Ladies and gentlemen, thank you for standing by. Welcome to the S&T Bancorp Q3 earnings conference call. At this time, all participants are on a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. I would now like to turn the call over to Chief Financial Officer, Mark Kochvar. Please go ahead. Great. Thank you. Good afternoon, everyone, and thank you for participating in today's conference call. Before beginning the presentation, I want to take time to refer you to our statement about forward-looking statements and risk factors, which is on the screen in front of you. This statement provides cautionary language required by the Securities and Exchange Commission for forward-looking statements that may be included in this presentation. A copy of the Q3 of 2022 earnings release can be obtained by clicking on the press release link on your screen or by visiting our investor relations website at www.stbancorp.com. We will be reviewing an earnings supplement slide deck as part of this presentation. You can obtain a copy of those slides by also clicking on the Earnings Supplement link on your screen or also on the website under Events and Presentations, Q3 2022 earnings conference call. Click on the Q3 2022 earnings supplement link. With me today are Chris McComish, S&T's CEO, and David Antolik, S&T's President. I'd now like to turn the call and program over to Chris. Thanks, Mark, and good afternoon, everybody. We're certainly pleased to be here with you reporting on very solid results for the quarter. Before I get into the numbers and then turn it back over to Mark and Dave for some more details, I did want to briefly emphasize to you all the progress that we continue to make building this company to deliver for both our shareholders, customers, and our employee base. Over the past four or five quarters, we've been on a steadfast journey in our strategic focus around strengthening the foundation of S&T, built over 120 years and rooted in our distinctive customer trust. All of this with an eye to sustainable, profitable top-tier growth and performance. I'm pleased to report that we continue to make great progress. Making progress both in building and enhancing our leadership team with an important blend of S&T legacy knowledge as well as outside industry expertise, all built for growth with the appropriate focus on safety and soundness in all that we do. Our leadership team clearly understands that we are the current stewards of this 120-year legacy of great customer trust and strong employee engagement. As I mentioned in our press release, award-winning on both fronts. Our company's performance will rise and fall going forward on the effectiveness of this leadership. While there's always work to do, which we do embrace and are energized by, and the environment remains uncertain, I couldn't be more pleased with the progress that we've made and optimistic for our future. Now let me go ahead and turn to the numbers. I'm on page three in the deck, and as you can see, $37 million in net income, which is a 28% increase in EPS for the quarter. Records on both fronts. A PPNR above 2 at 2.15% and solid revenue growth driving a 50% efficiency ratio. For the fifth straight quarter, we've had meaningful asset quality and improvement, and our return metrics have led to another increase in our dividend, the third in the last five quarters, up to now $0.31 per share. Turning to page four, and before I turn it over to Dave for more details, you will see that we see loan growth in the majority of our portfolios with some contraction that also does have an asset quality focus. On the deposit front, there is some contraction on a linked basis due to some seasonality as well as the rate environment. I look forward to your questions, and before that, I'll turn it over to Dave. Well, thank you, Chris, and thanks everyone on the line. We appreciate your interest in our company and participation in the call. As presented on slide 4, we realized overall loan growth of nearly 4% for the quarter. By category, we saw increases in all consumer loan types and in our C&I balances. Consumer activities remain robust as we head into Q4, and our pipelines point towards a continuation of this growth. With regard to C&I activity, our aggregate total revolving commitments grew during the quarter, along with the total number of commitments. This growth, coupled with a 1% increase in utilization rates to 44% when compared to Q2, resulted in balance growth of $20 million. We did experience declines in our CRE and construction portfolios during Q3, and we expect to see continued pressure on the construction portfolio as demand has declined due to increased interest rates, rising construction costs, and most particularly, availability and cost of labor. In the permanent CRE book, we saw normal course payoffs related to property sales and permanent market financing, along with several exits of negatively rated loans or those in less desirable segments. We continue to closely monitor economic conditions and look for signs of stress and adjust our risk appetite in order to support our desire to improve asset quality. Forecasting loan growth given the current economic environment is certainly challenging, but we remain comfortable with our low single-digit guidance heading into Q4 and into early 2023. Shifting to deposits, we experienced an overall decline of $202 million in Q3. Adding some color to the changes by category, on a point-to-point basis, demand deposit balance declines were primarily the result of activity in a handful of business customers. It's important to note that we retain these customer relationships and that these changes were a result of their decision to utilize their cash in order to support business activities. Also important to note is that our average demand deposit balances actually increased in Q3 by $10 million. Additionally, interest-bearing demand, money market, and CD changes were the result of market competition for those products and our active management of deposit costs. We remain focused on building upon our 120-year legacy deposit franchise by investing in people and infrastructure. We proudly announce that in August, we hired a new director of treasury management who's focusing on product and sales capabilities in order to support our commercial and business banking relationships. Turning to Slide 5. We're very pleased with the trajectory of our NPAs as presented. We had minimal charge-offs during Q3. Our ACL increased moderately in recognition of our qualitative analysis and impact of forecasted macroeconomic slowdowns. I'll now turn the program over to Mark. Hey, thanks, Dave. Net interest income increased by $8.6 million or about 11% compared to the Q2. The net interest margin rate in the Q3 was 4.04%. That's up 48 basis points from the Q2. That's up 52 basis points ex PPP. Loan yields improved by 58 basis points. The asset mix improved with lower average cash, and the cost of total deposits increased by just 18 basis points during the quarter. Interest-bearing deposits increased by 29 basis points. 51% of our loan portfolio is tied to short-term rates, which has been a big driver of the net interest income and net interest margin improvement. As part of our outlook strategy to protect the interest income and net interest margin in a declining rate environment, we have hedged that floating rate loan concentration to approximately 44% with received fixed swaps. We continue to evaluate the right level of hedging, which will depend on the rate environment and our deposit pricing experience. Our net interest income and net interest margin outlook for the next couple of quarters remains positive given expectations for additional short-term rate increases. We expect the net interest margin rate to improve and to continue as short rates increase, but moderate due to little additional improvement in asset mix, higher expected deposit betas, and the execution of our hedging strategy. Non-interest income increased by $2.1 million in the Q3 compared to the Q2. The largest item is a lower decline in the fair value of the assets in a non-qualified benefit plan, which relates to stock market performance and shows up in the other line. This was - $0.4 million in the Q3 compared to a - $1.4 million in the Q2, resulting in a $1 million quarter-over-quarter variance, favorable variance. This also shows up as a reduction in salaries and benefits, but is P&L neutral. Also impacting the other income line was a gain on sale of an OREO property for $0.6 million. Mortgage banking was essentially flat compared to the Q2, as the majority of our production went to the portfolio. Our quarterly fee outlook remains in the range of $14 million-$15 million. Expenses were up $1.2 million compared to the Q2. Salary and benefits increased primarily due to the other side of the non-qualified benefits plan that impacted fee income. Pension expense was also higher due to settlement accounting from lump sum payments on retirees. Improved revenue drove the efficiency ratios, as Chris mentioned, by over 4.5 percentage points to just above 50%, and also resulted in positive operating leverage. Our quarterly expense expectations remain well controlled in the $49 million-$50 million range. We have strong capital levels and are well positioned for the environment. We executed $3.5 million in buybacks during the Q3, and we'll continue to look for opportunities depending on economic conditions, our financial performance, and the price of our stock. We have approximately $29.8 million of repurchase capacity remaining in our buyback authorization. With a smaller securities portfolio as a% of assets, strong earnings, and a more efficient balance sheet, we have seen stability in our TCE ratio over the course of the year, despite higher AOCI adjustments. Thanks very much. At this time, I'd like to turn the call over to the operator to provide instructions for asking questions. Certainly. The floor is now open for questions. If you have any questions or comments, please press * one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold just a moment while we poll for questions. Your first question is coming from Daniel Tamayo with Raymond James. Please pose your question. Your line is live. Good afternoon, guys. Thanks for taking my question. Hey, Daniel. Hey, how you doing? Let me start on the NIM and deposits. You know, we saw a decline, as you mentioned in the quarter, thanks for the color on the few commercial clients that drove the decline in the demand side. But just curious in your thoughts, you know, how you think deposit betas trend in the Q4 and kind of beyond. And then how much impact that could have based on you know, a need to grow deposits or as you kind of continue to creep up in terms of loan deposit ratio. Thanks. Yeah. I mean, I think we do think that the deposit betas are going to increase, especially with the activity that the Fed is expected to have here in the Q4 with, you know, additional hikes in November and December as well. That is going to impact the incremental margin that we would expect. We would not expect it to continue at the pace that we've seen in the last couple of quarters. The other thing is that as you recognize, the balance sheet mix and the earning asset mix is changing. We have benefited from the reduction in cash, you know, which has improved that mix. That has relatively little left to go as we move from the Q3 to Q4 There are only a few more basis points of benefit to be derived there. We do expect, you know, that increase to possibly be, you know, half of what we've seen in the last couple of quarters, assuming that the Fed continues at the current pace. We are continuing to evaluate, you know, how to position ourselves both competitively and then overall with the balance sheet. I mean, we have a history of operating at a lower loan deposit ratios. We're working hard to make permanent changes to that and investing in the deposit franchise. We're comfortable and familiar with the trade-off between that and borrowing money in the wholesale market should that need arise. Okay, great. I guess related to the investments that you're making to strengthen deposit franchise that you called out, but the guidance has really been in a relatively tight range on a quarterly basis. Anything that we should think of in terms of as we go into 2023 from an expense base perspective? How you think about what growth may look like next year given those investments? Yeah. On the expense side, we would expect expenses to be a little bit higher, both because of those investments and also just the inflationary environment is a little tighter. We continue to see a challenged labor market and expect things like merit to be higher. We're also still in the process of planning, but would expect to make additional hires to support the deposit franchise, especially on the business side, where we see a lot of opportunities on treasury management. Yeah. Daniel, this is Chris. That will also mean some additional investments from a technology and digital capability. Dave mentioned the hiring of a top-tier treasury management leader for our company that will, you know, between working with core providers, other providers, continue to enhance service offerings for our customers, be it, you know, online and digital capabilities, both in the consumer side of our business and certainly in the commercial and the business banking side of the business. Some continued product capability enhancements as well as some additions of people. I appreciate that. Lastly, just a question on the asset yields. It looks like commercial real estate yields in particular have expanded a lot over the last couple of quarters. Is there, you know, I guess how much of that is floating relative to fixed in that portfolio? If there's another reason for why those would be able to kind of increase so much in a short period of time. Appreciate it. There's a couple of things going on there. There is a fair amount of floating. I'd say about 60% of it actually floats to us. Now a lot of those have been swapped back-to-back to the customer so that, you know, the customer has a fixed payment, but it's floating for us. That has helped in that, you know, where you might think of the CRE as being a fixed portfolio, for us, it's probably 60% floating. We also have had the benefit anyway of the received fixed swaps in there, which have been cash flow positive for the last couple of quarters. That is changing, and we expect that to become a little bit of a drag going into Q4 as the short rates go higher. Okay, that's terrific. Thanks for all the color. That's all for me. Thank you. Your next question is coming from Michael Perito with KBW. Please pose your question. Your line is live. Hey, guys. Good afternoon. Thank you, Mike. I was wondering if you could spend a little bit more time, you know, obviously you guys are adding some to the reserve on a qualitative basis, as you mentioned in the prepared remarks and in the release. You know, as you guys think about, you know, you talked a little bit about pipeline and the low single-digit growth expectation. As we think about the mix of that growth and the opportunities you guys have the best appetite for the most comfortable with today, any expansion you guys can provide on where you think some of the better and higher quality growth opportunities are for you guys over the next 3-6 months, at this point? Sure, Mike. You know, one of the areas that we're focusing in on is our business banking segment. We feel that there is opportunity in essentially all of our markets to do a better job there, and there is some opportunity for us, and we have added the staff in that segment. We think the consumer area where we've been able to grow over the past several quarters will continue to yield positive results. Certainly within the C&I book, within certain segments. We'll continue to focus and look for growth. As I mentioned in the prepared remarks, you know, we will feel some pressure and some challenges to grow the construction book and the permanent CRE book as well. That's helpful. Thank you. Just geographically, I guess, any additional thoughts to add in a kind of same context to that question? Yeah, you know, if you look at our franchise and the legacy growth that we've seen in Pittsburgh, we're certainly focused on continuing that and to grow out Western PA. You know, Eastern PA is more of a CRE market, but we've also built C&I teams there as well, so we think there's opportunity. Ohio, in both Northeast Ohio and Central Ohio, you know, there'll be incremental opportunities. You know, where there are some vertical opportunities within the ABL world, we've added some exposure to our, we have a small REIT book that we participate in. We've added some exposure there. We think that, you know, we're adding in a risk-friendly way where we get a return that's commensurate with the risk we take. We believe there will continue to be opportunities that will lead to this, you know, kind of low to mid-single digit growth that we've pointed towards. Great. Thank you. Then just lastly for me, just, you know, so we think about, you know, you guys mentioned kind of the near-term expectation around non-interest income. But as we think to next year and beyond, you know, I mean, the focus on treasury management and business banking, I mean, is there opportunities with the products and technology that you have to kind of grow fee income around some of these business customers as we look at, like, swap income or wealth management or treasury management or any of those elements that we should be thinking of? Yeah, this is Chris, Mike. There are opportunities there. You know, we are bullish in the underpinnings of our treasury management opportunities simply because of the current depth of relationships that we have, and we think there's latent opportunities within the book, both within our business banking space and somewhat in the C&I space as well. You know, if you look at the slide, the wealth management income, that actually has held up pretty well if you think about it. That's all, you know, asset under management based. It's not transaction fees. To remain flat in a market that's down 20%-25%, that's telling you that we're, you know, we're picking up new business and expanding assets under management in spite of some headwinds there. It's still gonna be very dependent upon, you know, what's going on in the external market. You know, in talking with our teams, our FAs and bankers that are focused there are really good alternatives for our customers, you know, in this ever-changing environment. Those conversations will remain important. You know, there is pressure on the consumer side, and we'll continue to look at what we're defining as deposit optimization and ensuring that we've got the right product set from a, you know, depository standpoint for our consumers. At the same time, you know, we're on the right side of everything that we need to be doing from a customer experience standpoint relative to NSF fees and things like that. There's a little. Yeah. There's a little bit of balance of both. You know, big emphasis certainly on the business commercial side in the treasury management space. That makes sense. Perfect. Thank you guys. Appreciate the color and for taking my questions. Sure thing. Thanks, Mike. Yeah. Thanks, Mike. Thanks. Your next question is coming from Matthew Breese with Stephens Inc. Please pose your question. Your line is live. Good afternoon. Matthew. I want to just discuss a little bit more about the NIM outlook. You know, maybe first, can you give us a sense for what the spot rate of deposits all-in were at the end of the quarter or as of, you know, today? Like in the last month of the quarter, kind of the overall deposit rates had ticked up a little bit to about 56 basis points. I think at the quarter, we were closer to 43. Okay. I mean, to date, you've done a nice job kind of keeping the composition. Non-interest bearing deposits are, you know, 36% of the total. CDs continue to come down. Have you adjusted your outlook for deposit betas, you know, through cycle at all, or can you give us some update there? I think it's still evolving. You know, the speed of the Fed is still troublesome in how long the catch-up takes. We still think we're better positioned overall, compared to last cycle, even though that cycle was very different in terms of how long it took. You know, in that cycle, we've kind of hit the mid-30s with the better composition that you referenced, especially on the DDA side and our emphasis on the business side to maintain a lot of that. If we're successful with that, you know, we would still expect our cumulative betas to be mid-20s to low 20s compared to that mid-30s in the last cycle. Okay. Then maybe along those same lines, you know, assuming the Fed is done, you know, by early 2023 or wherever you choose them or assume that they stop, you know, how far after that, or how long after that, just given the asset sensitive nature of the balance sheet, do you expect to see the NIM perhaps stop increasing, maybe even start to see some compression? Yeah. That, I think there definitely will be some. We do have a fair amount of ARM product that will give us some continued improvement. You know, those are repricing higher, and we expect that to continue, but it's nowhere near the impact that the float has. On the liability side, you know, there's very little CDs that will be there to offset that. It'll be how long that pressure from the transactional, you know, especially the money market, continues. I mean, I think it probably continues as long as they're flat. There's only gonna be a little bit of pressure to price higher. Depending on the competition, if we get back into a growth mode, us as well as others will be out there, chasing deposits again. I think it depends a little bit on the trajectory of growth, post Fed stopping. Got it. Okay. Last one for me. Just wanted to talk a little bit about the construction portfolio. Could you remind us of kind of the underlying composition, what the end projects are within the construction book? You know, the area that I think a lot of folks are starting to have some concern with is resi development, just given the movement in mortgage rates from, you know, 3% a year ago to knocking on 7% today, and the ultimate end consumer's affordability of that same kind of project. Yeah. In the commercial construction segment, there's very limited exposure to resi development. You know, largest categories would be multifamily. There's some warehouse. We also have some wholesale, and there's some other transportation kind of related construction projects. Okay. Any signs of deterioration within the construction book to date? No. No, we monitor it very, very closely. We have a very robust review process that we use. Frankly, that's why you've seen some of the reduction in the exposure, because we manage it tightly. It's just really tough to get something approved today, to get it built on budget, on time. The demand has declined, and we would expect to see that decline continue. Yeah. Some of the contraction relates to, you know, those projects coming off being paid out or moving into another category, and then the, you know, not as much new coming on simply because of what Dave talked about. Got it. Okay. I appreciate it. That's all I had. Thank you. Your next question is coming from Daniel Cardenas with Janney Montgomery Scott. Please pose your question. Your line is live. Hey. Afternoon, guys. Hi, Dan. Hi, Dan. Maybe just I missed the line utilization number that you threw out, Dave. Maybe if you could just repeat that for me and then maybe compare it to what it was versus you know pre-pandemic levels. Yeah. It's about the same level that it was pre-pandemic. It was 44% for Q3, up from 43% the prior quarter. You know, we troughed in the low thirties, you know, 32%, 33% during the pandemic. We're at about the same utilization level that we were pre-pandemic. The one exception to that would be the floor plan portfolio, which has not recovered. It's half of what it was pre-pandemic. Maybe a little bit of color in terms of, you know, paydowns and payoffs. Have they kind of normalized here, in the last couple of quarters? Or are you still seeing some pretty good headwinds? Yeah. You know, in Q3, as I mentioned, it was a combination of normal course and some payoffs that were credit related. You know, we took the opportunity to exit a few credits that we felt weren't within our risk appetite from a credit perspective at this point. I would expect there to be a modest decline in Q4 in terms of payoffs. That's what we forecast. Kudos on the reduction in your non-performers. You know, as we look at the commercial ones, so was that primarily one large credit that either returned to performing status or paid down, or was that multiple credits? It was one credit primarily driving that number, and it was an exit. It was a real estate entity. Okay. What are your watchlist trends looking like right now as you come into the Q4 and are thinking about in 2023? I mean, just given that you bulked up your provision levels a little and your reserve levels a little bit this quarter. Yeah. The Q3, there were a fair amount of inflows and outflows that kind of balanced each other. You know, we're looking again at some additional macroeconomic pressure that's driving the additional provision. What's the M&A environment looking like right now? Is it fairly quiet, or are you guys seeing a pickup in deal flow? It's Chris. I would define it as fairly quiet. Quite honestly, we're focused on what we can control and very focused on delivering results and performance and building a currency that gives us an opportunity in the future. That's all I have for right now. I'll step back. Thanks, guys. Thank you. Thanks. Thanks. Once again, if there are any remaining questions or comments, please press * one on your phone at this time. Please hold a moment while we pull for any additional questions. Operator, we have one question that we got through the online that we'd like to go through. Sure. That question is, I think that last time your net interest margin was above 4% was in 2010. Are there any structural or competitive reasons the NIM can't stay above 4% in a flat to higher rate environment? Or do you think the net interest margin will ultimately revert back to 3.60%, 3.70% pre-pandemic level as funding costs play catch up? It is right. The last time I was looking at that myself, last time we were above 4% was in 2010. It has been quite a while through that low rate environment. We think we should be able to stay at a much higher rate, and that 4% will be a good level to be able to do that. There are some structural differences that we're enjoying right now, and our emphasis on the deposits franchise is to try to maintain those. That's namely a higher level of deposits and also a better mix. That DDA percent in the mid-30s, you know, compares to probably mid-20s or low 20s, pre-2010. If we are able to maintain those levels that we currently have, you know, that should give us a much better structural opportunity to maintain that 4%. The higher level of deposits, you know, in keeping that loan-to-deposit in below 100% certainly, if not lower, you know, should allow us to stay away from, in that higher rate environment, the higher cost of wholesale fundings to finish up that gap. That is, you know, one of the main reasons why we are so focused on this deposit franchise, especially as we move potentially into that higher rate environment for a longer period of time. Operator, that takes care of the question we had. Anything else that you're seeing? No, there are no additional questions in the queue from the lines at this time. At this time, I would like to turn the floor back over to S&T Bancorp CEO, Chris McComish, for any closing remarks. No. Again, thanks to everybody on the call and for your interest in our company. Obviously, we're very proud of the quarter. I'm really proud of this leadership team and our employee base, what we're doing every day to take care of customers, and we look forward to being back with you in another quarter, if not between now and then. Thank you all very much. Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.