This report provides a comprehensive examination of S&T Bancorp, Inc. (STBA), evaluating the company across five critical dimensions: Business & Moat, Financial Statements, Past Performance, Future Growth, and Fair Value. Updated as of October 27, 2025, our analysis benchmarks STBA against competitors such as F.N.B. Corporation (FNB), Fulton Financial Corporation (FULT), and WesBanco, Inc. (WSBC), while framing key takeaways within the investment principles of Warren Buffett and Charlie Munger.
Mixed. S&T Bancorp is a stable community bank known for its consistent dividend growth and profitability. However, its business moat is narrow, facing intense competition in slow-growing regional markets. A key weakness is its high loan-to-deposit ratio, which has climbed over 100%, indicating a funding risk. The bank's earnings have been volatile and have recently shown signs of weakening. While the stock appears fairly valued, it lacks clear catalysts for significant near-term growth. STBA may appeal to income-focused investors, but growth-oriented investors may find stronger alternatives.
US: NASDAQ
S&T Bancorp, Inc. (STBA) functions as a classic regional bank holding company, with its principal subsidiary, S&T Bank, driving its operations. The bank's business model is fundamentally simple and relationship-driven: it attracts deposits from individuals and businesses in its local communities and uses these funds to provide loans, primarily to commercial enterprises and consumers within the same geographic areas. Its core operations are concentrated in Western and Central Pennsylvania, with a growing presence in Northeast and Central Ohio and Upstate New York. The bank's main revenue-generating activities can be broken down into four key areas: Commercial Lending, Consumer Lending, Deposit Gathering (as the funding source for lending), and Wealth Management services, which generate fee income. This traditional model thrives on deep local market knowledge and long-term customer relationships, which form the bedrock of its competitive standing against larger, national competitors.
The most significant contributor to S&T's revenue is its Commercial Lending division, which likely generates more than two-thirds of the bank's net interest income. This segment is further divided into two main products: Commercial Real Estate (CRE) loans and Commercial & Industrial (C&I) loans. CRE loans, which finance properties like office buildings, retail spaces, and multi-family housing, constitute the largest portion of the loan portfolio, representing approximately 50% of total loans. C&I loans, provided to businesses for operational needs like inventory, equipment, and expansion, make up another 20%. The market for these loans in STBA's operating regions is mature and highly competitive, with a modest CAGR tied to regional economic growth. Profit margins depend heavily on the bank's ability to price risk appropriately and maintain a low cost of funds. Key competitors include larger regional players like F.N.B. Corporation (FNB) and Huntington Bancshares (HBAN), as well as numerous smaller community banks that vie for the same local business clients. The primary consumers of these loan products are small-to-medium-sized businesses (SMBs) and local real estate developers who value the personalized service and quicker decision-making that a community bank can offer over a money-center bank. The stickiness of these relationships is moderate to high; while businesses can be sensitive to interest rates, they are often hesitant to switch from a lender who understands their local business context and has supported them through business cycles. The competitive moat for this division stems from this deep-seated local knowledge and personalized service, not from scale or cost advantages. This allows STBA to underwrite loans based on nuanced, on-the-ground information that larger competitors may lack, potentially leading to better credit outcomes. However, the heavy concentration in CRE also represents a significant vulnerability, as this sector is highly sensitive to economic downturns and interest rate fluctuations.
Consumer Lending is another core service, focused on providing residential mortgages, home equity lines of credit (HELOCs), and other consumer loans such as auto financing. This segment comprises a smaller but vital portion of the loan book, with residential real estate loans accounting for around 20% of the total. While it contributes less to interest income than the commercial side, it is crucial for building comprehensive relationships with retail customers. The market for consumer loans is vast but fiercely competitive, with STBA competing against national giants like JPMorgan Chase and Bank of America, specialized mortgage lenders, credit unions, and other regional banks. Profitability in this segment is often squeezed by intense price competition. The customers are individuals and families residing within the bank's geographic footprint. The stickiness of these products varies; mortgages have high switching costs and tend to be very sticky, whereas auto loans are more transactional. STBA's primary advantage here is its ability to cross-sell lending products to its existing deposit customers, leveraging the trust and convenience of an established banking relationship. The competitive moat in consumer lending is relatively weak on a standalone basis and relies almost entirely on the strength of its retail deposit franchise. Without a significant cost or product advantage, the bank's success is tied to its ability to convert depositors into borrowers through excellent service and community presence.
Wealth Management and Trust Services represent a critical, albeit smaller, component of STBA's business model, providing a key source of non-interest (fee) income. This division offers services such as investment management, financial planning, and trust and estate administration to high-net-worth individuals, families, and institutions. This segment contributes a significant portion of the bank's non-interest income, which in total represents about 17% of overall revenue. The wealth management industry is a growth market, but it is also highly fragmented and competitive, with STBA facing off against independent registered investment advisors (RIAs), brokerage firms like Charles Schwab, and the private banking arms of larger financial institutions. The customers are affluent clients who require sophisticated financial advice and personalized service. A key characteristic of this business is its extreme stickiness; relationships are built on deep personal trust, and clients are very reluctant to move their complex financial affairs to a new provider, resulting in high switching costs. This division's competitive moat is derived from the strength of its client relationships and its reputation for trustworthy advice within its local communities. This provides a stable and recurring revenue stream that is not dependent on interest rate movements, offering a valuable buffer against the volatility of the core lending business. Expanding this fee-based income is crucial for STBA's long-term resilience and profitability.
Finally, the foundation of the entire operation is Deposit Gathering. S&T Bank collects funds through a variety of products, including noninterest-bearing checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs). This is not a direct revenue line item but is the single most important factor in the bank's profitability, as a low-cost, stable deposit base directly funds its loan portfolio and determines its net interest margin. The market for deposits is intensely competitive, with every financial institution, from the largest national banks to online-only banks and credit unions, competing for customer funds. S&T's customers are the same local individuals and businesses it lends to. Stickiness is highest for primary checking accounts, especially for businesses and individuals who use direct deposit and automatic bill pay, creating significant inertia. As of early 2024, approximately 25% of STBA's deposits were noninterest-bearing, which is a solid, low-cost source of funding. The moat here is built on the convenience of the branch network, long-standing community ties, and the perceived hassle of switching primary banking relationships. This core deposit franchise is arguably STBA's most durable competitive advantage.
In conclusion, S&T Bancorp's business model is a durable, time-tested one centered on community-based relationship banking. Its primary competitive advantage, or moat, is built on a foundation of sticky, low-cost local deposits and an intimate understanding of its regional lending markets, particularly for small and medium-sized businesses. This allows it to compete effectively against larger, less nimble institutions within its specific geographic footprint. The wealth management division adds a valuable layer of high-margin, recurring fee income that diversifies its revenue streams.
However, this moat is not impenetrable. The bank's resilience is challenged by its significant geographic and product concentration. Its heavy reliance on commercial real estate lending makes it vulnerable to downturns in that specific sector, and its operations are tied to the economic health of its specific regions in the northeastern U.S. Furthermore, its fee income as a percentage of total revenue remains below that of many larger peers, indicating a continued high dependence on net interest income, which is subject to the volatility of interest rate cycles. While the business model is sound and has proven resilient, its long-term success will depend on its ability to prudently manage its credit concentrations and continue to grow its non-interest income streams to create a more balanced and all-weather business.
S&T Bancorp's recent financial performance highlights a company with strong core profitability and operational discipline, but with an increasingly stretched liquidity profile. On the income statement, the bank has posted steady growth in net interest income, reaching $89.24 million in the most recent quarter, up 5.64% year-over-year. This growth, combined with disciplined expense management, has resulted in a very healthy efficiency ratio of 54.7%, well below the industry standard of 60%. Profitability metrics are also solid, with a Return on Assets (ROA) of 1.43%, comfortably above the 1% benchmark often considered strong for banks.
The balance sheet reveals both significant strengths and a noteworthy weakness. The bank is well-capitalized, as evidenced by a Tangible Common Equity to Total Assets ratio of 11.2%. This provides a substantial cushion to absorb potential losses. Leverage is also low, with a debt-to-equity ratio of just 0.16. However, the primary red flag is liquidity. The bank's loan-to-deposit ratio has crept up to 100.7% as of the latest quarter. A ratio exceeding 100% indicates that the bank is lending out more than it holds in customer deposits, forcing it to rely on potentially more expensive and less stable funding sources like borrowings.
From a cash generation perspective, the company produced $173.37 million in operating cash flow in its latest fiscal year, supporting dividends and investments. The provision for credit losses has increased in recent quarters, from $1.97 million to $2.79 million, suggesting a prudent approach to managing potential credit risks in its loan portfolio. The allowance for loan losses as a percentage of gross loans stands at a reasonable 1.23%.
In conclusion, S&T Bancorp's financial foundation appears stable from a profitability and capital standpoint. Its ability to control costs and generate core earnings is a clear positive. However, the high loan-to-deposit ratio is a significant risk factor that cannot be overlooked. Investors should weigh the bank's strong operational performance against the potential vulnerabilities in its liquidity and funding structure.
An analysis of S&T Bancorp's performance over the last five fiscal years (FY2020–FY2024) reveals a story of recovery and stability, but not outstanding growth. The period was defined by a severe downturn in 2020 when the bank reported a massive $131.42 million provision for loan losses, causing earnings per share (EPS) to plummet to just $0.54. The subsequent years showed a strong rebound, with EPS peaking at $3.76 in 2023 before moderating to $3.43 in 2024. This trajectory highlights the bank's cyclical nature and sensitivity to credit conditions rather than a consistent, upward trend in earnings power.
From a growth perspective, STBA's record is modest. Over the five-year period, net loans grew from $7.1 billion to $7.6 billion and deposits grew from $7.4 billion to $7.8 billion. This slow and steady expansion is characteristic of a mature community bank but lags the more dynamic growth of larger regional competitors. Profitability, measured by Return on Equity (ROE), has been decent but inconsistent, ranging from a low of 1.79% in 2020 to a high of 11.73% in 2023, before settling at 9.86% in 2024. While the average ROE of around 10% in normal years is adequate, it does not stand out against more efficient peers who consistently generate higher returns.
On the positive side, STBA has a strong track record of returning capital to shareholders. The dividend per share has increased every year during the analysis period, showcasing a clear commitment from management. Free cash flow has consistently been sufficient to cover these dividend payments, with the payout ratio stabilizing at a sustainable level below 40% after the 2020 anomaly. Share buybacks, however, have been minimal and have not significantly reduced the share count over time. Net interest income, the bank's primary earnings driver, saw strong growth in 2022 and 2023 but declined in 2024, reflecting pressure on its net interest margin in the current rate environment.
In conclusion, S&T Bancorp's historical record supports confidence in its ability to operate as a stable, dividend-paying institution that can recover from setbacks. However, it does not show a history of strong, consistent growth or best-in-class profitability. Its performance is often average when compared to direct competitors, suggesting it is a solid but unspectacular performer in the regional banking space. The key takeaway is a history of reliability in its dividend, but volatility in its earnings.
The regional and community banking industry is navigating a period of significant change, with the next 3-5 years promising to reshape the competitive landscape. The primary driver of this shift is the normalization of interest rates after a decade of historically low levels. This has bifurcated the industry, rewarding banks with strong core deposit franchises while punishing those reliant on wholesale funding. Consequently, a major theme will be the continued "war for deposits," forcing banks to invest in digital capabilities and competitive rates to retain customers. Another key trend is industry consolidation. Smaller banks are struggling with the high fixed costs of technology and regulatory compliance, making them attractive acquisition targets for larger regional players like STBA seeking to gain scale. Technology, particularly the adoption of AI for underwriting and digital platforms for customer service, will be a critical differentiator. Banks that fail to innovate risk losing customers to more nimble fintech competitors and larger banks with superior tech budgets. The market for U.S. regional bank services is expected to grow at a modest CAGR of 2-3%, reflecting slow economic growth and tight credit conditions. Finally, regulatory scrutiny is likely to intensify, particularly around capital requirements and liquidity, which could constrain lending growth for the entire sector.
These industry shifts create both challenges and opportunities for regional banks. The primary catalyst for growth will be M&A, allowing well-capitalized banks to expand their geographic footprint and acquire valuable deposit bases at reasonable prices. Another potential catalyst is a "soft landing" for the economy, which would boost loan demand from small and medium-sized businesses—the core clientele for community banks. However, competitive intensity is set to increase. The barriers to entry for basic deposit and lending services are falling due to technology, with online-only banks and fintech lenders grabbing market share, particularly among younger demographics. Winning in this environment will require a dual strategy: maintaining the high-touch, relationship-based service that defines community banking while simultaneously offering a seamless digital experience. Banks that successfully integrate these two channels will be best positioned to thrive. The future will belong to institutions that can leverage technology to enhance efficiency and customer experience without losing their local connection.
Looking at S&T Bancorp's core product, Commercial Lending, its future growth is likely to be muted. This segment, split between Commercial Real Estate (CRE) and Commercial & Industrial (C&I) loans, currently faces significant constraints. CRE, particularly the office and retail sub-sectors, is grappling with post-pandemic changes in work and shopping habits, leading to higher vacancies and credit risk. This environment is limiting consumption as both lenders and borrowers become more cautious, and regulatory pressure is causing banks to tighten underwriting standards for CRE loans. Over the next 3-5 years, consumption will likely shift. We expect a decrease in new office and retail CRE originations, while demand may increase for industrial properties (warehouses, logistics) and multi-family housing. For C&I loans, growth will be tied to the economic health of STBA's local markets in Pennsylvania and Ohio. A potential catalyst could be a resurgence in domestic manufacturing, but overall growth is expected to track regional GDP. The U.S. commercial lending market is projected to grow at a slow pace of 1-2% annually. STBA's key consumption metric, loan originations, will likely be flat to slightly positive. Competitively, STBA vies with larger regionals like FNB and Huntington, which can offer more sophisticated treasury services. STBA outperforms when its local knowledge and quick decision-making are valued by small businesses. However, in a tight credit market, larger banks with more diversified funding may win on price. The number of smaller community banks is expected to continue decreasing due to consolidation, which could strengthen the position of survivors like STBA.
A key forward-looking risk for STBA is its high concentration in CRE. If a regional recession or a sharp downturn in commercial property values were to occur, it would directly impact the bank's largest loan category, leading to higher charge-offs and reduced lending capacity. This risk is medium, as while STBA has a history of prudent underwriting, its geographic concentration makes it vulnerable to local economic shocks. A 10% decline in CRE valuations could significantly increase non-performing assets and stall growth. Another risk is a prolonged period of high interest rates, which could further dampen loan demand from businesses hesitant to take on expensive debt, thereby lowering loan consumption. The probability of this is medium-to-high in the near term.
S&T's Consumer Lending segment, primarily residential mortgages and home equity lines, faces a different set of challenges. Current consumption is heavily constrained by housing affordability and elevated interest rates, which have significantly slowed both home sales and refinancing activity. Over the next 3-5 years, any increase in consumption will be driven by a potential decline in mortgage rates, which would unlock pent-up demand. We expect a shift away from refinancing towards purchase mortgages. Demand may also rise for home equity lines of credit (HELOCs) as homeowners with low-rate first mortgages tap into their home equity for renovations or other expenses rather than selling. The U.S. mortgage origination market is expected to recover from recent lows but remain well below the peaks seen in 2020-2021, with forecasted volume growth in the 5-10% range from a low base, contingent on rate cuts. STBA competes with a vast array of lenders, from national giants to online mortgage companies. Customers often choose based on rate and speed of closing. STBA's advantage is cross-selling to its existing deposit customers who value convenience and an established relationship. However, it is unlikely to win significant share from larger, more price-competitive players. The primary risk is a local housing market downturn, which could lead to credit losses. This risk is low-to-medium, as housing markets in STBA's footprint have historically been more stable than in other parts of the country.
The most significant opportunity for future growth lies in S&T's Wealth Management and Trust Services. This division generates high-margin, non-interest fee income, making it a critical tool for diversifying revenue away from traditional lending. Current consumption is limited by the bank's scale and ability to attract and retain top financial advisors. The key constraint is penetrating its existing customer base more effectively and competing against established independent advisors and brokerage firms. Over the next 3-5 years, consumption of wealth services is set to increase across the industry, driven by the massive transfer of wealth between generations and a growing need for retirement planning. A major catalyst would be a strategic investment in this division, such as hiring a team of advisors or acquiring a small registered investment advisor (RIA). The U.S. wealth management market is projected to grow at a CAGR of 4-6%. Key consumption metrics are Assets Under Management (AUM) and revenue per client. STBA will outperform if it can successfully leverage its trusted banking brand to convert its most affluent deposit customers into wealth management clients. However, firms like Charles Schwab and local RIAs are formidable competitors who often win on platform breadth and specialized expertise. A key risk is a sustained equity market downturn, which would reduce AUM and associated fees. This is a medium probability risk over a 3-5 year horizon and could reduce fee income by 10-15% in a bear market.
Beyond its main business lines, S&T Bancorp's future growth will also be influenced by its capital allocation strategy. As a smaller regional bank, organic growth is difficult to accelerate. Therefore, disciplined M&A will be a crucial lever. Acquiring a smaller, in-market competitor could provide valuable low-cost deposits, talented lenders, and cost synergies, immediately boosting earnings per share. The bank's solid capital position provides the flexibility to pursue such opportunities. Furthermore, continued investment in digital technology is not just a defensive measure but a requirement for growth. Enhancing its mobile banking app and online account opening processes can help attract younger customers and improve the efficiency of its existing branch network, ultimately supporting deposit growth which is the lifeblood of the bank.
As of October 27, 2025, S&T Bancorp's stock price of $36.31 presents a generally reasonable valuation, with analysis suggesting a fair value range of approximately $37 to $42. This indicates the stock is slightly undervalued with a modest margin of safety. This valuation is derived from a triangulation of several common methods used for financial institutions, with the most weight given to multiples-based and asset-based approaches.
The multiples approach provides a favorable view. STBA's trailing P/E ratio of 10.53 is below the regional bank peer average of approximately 12x, implying a potential fair value in the low $40s. Furthermore, its Price to Tangible Book Value (P/TBV) of 1.27x is a critical metric for banks. This premium over its tangible asset value is justified by the company's solid Return on Equity (ROE) of 9.57%, which indicates it is generating adequate profits from its asset base. This suggests the stock is not excessively priced on an asset basis.
Conversely, a Dividend Discount Model (DDM) using a required return of 9.52% and a long-term dividend growth rate of 3.0% yields a much lower valuation of around $21.44. This model is highly sensitive to its inputs and often undervalues banks that retain a significant portion of their earnings for growth rather than paying them out as dividends. Because of these limitations, the DDM result is considered with caution. By weighing the more reliable P/E and P/TBV approaches most heavily, a fair value range of $37.00 - $42.00 appears appropriate, positioning the stock at the lower end of this range.
Charlie Munger would view S&T Bancorp as a perfectly understandable, but ultimately mediocre, regional bank. He prizes great businesses at fair prices, and while STBA is stable and well-capitalized, its financial performance is unremarkable. With a Return on Average Assets (ROAA) of around 1.0% and an efficiency ratio in the high 50s%, it fails to stand out against best-in-class peers like First Commonwealth Financial (FCF), which achieves a superior 1.3% ROAA with better cost controls. Paying a premium for an average operator, indicated by its Price-to-Tangible Book Value of ~1.3x, is a classic example of an unforced error Munger would seek to avoid. The takeaway for retail investors is that while STBA is not a troubled bank, there are demonstrably better operators in its direct vicinity that represent a more rational allocation of capital. If forced to choose the best regional banks, Munger would likely favor First Commonwealth Financial (FCF) for its operational excellence, Peoples Financial Services (PFIS) for its fortress balance sheet and value pricing, and F.N.B. Corporation (FNB) for its scale and reasonable valuation. Munger's decision on STBA would only change if its valuation fell significantly, perhaps below its tangible book value, or if a new management team demonstrated a clear path to superior profitability.
Warren Buffett approaches banks as simple, long-term investments, seeking those with a durable moat built on low-cost deposits, conservative lending, and trustworthy management. In 2025, he would view S&T Bancorp (STBA) as an understandable but ultimately average regional bank. While STBA is solidly capitalized, its profitability and efficiency metrics, such as a Return on Average Assets (ROAA) of around 1.0% and an efficiency ratio in the high-50s%, are unremarkable when compared to higher-performing peers. Buffett would be concerned that at a valuation of approximately 1.3 times its tangible book value, the stock offers no margin of safety for a business that isn't a best-in-class operator. The bank's geographic concentration in the mature markets of Pennsylvania and Ohio also limits its long-term growth prospects. Therefore, Buffett would likely avoid the stock, concluding it's a fair business but trading at a full price without the exceptional characteristics he seeks. Forced to choose the best in this sub-industry, Buffett would likely favor First Commonwealth Financial (FCF) for its superior operational excellence (ROAA ~1.3%), Peoples Financial Services (PFIS) for its combination of high profitability, fortress balance sheet (CET1 >15%), and deep value price (<1.0x P/TBV), and F.N.B. Corporation (FNB) for its superior scale and growth potential. A significant price decline for STBA, perhaps to or below its tangible book value, would be necessary for him to reconsider.
Bill Ackman would view S&T Bancorp as a simple, understandable business, but one that ultimately fails to meet his high standards for investment. His investment thesis in banking would focus on identifying dominant, scalable franchises with best-in-class profitability and a clear path to long-term value creation, none of which STBA exhibits. While the bank is stable, its lack of scale at ~$9.5 billion in assets and average profitability, with a Return on Average Assets (ROAA) around 1.0%, would be significant deterrents. Ackman would compare this to a direct competitor like First Commonwealth Financial (FCF), which operates in the same market but generates a much higher ROAA of ~1.3%, highlighting that STBA is not a top-tier operator. The primary risk is its geographic concentration in slower-growth markets and intense competition, which caps its potential and prevents it from building a durable, wide moat. Therefore, Ackman would avoid the stock, as it is neither a high-quality compounder nor a compelling turnaround story. If forced to choose the best regional banks from the list, he would favor F.N.B. Corporation (FNB) for its superior scale (~$46B assets), First Commonwealth Financial (FCF) for its best-in-class profitability (~1.3% ROAA), and Fulton Financial (FULT) for its combination of scale (~$28B assets) and solid returns (~1.15% ROAA). Ackman's decision could change only if STBA were to be acquired at a significant premium, turning it into a short-term event-driven play rather than a long-term investment.
S&T Bancorp, Inc. operates in the highly fragmented and competitive regional banking sector, where success is often dictated by local market knowledge, customer relationships, and operational efficiency. The bank's core business model, centered on traditional lending and deposit-gathering in Pennsylvania and Ohio, is a durable one but faces constant pressure. Larger national banks can offer a wider array of digital services and leverage massive scale, while smaller community banks can sometimes foster deeper local ties. STBA sits in a challenging middle ground, needing to invest in technology to stay relevant without the budget of a banking giant, while also defending its turf from smaller, nimble rivals.
The economic environment, particularly interest rate fluctuations, plays an outsized role in STBA's performance, as it does for all regional banks. A significant portion of its revenue comes from the net interest margin—the spread between the interest it earns on loans and the interest it pays on deposits. In a rising rate environment, margins can expand, but it can also increase funding costs and dampen loan demand. Conversely, falling rates can compress margins. STBA's ability to manage its balance sheet to navigate these cycles is a critical determinant of its long-term success against peers who may have more sophisticated hedging strategies or more diverse revenue streams from wealth management or insurance services.
Ultimately, STBA's competitive standing hinges on its ability to execute a focused strategy. This involves prudently growing its loan portfolio in its core markets, maintaining strong credit quality to avoid significant loan losses during economic downturns, and controlling non-interest expenses. While it may not be the fastest-growing or most profitable bank in its class, its value proposition to investors often rests on its stability, conservative management, and a reliable dividend stream. Its challenge is to prove it can deliver consistent, if not spectacular, returns while fending off competition from all sides in a mature market.
F.N.B. Corporation (FNB) is a significantly larger and more diversified regional bank, operating across a wider seven-state footprint in the Mid-Atlantic and Southeast. This scale gives FNB a substantial advantage over the more geographically concentrated S&T Bancorp (STBA). While both compete in the Pennsylvania and Ohio markets, FNB's larger asset base, broader service offerings including capital markets and insurance, and greater market presence position it as a more formidable and dynamic competitor. STBA, in contrast, is a more traditional community-focused bank, which can be a strength in its specific localities but limits its overall growth potential compared to the regional powerhouse that FNB has become through consistent acquisitions and organic expansion.
In terms of business moat, which for a bank means its durable competitive advantages, FNB holds a clear edge. FNB's brand is stronger across a wider geography, reflected in its ~$36 billion deposit base versus STBA's ~$7.8 billion. While switching costs for basic banking are moderate for both, FNB's integrated wealth management and insurance services create stickier relationships. FNB's scale is its biggest advantage, with ~$46 billion in assets compared to STBA's ~$9.5 billion, allowing for greater efficiency and investment in technology. Neither has strong network effects in the traditional sense, but FNB's larger branch and ATM network is a tangible benefit. Both operate under the same high regulatory barriers inherent in banking. Overall, FNB is the winner on Business & Moat due to its superior scale and more diversified business mix, which create a more resilient franchise.
Analyzing their financial statements reveals FNB's superior operational performance. FNB consistently reports better profitability and efficiency. For example, FNB's Return on Average Assets (ROAA), a key measure of how well a bank uses its assets to generate profit, was recently around 1.1%, while STBA's was closer to 1.0%. FNB's efficiency ratio, which measures non-interest expense as a percentage of revenue (lower is better), is typically in the mid-50% range, superior to STBA's high-50% to low-60% range. This means FNB spends less to generate each dollar of revenue. Both maintain strong capital levels, with Common Equity Tier 1 (CET1) ratios comfortably above regulatory minimums, but FNB's scale allows it to generate superior returns. FNB is the clear winner on Financials due to its higher profitability and greater efficiency.
Looking at past performance, FNB has a stronger track record of growth and shareholder returns. Over the last five years, FNB has grown its revenue and assets at a faster clip, partly through strategic acquisitions like the one for Howard Bancorp. Its 5-year total shareholder return has generally outpaced STBA's, reflecting its successful expansion and operational execution. STBA's performance has been steady but less impressive, with slower loan and deposit growth. In terms of risk, both have managed credit quality well, but FNB's larger size and diversification have historically provided a more stable earnings stream. FNB is the winner on Past Performance, having delivered superior growth and returns to shareholders.
For future growth, FNB again appears better positioned. Its presence in higher-growth markets in the Southeast, such as North and South Carolina, provides a significant tailwind that STBA, concentrated in slower-growing Pennsylvania and Ohio markets, lacks. FNB's management has a proven track record of successfully integrating acquisitions to enter new markets and gain scale, a key driver of future earnings growth in the banking industry. STBA's growth is more likely to be organic and incremental, focused on deepening its penetration in existing markets. While STBA's path is lower-risk, FNB's strategy offers a much higher ceiling for growth. FNB is the winner on Future Growth outlook due to its exposure to more dynamic markets and its proven M&A capabilities.
From a valuation perspective, the comparison becomes more nuanced. STBA often trades at a slight premium to FNB on a Price-to-Tangible Book Value (P/TBV) basis, sometimes around 1.3x for STBA versus 1.0x for FNB. P/TBV is a key metric for banks, comparing the stock price to the hard assets of the company. A lower P/TBV can suggest a stock is undervalued. FNB typically offers a higher dividend yield, recently around 5.0% versus STBA's 4.5%. Given FNB's stronger growth profile, higher profitability, and better efficiency, its lower valuation multiple and higher dividend yield make it appear to be the better value. An investor is paying less for a higher-quality, faster-growing bank. FNB is the winner on Fair Value.
Winner: F.N.B. Corporation over S&T Bancorp, Inc. The verdict is decisively in favor of FNB. It is a larger, more efficient, and more profitable institution with a superior track record and clearer path for future growth. FNB's key strengths are its scale (~$46B in assets vs. STBA's ~$9.5B), better efficiency ratio (mid-50s% vs. STBA's high-50s%), and exposure to faster-growing markets. STBA's primary weakness in this comparison is its lack of scale and geographic concentration, which limits its growth and efficiency potential. While STBA is a solid, well-managed bank, FNB operates at a different level, making it the superior investment choice based on nearly every key metric.
Fulton Financial Corporation (FULT) is a larger regional bank with a strong presence in the Mid-Atlantic, operating in Pennsylvania, Maryland, Delaware, New Jersey, and Virginia. With assets nearly three times the size of S&T Bancorp's (STBA), FULT boasts greater scale and geographic diversity. While both are Pennsylvania-based and share some overlapping markets, FULT's broader reach and more significant wealth management business give it a more diversified earnings stream. STBA remains a more traditional and smaller community-focused bank, which makes it more nimble in its core markets but also more vulnerable to regional economic downturns compared to the more spread-out FULT.
Comparing their business moats, FULT has an advantage primarily due to its scale and brand recognition across a five-state area. FULT's brand is well-established, with a deposit base of ~$22 billion versus STBA's ~$7.8 billion. This larger scale provides FULT with better operational leverage and the ability to invest more heavily in technology and marketing. Switching costs are comparable and moderate for both, tied to the inconvenience of moving direct deposits and automatic payments. FULT’s larger footprint gives it a network advantage in its operating region. Both banks are subject to the same strict regulatory barriers. The winner for Business & Moat is FULT, as its larger asset base (~$28 billion vs. STBA's ~$9.5 billion) and geographic diversity create a more resilient and powerful franchise.
Financially, Fulton Financial consistently demonstrates superior profitability. FULT’s Return on Average Assets (ROAA) typically hovers around 1.15%, comfortably above STBA’s 1.0%. This indicates FULT is more effective at converting its assets into profits. In terms of efficiency, the two are often closely matched, with efficiency ratios for both hovering around the 60% mark, which is average for the industry but suggests room for improvement for both. On the balance sheet, both are well-capitalized, with CET1 ratios above 10%, signaling a strong buffer against financial stress. However, FULT's superior core profitability metrics give it the financial edge. The winner on Financials is FULT, driven by its consistently higher ROAA.
Historically, FULT has demonstrated more consistent earnings growth, though shareholder returns have sometimes been similar. Over the past five years, FULT has generally delivered slightly better revenue and earnings per share (EPS) growth, benefiting from its exposure to more economically diverse markets. Total shareholder returns have been competitive, but FULT's larger dividend and more consistent earnings trajectory have often made it a preferred choice for income investors. Margin trends for both have been heavily influenced by the interest rate environment, with no clear long-term winner. In terms of risk, both have maintained solid credit quality. The winner for Past Performance is FULT, due to its slightly more robust growth profile and operational consistency.
Looking ahead, FULT's growth prospects appear modestly better than STBA's. FULT's presence in more populated and economically vibrant areas within the Mid-Atlantic, such as parts of Virginia and Maryland, gives it access to better organic growth opportunities. The bank has also been investing heavily in its digital platforms to better compete with larger banks and fintechs, which could drive future efficiency gains and customer acquisition. STBA’s growth is more tightly linked to the economic health of Western Pennsylvania and Ohio. While STBA can grow by taking market share, FULT has the advantage of operating in markets with more favorable demographic trends. The winner on Future Growth is FULT.
In terms of valuation, both banks often trade at similar multiples, making the choice less clear-cut. Both STBA and FULT have recently traded at a Price-to-Tangible Book Value (P/TBV) ratio between 1.2x and 1.3x. Their dividend yields are also very competitive, often both in the 4.0% to 4.5% range. Given FULT's slightly superior profitability (higher ROAA) and better growth prospects, one could argue it represents better value even at a similar valuation. An investor is getting a higher-quality operation for a comparable price. The winner on Fair Value is FULT, as its stronger fundamentals justify its valuation more compellingly than STBA's.
Winner: Fulton Financial Corporation over S&T Bancorp, Inc. FULT stands out as the stronger company due to its larger scale, superior profitability, and better geographic diversification. Its key strengths include a consistently higher ROAA (~1.15% vs. STBA's ~1.0%) and a more substantial asset base (~$28B vs. ~$9.5B) that supports greater investment and resilience. STBA's main weakness in this matchup is its smaller size and reliance on a less dynamic economic region, which caps its growth potential. While STBA is a respectable and stable bank, FULT offers investors a more compelling combination of quality, stability, and growth, making it the clear winner.
WesBanco, Inc. (WSBC) is a regional bank holding company with a footprint that spans six states, including key markets for S&T Bancorp (STBA) like Pennsylvania and Ohio. With ~$17 billion in assets, WSBC is significantly larger than STBA, giving it advantages in scale and geographic diversification. This diversification across different economic regions, from the Mid-Atlantic to the Midwest, provides a buffer against localized downturns that a more concentrated bank like STBA might feel more acutely. While both compete on the basis of community banking and personal relationships, WSBC's larger size allows it to offer a broader suite of products and services, posing a direct competitive threat in overlapping territories.
When evaluating their business moats, WSBC's primary advantage is its scale. Its brand is recognized across a wider six-state area, supported by a deposit base of ~$13 billion compared to STBA's ~$7.8 billion. This larger operational scale (~$17 billion in assets vs. STBA's ~$9.5 billion) allows WSBC to spread its fixed costs over a larger revenue base, which should theoretically lead to better efficiency. Switching costs are moderate and similar for both, rooted in customer inertia. Regulatory barriers are identical for both. The winner on Business & Moat is WSBC, as its greater scale and geographic diversification create a more durable and resilient banking franchise.
However, a deeper look at their financial statements shows that STBA is often the more efficient and profitable operator. STBA typically reports a higher Return on Average Assets (ROAA), recently around 1.0%, compared to WSBC's, which has been closer to 0.9%. This means STBA generates more profit from its assets. Furthermore, STBA's efficiency ratio is generally better, often in the high-50% range, while WSBC's has frequently been higher, sometimes exceeding 64%. This indicates that WSBC spends more on overhead to generate its revenue. Both banks are well-capitalized with strong CET1 ratios. Despite WSBC's size, STBA's superior operational metrics make it the winner on Financials.
Past performance paints a mixed picture. WSBC has grown its assets and footprint more aggressively over the past decade, largely through a series of successful acquisitions. This has led to faster top-line revenue growth. However, STBA has often delivered more consistent profitability and better efficiency metrics during the same period. In terms of total shareholder return over a 3- and 5-year period, the performance has been competitive and has varied depending on the time frame, with neither bank establishing a decisive, long-term advantage. Given STBA's better track record on core profitability, even with slower growth, it has shown better operational execution. The winner on Past Performance is STBA due to its more consistent bottom-line results.
For future growth, WSBC may have a slight edge due to its demonstrated history as a strategic acquirer. The banking industry is consolidating, and WSBC's larger size and experience in integrating other banks position it well to continue growing through M&A. This provides a path to expansion that STBA has been less aggressive in pursuing. Organically, both face similar challenges in the mature markets of the industrial Midwest. However, WSBC's proven ability to execute and integrate deals gives it an inorganic growth lever that is more potent than STBA's. The winner on Future Growth is WSBC, based on its stronger M&A track record.
From a valuation standpoint, investors often have a clear choice based on what they prioritize. WSBC typically offers a higher dividend yield, recently over 5.0%, which is very attractive to income investors. STBA's yield is also robust but generally lower, around 4.5%. However, STBA often trades at a higher Price-to-Tangible Book Value (P/TBV) multiple (~1.3x) compared to WSBC (~1.1x), reflecting the market's appreciation for its higher profitability and efficiency. The choice here is between WSBC's higher yield and STBA's higher quality metrics. Given its superior profitability, STBA might be considered a better value despite the higher multiple, as you are paying for better performance. It's a close call, but STBA gets the nod on Fair Value for its higher quality.
Winner: S&T Bancorp, Inc. over WesBanco, Inc. In a close contest, STBA emerges as the winner due to its superior operational execution. STBA's key strengths are its consistently higher profitability (ROAA of ~1.0% vs. WSBC's ~0.9%) and better cost management, as seen in its lower efficiency ratio. WSBC's notable weakness is its struggle to translate its larger scale into better profitability, and its higher efficiency ratio suggests operational bloat. While WSBC is larger and has a stronger M&A history, STBA has proven to be a better operator, more effectively turning its assets into profit. This superior execution makes STBA the slightly better choice for investors focused on fundamental quality.
First Commonwealth Financial Corporation (FCF) is arguably S&T Bancorp's (STBA) most direct and formidable competitor. Both are headquartered in Indiana, Pennsylvania, and have very similar asset sizes and geographic footprints focused on Pennsylvania and Ohio. This direct overlap makes for an intense rivalry in their home markets. FCF has distinguished itself in recent years through superior operational efficiency and profitability, often positioning itself as a best-in-class operator among banks of its size. While STBA is a solid and stable institution, FCF has demonstrated a greater ability to generate higher returns from a similar business model.
In the battle of business moats, the two banks are very evenly matched. Both have long histories in their core markets and strong local brand recognition, with STBA's roots going back to 1902 and FCF's to 1982. Their scale is nearly identical, with FCF having ~$10.6 billion in assets and STBA ~$9.5 billion. This means neither has a meaningful scale advantage. Switching costs are moderate for customers of both banks. Both operate under the same high regulatory barriers. Given their head-to-head competition and similar size, neither has a discernible moat over the other. This category is a draw. The winner for Business & Moat is declared even, as both banks possess similar local brand strength and scale within their shared markets.
Financial statement analysis is where FCF clearly pulls ahead. FCF consistently posts some of the best profitability metrics in its peer group. Its Return on Average Assets (ROAA) is frequently around 1.3%, which is excellent for a regional bank and significantly higher than STBA’s 1.0%. This is driven by superior cost control; FCF’s efficiency ratio is often in the low-to-mid 50% range, while STBA’s is in the high 50s%. This means FCF is a much leaner and more profitable operator. Both maintain strong capital levels with CET1 ratios above 10%, but FCF's ability to generate more profit from each dollar of assets is a decisive advantage. The winner on Financials is FCF, by a wide margin, due to its superior ROAA and efficiency ratio.
An analysis of past performance further solidifies FCF's lead. Over the last five years, FCF has delivered stronger and more consistent earnings per share (EPS) growth than STBA. This outperformance is a direct result of its disciplined expense management and strong net interest margin. This operational excellence has been rewarded by the market, with FCF's total shareholder return generally exceeding STBA's over 3- and 5-year periods. While both have managed credit risk effectively, FCF's ability to grow earnings more quickly and efficiently makes its track record more impressive. The winner on Past Performance is FCF.
Looking at future growth, both banks face similar prospects tied to the economic conditions of Pennsylvania and Ohio. Neither has a geographic advantage. However, FCF's lean operating model gives it more flexibility to invest in growth initiatives, such as technology and talent acquisition, without straining its budget. Its track record of successful acquisitions, like the recent one of Centric Financial, also shows a clear path to inorganic growth. STBA's growth is likely to be more methodical and organic. FCF's proven operational prowess suggests it is better equipped to capitalize on future opportunities, whether organic or through M&A. The winner on Future Growth is FCF.
From a valuation perspective, the market recognizes FCF's superior quality, but it doesn't always trade at a prohibitive premium. FCF often has a higher Price-to-Tangible Book Value (P/TBV) ratio, sometimes around 1.4x compared to STBA's 1.3x. This premium is justified by its significantly higher profitability (ROAA ~1.3% vs ~1.0%). FCF's dividend yield is typically lower than STBA's, recently 3.8% vs. 4.5%, as it retains more earnings to fund growth. For an investor focused on total return (capital appreciation plus dividends), FCF presents a better proposition. Its higher growth and profitability offer a clearer path to stock price appreciation that can more than offset the lower yield. The winner on Fair Value is FCF, as its premium valuation is well-supported by its superior financial performance.
Winner: First Commonwealth Financial Corporation over S&T Bancorp, Inc. FCF is the decisive winner in this head-to-head comparison of two very similar banks. Its key strength is its best-in-class operational efficiency and profitability, demonstrated by its efficiency ratio in the mid-50s% and ROAA of ~1.3%, both of which are significantly better than STBA's. STBA's weakness is simply not being as good of an operator as its direct rival; it is less efficient and less profitable. For investors looking to own a regional bank in the Pennsylvania/Ohio market, FCF represents a higher-quality choice that has consistently delivered superior results, making it the clear victor.
Univest Financial Corporation (UVSP) is a smaller, more geographically focused competitor to S&T Bancorp (STBA). With ~$7.5 billion in assets, UVSP is smaller than STBA's ~$9.5 billion. UVSP's operations are heavily concentrated in southeastern Pennsylvania, a more affluent and economically dynamic region compared to STBA's core markets in the western part of the state. This gives UVSP a potential advantage in terms of organic growth opportunities. Furthermore, Univest has a more diversified business model, with significant revenue contributions from its insurance and wealth management divisions, which provides a valuable source of non-interest income that is less sensitive to interest rate changes than STBA's more traditional banking model.
Evaluating their business moats, UVSP's key advantage is its diversified revenue stream. Its insurance and wealth management arms create stickier customer relationships and higher switching costs compared to STBA's primarily banking-focused model. Brand recognition for both is strong but localized; UVSP is a household name in the Philadelphia suburbs, while STBA is better known in western Pennsylvania. STBA has a modest scale advantage with its ~$9.5 billion in assets versus UVSP's ~$7.5 billion. Both face identical high regulatory barriers. The winner for Business & Moat is UVSP, as its diversified business model creates a more resilient and less cyclical earnings profile.
Financially, the two banks are often closely matched in core banking profitability, but UVSP's diversification gives it an edge. Both typically report a Return on Average Assets (ROAA) around the 1.0% mark, indicating similar efficiency in generating profits from their asset base. However, UVSP's efficiency ratio is often higher (worse), sometimes in the mid-60% range compared to STBA's high-50% range. This is partly due to the higher costs associated with running its non-banking businesses. On the balance sheet, both are very well-capitalized; UVSP often reports a very strong CET1 ratio, sometimes above 12%. While STBA is a more efficient pure-play bank, UVSP's diversified model is a strategic advantage. It's a close call, but STBA's better cost control in its core operations gives it a slight edge. The winner on Financials is STBA.
Looking at past performance, both companies have been steady performers for shareholders. They have delivered comparable, if not spectacular, growth in revenue and earnings over the past five years. Total shareholder returns have also been in a similar range, with neither establishing a consistent long-term lead over the other. Both have a long history of paying reliable dividends. The performance narrative for both has been one of stability rather than high growth. Given the lack of a clear long-term outperformer, this category is a draw. The winner on Past Performance is declared even.
In terms of future growth, UVSP appears to have the upper hand. Its concentration in the wealthier and faster-growing southeastern Pennsylvania market provides a stronger tailwind for organic loan and deposit growth. In contrast, STBA operates in more mature, slower-growing markets. Furthermore, UVSP's well-established insurance and wealth management businesses offer cross-selling opportunities and avenues for growth that are less developed at STBA. These non-bank segments can grow independently of the local lending environment. The winner on Future Growth is UVSP, due to its superior geographic positioning and more diverse growth drivers.
From a valuation perspective, UVSP often appears cheaper, which could signal an opportunity for investors. It frequently trades at a discount to its tangible book value, with a Price-to-Tangible Book Value (P/TBV) ratio below 1.0x, while STBA typically trades at a premium, around 1.3x P/TBV. A P/TBV below 1.0x can suggest that the market is undervaluing the company's core assets. UVSP also tends to offer a higher dividend yield, recently close to 4.8% versus STBA's 4.5%. Given that its profitability is comparable to STBA's and its growth prospects are arguably better, UVSP's lower valuation makes it seem like the more attractive investment. The winner on Fair Value is UVSP.
Winner: Univest Financial Corporation over S&T Bancorp, Inc. UVSP emerges as the winner due to its better growth prospects, diversified business model, and more attractive valuation. UVSP's key strengths are its presence in the economically robust southeastern Pennsylvania market and its significant non-interest income from insurance and wealth management, which provides earnings stability. STBA's weakness in this comparison is its reliance on slower-growing markets and a more traditional, interest-rate-sensitive business model. While STBA is a more efficient pure-play bank, UVSP offers a more compelling combination of growth, diversification, and value, making it the better long-term investment choice.
Peoples Financial Services Corp. (PFIS) is a much smaller community bank with a concentrated presence in eastern Pennsylvania and southern New York. With ~$3.6 billion in assets, it is less than half the size of S&T Bancorp (STBA), which has ~$9.5 billion. This size difference is significant, as it places PFIS firmly in the 'community bank' category, while STBA operates as a larger regional player. PFIS's business model is hyper-focused on traditional banking for individuals and small businesses in its specific local markets. This focus can be a strength, fostering deep community ties, but it also exposes the bank to significant concentration risk compared to the more geographically dispersed STBA.
When comparing their business moats, STBA has a clear advantage due to its superior scale. A larger asset base (~$9.5B vs. PFIS's ~$3.6B) allows STBA to absorb regulatory costs more easily and invest more in technology. While PFIS may have a stronger brand in its niche markets, STBA's brand is recognized over a much larger territory. Switching costs are moderate for both. The most significant difference is scale, where STBA's ability to lend more and serve larger clients creates a more durable competitive position. Both operate under the same regulatory framework, but the cost burden is lighter for a larger institution. The winner for Business & Moat is STBA, primarily due to its significant scale advantage.
Financially, however, the smaller PFIS is a remarkably strong performer. It consistently reports a higher Return on Average Assets (ROAA), often around 1.2%, compared to STBA's 1.0%. This indicates that PFIS is more profitable on an asset-for-asset basis. Its efficiency ratio is also competitive and often similar to STBA's, hovering around the 59% mark. PFIS's most impressive metric is its capital position; its CET1 ratio is exceptionally high, frequently exceeding 15%. This signifies an extremely conservative and well-capitalized balance sheet, providing a massive cushion against potential losses. STBA's capital levels are solid, but PFIS's are fortress-like. The winner on Financials is PFIS due to its superior profitability and exceptionally strong capital base.
An analysis of past performance shows that PFIS has been a very steady and reliable performer, even if it has not grown as fast as some peers. Its earnings have been consistent, supported by strong credit quality and a stable net interest margin. STBA has grown its balance sheet more quickly over the past decade, but PFIS has delivered a very dependable, albeit slower, rate of earnings growth. For long-term shareholders, PFIS has provided stable returns and a consistent dividend. In a contest of stability versus growth, PFIS's rock-solid operational consistency gives it a slight edge. The winner on Past Performance is PFIS.
Looking at future growth, STBA has a clear advantage. Its larger size and broader geographic footprint provide more avenues for growth, both organically and through potential acquisitions. PFIS, with its heavy concentration in a few counties, has a much more limited organic growth runway. Its future is tied almost exclusively to the economic health of its local communities. While it could grow through M&A, its smaller size makes it more likely to be an acquisition target itself rather than a consolidator. STBA has a far greater capacity to expand and deploy capital for growth. The winner on Future Growth is STBA.
From a valuation standpoint, PFIS often trades at a significant discount, making it appear very cheap. Its Price-to-Earnings (P/E) ratio is typically lower, around 7.5x compared to STBA's 9.0x. More importantly, its Price-to-Tangible Book Value (P/TBV) ratio is often below 1.0x (e.g., 0.9x), while STBA trades at a premium (~1.3x). This means an investor can buy PFIS for less than the stated value of its tangible assets. Given its superior profitability (higher ROAA) and fortress-like balance sheet (CET1 >15%), this discount seems unwarranted. PFIS offers a higher-quality bank for a much lower price. The winner on Fair Value is PFIS, by a landslide.
Winner: Peoples Financial Services Corp. over S&T Bancorp, Inc. Despite its much smaller size, PFIS is the winner due to its superior profitability, fortress balance sheet, and significantly more attractive valuation. PFIS's key strengths are its high ROAA (~1.2%), massive CET1 ratio (>15%), and a P/TBV ratio often below 1.0x. STBA's main weakness in this comparison is that it is a lower-returning and more expensively valued bank. While STBA offers better growth potential and liquidity due to its size, PFIS represents a higher-quality, lower-risk investment at a deep discount, making it the more compelling choice for value-oriented investors.
Based on industry classification and performance score:
S&T Bancorp operates a traditional community banking model, focusing on gathering local deposits to fund commercial and consumer loans within its regional footprint. Its primary strength lies in its sticky, low-cost core deposit base and established relationships with small-to-medium-sized businesses, which create a moderate competitive moat. However, the bank faces weaknesses in its relatively low level of diversified fee income and significant exposure to the cyclical commercial real estate market. The investor takeaway is mixed; while the core banking franchise is stable, its reliance on interest income and specific loan categories presents risks in a challenging economic environment.
The bank's fee income provides some revenue diversification but remains a relatively small part of its overall business, leaving it heavily reliant on interest-rate-sensitive lending.
A balanced revenue stream is key to navigating different economic cycles. For S&T Bancorp, noninterest income as a percentage of total revenue stands at approximately 17%. This is below the typical regional bank average, which often falls in the 20% to 25% range. The primary source of its fee income is its wealth management and trust business, which is a high-quality, recurring revenue stream. However, other components like service charges and mortgage banking income can be more volatile. The bank's lower-than-average contribution from fee income indicates a high dependence on net interest income from its loan portfolio. This concentration makes its earnings more vulnerable to compression in net interest margins during periods of falling interest rates or intense lending competition.
S&T's deposit base appears well-diversified across retail and business customers with minimal reliance on risky, wholesale funding sources.
S&T Bancorp sources its deposits organically from the communities it serves, resulting in a healthy mix of customer types. The bank does not provide a precise breakdown between retail and small business deposits, but its focus on relationship banking suggests a balanced contribution from both. More importantly, the bank has very low reliance on brokered deposits, which are funds sourced through third-party intermediaries and are considered less stable and more expensive than core deposits. Publicly available data shows brokered deposits are a minimal part of its funding mix. Furthermore, the bank does not report any significant deposit concentrations from its top customers, mitigating the risk of a single large depositor's withdrawal causing a liquidity issue. This diversified, granular deposit base is a significant strength, providing a stable foundation to fund its lending activities.
S&T has a strong, well-established niche in commercial lending within its specific geographic markets, but this focus also creates significant concentration risk.
S&T Bancorp has successfully carved out a niche as a go-to lender for small-to-medium-sized businesses and commercial real estate investors in its operating regions. Its loan portfolio is heavily weighted towards commercial loans, with CRE and C&I loans together making up over 70% of the total loan book. The bank's expertise is in relationship-based underwriting for these local businesses, a segment often underserved by larger national banks. This focus demonstrates a clear competitive differentiation. However, this specialization is a double-edged sword. The heavy concentration in CRE, in particular, exposes the bank to significant risk if this sector experiences a downturn. While the bank has proven its ability to operate successfully in this niche, the lack of diversification across different loan types is a structural weakness that cannot be overlooked.
The bank maintains a solid base of low-cost core deposits, but a rise in funding costs and a reliance on time deposits highlight increasing competition for funds.
S&T Bancorp's ability to attract and retain stable, low-cost funding is a cornerstone of its business. As of early 2024, noninterest-bearing deposits constituted around 25% of total deposits. While this is a decent figure, it is roughly in line with or slightly below the average for many high-performing community banks, which can sometimes exceed 30%. The bank's cost of total deposits was recently reported at 2.29%, reflecting the broader industry trend of rising funding pressures. A potential concern is the portion of uninsured deposits, which stood at approximately 29%. This is a manageable level but requires monitoring, as it represents funds that could be more prone to flight in a crisis. The bank's deposit base is stable, but it is not immune to the competitive pressures that are pushing funding costs higher across the sector.
S&T Bank's well-established and efficient branch network provides a solid physical presence for gathering deposits, though its scale remains geographically concentrated.
S&T Bancorp operates a network of approximately 75 branches, primarily in Pennsylvania and Ohio. For a bank of its size (under $10 billion in assets), this footprint provides good density in its core markets, which is crucial for the relationship-based community banking model. A key metric, deposits per branch, stands at a very healthy level, estimated to be over $100 million per branch ($7.5 billion in deposits / 75 branches). This figure is generally considered strong and suggests efficient use of its physical locations for deposit gathering. The bank has also engaged in sensible network optimization, closing or consolidating branches where traffic is low while investing in others. While the network lacks national scale, its regional density serves as a competitive advantage in attracting and retaining local retail and small business customers who still value in-person service, forming a key part of its deposit-gathering moat.
S&T Bancorp's recent financial statements show a stable but mixed picture. The bank demonstrates solid profitability, with a return on assets around 1.4% and a strong efficiency ratio of 54.7%, indicating good cost control. However, a key weakness is its high loan-to-deposit ratio, which has climbed over 100%, suggesting a dependency on funding sources beyond core deposits. While its capital base is robust, this liquidity risk is significant. The overall investor takeaway is mixed; the bank is profitable and efficient, but its liquidity position requires careful monitoring.
The bank has a very strong capital position but fails on liquidity due to an exceptionally high loan-to-deposit ratio, creating a significant funding risk.
S&T Bancorp exhibits a split performance in this category. On one hand, its capital buffers are robust. The Tangible Common Equity to Total Assets ratio was 11.2% in the most recent quarter. This is significantly above the 8% level often considered well-capitalized, indicating a strong ability to absorb unexpected losses. The bank's leverage is also low, with a debt-to-equity ratio of only 0.16.
However, the bank's liquidity position is a major concern. The loan-to-deposit ratio reached 100.7% in the last quarter, up from 99.5% at year-end. A ratio above 100% is a clear red flag, meaning the bank has loaned out all of its deposit funding and is relying on other borrowings to fund its lending activities. This is well above the industry average, which is typically in the 80-90% range. While strong capital is a positive, strained liquidity presents a material risk, especially if funding markets become tight.
The bank maintains adequate loan loss reserves that are in line with industry standards, and its recent increase in provisions shows prudent risk management.
S&T Bancorp appears to be well-prepared for potential credit losses. The bank's Allowance for Credit Losses (ACL) as a percentage of gross loans was 1.23% ($98.16 million in reserves against $7,981 million in loans) in the most recent quarter. This level of reserves is generally considered average and appropriate for a regional bank of its size and is in line with the typical industry benchmark of 1.25% to 1.50%.
Furthermore, the Provision for Loan Losses, which is the amount set aside from earnings to build these reserves, has been increasing. It rose to $2.79 million in Q3 2025 from $1.97 million in Q2 2025. This proactive provisioning suggests management is anticipating or guarding against potential weakening in the credit environment. While data on nonperforming loans is not available, the healthy reserve levels indicate a disciplined approach to credit risk.
The bank appears to be managing interest rate changes effectively, as shown by its growing net interest income, though a lack of specific data on its securities portfolio limits a full assessment.
S&T Bancorp's ability to navigate the interest rate environment seems adequate. The key indicator, Net Interest Income (NII), grew 5.64% year-over-year in the latest quarter, suggesting that the income from its assets (loans and securities) is rising faster than the interest it pays on its liabilities (deposits and borrowings). This widening spread is crucial for profitability in a shifting rate landscape.
While specific data on unrealized losses and the duration of the securities portfolio is not provided, we can look at 'Comprehensive Income and Other' on the balance sheet, which stood at -$52.4 million in Q2 2025. This likely reflects the negative impact of higher rates on the value of its bond portfolio. However, relative to its Tangible Common Equity of $1,069 million in the same period, this represents an impact of just under 5%, which is a manageable figure compared to many peers. This suggests that while there is some exposure, it does not severely impair the bank's capital base.
The bank's core profitability engine is performing well, with consistent growth in Net Interest Income driven by a widening spread between asset yields and funding costs.
S&T Bancorp's core earnings power, measured by Net Interest Income (NII), is solid and growing. In the most recent quarter, NII reached $89.24 million, a 5.64% increase compared to the same period last year and a 3.1% increase from the prior quarter. This consistent growth is a positive signal for investors, as NII is the primary source of revenue for most banks. This performance suggests the bank is successfully pricing its loans and managing its funding costs in the current economic climate.
While the specific Net Interest Margin (NIM) percentage is not provided, the trend in its components is favorable. Total interest income grew faster than total interest expense between Q2 and Q3 2025. This indicates that the spread, which is the difference between what the bank earns on its loans and investments and what it pays on its deposits and borrowings, is expanding. A stable or growing margin is a hallmark of a well-managed bank.
The bank operates very efficiently with a ratio well below industry averages, demonstrating strong discipline over its non-interest expenses.
S&T Bancorp excels at managing its costs. Its efficiency ratio, which measures non-interest expenses as a percentage of revenue, was 54.7% in the most recent quarter. This is a strong result, as a ratio below 60% is typically considered efficient for regional banks. The bank has also shown improvement, with the ratio declining from 58.1% in the prior quarter, indicating successful cost control initiatives.
Analyzing the components of non-interest expense, salaries and employee benefits make up the largest portion at 57% ($32.18 million out of $56.38 million), which is standard for a service-oriented business like banking. The overall non-interest expense actually decreased from $58.11 million in Q2 to $56.38 million in Q3, reinforcing the narrative of disciplined expense management. This operational leaness is a key strength that directly supports bottom-line profitability.
S&T Bancorp's past performance presents a mixed picture for investors. The bank demonstrated resilience by recovering strongly after a significant earnings collapse in 2020, and it has reliably grown its dividend each year, with the payout increasing from $1.12 to $1.34 per share over the last five years. However, its earnings path has been volatile, and core profitability metrics like net interest income have recently weakened. Compared to peers like F.N.B. Corp and First Commonwealth, STBA's growth has been slower and its operational efficiency is average at best. The investor takeaway is mixed; while the dependable dividend is a plus, the inconsistent earnings and lack of superior performance relative to competitors are notable weaknesses.
The bank has achieved modest and steady growth in its core loans and deposits, but its loan-to-deposit ratio has climbed to nearly 100%, indicating limited flexibility.
Over the past three years, S&T Bancorp has managed to grow its balance sheet at a moderate pace. From FY2022 to FY2024, net loans increased from $7,083 million to $7,641 million, while total deposits grew from $7,220 million to $7,783 million. This steady, if unspectacular, growth shows the bank is successfully retaining and growing its customer base in its core markets. As noted in competitor comparisons, this growth has been slower than peers like FNB, which have expanded more aggressively.
A key metric to watch is the loan-to-deposit ratio. This ratio, which measures how much of the bank's deposit base is loaned out, has risen to 99.5% in FY2024 (based on $7,747 million in gross loans and $7,783 million in deposits). While this reflects efficient use of its capital, a ratio this high leaves little room for future loan growth without a corresponding increase in deposits or more expensive wholesale funding. This could act as a constraint on future net interest income growth.
The bank's core profitability is showing signs of pressure, with a recent decline in net interest income and a worsening efficiency ratio that lags more disciplined peers.
An analysis of longer-term trends reveals challenges in profitability and cost control. Net Interest Income (NII), the main driver of a bank's revenue, grew well through 2023 but experienced a 4.2% decline in FY2024 to $334.81 million. This suggests the bank's Net Interest Margin (NIM) is being compressed as funding costs rise. A declining NII is a significant headwind for future earnings growth.
Furthermore, the bank's cost discipline has slipped. The efficiency ratio, which measures non-interest expenses as a percentage of revenue (lower is better), deteriorated from 51.4% in FY2023 to 57.0% in FY2024. While a ratio in the high 50s is not terrible, it is worse than top-tier competitors like FCF, which operate in the low-to-mid 50s. The combination of falling core revenue and rising relative costs is a negative trend for shareholder returns.
Earnings per share have been highly volatile over the last five years, marked by a sharp decline in 2020 and a recent dip in 2024, failing to demonstrate a consistent growth trend.
S&T Bancorp's historical earnings path has been choppy and unpredictable. After posting an EPS of $0.54 in FY2020 due to heavy loan loss provisions, earnings recovered strongly to $2.81 in 2021 and peaked at $3.76 in 2023. However, this growth trajectory was broken in FY2024, with EPS declining to $3.43. This volatility makes it difficult to have confidence in a steady, upward earnings trend. The 3-year average Return on Equity (ROE) from FY2022-2024 was approximately 10.98%, a respectable figure for a bank but not best-in-class, as competitors like First Commonwealth have consistently posted higher returns.
The lack of a smooth earnings progression is a key weakness. While the recovery from 2020 was impressive, the recent decline suggests that earnings are sensitive to changes in the economic and interest rate environment. For investors seeking predictable growth, this track record is a red flag.
A massive provision for loan losses in 2020 severely blemishes an otherwise stable credit history, raising questions about the bank's risk management during downturns.
The stability of S&T Bancorp's credit performance is defined by one major negative event. In FY2020, the bank recorded an enormous provisionForLoanLosses of $131.42 million, which was responsible for wiping out most of its earnings for that year. Such a large provision suggests significant deterioration in the loan portfolio and a failure to stay ahead of credit risk leading into the economic uncertainty of that period. This event represents a significant blemish on the bank's long-term track record.
Since 2020, credit metrics have stabilized significantly. Provisions have returned to much more normal levels, including a negligible $0.13 million in FY2024. The bank's allowance for loan losses has remained adequate, standing at 1.31% of gross loans at the end of FY2024. While the recent performance is stable, the scale of the 2020 event is too large to ignore and indicates a vulnerability in its underwriting or risk models during periods of economic stress.
The bank has an excellent and consistent record of annual dividend increases, though share buybacks have been modest and have not meaningfully reduced the share count.
S&T Bancorp has demonstrated a strong commitment to its dividend, which is a significant strength. Over the last five fiscal years, the dividend per share has grown steadily each year, rising from $1.12 in FY2020 to $1.34 in FY2024. After a major spike in the payout ratio to over 200% in 2020 due to collapsed earnings, it has since normalized to a very sustainable range of 34% to 41%, indicating that dividend payments are well-covered by earnings. This reliability is attractive for income-focused investors.
However, the company's share repurchase activity has been less impressive. While some buybacks have occurred, such as the -$20.61 million in FY2023, they have been inconsistent and relatively small, with only -$0.87 million repurchased in FY2024. As a result, the number of shares outstanding has only decreased marginally over the five-year period. While the dividend history is strong, a more aggressive buyback program could have further enhanced shareholder returns.
S&T Bancorp's future growth appears modest and faces several headwinds. The bank's primary growth engine, commercial lending, is constrained by economic uncertainty and specific challenges in the commercial real estate sector. While there is potential to expand its fee-based wealth management services, this part of the business remains underdeveloped compared to peers, leaving STBA highly dependent on interest income. Growth will likely come from disciplined, low-single-digit loan growth within its existing markets rather than transformative initiatives. The investor takeaway is mixed, as STBA offers stability but lacks clear, compelling catalysts for accelerated growth over the next 3-5 years.
Management guidance points to low single-digit loan growth, reflecting a cautious economic outlook and limited opportunities for aggressive expansion in its core markets.
S&T Bancorp's outlook for loan growth is conservative. Management has guided for low single-digit percentage growth, which is largely in line with expected nominal GDP growth in its operating regions. This guidance reflects a challenging environment for its core commercial lending business, particularly in the CRE space, where underwriting standards are tight and demand is soft. While a cautious approach is prudent for risk management, it does not signal a strong growth trajectory. The bank's loan pipeline does not appear robust enough to support an acceleration in earnings, positioning it for slow, steady performance rather than dynamic growth.
The bank maintains solid capital levels but lacks a clear, communicated strategy for using that capital for growth-oriented M&A, leaving investors to guess about its primary long-term growth lever.
S&T Bancorp's capital ratios are strong, providing the financial capacity for strategic moves like acquisitions or significant buybacks. However, management has not articulated a clear and compelling plan for deploying this capital to drive future growth. In the consolidating regional bank landscape, a well-defined M&A strategy is a critical indicator of future growth potential. While the bank may be opportunistic, the absence of an announced, proactive strategy for acquisitions—either as a buyer or a seller—makes it difficult for investors to underwrite a strong growth story. Capital is being managed for stability rather than being positioned as a tool for shareholder value creation through expansion.
S&T is effectively managing its physical footprint for efficiency, but its digital growth strategy lacks clear, ambitious targets needed to drive significant future expansion.
S&T Bancorp has demonstrated a sensible approach to managing its branch network, focusing on consolidation and efficiency, as evidenced by its strong deposits per branch of over $100 million. This shows good management of its physical assets. However, the future of banking growth is increasingly digital. The bank has not publicly announced specific, aggressive targets for digital user growth or cost savings directly tied to a digital transformation strategy. While optimizing the current network is important for maintaining profitability, it is not a forward-looking growth driver in an industry where digital adoption is key to acquiring and retaining the next generation of customers. Without clear goals for expanding its digital reach, the strategy appears more defensive than offensive.
Like many peers, S&T Bancorp faces pressure on its net interest margin due to rising deposit costs, and its outlook does not suggest a significant near-term recovery.
The bank's Net Interest Margin (NIM) has been under pressure as the cost of deposits has risen faster than the yield on its assets. Management's forward-looking commentary does not indicate a strong rebound in NIM in the near future. While a portion of its loan portfolio is variable-rate, it is not enough to fully offset the fierce competition for deposits that is pushing funding costs higher across the industry. Without a clear path to NIM expansion, a primary driver of the bank's profitability is facing a headwind, which will constrain earnings growth over the next year.
The company's reliance on interest income is a weakness, and it has not provided clear targets for growing its underdeveloped fee-based businesses like wealth management.
Fee income accounts for only about 17% of S&T's total revenue, which is well below peers and indicates a significant dependency on net interest margin. Growing non-interest income, particularly from its wealth management division, is the most logical path to creating a more resilient and profitable business model. Despite this opportunity, the bank has not provided investors with specific growth targets for wealth AUM, treasury management revenues, or overall noninterest income. This lack of stated ambition suggests that fee income expansion is not a top strategic priority, representing a missed opportunity to build a key future growth engine.
S&T Bancorp appears to be fairly valued to slightly undervalued, trading at a slight discount to peer multiples and its intrinsic value estimates. The company's key strengths include a solid 3.73% dividend yield backed by a conservative payout ratio and a reasonable Price to Tangible Book Value multiple. However, inconsistent and recently negative earnings growth presents a notable weakness, raising concerns about a potential value trap. The overall takeaway is neutral to slightly positive, suggesting the stock is a reasonably priced income play but may lack significant near-term growth catalysts.
The stock trades at a reasonable premium to its tangible book value, which is justified by its consistent profitability and returns.
For banks, the Price to Tangible Book Value (P/TBV) ratio is a critical valuation metric. STBA's tangible book value per share as of the last quarter was $28.67. At a price of $36.31, the P/TBV is 1.27x. A ratio above 1.0x implies that investors are paying more than the stated value of the bank's tangible assets. This premium is typically warranted for banks that can generate strong returns from those assets. With a Return on Equity (ROE) of 9.57%, STBA is creating value for shareholders. While not exceptionally high, this level of profitability supports a valuation above tangible book. Therefore, the current P/TBV appears justified and fairly priced.
The company's Price to Book multiple is well-aligned with its Return on Equity, indicating that the market is pricing the stock rationally based on its profitability.
A bank's Price to Book (P/B) ratio should reflect its ability to generate profits, as measured by Return on Equity (ROE). STBA's current P/B ratio is 0.95, while its ROE is 9.57%. A P/B ratio below 1.0x for a bank generating an ROE close to 10% is a healthy sign. In a stable interest rate environment, with the 10-Year Treasury yield around 4.02%, a 9.57% ROE is a solid return. The alignment between the P/B multiple and ROE suggests that the stock is not overvalued for its level of profitability and that its current market price reasonably reflects its fundamental earning power.
The stock's low P/E ratio is attractive, but its appeal is diminished by inconsistent and recently negative annual earnings growth, suggesting a potential value trap.
S&T Bancorp's trailing P/E ratio of 10.53 is below the peer average for regional banks, which hovers between 11x and 13x. This suggests the stock is cheaper than its peers on an earnings basis. However, this valuation must be viewed in the context of its growth. The company's EPS growth for the last full fiscal year (2024) was negative at -8.82%. While the most recent quarter showed positive growth (6.57%), the forward P/E of 10.55 indicates that analysts do not expect significant earnings acceleration in the near term. A low P/E is only attractive if earnings are stable or growing. The lack of a clear, positive growth trend makes it difficult to justify a higher multiple and presents a risk that the stock is cheap for a reason.
The stock offers an attractive and sustainable dividend yield with a conservative payout ratio, signaling a solid income return for investors.
S&T Bancorp provides a strong income profile for investors. The dividend yield is currently 3.73%, which is competitive within the regional banking sector where yields typically range from 3% to 4.5%. This is supported by a modest dividend payout ratio of 39.31%, which means the company is retaining a majority of its earnings for future growth and has a significant cushion to maintain its dividend payments, even if earnings decline. While share repurchases have not been a major factor recently (shares outstanding change YoY was -0.34% for fiscal 2024), the strength and sustainability of the dividend alone make this a passing factor for income-focused investors.
Compared to its regional banking peers, STBA appears attractively valued with a lower-than-average P/E ratio and a competitive dividend yield.
When stacked against its peers, STBA shows signs of being a relative bargain. Its trailing P/E ratio of 10.53 is below the industry's weighted average of 12.65. Its dividend yield of 3.73% is also attractive and compares favorably to the industry average dividend yield of 2.29%. The stock's beta of 0.92 suggests it is slightly less volatile than the overall market. Although its recent 52-week price performance has been lackluster, with the stock in the bottom half of its range, the combination of a valuation discount and a superior yield makes its risk/reward profile appealing relative to the broader sector.
The primary macroeconomic risk for S&T Bancorp is the persistent uncertainty around interest rates. As a regional bank, its profitability is highly dependent on its net interest margin (NIM)—the difference between the interest it earns on loans and what it pays for deposits. In a prolonged high-rate environment, the bank may be forced to pay more to retain customer deposits, causing these funding costs to rise faster than loan yields and compressing its NIM. Conversely, a sharp economic downturn could trigger a rapid drop in rates, but it would also likely lead to an increase in loan defaults. A recession, even a mild one, would force the bank to set aside more money for potential losses, directly impacting its earnings.
From an industry perspective, competition remains a formidable challenge. S&T Bancorp competes directly with giant national banks that have larger marketing budgets and more advanced digital platforms, as well as smaller community banks and non-bank fintech lenders. This fierce competition puts constant pressure on the bank's ability to attract and retain low-cost core deposits, which are the lifeblood of any lending institution. In the wake of the 2023 regional banking failures, regulatory scrutiny has intensified for banks of STBA's size. This likely means higher compliance costs and stricter requirements for managing capital and liquidity, which can constrain growth and add to operational expenses.
Looking at the company itself, S&T Bancorp's balance sheet carries specific vulnerabilities, most notably its exposure to the commercial real estate (CRE) market. This sector, especially office and certain retail properties, faces structural headwinds from the rise of remote work and e-commerce. A downturn in the CRE market could lead to a spike in non-performing loans and significant write-offs. The bank's geographic concentration, primarily in Pennsylvania, also means its performance is heavily tied to the health of the local economy. Any localized economic weakness could disproportionately affect its loan portfolio compared to a more geographically diversified competitor, making it a critical risk for investors to watch.
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