management acknowledged that some expense increases are expected to recur in future periods.

Is now the time to buy STBA? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions S&T Bancorp’s Q2 Earnings Call

• Justin Crowley (Piper Sandler) questioned the outlook for funding costs as loan growth accelerates. CFO Mark Kochvar explained that deposit gathering could offset higher borrowing costs but acknowledged potential margin pressure if deposit rates rise.
• Crowley (Piper Sandler) also asked about the margin impact if rates stay higher for longer. Kochvar clarified that incremental gains would be modest, mainly from loan and securities repricing and swap maturities.
• Crowley (Piper Sandler) inquired about the likelihood of surpassing $10 billion in assets and whether the company would actively manage below that level. Kochvar said it may be close, but any effort to stay under would be temporary.
• Daniel Tamayo (Raymond James) asked about the sustainability of low charge-offs and reserve levels. President Dave Antolik emphasized a focus on stabilizing asset quality, with only minor room for further reserve reduction.
• Kelly Motta (KBW) explored which loan categories and markets would drive growth in the coming quarters. Antolik pointed to consistent growth across CRE, home equity, and mortgage, with C&I expected to pick up from a healthy pipeline and recent banker hires.

Catalysts in Upcoming Quarters

In coming quarters, the StockStory team will monitor (1) whether S&T Bancorp can sustain loan growth across key segments, (2) how effectively margin management offsets potential funding cost pressures in a changing rate environment, and (3) the impact of approaching or surpassing the $10 billion asset threshold on both expenses and revenue. Progress on inorganic growth initiatives and the pace of commercial banker integration will also be important signposts.

S&T Bancorp currently trades at $36.87, down from $38.69 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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