S&T Bancorp (STBA) of Indiana, Pa., said Tuesday that its fourth-quarter profit increased 25% from the same period in 2012, to $11.9 million, due largely to improved asset quality and solid growth in both consumer and commercial loans.
Earnings per share also climbed 25%, to 40 cents, but still fell two cents shy of consensus analysts' estimates, according to Bloomberg.
The $4.5 billion-asset company said that its total loans held in portfolio increased 6.5% year over year, to nearly $3.6 billion. That loan growth helped boost net interest income by 4.4% year over year, to $35.7 million, and fueled a one-basis-point increase in the net interest margin, to 3.52%. Net interest income and the margin were also aided by lower costs on certificates of deposit.
Meanwhile, asset quality improved substantially as total nonperforming loans declined 59% year over year, to $22.5 million and net chargeoffs fell 18%, to $3.3 million. The improved credit quality allowed the company to reduce its provision for loan losses by 62% year over year, to $1.6 million.
"The investment we made in expanding our sales team has paid off with a return to solid loan growth in 2013, and our focus on managing problem loans has resulted in a sizeable decrease in nonperforming assets," S&T president and chief executive officer Todd Brice said in a news release.
Noninterest income fell 22% year over year, to $11.3 million, primarily due to a decrease in income from mortgage banking. At $29.4 million, its noninterest expenses were relatively flat year over year but climbed 5.4% from the third quarter as a result of increases in salaries, benefits and marketing costs.