Regional Banks Report Credit Quality Remained Strong in Q3

Four regional banks said Thursday (Oct. 17) that credit quality remained strong in the third quarter, while reporting mixed results in terms of growth in lending and deposits.

Commerce Bancshares, Huntington Bancshares, M&T Bank and S&T Bancorp reported their third-quarter results Thursday.

“Credit quality remains excellent,” Commerce Bancshares President and CEO John Kemper said in a Thursday earnings release.

Commerce Bancshares reported the ratio of non-accrual loans was flat compared to the previous quarter and the ratio of annualized net loan charge-offs inched down from .23% to .22%.

Huntington Bancshares Chairman, President and CEO Steve Steinour reported stable net charge-offs and improved nonperforming asset and criticized asset ratios, saying in a Thursday earnings release, “Credit continues to perform very well.”

“Our customers continue to show strength and resiliency, which supports a constructive outlook,” Steinour said.

M&T Bank reported that the level of nonaccrual loans improved to 1.42% of loans outstanding at the end of the third quarter, compared to 1.50% at the end of the previous quarter.

“M&T’s positive earnings momentum, strong capital position and unyielding focus on delivering for our customers and the communities we serve have positioned the franchise for a strong finish to 2024,” M&T Bank Chief Financial Officer Daryl N. Bible said in a Thursday earnings release.

S&T Bancorp said its net loan charge-offs increased during the quarter, but its nonperforming assets to total portfolio loans plus other real estate owned decreased 4 basis points.

S&T Bancorp CEO Chris McComish said in a Thursday earnings release that “continued improvement in asset quality” was one of the highlights of the bank’s third-quarter results.

The banks reported mixed results in terms of demand for loans compared to the previous quarter.

Commerce Bancshares saw its average loan balances decrease 0.9% due to lower loan demand.

M&T Bank and S&T Bancorp reported that their loan portfolios remained flat during the third quarter. Both banks said they saw growth in consumer loans, but this was offset by a decline in commercial real estate loans at M&T Bank and a decline in commercial loans at S&T Bancorp.

Huntington Bancshares reported that its average total loans and leases increased 1%.

Two of the four banks reported increases in total average deposits compared to the previous quarter, with Commerce Bancshares up 0.3% and Huntington Bancshares up 2%.

Two banks reported declines in average deposits, with M&T Bank down 13% and S&T Bancorp down 0.3%. Both banks attributed their drop to lower average brokered time deposits.