S&T Bancorp Inc.'s fourth-quarter profit rose nearly 7% from the prior quarter, to $9.3 million, but earnings per share missed analysts' projections as margins were squeezed and income from overdrafts declined.

The $4.1 billion-asset holding company for S&T Bank said that both net interest income and its margin fell year over year as it conducted "significant loan pay downs" and its asset mix shifted to lower-yielding securities. Net interest income fell 6%, to $35.2 million, and the margin fell 26 basis points, to 3.79%.

Noninterest income also slipped, falling 3.5% from a year ago, to $11.6 million. S&T attributed the drop, in part, to the August 2010 law requiring banks' to first obtain customers' permission to cover overdrafts, which cost the company about $1.8 million.

The company reported earnings per share of 33 cents, two cents shy of estimates of analysts polled by Thomson Reuters.

S&T last month exited the Troubled Asset Relief Program using available cash to repay roughly $108 million. S&T Chief Executive Todd Brice said the repayment will boost 2012 earnings-per-share by 22 cents.

S&T also said it expects its pending acquisition of $242 million-asset Mainline Bancorp Inc., of Ebensburg, Pa., to close this quarter.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.