# S&T Bancorp Inc: Form 10-Q for the period ended Mar 31, 2025

- Company: [S&T Bancorp Inc](/companies/stba.md) (CIK 719220)
- Form: 10-Q
- Filed: 2025-05-08
- Accepted by EDGAR: May 8, 2025, 17:22 ET
- Period: 2025-03-31
- Accession: 0000719220-25-000028
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/719220/000071922025000028/stba-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/719220/000071922025000028/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $8.3m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | $33.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.87 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.87 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 38,599,656 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $28.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $1.7m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2025-01-01 to 2025-03-31 | $13.0m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2025-03-31 | $211.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2025-03-31 | $9.72bn | us-gaap:Assets |
| Total liabilities | at 2025-03-31 | $8.30bn | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $1.42bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 36,355 characters.

*(dollars in thousands)*

| ASSETS | Three Months Ended March 31, 2025 Average Balance | Interest | Rate | Three Months Ended March 31, 2024 Average Balance | Interest | Rate |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Interest-bearing deposits with banks | $128,739 | $1,416 | 4.46% | $144,637 | $2,066 | 5.75% |
| Securities, at fair value(1)(2) | 990,414 | 8,875 | 3.59% | 966,703 | 6,798 | 2.81% |
| Loans held for sale | — | — | —% | 176 | 3 | 7.12% |
| Commercial real estate | 3,395,599 | 48,740 | 5.82% | 3,365,142 | 49,557 | 5.92% |
| Commercial and industrial | 1,535,235 | 25,319 | 6.69% | 1,626,633 | 29,768 | 7.36% |
| Commercial construction | 374,881 | 6,422 | 6.95% | 365,088 | 6,993 | 7.70% |
| **Total Commercial Loans** | **5,305,715** | **80,481** | **6.15%** | **5,356,863** | **86,318** | **6.48%** |
| Residential mortgage | 1,660,177 | 21,545 | 5.21% | 1,478,609 | 18,187 | 4.93% |
| Home equity | 653,113 | 10,148 | 6.30% | 648,265 | 11,269 | 6.99% |
| Installment and other consumer | 99,402 | 1,954 | 7.97% | 110,899 | 2,384 | 8.64% |
| Consumer construction | 45,157 | 763 | 6.86% | 69,676 | 970 | 5.60% |
| **Total Consumer Loans** | **2,457,849** | **34,410** | **5.64%** | **2,307,449** | **32,810** | **5.71%** |
| Total Portfolio Loans | 7,763,564 | 114,891 | 5.99% | 7,664,312 | 119,128 | 6.25% |
| **Total Loans(1)(3)** | **7,763,564** | **114,891** | **5.99%** | **7,664,488** | **119,131** | **6.25%** |
| Total other earning assets | 16,768 | 283 | 6.74% | 25,335 | 451 | 7.12% |
| **Total Interest-earning Assets** | **8,899,485** | **$125,465** | **5.70%** | **8,801,163** | **$128,446** | **5.86%** |
| Noninterest-earning assets | 727,176 |  |  | 737,742 |  |  |
| **Total Assets** | **$9,626,661** |  |  | **$9,538,905** |  |  |
| **LIABILITIES AND SHAREHOLDERS’ EQUITY** |  |  |  |  |  |  |
| Interest-bearing demand | $779,309 | $1,930 | 1.00% | $829,095 | $2,319 | 1.12% |
| Money market | 2,088,346 | 15,276 | 2.97% | 1,920,009 | 15,061 | 3.15% |
| Savings | 884,636 | 1,450 | 0.66% | 939,467 | 1,483 | 0.63% |
| Certificates of deposit | 1,860,840 | 19,698 | 4.29% | 1,639,059 | 17,798 | 4.37% |
| **Total Interest-bearing Deposits** | **5,613,131** | **38,354** | **2.77%** | **5,327,630** | **36,661** | **2.77%** |
| Short-term borrowings | 117,722 | 1,344 | 4.63% | 408,351 | 5,460 | 5.37% |
| Long-term borrowings | 50,886 | 477 | 3.80% | 39,221 | 442 | 4.53% |
| Junior subordinated debt securities | 49,423 | 874 | 7.17% | 49,364 | 1,010 | 8.23% |
| **Total Borrowings** | **218,031** | **2,695** | **5.01%** | **496,936** | **6,912** | **5.59%** |
| Other interest-bearing liabilities | 43,926 | 476 | 4.40% | 52,239 | 703 | 5.42% |
| **Total Interest-bearing Liabilities** | **5,875,088** | **41,525** | **2.87%** | **5,876,805** | **44,276** | **3.03%** |
| Noninterest-bearing liabilities | 2,350,574 |  |  | 2,371,586 |  |  |
| Shareholders' equity | 1,400,999 |  |  | 1,290,514 |  |  |
| **Total Liabilities and Shareholders' Equity** | **$9,626,661** |  |  | **$9,538,905** |  |  |
| Net Interest Income (FTE) (non-GAAP)(1)(2) |  | **$83,940** |  |  | **$84,169** |  |
| Net Interest Margin (FTE) (non-GAAP)(1)(2) |  |  | **3.81%** |  |  | **3.84%** |

*(1) Tax-exempt interest income is on an FTE basis (non-GAAP) using the statutory federal corporate income tax rate of 21 percent.*

*(2) Taxable investment income is adjusted for the dividend-received deduction for equity securities.*

*(3) Nonaccruing loans are included in the daily average loan amounts outstanding.*

Net interest income on an FTE basis (non-GAAP) decreased $0.2 million for the three months ended March 31, 2025 compared to the same period in 2024. The net interest margin, or NIM, on an FTE basis (non-GAAP) decreased 3 basis points to 3.81 percent for the three months ended March 31, 2025 compared to 3.84 percent in the same period in 2024. The decreases in net interest income and NIM on an FTE basis (non-GAAP) were primarily due to decreased interest rates resulting in lower interest income partially offset by lower interest expense driven by an improvement in our overall funding mix. Strong customer deposit growth in 2024 and 2025 has reduced our levels of wholesale funding.

Interest income on an FTE basis (non-GAAP) decreased $3.0 million for the three months ended March 31, 2025 compared to the same period in 2024. The decrease in interest income on an FTE basis (non-GAAP) was primarily due to lower interest rates. The average yield on loans decreased 26 basis points compared to the same period in 2024. Average loans increased $99.1 million for the three months ended March 31, 2025 compared to the same period in 2024. Partially offsetting the lower interest income on loans was higher interest income on securities due to the repositioning of $193.6 million of securities over the past four quarters into higher-yielding securities. The average yield on securities increased 78 basis points compared to the same period in 2024. Overall, the FTE rate (non-GAAP) on interest-earning assets decreased 16 basis points for the three months ended March 31, 2025 compared to the same period in 2024.

Interest expense decreased $2.8 million for the three months ended March 31, 2025 compared to the same period in 2024. The decrease in interest expense was primarily due to lower levels of wholesale funding and decreased interest rates. Average interest-bearing deposits increased $285.5 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to increases in certificates of deposit and money market balances. Average borrowings decreased $278.9 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to increased customer deposits. Overall, the cost of interest-bearing liabilities decreased 16 basis points for the three months ended March 31, 2025 compared to the same period in 2024.

The following table sets forth a summary of the changes in interest earned and interest paid resulting from changes in volume and changes in rates for the periods presented:

*(dollars in thousands)*

| Interest earned on: | Three Months Ended March 31, 2025 Compared to March 31, 2024 Volume (4) | Rate (4) | Total |
| --- | ---: | ---: | ---: |
| Interest-bearing deposits with banks | $(227) | $(423) | $(650) |
| Securities, at fair value(1)(2) | 167 | 1,911 | 2,078 |
| Loans held for sale | (3) | — | (3) |
| Commercial real estate | 449 | (1,265) | (816) |
| Commercial and industrial | (1,673) | (2,777) | (4,450) |
| Commercial construction | 188 | (759) | (571) |
| **Total Commercial Loans** | **(1,036)** | **(4,801)** | **(5,837)** |
| Residential mortgage | 2,233 | 1,124 | 3,357 |
| Home equity | 84 | (1,205) | (1,121) |
| Installment and other consumer | (247) | (182) | (429) |
| Consumer construction | (341) | 135 | (206) |
| **Total Consumer Loans** | **1,729** | **(128)** | **1,601** |
| Total Portfolio Loans | 693 | (4,929) | (4,236) |
| **Total Loans(1)(3)** | **690** | **(4,929)** | **(4,239)** |
| Total other earning assets | (152) | (16) | (168) |
| **Change in Interest Earned on Interest-earning Assets** | **$478** | **$(3,457)** | **$(2,979)** |
| **Interest paid on:** |  |  |  |
| Interest-bearing demand | $(139) | $(249) | $(388) |
| Money market | 1,320 | (1,106) | 214 |
| Savings | (87) | 53 | (34) |
| Certificates of deposit | 2,408 | (509) | 1,899 |
| **Total Interest-bearing Deposits** | **3,502** | **(1,811)** | **1,691** |
| Short-term borrowings | (3,886) | (230) | (4,116) |
| Long-term borrowings | 132 | (97) | 35 |
| Junior subordinated debt securities | 1 | (137) | (136) |
| **Total Borrowings** | **(3,753)** | **(464)** | **(4,217)** |
| Other interest-bearing liabilities | (112) | (115) | (227) |
| **Change in Interest Paid on Interest-bearing Liabilities** | **(363)** | **(2,390)** | **(2,753)** |
| **Change in Net Interest Income** | **$841** | **$(1,067)** | **$(226)** |

*(1) Tax-exempt income is on an FTE basis (non-GAAP) using the statutory federal corporate income tax rate of 21 percent.*

*(2) Taxable investment income is adjusted for the dividend-received deduction for equity securities.*

*(3) Nonaccruing loans are included in the daily average loan amounts outstanding.*

*(4) Changes to rate/volume are allocated to both rate and volume on a proportionate dollar basis.*

### Provision for Credit Losses

The provision for credit losses includes a provision for losses on loans and on unfunded commitments. The provision for credit losses fluctuates based on changes in loan balances, loan risk ratings, net loan charge-offs and recoveries, the macro environment and our CECL forecast. The provision for credit losses decreased $5.6 million to negative $3.0 million for the three months ended March 31, 2025 compared to $2.6 million for the same period in 2024. The decrease in the provision for credit losses was due to a lower level of ACL and a decrease in net loan charge-offs. The lower level of ACL was related to a reduction in specific reserves of $4.2 million for loans individually evaluated due to the partial pay-off of a $10.7 million C&I relationship that went nonperforming during the three months ended December 31, 2024. The provision for credit losses included a negative $0.5 million for the reserve for unfunded commitments for the three months ended March 31, 2025 compared to a negative $0.8 million for the same period in 2024.

Net loan recoveries were $0.0 million for the three months ended March 31, 2025 compared to net loan charge-offs of $6.6 million for the same period in 2024. Offsetting gross loan charge-offs of $0.9 million during the three months ended March 31, 2025 were $0.9 million in recoveries.

Refer to the "Allowance for Credit Losses" section of this MD&A for further details.

### Noninterest Income

*(dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Net (loss) gain on sale of securities | $(2,295) | $3 | $(2,298) | NM |
| Debit and credit card | 4,188 | 4,235 | (47) | (1.1)% |
| Service charges on deposit accounts | 3,962 | 3,828 | 134 | 3.5% |
| Wealth management | 3,084 | 3,042 | 42 | 1.4% |
| Other noninterest income | 1,490 | 1,722 | (232) | (13.5)% |
| **Total Noninterest Income** | **$10,429** | **$12,830** | **$(2,401)** | **(18.7)%** |
| NM - not meaningful |  |  |  |  |

Noninterest income decreased $2.4 million to $10.4 million for the three months ended March 31, 2025 compared to the same period in 2024. The decrease was mainly related to $2.3 million of realized losses from the repositioning of securities into longer duration, higher-yielding securities.

### Noninterest Expense

*(dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Salaries and employee benefits | $29,853 | $29,512 | $341 | 1.2% |
| Data processing and information technology | 4,930 | 4,954 | (24) | (0.5)% |
| Occupancy | 4,302 | 3,870 | 432 | 11.2% |
| Furniture, equipment and software | 3,483 | 3,472 | 11 | 0.3% |
| Marketing | 1,615 | 1,943 | (328) | (16.9)% |
| Other taxes | 1,494 | 1,871 | (377) | (20.1)% |
| Professional services and legal | 1,286 | 1,720 | (434) | (25.2)% |
| FDIC insurance | 1,040 | 1,049 | (9) | (0.9)% |
| Other | 7,088 | 6,129 | 959 | 15.6% |
| **Total Noninterest Expense** | **$55,091** | **$54,520** | **$571** | **1.0%** |

Noninterest expense increased $0.6 million to $55.1 million for the three months ended March 31, 2025 compared to the same period in 2024. Salaries and employee benefits increased $0.3 million primarily due to annual merit increases, restricted stock expense and higher incentives. Occupancy increased $0.4 million due to increased maintenance and utility costs. Other noninterest expense increased $1.0 million primarily as a result of education and Neighborhood Assistance Program, or NAP, contributions occurring earlier in 2025 than in 2024. Offsetting these increases were decreases in our expenses for marketing of $0.3 million related to the timing of various promotions, other taxes of $0.4 million due to education and NAP contributions and professional services and legal of $0.4 million primarily due to reduced consulting and legal expenses.

### Provision for Income Taxes

The provision for income taxes increased $0.4 million to $8.3 million for the three months ended March 31, 2025 compared to $7.9 million for the same period in 2024. Our effective tax rate was 19.9 percent for the three months ended March 31, 2025 compared to 20.2 percent for the three months ended March 31, 2024. The decrease in our effective tax rate for the three month period ended March 31, 2025 was primarily due to an increase in low-income housing tax credits compared to the same period in 2024.

### Financial Condition as of March 31, 2025

Total assets remained unchanged at $9.7 billion at March 31, 2025 and December 31, 2024. Total portfolio loans increased $93.4 million to $7.8 billion at March 31, 2025 compared to December 31, 2024. The commercial loan portfolio increased $81.6 million and the consumer loan portfolio increased $11.8 million compared to December 31, 2024.

Securities increased $23.5 million to $1.0 billion at March 31, 2025 compared to December 31, 2024. The securities portfolio was in a net unrealized loss position of $54.4 million at March 31, 2025 compared to a net unrealized loss position of $71.7 million at December 31, 2024. The improvement in the net unrealized loss position of the securities portfolio of $17.3 million was primarily due to a decline in interest rates from December 31, 2024.

Customer deposit growth continued to be strong during the three months ended March 31, 2025, allowing for a reduction in higher-cost borrowings and brokered deposits. Total deposits increased $109.8 million to $7.9 billion at March 31, 2025 compared to $7.8 billion at December 31, 2024.Customer deposits increased $134.7 million to $7.7 billion at March 31, 2025 compared to $7.6 billion at December 31, 2024. Brokered deposits decreased $24.9 million to $200.4 million at March 31, 2025 compared to $225.3 million at December 31, 2024. The increase in customer deposits is the result of our continued focus on growing our deposit franchise.

Total borrowings decreased $55.0 million, or 22.0 percent, to $195.3 million at March 31, 2025 compared to $250.3 million at December 31, 2024 primarily due to strong growth in customer deposits.

Total shareholders’ equity increased by $37.7 million to $1.4 billion at March 31, 2025 compared to December 31, 2024. The increase was primarily due to net income of $33.4 million and other comprehensive income of $16.4 million offset by dividends of $13.1 million.

### Securities Activity

*(dollars in thousands)*

|  | March 31, 2025 | December 31, 2024 | $ Change |
| --- | ---: | ---: | ---: |
| U.S. Treasury securities | $93,605 | $92,768 | $837 |
| Obligations of U.S. government corporations and agencies | 10,127 | 15,071 | (4,944) |
| Collateralized mortgage obligations of U.S. government corporations and agencies | 648,818 | 596,284 | 52,534 |
| Residential mortgage-backed securities of U.S. government corporations and agencies | 33,143 | 33,207 | (64) |
| Commercial mortgage-backed securities of U.S. government corporations and agencies | 219,285 | 224,798 | (5,513) |
| Obligations of states and political subdivisions | 4,972 | 24,287 | (19,315) |
| **Available-for-Sale Debt Securities** | **1,009,950** | **986,415** | **23,535** |
| Equity securities | 1,161 | 1,176 | (15) |
| **Total Securities Available for Sale** | **$1,011,111** | **$987,591** | **$23,520** |

We invest in various securities in order to maintain a source of liquidity, to satisfy various pledging requirements, to increase net interest income and as a tool of ALCO to reposition the balance sheet for interest rate risk purposes. Securities are subject to market risks that could negatively affect the level of liquidity available to us.

The securities portfolio increased $23.5 million to $1.0 billion at March 31, 2025 compared to December 31, 2024. The increase in the debt securities portfolio was primarily related to an improvement in unrealized losses of $17.3 million from December 31, 2024 to March 31, 2025 as a result of lower interest rates. Additionally, we recognized $2.3 million of realized losses due to the repositioning of $49.3 million of our securities portfolio into longer duration, higher-yielding securities during the three months ended March 31, 2025.

Our debt securities portfolio was in a net unrealized loss position of $54.4 million at March 31, 2025 compared to a net unrealized loss position of $71.7 million at December 31, 2024. At March 31, 2025, our debt securities portfolio had gross unrealized losses of $57.8 million offset by $3.4 million of gross unrealized gains compared to gross unrealized losses of $72.7 million offset by gross unrealized gains of $1.0 million at December 31, 2024.

### Loan Composition

The following table summarizes our loan portfolio as of the dates presented:

*(dollars in thousands)*

| Commercial | March 31, 2025 Amount | % of Total | December 31, 2024 Amount | % of Total | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial real estate | $3,462,246 | 44.2% | $3,388,017 | 43.8% | $74,229 | 2.2% |
| Commercial and industrial | 1,520,475 | 19.4% | 1,540,397 | 19.9% | (19,922) | (1.3)% |
| Commercial construction | 380,129 | 4.8% | 352,886 | 4.5% | 27,243 | 7.7% |
| **Total Commercial Loans** | **5,362,850** | **68.4%** | **5,281,300** | **68.2%** | **81,550** | **1.5%** |
| **Consumer** |  |  |  |  |  |  |
| Consumer real estate | 2,375,334 | 30.3% | 2,356,901 | 30.4% | 18,433 | 0.8% |
| Other consumer | 98,165 | 1.3% | 104,757 | 1.4% | (6,592) | (6.3)% |
| **Total Consumer Loans** | **2,473,499** | **31.6%** | **2,461,658** | **31.8%** | **11,841** | **0.5%** |
| **Total Portfolio Loans** | **$7,836,349** | **100.0%** | **$7,742,958** | **100.0%** | **$93,391** | **1.2%** |

The loan portfolio represents the most significant source of interest income for us. The risk that borrowers will be unable to pay such obligations is inherent in the loan portfolio. Other conditions, such as downturns in the borrower’s industry or the overall economic climate, can significantly impact the borrower’s ability to pay.

Total portfolio loans were $7.8 billion at March 31, 2025 compared to $7.7 billion at December 31, 2024. For the periods ending March 31, 2025 and December 31, 2024, 24 percent of our total loans were adjustable rate, 37 percent were floating rate and 39 percent were fixed rate.

Commercial loans, including CRE, C&I and commercial construction, comprised 68.4 percent of total portfolio loans at March 31, 2025 and 68.2 percent at December 31, 2024. The commercial loan portfolio increased $81.6 million at March 31, 2025 compared to December 31, 2024 due to increases of $74.2 million in CRE and $27.3 million in commercial construction offset by a decrease of $19.9 million in C&I. The increase in commercial loans was due to improved demand and lower pay-offs in the first three months of 2025 compared to elevated payoffs experienced in 2024.

Consumer loans represent 31.6 percent of our total portfolio loans at March 31, 2025 and 31.8 percent at December 31, 2024. The consumer loan portfolio increased $11.8 million at March 31, 2025 compared to December 31, 2024, primarily due to growth in our consumer real estate portfolio of $18.4 million, as we continue to hold mortgages in our portfolio rather than sell them in the secondary market.

### Allowance for Credit Losses

We maintain an ACL at a level determined to be adequate to absorb estimated expected credit losses within the loan portfolio over the contractual life of an instrument that considers our historical loss experience, current conditions and forecasts of future economic conditions as of the balance sheet date. We develop and document a systematic ACL methodology based on the following portfolio segments: 1) CRE, 2) C&I, 3) Commercial Construction, 4) Business Banking, 5) Consumer Real Estate and 6) Other Consumer. Refer to Part 1. Financial Information, Note 5. Loans and Allowance for Credit Losses for details on our portfolio segments.

The following table presents activity in the ACL for the period presented:

*(dollars in thousands)*

| Allowance for credit losses on loans: | Three Months Ended March 31, 2025 Commercial Real Estate | Commercial and Industrial | Commercial Construction | Business Banking | Consumer Real Estate | Other Consumer | Total Loans |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Balance at beginning of period | $30,254 | $37,084 | $4,893 | $10,681 | $15,776 | $2,806 | $101,494 |
| Provision for credit losses on loans(1) | (493) | (3,643) | 1,017 | 650 | 160 | (202) | (2,511) |
| Charge-offs | — | (172) | (30) | (143) | (162) | (377) | (884) |
| Recoveries | 134 | 145 | — | 25 | 133 | 474 | 911 |
| **Net Recoveries (Charge-offs)** | **134** | **(27)** | **(30)** | **(118)** | **(29)** | **97** | **27** |
| **Balance at End of Period** | **$29,895** | **$33,414** | **$5,880** | **$11,213** | **$15,907** | **$2,701** | **$99,010** |
| (1) Excludes the provision for credit losses for unfunded commitments. |  |  |  |  |  |  |  |

33

The following table presents key ACL ratios for the periods presented:

|  | March 31, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| Ratio of net charge-offs to average loans outstanding(1) | —% | 0.11% |
| Allowance for credit losses as a percentage of total portfolio loans | 1.26% | 1.31% |
| Allowance for credit losses to nonaccrual loans | 443% | 363% |

#### (1) Year-to-date net charge-offs annualized

Net loan recoveries were $0.0 million for the three months ended March 31, 2025. Refer to the "Provision for Credit Losses" section of this MD&A for further details.

The ACL decreased $2.5 million to $99.0 million, or 1.26 percent of total portfolio loans, at March 31, 2025 compared to $101.5 million, or 1.31 percent of total portfolio loans, at December 31, 2024. The decrease in the ACL is due to a reduction in specific reserves for loans individually evaluated related to the partial pay-off of a $10.7 million C&I relationship that went nonperforming during the three months ended December 31, 2024. The decrease in the ACL was partially offset by a $1.2 million increase in our quantitative reserve due to loan growth and downgrades in our C&I portfolio and a $0.5 million increase in our qualitative reserve and forecast due to the concerns in the economic environment.

Substandard loans increased $6.9 million to $116.7 million at March 31, 2025 compared to $109.8 million at December 31, 2024. The increase in substandard loans was primarily due to the downgrade of a $10.5 million C&I relationship which was partially offset by loan payoffs. Special mention loans decreased $3.0 million to $95.9 million at March 31, 2025 compared to $98.9 million at December 31, 2024 primarily due to loan payoffs.

Nonperforming assets, or NPAs, consist of nonaccrual loans and OREO. The following represents NPAs as of the dates presented:

*(dollars in thousands)*

| Nonaccrual Loans | March 31, 2025 | December 31, 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Commercial real estate | $3,441 | $4,173 | $(732) |
| Commercial and industrial | 6,749 | 12,570 | (5,821) |
| Commercial construction | 1,006 | — | 1,006 |
| Consumer real estate | 10,925 | 10,964 | (39) |
| Other Consumer | 218 | 230 | (12) |
| **Total Nonaccrual Loans** | **22,339** | **27,937** | **(5,598)** |
| OREO | 29 | 8 | 21 |
| **Total Nonperforming Assets** | **$22,368** | **$27,945** | **$(5,577)** |
| **Asset Quality Ratios:** |  |  |  |
| Nonaccrual loans as a percent of total portfolio loans | 0.29% | 0.36% | (0.07)% |
| Nonperforming assets as a percent of total portfolio loans plus OREO | 0.29% | 0.36% | (0.07)% |

Our policy is to place loans in all categories in nonaccrual status when collection of interest or principal is doubtful, or generally when interest or principal payments are 90 days or more past the contractual due date. Nonaccrual loans decreased $5.6 million to $22.3 million at March 31, 2025 compared to $27.9 million at December 31, 2024. The decrease in nonaccrual loans was primarily due to the partial pay-off of the $10.7 million C&I relationship mentioned above.

### Deposits

Deposits are our primary source of funds. The following table presents the mix of deposits as of the dates presented:

*(dollars in thousands)*

|  | March 31, 2025 Amount | % of Deposits | December 31, 2024 Amount | % of Deposits | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Personal | $4,674,337 | 59.2% | $4,533,149 | 58.2% | $141,188 | 3.1% |
| Business | 2,619,202 | 33.2% | 2,679,191 | 34.4% | (59,989) | (2.2)% |
| Public funds | 399,026 | 5.1% | 345,512 | 4.5% | 53,514 | 15.5% |
| Brokered | 200,368 | 2.5% | 225,265 | 2.9% | (24,897) | (11.1)% |
| **Total Deposits** | **$7,892,933** | **100.0%** | **$7,783,117** | **100.0%** | **$109,816** | **1.4%** |

The following table presents the composition of deposits for the periods presented:

*(dollars in thousands)*

| Customer Deposits | March 31, 2025 | December 31, 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Noninterest-bearing demand | $2,164,491 | $2,185,242 | $(20,751) |
| Interest-bearing demand | 809,722 | 812,768 | (3,046) |
| Money market | 2,059,713 | 1,939,980 | 119,733 |
| Savings | 886,007 | 877,859 | 8,148 |
| Certificates of deposit | 1,772,632 | 1,742,003 | 30,629 |
| **Total Customer Deposits** | **7,692,565** | **7,557,852** | **134,713** |
| **Brokered Deposits** |  |  |  |
| Money market | 150,368 | 100,305 | 50,063 |
| Certificates of deposit | 50,000 | 124,960 | (74,960) |
| **Total Brokered Deposits** | **200,368** | **225,265** | **(24,897)** |
| **Total Deposits** | **$7,892,933** | **$7,783,117** | **$109,816** |

Total deposits increased $109.8 million, or 1.4 percent, at March 31, 2025 compared to December 31, 2024. Customer deposits increased $134.7 million, or 1.8 percent compared to December 31, 2024, as a result of our focus on growing our deposit franchise. Total brokered deposits decreased $24.9 million from December 31, 2024 due to strong growth in customer deposits. Brokered deposits are an additional source of funds utilized by ALCO as a way to diversify funding sources, as well as manage our funding costs and structure.

As a member of the IntraFi network, we are able to offer our customers insurance coverage on interest-bearing demand, money market and certificates of deposit balances in excess of the FDIC insurance limits. IntraFi balances were $316.3 million at March 31, 2025 compared to $324.8 million at December 31, 2024.

We had total uninsured deposits of $2.7 billion, or 33.9 percent of our total deposit base, at March 31, 2025 compared to $2.6 billion, or 33.5 percent of our total deposit base, at December 31, 2024.

### Borrowings

Borrowings are an additional source of funding for us. Short-term borrowings are for terms under or equal to one year at March 31, 2025 and are comprised of FHLB Advances. Long-term borrowings are for original terms greater than one year and are comprised of FHLB advances and finance leases. Total borrowings decreased $55.0 million to $195.3 million at March 31, 2025 compared to $250.3 million at December 31, 2024 primarily due to strong growth in customer deposits.

*(dollars in thousands)*

|  | March 31, 2025 | December 31, 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Short-term borrowings | $95,000 | $150,000 | $(55,000) |
| Long-term borrowings | 50,876 | 50,896 | (20) |
| Junior subordinated debt securities | 49,433 | 49,418 | 15 |
| **Total Borrowings** | **$195,309** | **$250,314** | **$(55,005)** |

35

Information pertaining to short-term borrowings is summarized in the table below for the three months ended March 31, 2025 and for the twelve months ended December 31, 2024.

*(dollars in thousands)*

|  | Short-Term Borrowings March 31, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| Balance at the period end | $95,000 | $150,000 |
| Average balance during the period | $117,721 | $257,524 |
| Average interest rate during the period | 4.63% | 5.12% |
| Maximum month-end balance during the period | $125,000 | $465,000 |
| Average interest rate at the period end | 4.52% | 4.60% |

Information pertaining to long-term borrowings and junior subordinated debt securities is summarized in the tables below for the three months ended March 31, 2025 and for the twelve months ended December 31, 2024.

*(dollars in thousands)*

|  | Long-Term Borrowings March 31, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| Balance at the period end | $50,876 | $50,896 |
| Average balance during the period | $50,886 | $46,306 |
| Average interest rate during the period | 3.80% | 4.24% |
| Maximum month-end balance during the period | $50,890 | $64,015 |
| Average interest rate at the period end | 3.75% | 3.75% |
|  | **Junior Subordinated Debt Securities** |  |
| (dollars in thousands) | **March 31, 2025** | **December 31, 2024** |
| Balance at the period end | $49,433 | $49,418 |
| Average balance during the period | $49,423 | $49,386 |
| Average interest rate during the period | 7.17% | 8.05% |
| Maximum month-end balance during the period | $49,433 | $49,418 |
| Average interest rate at the period end | 6.89% | 6.96% |

### Liquidity and Capital Resources

Liquidity is defined as a financial institution’s ability to meet its cash and collateral obligations at a reasonable cost. Our primary future cash needs are centered on the ability to (i) satisfy the financial needs of depositors who may want to withdraw funds or of borrowers needing to access funds to meet their credit needs and (ii) to meet our future cash commitments under contractual obligations with third parties. In order to manage liquidity risk, our Board of Directors has delegated authority to ALCO for the formulation, implementation and oversight of liquidity risk management for S&T. ALCO’s goal is to maintain adequate levels of liquidity at a reasonable cost to meet funding needs in both a normal operating environment and for potential liquidity stress events. ALCO monitors and manages liquidity through various ratios, reviewing cash flow projections, performing stress tests and having a detailed contingency funding plan. ALCO policy guidelines define graduated risk tolerance levels. If our liquidity position moves to a level that has been defined as high risk, specific actions are required, such as increased monitoring or the development of an action plan to reduce the risk position.

Our primary funding and liquidity source is a stable customer deposit base. We believe S&T has the ability to retain existing deposits and attract new deposits, mitigating any funding dependency on other more volatile funding sources. Refer to the "Financial Condition as of March 31, 2025 - Deposits" section of this MD&A, for additional discussion on deposits. Although deposits are the primary source of funds, we have identified various other funding sources that can be used as part of our normal funding program. Additional funding sources accessible to S&T include borrowing availability at the FHLB, federal funds lines with other financial institutions and the brokered deposit market. We also have borrowing availability at the Federal Reserve Discount Window through the Borrower-in-Custody Program.

Available borrowing capacity exceeds uninsured deposits of $2.7 billion at March 31, 2025. The following table summarizes funding sources available as of the dates presented:

*(dollars in thousands)*

|  | March 31, 2025 Borrowing Capacity | Balance (1) | Available | December 31, 2024 Borrowing Capacity | Balance (1) | Available |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| FHLB(1) | $2,036,064 | $310,234 | $1,725,830 | $1,980,615 | $304,565 | $1,676,050 |
| Borrower-in-Custody Program | 2,098,353 | — | 2,098,353 | 1,995,489 | — | 1,995,489 |
| **Total** | **$4,134,417** | **$310,234** | **$3,824,183** | **$3,976,104** | **$304,565** | **$3,671,539** |
| (1) FHLB balances include advances, letters of credit, interest due on advances and the credit enhancement obligation on mortgages sold to the FHLB. |  |  |  |  |  |  |

We have contractual obligations representing required future payments on certificates of deposit, junior subordinated debt securities, short-term borrowings, long-term borrowings, operating and capital leases, funding commitments on tax credit equity investments and purchase obligations. See the "Liquidity and Capital Resources" section presented in our Form 2024 10-K under Part II, Item 7- "Management’s Discussion and Analysis of Financial Condition and Results of Operations" for more information on these future cash outflows. Total certificates of deposit decreased $44.3 million to $1.8 billion at March 31, 2025 compared to December 31, 2024 and short-term borrowings decreased $55.0 million to $95.0 million at March 31, 2025 compared to December 31, 2024. Other than these changes, there have been no material changes to the contractual obligations previously disclosed in our 2024 Form 10-K.

An important component of our ability to effectively respond to potential liquidity stress events is maintaining a cushion of highly liquid assets. Highly liquid assets are those that can be converted to cash quickly to meet financial obligations. ALCO policy guidelines define a ratio of highly liquid assets to total assets by graduated risk tolerance levels of minimal, moderate and high. At March 31, 2025, S&T Bank had $923.1 million in highly liquid assets, which consisted primarily of $124.4 million in interest-bearing deposits with banks and $798.7 million in unpledged securities. This resulted in a highly liquid assets to total assets ratio of 9.5 percent at March 31, 2025.

We continue to maintain a strong capital position with our leverage ratio at 12.09 percent at March 31, 2025 compared to 11.98 percent at December 31, 2024, both in excess of the well-capitalized regulatory guideline of 5.00 percent. We continue to be well-capitalized with a risk-based Common Equity Tier 1 ratio of 14.67 percent at March 31, 2025 compared to 14.58 percent at December 31, 2024, both in excess of the well-capitalized regulatory guideline of 6.50 percent.

The following table summarizes capital amounts and ratios for S&T and S&T Bank as of the dates presented:

*(dollars in thousands)*

| S&T Bancorp, Inc. | Adequately Capitalized Amount | Well- Capitalized Ratio | March 31, 2025 Amount | Ratio | December 31, 2024 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Tier 1 leverage | 4.00% | 5.00% | $1,127,467 | 12.09% | $1,112,126 | 11.98% |
| Common equity tier 1 to risk-weighted assets | 4.50% | 6.50% | 1,103,467 | 14.67% | 1,088,126 | 14.58% |
| Tier 1 capital to risk-weighted assets | 6.00% | 8.00% | 1,127,467 | 14.99% | 1,112,126 | 14.90% |
| Total capital to risk-weighted assets | 8.00% | 10.00% | 1,246,607 | 16.57% | 1,230,497 | 16.49% |
| **S&T Bank** |  |  |  |  |  |  |
| Tier 1 leverage | 4.00% | 5.00% | $1,072,716 | 11.51% | $1,060,010 | 11.43% |
| Common equity tier 1 to risk-weighted assets | 4.50% | 6.50% | 1,072,716 | 14.27% | 1,060,010 | 14.21% |
| Tier 1 capital to risk-weighted assets | 6.00% | 8.00% | 1,072,716 | 14.27% | 1,060,010 | 14.21% |
| Total capital to risk-weighted assets | 8.00% | 10.00% | 1,191,816 | 15.85% | 1,178,335 | 15.79% |

We have filed a shelf registration statement on Form S-3 under the Securities Act of 1933, as amended, with the SEC, which allows for the issuance of a variety of securities including debt and capital securities, preferred and common stock and warrants. We may use the proceeds from the sale of securities for general corporate purposes, which could include investments at the holding company level, investing in, or extending credit to subsidiaries, possible acquisitions and stock repurchases. We have not issued any securities pursuant to this shelf registration statement at March 31, 2025.

## Market risk

As filed, 6,273 characters.

Market risk is defined as the degree to which changes in interest rates, foreign exchange rates, commodity prices or equity prices can adversely affect a financial institution’s earnings or capital. For most financial institutions, including S&T, market risk primarily reflects exposures to changes in interest rates. Interest rate fluctuations affect earnings by changing net interest income and other interest-sensitive income and expense levels. Interest rate changes also affect capital by changing the net present value of a bank’s future cash flows, and the cash flows themselves, as rates change. Accepting this risk is a normal part of banking and can be an important source of profitability and enhancing shareholder value. However, excessive interest rate risk can threaten a bank’s earnings, capital, liquidity and solvency. Our sensitivity to changes in interest rate movements is continually monitored by ALCO. ALCO monitors and manages market risk through rate shock analyses, economic value of equity, or EVE, analyses and by performing stress tests and simulations to mitigate earnings and market value fluctuations due to changes in interest rates.

Rate shock analyses results are compared to a base case to provide an estimate of the impact that market rate changes may have on 12 and 24 months of pretax net interest income. The base case and rate shock analyses are performed on a static balance sheet. A static balance sheet is a no growth balance sheet in which all maturing and/or repricing cash flows are reinvested in the same product at the existing product spread. Rate shock analyses assume an immediate parallel shift in market interest rates and also include management assumptions regarding the impact of interest rate changes on non-maturity deposit products (noninterest-bearing demand, interest-bearing demand, money market and savings) and changes in the prepayment behavior of loans and securities with optionality. S&T policy guidelines limit the change in pretax net interest income over 12 and 24 month horizons using rate shocks in increments of +/- 100 basis points. Policy guidelines define the percentage change in pretax net interest income by graduated risk tolerance levels of minimal, moderate and high.

In order to monitor interest rate risk beyond the 24 month time horizon of rate shocks on pretax net interest income, we also perform EVE analyses. EVE represents the present value of all asset cash flows minus the present value of all liability cash flows. EVE change results are compared to a base case to determine the impact that market rate changes may have on our EVE. As with rate shock analyses on pretax net interest income, EVE analyses incorporate management assumptions regarding prepayment behavior of fixed rate loans and securities with optionality and the behavior and value of non-maturity deposit products. S&T policy guidelines limit the change in EVE using rate shocks in increments of +/- 100 basis points. Policy guidelines define the percentage change in EVE by graduated risk tolerance levels of minimal, moderate and high.

The table below reflects the rate shock analyses results for the 1-12 and 13-24 month periods of pretax net interest income and EVE.

| Change in Interest Rate (basis points) | March 31, 2025 1 - 12 Months % Change in Pretax Net Interest Income | 13 - 24 Months % Change in Pretax Net Interest Income | % Change in EVE % Change in Pretax Net Interest Income | December 31, 2024 1 - 12 Months % Change in Pretax Net Interest Income | 13 - 24 Months | % Change in EVE |
| ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| 400 | 2.4 | 7.9 | (13.2) | 3.2 | 8.4 | (32.3) |
| 300 | 1.6 | 5.7 | (8.5) | 1.9 | 5.8 | (24.1) |
| 200 | 1.1 | 4.2 | (4.0) | 0.8 | 3.7 | (15.4) |
| 100 | 0.7 | 2.5 | (0.7) | (0.1) | 1.7 | (7.2) |
| -100 | (1.8) | (3.9) | (2.6) | (3.4) | (5.2) | 3.0 |
| -200 | (4.3) | (9.2) | (9.2) | (6.2) | (10.3) | 3.5 |
| -300 | (7.6) | (15.5) | (20.4) | (9.2) | (16.2) | 0.2 |
| -400 | (10.5) | (20.4) | (38.2) | (12.9) | (22.7) | (7.9) |

The results from the rate shock analyses on net interest income are generally consistent with having an asset sensitive balance sheet. Having an asset sensitive balance sheet means more assets than liabilities will reprice during the measured time frames. The implications of an asset sensitive balance sheet will differ depending upon the change in market interest rates. For example, with an asset sensitive balance sheet in a declining interest rate environment, more assets than liabilities will decrease in rate. This situation could result in a decrease in net interest income and operating income. Conversely, with an asset sensitive balance sheet in a rising interest rate environment, more assets than liabilities will increase in rate. This situation could result in an increase in net interest income and operating income.

Our rate shock analyses remain relatively unchanged in the percentage change in pretax net interest income in the rates up scenarios when comparing March 31, 2025 to December 31, 2024. The percentage change in pretax net interest income in the rates down scenarios show a decline when comparing March 31, 2025 to December 31, 2024 primarily due to updates of our deposit beta and loan prepayment assumptions and upcoming maturities within our receive-fixed balance sheet swap portfolio. Our EVE analyses show an improvement in the rates up scenarios and a decline in the rates down scenarios when comparing March 31, 2025 to December 31, 2024 primarily due to updates of our deposit retention assumptions.

In addition to rate shocks and EVE analyses, we perform a market risk stress test at least annually. The market risk stress test includes sensitivity analyses and simulations. Sensitivity analyses are performed to help us identify which model assumptions cause the greatest impact on pretax net interest income. Sensitivity analyses may include changing prepayment behavior of loans and securities with optionality and the impact of interest rate changes on non-maturity deposit products. Simulation analyses may include the potential impact of rate changes other than the policy guidelines, yield curve shape changes, significant balance mix changes and various growth scenarios.

## Controls and procedures

As filed, 1,820 characters.

### Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of S&T’s Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO (its principal executive officer and principal financial officer, respectively), management has evaluated the effectiveness of the design and operation of S&T’s disclosure controls and procedures as of March 31, 2025. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods required by the Securities and Exchange Commission, or the SEC, and that such information is accumulated and communicated to S&T’s management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Based on and as of the date of such evaluation, our CEO and CFO concluded that the design and operation of our disclosure controls and procedures were effective in all material respects, as of the end of the period covered by this report.

### Changes in Internal Control over Financial Reporting

During the quarter ended March 31, 2025, there were no changes made to S&T’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that materially affected, or are reasonably likely to materially affect, S&T’s internal control over financial reporting.

### PART II

### OTHER INFORMATION

## Risk factors

As filed, 225 characters.

There have been no material changes to the risk factors that we have previously disclosed in Part I, Item 1A – “Risk Factors” in our 2024 Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 3, 2025.

Filed May 8, 2025.
Source: SEC EDGAR, the filing index for accession 0000719220-25-000028. Last ingested by Listed: Oct 29, 2026, 04:32 ET. No prices; not investment advice.