Safe and Sound

S&T Bank

Indiana, PA
4
Star Rating
S&T Bank is an Indiana, PA-based, FDIC-insured bank that opened its doors in 1902. As of June 30, 2017, the bank had equity of $844.2 million on assets of $7.06 billion.

U.S. bank customers have $5.43 billion on deposit at 61 offices in multiple states run by 1,075 full-time employees. With that footprint, the bank has amassed loans and leases worth $5.73 billion, including real estate loans of $4.29 billion.

Overall, Bankrate believes that, as of June 30, 2017, S&T Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the bank did on the three major criteria Bankrate used to score American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of a bank's financial resilience. It acts as a cushion against losses and as protection for depositors when a bank is experiencing economic trouble. From a safety and soundness perspective, the higher the capital, the better.
S&T Bank fell short of the national average of 13.38 on our test to measure capital adequacy, achieving a score of 8 out of a possible 30 points.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. S&T Bank's Tier 1 capital ratio was 10.09 percent, above the 6 percent level considered adequate by regulators, but below the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to economic headwinds.

Overall, S&T Bank held equity amounting to 11.95 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of problem assets, such as past-due loans, on the bank's loan loss reserves and overall capitalization.

Having lots of these kinds of assets means a bank could eventually have to use capital to cover losses, reducing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, resulting in diminished earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, S&T Bank scored 40 out of a possible 40 points, beating out the national average of 37.62 points.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of June 30, 2017, 0.63 percent of S&T Bank's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.04 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . The size of that reserve can be a widely used indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on S&T Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its long-term survivability. A bank can retain its earnings, expanding its capital buffer, or use them to deal with problematic loans, potentially making the bank better able to withstand economic trouble. Losses, on the other hand, diminish a bank's ability to do those things.

S&T Bank beat the national average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.

Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. S&T Bank's most recent annualized quarterly return on equity was 9.54 percent, above the national average of 9.28 percent.

The bank reported net income of $39.7 million on total equity of $844.2 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.13 percent, above the 1 percent deemed satisfactory in accordance with industry standards, but below the average for U.S. banks of 1.14 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.