S&T shares up on stronger-than-expected 3Q profit

S&T Bancorp 3rd-qtr profit falls more than half, but is better than forecast and shares rise

• On 5:07 pm EDT, Monday October 19, 2009

INDIANA, Pa. (AP) -- S&T Bancorp on Monday said its third-quarter profit dropped by more than half after it set aside more cash to cover bad loans, expenses rose and it booked losses on certain investments.

But the results came in better than Wall Street expected, and shares rose sharply in heavy trading. The stock closed up 87 cents, or 6.4 percent, at $14.51.

The bank said its net income after paying preferred dividends was $7.7 million, or 28 cents per share, for the quarter ended Sept. 30, compared with profit of $15.7 million, or 57 cents per share, in the year-ago period.

Analysts polled by Thomson Reuters, on average, expected profit of 15 cents per share in this year's third quarter.

Net interest income, or the money the bank earned from deposits, was $38.1 million, up slightly from $34.4 million in the 2008 quarter.

Non-interest income, or earnings from fees and charges, slipped slightly to $10.3 million from $10.6 million a year ago.

The bank raised its provision for loan losses, or the money it set aside to cover bad loans, to $8.4 million, from $6.2 million last year.

Non-performing assets, or loans that are past due, rose to $92 million, nearly triple the $33.9 million from the same quarter last year. The bank wrote off $5.4 million in loans that it not longer expects to collect, up from $1.7 million last year.

Expenses rose 11 percent to $2.5 million for the quarter. S&T said its Federal Deposit Insurance Corp. payments totaled $1.5 million, up from $131,000 last year. FDIC accelerated banks' insurance payments recently to cover its increasing obligations for troubled banks.

Higher staff levels and costs related to its purchase of another bank last year also drove S&T's expenses higher.

It booked $2.1 million in investment losses, versus $341,000 in such losses in the year-ago quarter.

Analyst Collyn Bememt Gilbert of Stifel Nicolaus & Co. said the results came in much better than expected because the bank set aside less to cover bad loans than anticipated. While losses are lower, Gilbert noted the increase in non-performing assets as an area of concern.

S&T shares have traded between $10.49 and $36.01 in the past year, and started the session down 61 percent for the year.

Buzz up!