S&T BANCORP INC (STBA) stock intrinsic value fair value estimate & owner earnings analysis

S&T Bancorp is a $9.9 billion Pennsylvania bank holding company operating 72 branches across western Pennsylvania and Ohio, with $8.1 billion of loans and $8.0 billion of deposits at the end of 2025. Because it is a bank, owner earnings are best measured as net income available to common shareholders, which already carries the cost of stock compensation. On that basis per-share earnings ran $2.83 in 2021, $3.47 in 2022, $3.74 in 2023, $3.41 in 2024 and $3.49 in 2025 - a business that compounds slowly, roughly 2 percent a year since the 2018 tax change, with results that swing on interest rates and credit costs rather than on volume growth. The first half of 2026 was stronger at $1.96 per share, helped by wider margins and steady buybacks that have cut the share count from about 38.3 million to 35.3 million in eighteen months. In a pessimistic case earnings step down to roughly $3.10 and barely grow, as margins compress and commercial real estate losses normalize from today's unusually low charge-off rate of 0.18 percent; discounted heavily, that path is worth about $29, which is close to tangible book value. A middle case assumes about $3.70 of normalized earnings growing 3.5 percent, roughly the historical 2 percent plus continued buybacks, giving about $54. An optimistic case assumes 6 percent growth off the current $3.95 run-rate and is worth about $81. Capital is genuinely strong, with a common equity tier 1 ratio of 14.3 percent against a 7.0 percent requirement, so the surplus is not counted separately - its value shows up in the buybacks already assumed. Commercial real estate is about 48 percent of loans, and in its 2021 10-K the bank disclosed a $58.7 million pre-tax loss in 2020 from a check-kiting scheme by a single business customer, so the downside is not fully knowable. That argues for anchoring on the pessimistic value rather than the middle one, and applying roughly a 30 percent margin of safety at about 75 percent confidence, giving a margin-of-safety price near $20.50.