S&T Bancorp Inc: Form 10-Q for the period ended Mar 31, 2026

(dollars in thousands)

(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) increased $5.1 million, or 6.06 percent, for the three months ended March 31, 2026 compared to the same period in 2025. The net interest margin, or NIM, on an FTE basis (non-GAAP) increased 11 basis points to 3.92 percent for the three months ended March 31, 2026 compared to 3.81 percent in the same period in 2025. The increases in net interest income and NIM on an FTE basis (non-GAAP) were primarily due to the impact of lower interest rates on interest-bearing liabilities.

Interest income on an FTE basis (non-GAAP) increased $1.5 million for the three months ended March 31, 2026 compared to the same period in 2025. The increase in interest income on an FTE basis (non-GAAP) was primarily driven by a $245.7 million increase in total portfolio loans that more than offset the impact of declining loan yields. The average yield on loans decreased 13 basis points compared to the same period in 2025 due to lower interest rates. Interest income on an FTE basis (non-GAAP) also improved due to an increase in securities yield of 19 basis points to 3.78 percent compared to 3.59 percent in the same period in 2025. Overall, the FTE rate (non-GAAP) on interest-earning assets decreased 10 basis points for the three months ended March 31, 2026 compared to the same period in 2025.

Interest expense decreased $3.6 million for the three months ended March 31, 2026 compared to the same period in 2025. The decrease in interest expense was primarily due to a decline in interest rates. Average interest-bearing deposits increased $250.4 million for the three months ended March 31, 2026 compared to the same period in 2025. Average borrowings decreased $43.6 million for the three months ended March 31, 2026 compared to the same period in 2025 primarily due to an increase in deposits. Overall, the cost of interest-bearing liabilities decreased 33 basis points for the three months ended March 31, 2026 compared to the same period in 2025.

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)

(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 provisions for losses on loans and on unfunded loan 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 Current Expected Credit Losses, or CECL, forecast.

The provision for credit losses increased $4.3 million to $1.3 million for the three months ended March 31, 2026 compared to negative $3.0 million for the same period in 2025. The increase was primarily due to higher net loan charge-offs and an increase in specific reserve for loans individually evaluated.

Net loan charge-offs were $1.7 million for the three months ended March 31, 2026 compared to net loan charge-offs of $0.0 million for the same period in 2025. Refer to the "Allowance for Credit Losses" section of this MD&A for further details.

Noninterest Income

(dollars in thousands)

Noninterest income increased $3.2 million to $13.6 million for the three months ended March 31, 2026 compared to the same period in 2025. The increase was mainly related to $2.3 million in realized losses from the repositioning of securities into longer duration, higher-yielding securities which occurred in 2025 and is not present in 2026.

Noninterest Expense

(dollars in thousands)

Noninterest expense increased $1.6 million to $56.7 million for the three months ended March 31, 2026 compared to the same period in 2025. The increase in noninterest expense mainly related to higher salaries and employee benefits of $1.5 million primarily due to increased salary, medical and incentive costs. Other taxes increased $0.6 million primarily due to the timing of contributions to the Educational Improvement Tax Credit Program and other noninterest expense decreased $0.8 million primarily due to the same contribution timing. These contributions are reported in other expense and generate tax credits that reduce shares tax expense, which is included in other taxes.

Provision for Income Taxes

The provision for income taxes increased $0.7 million to $9.0 million for the three months ended March 31, 2026 compared to $8.3 million for the same period in 2025. Our effective tax rate was 20.4 percent for the three months ended March 31, 2026 compared to 19.9 percent for the for the three months ended March 31, 2025. The increase in our effective tax rate for the three months ended March 31, 2026 was primarily due to an increase in pretax income and state income tax expense compared to the same period in 2025.

Financial Condition at March 31, 2026

Total assets were $9.9 billion at both March 31, 2026 and December 31, 2025. Cash and due from banks increased $175.6 million related to a significant increase in deposits and a decline in loans compared to December 31, 2025. Total portfolio loans decreased $112.6 million, or 1.4 percent, to $8.0 billion at March 31, 2026 compared to December 31, 2025. The commercial loan portfolio decreased $79.0 million and the consumer loan portfolio decreased $33.6 million compared to December 31, 2025. The decline in loans related to lower fundings, reduced utilization and higher commercial real estate loan payoffs.

Securities increased $21.9 million to $1.0 billion at March 31, 2026 compared to December 31, 2025. The increase in the debt securities portfolio was primarily due to purchases offset by an increase in unrealized losses as a result of higher interest rates. The securities portfolio was in a net unrealized loss position of $42.7 million at March 31, 2026 compared to a net unrealized loss position of $34.9 million at December 31, 2025.

Total deposits increased $226.4 million, or 2.8 percent, to $8.2 billion at March 31, 2026 compared to $8.0 billion at December 31, 2025. Customer deposits increased $306.5 million, or 3.9 percent, to $8.1 billion at March 31, 2026 compared to $7.8 billion at December 31, 2025 driven by broad-based growth across all lines of business and nearly all deposit product categories. The increase in customer deposits allowed for a reduction in brokered deposits which decreased $80.1 million to $100.3 million at March 31, 2026 compared to $180.4 million at December 31, 2025.

Total borrowings decreased $115.0 million to $150.3 million at March 31, 2026 compared to $265.3 million at December 31, 2025 due to strong customer deposit growth.

Total shareholders’ equity decreased by $33.2 million to $1.4 billion at March 31, 2026 compared to December 31, 2025. The decrease was primarily due to repurchases of S&T common stock of $50.2 million which includes excise tax and commissions of $0.6 million, other comprehensive loss of $5.8 million and dividends of $13.4 million offset by net income of $35.1 million. During the first quarter of 2026, 1,146,100 common shares were repurchased at an average price of $43.30 per share.

Securities Activity

The following table summarizes our securities portfolio at the dates presented:

(dollars in thousands)

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 $21.9 million to $1.0 billion at March 31, 2026 compared to December 31, 2025. The increase in the debt securities portfolio was primarily related to purchases offset by an increase in unrealized losses of $7.8 million at March 31, 2026 compared to December 31, 2025 as a result of higher interest rates. Our debt securities portfolio was in a net unrealized loss position of $42.7 million at March 31, 2026 compared to a net unrealized loss position of $34.9 million at December 31, 2025. At March 31, 2026, our debt securities portfolio had gross unrealized losses of $46.3 million offset by $3.6 million of gross unrealized gains compared to gross unrealized losses of $42.4 million offset by gross unrealized gains of $7.5 million at December 31, 2025.

Loan Composition

The following table summarizes our loan portfolio at the dates presented:

(dollars in thousands)

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 $8.0 billion at March 31, 2026 compared to $8.1 billion at December 31, 2025. The decline in commercial loans related to reduced utilization rates and higher commercial real estate loan payoffs. Additionally, we experienced increased competition in pricing and loan structure which contributed to lower-than-anticipated new fundings for the three months ended March 31, 2026.

Commercial loans, including CRE, C&I and commercial construction comprised 68.4 percent of total portfolio loans at March 31, 2026 compared to 68.5 percent at December 31, 2025. The commercial loan portfolio decreased $79.0 million at March 31, 2026 compared to December 31, 2025 due to decreases of $94.7 million in CRE and $8.3 million in C&I offset by an increase of $23.9 million in commercial construction.

Consumer loans represent 31.6 percent of our total portfolio loans at March 31, 2026 compared to 31.5 percent at December 31, 2025. The consumer loan portfolio decreased $33.6 million at March 31, 2026 compared to December 31, 2025 due to decreases of $26.2 million in consumer real estate and $7.3 million in other consumer loans. At both March 31, 2026 and December 31, 2025, 23 percent of our total loans were adjustable rate, 37 percent were floating rate and 40 percent were fixed rate.

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)

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

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

The ACL increased $0.1 million to $93.3 million, or 1.17 percent of total portfolio loans, at March 31, 2026 compared to $93.2 million, or 1.15 percent of total portfolio loans, at December 31, 2025. The increase in the ACL and ACL as a percentage of total portfolio loans was primarily due to an increase of $1.0 million in specific reserves for loans individually evaluated and higher special mention loans which was partially offset by lower substandard and total loan balances.

Substandard loans decreased $10.5 million to $114.6 million at March 31, 2026 compared to $125.1 million at December 31, 2025. The decrease in the amount of substandard loans was primarily due to loan paydowns. Special mention loans increased $57.8 million to $126.8 million at March 31, 2026 compared to $69.0 million at December 31, 2025. The increase in special mention loans was related to downgrades of three C&I relationships and one CRE relationship.

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

(dollars in thousands)

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 $5.7 million to $49.9 million at March 31, 2026 compared to $55.6 million at December 31, 2025. The decrease in nonaccrual loans was primarily due to paydowns in the C&I portfolio.

Deposits

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

(dollars in thousands)

Total deposits increased $226.4 million, or 2.8 percent, at March 31, 2026 compared to December 31, 2025 as a result of our continued focus on growing our deposit franchise. Customer deposits increased $306.5 million, or 3.9 percent, compared to December 31, 2025, driven by broad-based growth across all lines of business and nearly all product categories. While most of this increase reflects growth in our customer deposit base, a portion relates to seasonality and temporary inflows that are not expected to remain. Growth in customer deposits also enabled a reduction in brokered deposits, which decreased $80.1 million from December 31, 2025. 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 $330.4 million at March 31, 2026 compared to $317.3 million at December 31, 2025.

We had total uninsured deposits of $2.9 billion, or 35.8 percent of our total deposit base, at March 31, 2026 compared to $2.7 billion, or 33.7 percent of our total deposit base, at December 31, 2025.

Borrowings

Borrowings are an additional source of funding for us. Short-term borrowings are for terms under or equal to one year 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 $115.0 to $150.3 million at March 31, 2026 compared to $265.3 million at December 31, 2025 due to strong customer deposit growth and lower loan balances.

The following table presents the composition of total borrowings at the dates presented:

(dollars in thousands)

Information pertaining to short-term borrowings is summarized in the table below for the three months ended March 31, 2026 and for the twelve months ended December 31, 2025:

(dollars in thousands)

36

Information for long-term borrowings and junior subordinated debt securities is summarized in the tables below for the three months ended March 31, 2026 and for the twelve months ended December 31, 2025:

(dollars in thousands)

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 at March 31, 2026 - 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 us include borrowing availability at the FHLB, Federal Reserve Discount Window through the Borrower-in-Custody Program, federal funds lines with other financial institutions and the brokered deposit market.

Available borrowing capacity exceeds uninsured deposits of $2.9 billion at March 31, 2026. The following table summarizes funding sources available at the dates presented:

(dollars in thousands)

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 2025 Form 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. There have been no material changes to the contractual obligations previously disclosed in our 2025 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, 2026, S&T Bank had $1.0 billion in highly liquid assets which consisted primarily of $276.0 million in interest-bearing deposits with banks and $763.0 million in unpledged securities. This resulted in a highly liquid assets to total assets ratio of 10.5 percent at March 31, 2026.

We continue to maintain a strong capital position with our capital ratios in excess of the well-capitalized regulatory guidelines. The following table summarizes capital amounts and ratios for S&T and S&T Bank at the dates presented:

(dollars in thousands)

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, 2026.

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:

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 show more improvement in the percentage change in pretax net interest income in the 1-12 month rates up scenarios when comparing March 31, 2026 to December 31, 2025 primarily because of temporary increased cash levels which were used to reduce wholesale funding. The remaining impact is due to increased floating rate loans and upcoming maturities within our receive-fixed balance sheet swap portfolio. The percentage change in pretax net interest income in the 1-12 month rates down scenarios remain relatively unchanged when comparing March 31, 2026 to December 31, 2025. Our rate shock analyses remain relatively unchanged in the percentage change in pretax net interest income in the 13-24 month scenarios when comparing March 31, 2026 to December 31, 2025. Our EVE analyses remain relatively unchanged in the

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, 2026. 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, 2026, 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

There have been no material changes to the risk factors that we have previously disclosed in Part I, Item 1A – “Risk Factors” in our 2025 Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 27, 2026.