UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

FORM 10-Q

______________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2023~~2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-12508

______________________________________

S&T BANCORP INC.

(Exact name of registrant as specified in its charter)

______________________________________

Pennsylvania

25-1434426

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

800 Philadelphia Street

Indiana

15701

(Address of principal executive offices)

(zip code)

800-325-2265

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $2.50 par value	STBA	~~The~~ NASDAQ ~~Stock~~Global Select Market ~~LLC~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Common Stock, $2.50 Par Value - ~~38,967,075~~38,235,882 shares as of April ~~28, 2023~~30, 2024

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

~~INDEX~~

~~S&T BANCORP, INC. AND SUBSIDIARIES~~

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


		March 31, 2023			December 31, 2022

		March 31, 2024

		March 31, 2024

		March 31, 2024								December 31, 2023
(in thousands, except share and per share data)	(in thousands, except share and per share data)	(Unaudited)			(Audited)			(in thousands, except share and per share data)	(Unaudited)	(Audited)
ASSETS	ASSETS
Cash and due from banks, including interest-bearing deposits of $151,209 and $138,149 at March 31, 2023 and December 31, 2022			$	244,152		$	210,009
Securities, at fair value			998,708			1,002,778
Cash and due from banks, including interest-bearing deposits of $143,927 and $160,802 at March 31, 2024 and December 31, 2023
Cash and due from banks, including interest-bearing deposits of $143,927 and $160,802 at March 31, 2024 and December 31, 2023
Cash and due from banks, including interest-bearing deposits of $143,927 and $160,802 at March 31, 2024 and December 31, 2023
Securities available for sale, at fair value
Loans held for sale	Loans held for sale		81			16
Portfolio loans, net of unearned income	Portfolio loans, net of unearned income		7,251,064			7,183,969
Allowance for credit losses	Allowance for credit losses		(108,113)			(101,340)
Portfolio loans, net	Portfolio loans, net		7,142,951			7,082,629
Bank owned life insurance	Bank owned life insurance		85,476			85,185
Premises and equipment, net	Premises and equipment, net		49,126			49,285
Federal Home Loan Bank and other restricted stock, at cost	Federal Home Loan Bank and other restricted stock, at cost		30,262			23,035
Goodwill	Goodwill		373,424			373,424
Other intangible assets, net			5,039			5,378

Other assets
Other assets
Other assets	Other assets		264,223			278,828
Total Assets	Total Assets		$	9,193,442		$	9,110,567
LIABILITIES	LIABILITIES
Deposits:	Deposits:
Deposits:
Deposits:
Noninterest-bearing demand
Noninterest-bearing demand
Noninterest-bearing demand	Noninterest-bearing demand		$	2,468,638		$	2,588,692
Interest-bearing demand	Interest-bearing demand		841,130			846,653
Money market	Money market		1,599,814			1,731,521
Savings	Savings		1,068,274			1,118,511
Certificates of deposit	Certificates of deposit		1,175,238			934,593

Total Deposits	Total Deposits		7,153,094			7,219,970

Short-term borrowings
Short-term borrowings
Short-term borrowings	Short-term borrowings		495,000			370,000
Long-term borrowings	Long-term borrowings		14,628			14,741
Junior subordinated debt securities	Junior subordinated debt securities		54,468			54,453

Other liabilities	Other liabilities		248,457			266,744
Other liabilities
Other liabilities
Total Liabilities	Total Liabilities		7,965,647			7,925,908
SHAREHOLDERS’ EQUITY	SHAREHOLDERS’ EQUITY
Common stock ($2.50 par value) Authorized—50,000,000 shares Issued—41,449,444 shares at March 31, 2023 and December 31, 2022 Outstanding—38,998,156 shares at March 31, 2023 and 38,999,733 shares at December 31, 2022			103,623			103,623
Common stock ($2.50 par value) Authorized—50,000,000 shares Issued—41,449,444 shares at March 31, 2024 and December 31, 2023 Outstanding—38,233,280 shares at March 31, 2024 and 38,232,806 shares at December 31, 2023
Common stock ($2.50 par value) Authorized—50,000,000 shares Issued—41,449,444 shares at March 31, 2024 and December 31, 2023 Outstanding—38,233,280 shares at March 31, 2024 and 38,232,806 shares at December 31, 2023
Common stock ($2.50 par value) Authorized—50,000,000 shares Issued—41,449,444 shares at March 31, 2024 and December 31, 2023 Outstanding—38,233,280 shares at March 31, 2024 and 38,232,806 shares at December 31, 2023
Additional paid-in capital	Additional paid-in capital		407,113			406,283
Retained earnings	Retained earnings		890,840			863,948
Accumulated other comprehensive loss	Accumulated other comprehensive loss		(96,658)			(112,125)
Treasury stock — 2,451,288 shares at March 31, 2023 and 2,449,711 shares at December 31, 2022, at cost			(77,123)			(77,070)
Treasury stock — 3,216,164 shares at March 31, 2024 and 3,216,638 shares at December 31, 2023, at cost
Total Shareholders’ Equity	Total Shareholders’ Equity		1,227,795			1,184,659
Total Liabilities and Shareholders’ Equity	Total Liabilities and Shareholders’ Equity		$	9,193,442		$	9,110,567

See Notes to Consolidated Financial Statements

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS)~~

(Unaudited)

Three Months Ended March 31,

(dollars in thousands, except per share data)

2023

2022

INTEREST AND DIVIDEND INCOME

Loans, including fees

102,724

64,593

Investment Securities:

Taxable

7,457

4,936

Tax-exempt

214

482

Tax-exempt

Dividends

508

Total Interest and Dividend Income

110,903

70,109

Total Interest and Dividend Income

INTEREST EXPENSE

Deposits

14,903

1,853

Deposits

Borrowings, junior subordinated debt securities and other

7,209

523

Total Interest Expense

22,112

2,376

Total Interest Expense

NET INTEREST INCOME

88,791

67,733

Provision for credit losses

922

(512)

Provision for credit losses

Net Interest Income After Provision for Credit Losses

87,869

68,245

Net Interest Income After Provision for Credit Losses

NONINTEREST INCOME

Debit and credit card

4,373

5,063

Debit and credit card

Service charges on deposit accounts

4,076

3,974

Wealth management

2,948

3,242

Wealth management

Mortgage banking

301

1,015

Mortgage banking

Other

1,492

1,932

Total Noninterest Income

13,190

15,226

Total Noninterest Income

NONINTEREST EXPENSE

Salaries and employee benefits

27,601

23,712

Salaries and employee benefits

Data processing and information technology

4,258

4,435

Occupancy

3,835

3,882

Occupancy

Furniture, equipment and software

2,861

2,777

Marketing

1,853

1,361

Marketing

Other taxes

Professional services and legal

1,821

1,949

Other taxes

1,790

1,537

Professional services and legal

FDIC insurance

1,012

937

FDIC insurance

Other

6,668

6,824

Total Noninterest Expense

51,699

47,414

Total Noninterest Expense

Income Before Taxes

49,360

36,057

Income tax expense

9,561

6,914

Income tax expense

Net Income

39,799

29,143

Earnings per share—basic

1.02

0.74

Earnings per share—basic

Earnings per share—diluted

1.02

0.74

Dividends declared per share

0.32

0.29

Comprehensive Income (Loss)

55,266

(10,810)

Dividends declared per share

Comprehensive Income

See Notes to Consolidated Financial Statements

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited)


		Three months ended March 31, 2022
(dollars in thousands, except share and per share data)		Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total
Balance at January 1, 2022			$	103,623		$	403,095		$	773,659		$	(7,090)		$	(66,833)		$	1,206,454
Net income for the three months ended March 31, 2022			—			—			29,143			—			—			29,143
Other comprehensive loss, net of tax			—			—			—			(39,953)			—			(39,953)

Cash dividends declared ($0.29 per share)			—			—			(11,384)			—			—			(11,384)
Treasury stock issued for restricted stock awards (4,250 shares)						—			(135)			—			135			—
Forfeitures of restricted stock awards (3,756 shares)			—			—			62			—			(118)			(56)

Recognition of restricted stock compensation expense			—			746			—			—			—			746
Balance at March 31, 2022			$	103,623		$	403,841		$	791,345		$	(47,043)		$	(66,816)		$	1,184,950
See Notes to Consolidated Financial Statements

		Three months ended March 31, 2023
		Three Months Ended March 31, 2023
		Three Months Ended March 31, 2023
		Three Months Ended March 31, 2023
(dollars in thousands, except share and per share data)	(dollars in thousands, except share and per share data)	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total			(dollars in thousands, except share and per share data)	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Total
Balance at January 1, 2023	Balance at January 1, 2023		$	103,623		$	406,283		$	863,948		$	(112,125)		$	(77,070)		$	1,184,659
Net Income for the three months ended March 31, 2023			—			—			39,799			—			—			39,799
Net income for the three months ended March 31, 2023
Other comprehensive income, net of tax	Other comprehensive income, net of tax		—			—			—			15,467			—			15,467
Impact of adoption of ASU 2022-02	Impact of adoption of ASU 2022-02		—			—			(447)			—			—			(447)
Cash dividends declared ($0.32 per share)	Cash dividends declared ($0.32 per share)		—			—			(12,494)			—			—			(12,494)

Forfeitures of restricted stock awards (1,577 shares)	Forfeitures of restricted stock awards (1,577 shares)		—			—			34			—			(53)			(19)
Forfeitures of restricted stock awards (1,577 shares)
Forfeitures of restricted stock awards (1,577 shares)

Recognition of restricted stock compensation expense	Recognition of restricted stock compensation expense		—			830			—			—			—			830

Recognition of restricted stock compensation expense

Recognition of restricted stock compensation expense

Balance at March 31, 2023

Balance at March 31, 2023

Balance at March 31, 2023	Balance at March 31, 2023		$	103,623		$	407,113		$	890,840		$	(96,658)		$	(77,123)		$	1,227,795
See Notes to Consolidated Financial Statements	See Notes to Consolidated Financial Statements

		Three months ended March 31, 2024

		Three months ended March 31, 2024

		Three months ended March 31, 2024
(dollars in thousands, except share and per share data)																				(dollars in thousands, except share and per share data)	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Total
Balance at January 1, 2024
Net Income for the three months ended March 31, 2024
Other comprehensive loss, net of tax
Impact of adoption of ASU 2023-02
Cash dividends declared ($0.33 per share)
Treasury stock issued for restricted stock awards (2,062 shares)
Forfeitures of restricted stock awards (1,588 shares)

Recognition of restricted stock compensation expense

Recognition of restricted stock compensation expense

Recognition of restricted stock compensation expense

Balance at March 31, 2024

Balance at March 31, 2024

Balance at March 31, 2024
See Notes to Consolidated Financial Statements

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three months ended March 31,

(dollars in thousands)

2023

2022

(dollars in thousands)

OPERATING ACTIVITIES

Net Cash Provided by Operating Activities

41,904

86,596

INVESTING ACTIVITIES

Purchases of securities

(11,226)

(211,265)

Proceeds from maturities, prepayments and calls of securities

28,140

44,025

Proceeds from maturities, prepayments and calls of securities

Proceeds from sales of securities

Proceeds from redemption of Federal Home Loan Bank stock

15,174

5,818

Purchases of Federal Home Loan Bank stock

(22,401)

(5,648)

Net (increase) decrease in loans

(63,646)

38,449

Redemption (purchases) of Federal Home Loan Bank stock

Net increase in loans

Proceeds from sale of portfolio loans

1,947

—

Proceeds from sale of other real estate owned

—

6,285

Proceeds from sale of portfolio loans

Purchases of premises and equipment

(1,439)

(660)

Proceeds from the sale of premises and equipment

Proceeds from life insurance settlement

Net payments from cash flow hedge

Net Cash Used in Investing Activities

(53,394)

(122,940)

FINANCING ACTIVITIES

Net (decrease) increase in core deposits

(307,521)

13,419

Net increase (decrease) in certificates of deposit

240,664

(49,465)

FINANCING ACTIVITIES

Net decrease in demand, money market and savings deposits

Net increase in certificates of deposit

Net (decrease) increase in short-term borrowings

Net increase (decrease) in short-term borrowings

125,000

(14,379)

Repayments on long-term borrowings

(113)

(259)

Repurchase of shares for taxes on restricted stock

(19)

(56)

Repurchase of shares for taxes on restricted stock

Cash dividends paid to common shareholders

(12,378)

(11,374)

Net Cash Provided by (Used in) Financing Activities

45,633

(62,114)

Net increase (decrease) in cash and cash equivalents

34,143

(98,458)

Cash and cash equivalents at beginning of period

210,009

922,215

Cash and Cash Equivalents at End of Period

244,152

823,757

Net Cash (Used in) Provided by Financing Activities

Net (decrease) increase in cash and due from banks

Cash and due from banks at beginning of period

Cash and Due From Banks at End of Period

Supplemental Disclosures

Right of use assets obtained in exchange for lease obligations

1,270

—

Right of use assets obtained in exchange for lease obligations

Cash paid for interest

18,095

2,507

Cash paid for interest

Cash paid for income taxes, net of refunds

(7)

Transfers of loans to other real estate owned

—

Transfers of loans to other real estate owned

See Notes to Consolidated Financial Statements

~~See Notes to Consolidated Financial Statements~~

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION

Principles of Consolidation

The interim Consolidated Financial Statements include the accounts of S&T Bancorp, Inc., or S&T, and its wholly owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation. Investments of 20 percent to 50 percent of the outstanding common stock of investees are accounted for using the equity method of accounting.

Basis of Presentation

The accompanying unaudited interim Consolidated Financial Statements of S&T have been prepared in accordance with generally accepted accounting principles, or GAAP, in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, filed with the Securities and Exchange Commission, or SEC, on February ~~24, 2023 (2022~~27, 2024 (2023 Form 10-K). In the opinion of management, the accompanying interim financial information reflects all adjustments, consisting of normal recurring adjustments, necessary to present fairly our financial position and the results of operations for each of the interim periods presented. Results of operations for interim periods are not necessarily indicative of the results of operations that may be expected for a full year or any future period.

Reclassification

Amounts in prior period financial statements and footnotes are reclassified whenever necessary to conform to the current period presentation. Reclassifications had no effect on our results of operations or financial condition.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

Recently Adopted Accounting Standards ~~Updates, or ASU or Updated~~

~~Financial Instruments Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures~~

~~In March 2022, the FASB issued~~ ~~ASU 2022-02~~, Financial Instruments Credit Losses (Topic 326): Troubled Debt Restructuring and Vintage Disclosures. The guidance eliminates the “once a TDR, always a TDR” requirement for loan disclosures and requires disclosures about the performance of modified loans to borrowers experiencing financial difficulty in the 12 months following the modification.

The amendments eliminate the recognition and measurement guidance related to TDRs for creditors that have adopted ASC 326 Financial Instruments - Credit Losses. We adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, on January 1, 2020. ASC 326 requires the recognition of lifetime expected credit losses when a loan is originated or acquired, so the effect of credit losses that occur in loans modified in TDRs is already included in the allowance for credit losses.

ASU 2022-02 requires a creditor to apply the loan refinancing and restructuring guidance in ASC 310-20 (consistent with the accounting for other loan modifications) to determine whether a modification results in a new loan or a continuation of an existing loan. It also requires enhanced disclosures for modifications in the form of interest rate reductions, principal forgiveness, other-than-insignificant payment delays or term extensions (or combinations thereof) of loans made to borrowers experiencing financial difficulty. Disclosures are required regardless of whether a modification of a loan to a borrower experiencing financial difficulty results in a new loan. The objective of the disclosures is to provide information about the type and magnitude of modifications and the degree of their success in mitigating potential credit losses.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, and interim periods therein. We adopted ASU 2022-02, as of January 1, 2023, using a modified retrospective transition approach. Results for reporting periods beginning after January 1, 2023 are presented under ASU 2022-02 while prior period amounts continue to be reported in accordance with previously applicable GAAP. Under the previously applicable accounting guidance, commercial TDRs were individually assessed to determine if a specific reserve was required in the allowance for credit losses, or ACL. The elimination

~~Table of Contents~~

~~S&T BANCORP, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

of TDRs resulted in these loans being included in homogenous pools. The adoption of this ASU resulted in a day one cumulative effective adjustment recorded as an increase to our ACL of $0.6 million, with the offset being recorded as a decrease to retained earnings, net of tax. Refer to Note 5 Loans and Allowance for Credit Losses for additional disclosures related to modifications of loans to borrowers experiencing financial difficulty as well as gross charge-off vintage disclosures.

~~Accounting Standards Updates Issued But Not Yet Adopted~~

Investments Equity Method and Joint Ventures (Topic 323) Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method

In March 2023, the FASB issued ASU 2023-02, Investments Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, or PAM, to allow reporting entities to consistently account for equity investments made primarily for the purpose of receiving income tax credits and other income tax benefits. If certain conditions are met, a reporting entity may elect to account for its tax equity investments by using the ~~proportional amortization method~~PAM regardless of the program from which it receives income tax credits, instead of only using it for low-income-housing tax credit, ~~(“LIHTC”)~~or LIHTC, structures. This amendment also eliminates ~~certain LIHTC-specific guidance aligning~~ the ~~accounting with other equity~~ability to account for LIHTC investments ~~in tax credit structures.~~using the cost method. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. We adopted this ASU, as of January 1, 2024, using a modified retrospective transition approach, which resulted in a $1.0 million cumulative effect adjustment being recorded to retained earnings related to the transition of the cost method to the proportional amortization method on LIHTC partnerships. We also elected to apply PAM to our qualifying historic tax credit, or HTC, equity investments. Results for reporting periods beginning after January 1, 2024 are ~~evaluating~~presented using the PAM, while prior period amounts continue to be reported in accordance with previously applicable GAAP. Under the previously applicable accounting guidance, tax credit investments were accounted for using the cost method. The investment was amortized on a straight-line basis over a maximum of 10 years, which represents the period over which the tax credits will be utilized. The amortization expense was recognized in other noninterest expense and ~~disclosure requirements~~the tax credits offset income tax expense. Under the PAM, the equity investment is amortized in proportion to the income tax credits and other income tax benefits received. The amortization expense and the income tax credits are required to be presented on a net basis in income tax expense on the Condensed Consolidated Statements of ~~ASU 2023-02 and do not expect them~~Comprehensive Income. Refer to ~~have a material effect on our consolidated financial statements.~~Note 7 Tax Credit Equity Investments for additional disclosures.

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recently Issued Accounting Standards Not Yet Adopted

Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to improve disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This update does not change how a public entity identifies its operating segments; however, it does require that an entity that has a single reportable segment provide all the disclosures required by the amendments in this update. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. A public entity should apply the amendments in this update retrospectively to all prior periods presented in the consolidated financial statements. Early adoption is permitted. We currently have one reportable operating segment, Community Banking. This ASU will not impact our consolidated financial statements and will have minimal impact to our disclosures, requiring identification of the chief operating decision maker and the information used to make operating decisions and to allocate resources.

Income Taxes (Topic 740) Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to enhance the transparency and decision usefulness of the disclosures. The amendments in this update address investor requests for more transparency about income tax information through improvements to disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in this update are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual consolidated financial statements that have not yet been issued. This ASU is not expected to have a significant impact on disclosures, and will not impact our consolidated financial statements.

NOTE 2. EARNINGS PER SHARE

Diluted ~~earnings per share~~EPS is calculated using both the two-class and the treasury stock methods with the more dilutive method used to determine diluted ~~earnings per share.~~EPS. The two-class method was used to determine EPS for the three months ended March 31, 2024 and the treasury stock method was used to determined earnings per share for the three months ended March 31, ~~2023 and the two-class method was used to determine earnings per share for the three months ended March 31, 2022.~~ 2023.

The following table reconciles the numerators and denominators of basic and diluted ~~earnings per share~~EPS calculations for the periods presented:

Three months ended March 31,

(in thousands, except share and per share data)

2023

2022

Numerator for Earnings per Share—Basic and Diluted

Net income

39,799

29,143

(in thousands, except share and per share data)

Numerator for Earnings per Share—Basic and Diluted:

Net income—Treasury Stock Method—Basic and Diluted

Less: Income allocated to participating shares

109

Net Income Allocated to Shareholders

39,754

29,034

Less: Income allocated to participating shares

Net Income Allocated to Shareholders—Two-Class Method—Basic and Diluted

Denominator for Earnings per Share—Basic:

Denominator for Earnings per Share—Treasury Stock Method—Basic and Diluted:

Weighted Average Shares Outstanding—Basic

38,865,669

39,073,754

Denominator for Earnings per Share—Treasury Stock Method—Diluted:

Weighted Average Shares Outstanding—Basic

38,865,669

39,073,754

Add: Potentially dilutive shares

166,393

112,268

Add: Potentially dilutive shares

Denominator for Treasury Stock Method—Diluted

39,032,062

39,186,022

Denominator for Earnings per Share—Two Class Method —Diluted:

Denominator for Earnings per Share—Two-Class Method—Basic and Diluted:

Weighted Average Shares Outstanding—Basic

38,865,669

39,073,754

Add: Average participating shares outstanding

108,991

16,179

Add: Average participating shares outstanding

Denominator for Two-Class Method—Diluted

38,974,660

39,089,933

Earnings per share—Basic

1.02

0.74

Earnings per share—basic

Earnings per share—Diluted

1.02

0.74

Earnings per share—basic

Earnings per share—diluted

Restricted stock considered anti-dilutive excluded from potentially dilutive shares

1,133

—

Restricted stock considered anti-dilutive excluded from potentially dilutive shares

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3. FAIR VALUE MEASUREMENTS

We use fair value measurements when recording and disclosing certain financial assets and liabilities. Debt securities, equity securities and derivative financial instruments are recorded at fair value on a recurring basis. Additionally, from time to time, we may be required to record other financial instruments at fair value on a nonrecurring basis, such as loans held for sale, individually assessed loans, other real estate owned, or OREO, and other repossessed assets, mortgage servicing rights, or MSRs, and certain other assets.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants at the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction. In determining fair value, we use various valuation approaches, including market, income and cost approaches. The fair value standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability, which are developed based on market data that we have obtained from independent sources. Unobservable inputs reflect our estimates of assumptions that market participants would use in pricing an asset or liability, which are developed based on the best information available in the circumstances.

The fair value hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The fair value hierarchy is broken down into three levels based on the reliability of inputs as ~~follows:~~follows.

Level 1: valuation is based upon unadjusted quoted market prices for identical instruments traded in active markets.

Level 2: valuation is based upon quoted market prices for similar instruments traded in active markets, quoted market prices for identical or similar instruments traded in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by market data.

~~Table of Contents~~

~~S&T BANCORP, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

Level 3: valuation is derived from other valuation methodologies, including discounted cash flow models and similar techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in determining fair value.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

There have been no changes in our valuation methodologies during the three months ended March 31, ~~2023.~~2024. Refer to Note 1 Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in our ~~2022~~2023 Form 10-K for more information on the valuation methodologies that we use for financial instruments recorded at fair value on a recurring or nonrecurring basis.

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

The following tables present our assets and liabilities that are measured at fair value on a recurring basis by fair value hierarchy level at the dates presented:
March 31, 2023
(dollars in thousands) Level 1 Level 2 Level 3 Total
ASSETS
Available-for-sale debt securities:
U.S. Treasury securities $ 133,704 $ — $ — $ 133,704
Obligations of U.S. government corporations and agencies — 42,095 — 42,095
Collateralized mortgage obligations of U.S. government corporations and agencies — 432,739 — 432,739
Residential mortgage-backed securities of U.S. government corporations and agencies — 41,170 — 41,170
Commercial mortgage-backed securities of U.S. government corporations and agencies — 317,099 — 317,099
Obligations of states and political subdivisions — 30,895 — 30,895
Total Available-for-sale Debt Securities 133,704 863,998 — 997,702
Marketable equity securities 953 53 — 1,006
Total Securities 134,657 864,051 — 998,708
Securities held in a deferred compensation plan 7,790 — — 7,790
Derivative financial assets:
Interest rate swaps - commercial loans — 67,397 — 67,397
Interest rate lock commitments — — 6 6
Total Assets $ 142,447 $ 931,448 $ 6 $ 1,073,901
LIABILITIES
Derivative financial liabilities:
Interest rate swaps - commercial loans $ — $ 67,397 $ — $ 67,397
Interest rate swaps - cash flow hedge — 15,288 — 15,288
Total Liabilities $ — $ 82,685 $ — $ 82,685

~~Table of Contents~~


	March 31, 2024
(dollars in thousands)	Level 1		Level 2		Level 3		Total
ASSETS
Available-for-sale debt securities:
U.S. Treasury securities	$	132,586	$	—	$	—	$	132,586
Obligations of U.S. government corporations and agencies	—		32,593		—		32,593
Collateralized mortgage obligations of U.S. government corporations and agencies	—		467,198		—		467,198
Residential mortgage-backed securities of U.S. government corporations and agencies	—		36,662		—		36,662
Commercial mortgage-backed securities of U.S. government corporations and agencies	—		275,749		—		275,749

Obligations of states and political subdivisions	—		25,005		—		25,005
Total Available-for-Sale Debt Securities	132,586		837,207		—		969,793
Equity securities	935		—		—		935
Total Securities Available for Sale	133,521		837,207		—		970,728
Securities held in a deferred compensation plan	10,257		—		—		10,257
Derivative financial assets:
Interest rate swaps - commercial loans	—		72,093		—		72,093



Total Assets	$	143,778	$	909,300	$	—	$	1,053,078
LIABILITIES
Derivative financial liabilities:
Interest rate swaps - commercial loans	$	—	$	72,578	$	—	$	72,578


Interest rate swaps - cash flow hedge	—		18,404		—		18,404
Total Liabilities	$	—	$	90,982	$	—	$	90,982

~~S&T BANCORP, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~


		December 31, 2022
	December 31, 2023													December 31, 2023
(dollars in thousands)	(dollars in thousands)	Level 1		Level 2		Level 3		Total		(dollars in thousands)	Level 1	Level 2	Level 3		Total
ASSETS	ASSETS
Available-for-sale debt securities:	Available-for-sale debt securities:
Available-for-sale debt securities:
Available-for-sale debt securities:
U.S. Treasury securities
U.S. Treasury securities
U.S. Treasury securities	U.S. Treasury securities	$	131,695	$	—	$	—	$	131,695
Obligations of U.S. government corporations and agencies	Obligations of U.S. government corporations and agencies	—		41,811		—		41,811
Collateralized mortgage obligations of U.S. government corporations and agencies	Collateralized mortgage obligations of U.S. government corporations and agencies	—		428,407		—		428,407
Residential mortgage-backed securities of U.S. government corporations and agencies	Residential mortgage-backed securities of U.S. government corporations and agencies	—		41,587		—		41,587
Commercial mortgage-backed securities of U.S. government corporations and agencies	Commercial mortgage-backed securities of U.S. government corporations and agencies	—		327,313		—		327,313
Corporate obligations		—		500		—		500

Obligations of states and political subdivisions	Obligations of states and political subdivisions	—		30,471		—		30,471
Total Available-for-sale Debt Securities		131,695		870,089		—		1,001,784
Marketable equity securities		952		42		—		994
Total Securities		132,647		870,131		—		1,002,778
Obligations of states and political subdivisions
Obligations of states and political subdivisions
Total Available-for-Sale Debt Securities
Equity securities
Total Securities Available for Sale
Securities held in a deferred compensation plan	Securities held in a deferred compensation plan	8,087		—		—		8,087
Derivative financial assets:	Derivative financial assets:
Interest rate swaps - commercial loans	Interest rate swaps - commercial loans	—		83,449		—		83,449
Interest rate lock commitments		—		—		5		5
Forward sale contracts - mortgage loans		—		—		2		2
Interest rate swaps - commercial loans
Interest rate swaps - commercial loans

Total Assets

Total Assets

Total Assets	Total Assets	$	140,734	$	953,580	$	7	$	1,094,321
LIABILITIES	LIABILITIES
Derivative financial liabilities:	Derivative financial liabilities:
Derivative financial liabilities:
Derivative financial liabilities:
Interest rate swaps - commercial loans
Interest rate swaps - commercial loans
Interest rate swaps - commercial loans	Interest rate swaps - commercial loans	$	—	$	83,449	$	—	$	83,449

Interest rate swaps - cash flow hedge
Interest rate swaps - cash flow hedge
Interest rate swaps - cash flow hedge	Interest rate swaps - cash flow hedge	—		21,368		—		21,368
Total Liabilities	Total Liabilities	$	—	$	104,817	$	—	$	104,817

Assets Recorded at Fair Value on a Nonrecurring Basis

We may be required to measure certain assets and liabilities at fair value on a nonrecurring basis. Nonrecurring assets are recorded at the lower of cost or fair value in our consolidated financial statements. There were no liabilities measured at fair value on a nonrecurring basis at either March 31, ~~2023~~2024 or December 31, ~~2022.~~

2023. There were no Level 3 assets measured at fair value on a nonrecurring basis as of March 31, 2023. Level 3 assets measured at fair value on a nonrecurring basis and the significant unobservable inputs used in the fair value measurements as of December 31, 2022 were as follows:

December 31, 2022 Valuation Technique Significant Unobservable Inputs Range Weighted Average
(dollars in thousands)
Other real estate owned 3,060 Collateral method Discount rate 13.00% 13.00%

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

value on a nonrecurring basis as of March 31, 2024 or December 31, 2023. There was one Level 2 individually assessed loan measured at fair value on a nonrecurring basis for $13.4 million at March 31, 2024 and $5.9 million at December 31, 2023.

Fair Value of Financial Instruments

The following tables present the carrying values and fair values of our financial instruments at the dates presented:


		Carrying Value(1)			Fair Value Measurements at March 31, 2023
	Carrying Value(1)																					Carrying Value(1)		Fair Value Measurements at March 31, 2024
(dollars in thousands)			(dollars in thousands)	Carrying Value(1)			Total				Level 1				Level 2				Level 3		(dollars in thousands)		Total		Level 1	Level 2	Level 3
ASSETS	ASSETS
Cash and due from banks, including interest-bearing deposits	Cash and due from banks, including interest-bearing deposits	$	244,152				$	244,152			$	244,152			$	—			$	—
Securities		998,708			998,708				134,657				864,051
Loans held for sale		81			81				—				81				—
Cash and due from banks, including interest-bearing deposits
Cash and due from banks, including interest-bearing deposits
Securities available for sale

Portfolio loans, net
Portfolio loans, net
Portfolio loans, net	Portfolio loans, net	7,142,951			6,883,297				—				—				6,883,297
Collateral receivable	Collateral receivable	4,901			4,901				4,901				—				—
Securities held in a deferred compensation plan	Securities held in a deferred compensation plan	7,790			7,790				7,790				—				—
Mortgage servicing rights	Mortgage servicing rights	6,935			9,335				—				—				9,335
Interest rate swaps - commercial loans	Interest rate swaps - commercial loans	67,397			67,397				—				67,397				—

Interest rate lock commitments		6			6				—				—				6

LIABILITIES

LIABILITIES

LIABILITIES	LIABILITIES
Deposits	Deposits	$	7,153,094		$	7,132,944			$	5,977,856			$	1,155,088			$	—
Deposits
Deposits
Collateral payable	Collateral payable	55,301			55,301				55,301				—				—

Short-term borrowings
Short-term borrowings
Short-term borrowings	Short-term borrowings	495,000			495,000				—				495,000				—
Long-term borrowings	Long-term borrowings	14,628			14,162				—				14,162				—
Junior subordinated debt securities	Junior subordinated debt securities	54,468			54,468				—				54,468				—
Interest rate swaps - commercial loans	Interest rate swaps - commercial loans	67,397			67,397				—				67,397				—
Interest rate swaps - cash flow hedge	Interest rate swaps - cash flow hedge	15,288			15,288				—				15,288				—

(1) As reported in the Consolidated Balance Sheets	(1) As reported in the Consolidated Balance Sheets

(1) As reported in the Consolidated Balance Sheets

(1) As reported in the Consolidated Balance Sheets


		Carrying Value(1)			Fair Value Measurements at December 31, 2022
	Carrying Value(1)																					Carrying Value(1)		Fair Value Measurements at December 31, 2023
(dollars in thousands)			(dollars in thousands)	Carrying Value(1)			Total				Level 1				Level 2				Level 3		(dollars in thousands)		Total		Level 1	Level 2	Level 3
ASSETS	ASSETS
Cash and due from banks, including interest-bearing deposits	Cash and due from banks, including interest-bearing deposits	$	210,009				$	210,009			$	210,009			$	—			$	—
Securities		1,002,778			1,002,778				132,647				870,131				—
Cash and due from banks, including interest-bearing deposits
Cash and due from banks, including interest-bearing deposits
Securities available for sale
Loans held for sale	Loans held for sale	16			16				—				16				—
Portfolio loans, net	Portfolio loans, net	7,082,629			6,815,167				—				—				6,815,167
Collateral receivable	Collateral receivable	6,307			6,307				6,307				—				—
Securities held in a deferred compensation plan	Securities held in a deferred compensation plan	8,087			8,087				8,087				—				—
Mortgage servicing rights	Mortgage servicing rights	7,147			9,994				—				—				9,994
Interest rate swaps - commercial loans	Interest rate swaps - commercial loans	83,449			83,449				—				83,449				—
Interest rate lock commitments		5			5				—				—				5
Forward sale contracts		2			2				—				—				2

LIABILITIES	LIABILITIES

LIABILITIES

LIABILITIES
Deposits
Deposits
Deposits	Deposits	$	7,219,970		$	7,194,225			$	6,285,377			$	908,848			$	—
Collateral payable	Collateral payable	65,065			65,065				65,065				—				—

Short-term borrowings
Short-term borrowings
Short-term borrowings	Short-term borrowings	370,000			370,000				—				370,000				—
Long-term borrowings	Long-term borrowings	14,741			14,174				—				14,174				—
Junior subordinated debt securities	Junior subordinated debt securities	54,453			54,453				—				54,453				—
Interest rate swaps - commercial loans	Interest rate swaps - commercial loans	83,449			83,449				—				83,449				—
Interest rate swaps - cash flow hedge	Interest rate swaps - cash flow hedge	21,368			21,368				—				21,368				—

(1) As reported in the Consolidated Balance Sheets	(1) As reported in the Consolidated Balance Sheets
(1) As reported in the Consolidated Balance Sheets
(1) As reported in the Consolidated Balance Sheets

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4. SECURITIES

The following table presents the fair values of our securities portfolio at the dates presented:

(dollars in thousands) March 31, 2023 December 31, 2022
Available-for-sale debt securities $ 997,702 $ 1,001,784
Marketable equity securities 1,006 994
Total Securities $ 998,708 $ 1,002,778


(dollars in thousands)	March 31, 2024		December 31, 2023
Debt securities	$	969,793	$	969,308
Equity securities		935		1,083
Total Securities Available for Sale	$	970,728	$	970,391

The following tables present the amortized cost and fair value of available-for-sale debt securities as of the dates presented:


		March 31, 2023												December 31, 2022													March 31, 2024				December 31, 2023
(dollars in thousands)	(dollars in thousands)	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value			Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value			(dollars in thousands)	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value		Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
U.S. Treasury securities	U.S. Treasury securities		$	145,139		$	19		$	(11,454)		$	133,704		$	145,416		$	—		$	(13,721)		$	131,695
Obligations of U.S. government corporations and agencies	Obligations of U.S. government corporations and agencies		43,445			—			(1,350)			42,095			43,479			—			(1,668)			41,811
Collateralized mortgage obligations of U.S. government corporations and agencies	Collateralized mortgage obligations of U.S. government corporations and agencies		479,804			309			(47,374)			432,739			482,039			203			(53,835)			428,407
Residential mortgage-backed securities of U.S. government corporations and agencies	Residential mortgage-backed securities of U.S. government corporations and agencies		48,273			5			(7,108)			41,170			49,418			3			(7,834)			41,587
Commercial mortgage-backed securities of U.S. government corporations and agencies	Commercial mortgage-backed securities of U.S. government corporations and agencies		338,646			115			(21,662)			317,099			352,465			—			(25,152)			327,313
Corporate obligations			—			—			—			—			500			—			—			500

Obligations of states and political subdivisions
Obligations of states and political subdivisions
Obligations of states and political subdivisions	Obligations of states and political subdivisions		30,656			239			—			30,895			30,788			55			(372)			30,471
Total Available-for-Sale Debt Securities (1)	Total Available-for-Sale Debt Securities (1)		$	1,085,963		$	687		$	(88,948)		$	997,702		$	1,104,105		$	261		$	(102,582)		$	1,001,784

(1) Excludes interest receivable of ~~$3.3~~$3.4 million at March 31, ~~2023~~2024 and ~~$3.7~~$3.8 million at December 31, ~~2022.~~2023. Interest receivable is included in other assets in the Consolidated Balance Sheets.

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables present the fair value and the age of gross unrealized losses on available-for-sale debt securities by investment category as of the dates presented:


		March 31, 2023
		Less Than 12 Months					12 Months or More					Total
	March 31, 2024																									March 31, 2024
	Less Than 12 Months																			Less Than 12 Months				12 Months or More				Total
(dollars in thousands)	(dollars in thousands)	Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		(dollars in thousands)	Number of Securities	Fair Value		Unrealized Losses	Number of Securities	Fair Value		Unrealized Losses		Number of Securities		Fair Value	Unrealized Losses
U.S. Treasury securities	U.S. Treasury securities	1	$	9,413	$	(112)	12	$	114,151	$	(11,342)	13	$	123,564	$	(11,454)
Obligations of U.S. government corporations and agencies	Obligations of U.S. government corporations and agencies	4	27,382		(618)		2	14,713		(732)		6	42,095		(1,350)
Collateralized mortgage obligations of U.S. government corporations and agencies	Collateralized mortgage obligations of U.S. government corporations and agencies	16	130,667		(3,867)		43	283,266		(43,507)		59	413,933		(47,374)
Residential mortgage-backed securities of U.S. government corporations and agencies	Residential mortgage-backed securities of U.S. government corporations and agencies	3	1,487		(69)		12	39,280		(7,039)		15	40,767		(7,108)
Commercial mortgage-backed securities of U.S. government corporations and agencies	Commercial mortgage-backed securities of U.S. government corporations and agencies	9	63,174		(1,607)		25	243,481		(20,055)		34	306,655		(21,662)
Obligations of states and political subdivisions	Obligations of states and political subdivisions	—	—		—		—	—		—		—	—		—

Total	Total	33	$	232,123	$	(6,273)	94	$	694,891	$	(82,675)	127	$	927,014	$	(88,948)

Total

Total


		December 31, 2022
		Less Than 12 Months					12 Months or More					Total
	December 31, 2023																									December 31, 2023
	Less Than 12 Months																			Less Than 12 Months				12 Months or More				Total
(dollars in thousands)	(dollars in thousands)	Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		(dollars in thousands)	Number of Securities	Fair Value		Unrealized Losses	Number of Securities	Fair Value		Unrealized Losses		Number of Securities		Fair Value	Unrealized Losses
U.S. Treasury securities	U.S. Treasury securities	6	$	57,057	$	(3,363)	8	$	74,638	$	(10,358)	14	$	131,695	$	(13,721)
Obligations of U.S. government corporations and agencies	Obligations of U.S. government corporations and agencies	6	41,811		(1,668)		—	—		—		6	41,811		(1,668)
Collateralized mortgage obligations of U.S. government corporations and agencies	Collateralized mortgage obligations of U.S. government corporations and agencies	47	296,509		(28,153)		13	112,902		(25,682)		60	409,411		(53,835)
Residential mortgage-backed securities of U.S. government corporations and agencies	Residential mortgage-backed securities of U.S. government corporations and agencies	25	7,143		(589)		3	34,223		(7,245)		28	41,366		(7,834)
Commercial mortgage-backed securities of U.S. government corporations and agencies	Commercial mortgage-backed securities of U.S. government corporations and agencies	30	241,009		(11,975)		7	86,304		(13,177)		37	327,313		(25,152)
Obligations of states and political subdivisions		2	20,127		(372)		—	—		—		2	20,127		(372)

Total	Total	116	$	663,656	$	(46,120)	31	$	308,067	$	(56,462)	147	$	971,723	$	(102,582)

Total

Total

We evaluate securities with unrealized losses quarterly to determine if the decline in fair value has resulted from credit impairment or other factors. We do not believe any individual unrealized loss as of March 31, ~~2023~~2024 represents a credit impairment. There were ~~127~~143 debt securities in an unrealized loss position at March 31, ~~2023~~2024 and ~~147~~133 debt securities in an unrealized loss position at December 31, ~~2022.~~2023. The unrealized losses on debt securities were ~~primarily~~ attributable to changes in interest rates and not related to the credit quality of the issuers. All debt securities were determined to be investment grade and paying principal and interest according to the contractual terms of the security. We do not intend to sell, and it is more likely than not that we will not be required to sell, the securities in an unrealized loss position before recovery of their amortized cost.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents net unrealized gains and losses, net of tax, on available-for-sale debt securities included in accumulated other comprehensive income (loss), for the periods presented:


		March 31, 2023						December 31, 2022
	March 31, 2024																March 31, 2024				December 31, 2023
(dollars in thousands)	(dollars in thousands)	Gross Unrealized Gains		Gross Unrealized Losses		Net Unrealized Losses		Gross Unrealized Gains		Gross Unrealized Losses		Net Unrealized Losses		(dollars in thousands)	Gross Unrealized Gains	Gross Unrealized Losses		Net Unrealized Losses	Gross Unrealized Gains	Gross Unrealized Losses		Net Unrealized Losses
Total unrealized gains (losses) on available-for-sale debt securities	Total unrealized gains (losses) on available-for-sale debt securities	$	687	$	(88,948)	$	(88,261)	$	261	$	(102,582)	$	(102,321)
Income tax (expense) benefit	Income tax (expense) benefit	(147)		19,005		18,858		(56)		21,915		21,859
Net Unrealized Gains (Losses), Net of Tax Included in Accumulated Other Comprehensive Income (Loss)	Net Unrealized Gains (Losses), Net of Tax Included in Accumulated Other Comprehensive Income (Loss)	$	540	$	(69,943)	$	(69,403)	$	205	$	(80,667)	$	(80,462)

The amortized cost and fair value of available-for-sale debt securities at March 31, ~~2023~~2024 by contractual maturity are included in the table below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

March 31, 2023

March 31, 2024

(dollars in thousands)

Amortized
Cost

Fair Value

(dollars in thousands)

Amortized
Cost

Fair Value

Obligations of the U.S. Treasury, U.S. government corporations and agencies, and obligations of states and political subdivisions

Obligations of the U.S. Treasury, U.S. government corporations and agencies and obligations of states and political subdivisions

Due in one year or less

9,988

9,827

Due after one year through five years

159,631

149,422

Due after five years through ten years

38,147

35,922

Due after ten years

11,474

11,523

Available-for-Sale Debt Securities With Fixed Maturities

219,240

206,694

Debt Securities without a single maturity date

Collateralized mortgage obligations of U.S. government corporations and agencies

479,804

432,739

Collateralized mortgage obligations of U.S. government corporations and agencies

Residential mortgage-backed securities of U.S. government corporations and agencies

48,273

41,170

Commercial mortgage-backed securities of U.S. government corporations and agencies

338,646

317,099

Total Available-for-Sale Debt Securities

1,085,963

997,702

Total Available-for-Sale Debt Securities

Debt securities are pledged in order to meet various regulatory and legal requirements. Restricted pledged securities had a carrying value of ~~$18.3~~$194.4 million at March 31, ~~2023~~2024 and ~~$17.9~~$18.4 million at December 31, ~~2022.~~2023. Unrestricted pledged securities had a carrying value of ~~$212.3~~$207.7 million at March 31, ~~2023~~2024 and ~~$251.5~~$214.0 million at December 31, ~~2022.~~2023. Any changes to restricted pledged securities require approval of the pledge beneficiary. Approval is not required for unrestricted pledged securities.

1413

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5. LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans and Loans Held for Sale

Loans are presented net of unearned income. Unearned income consisted of net deferred loan fees and costs of ~~$7.4~~$5.8 million at March 31, ~~2023~~2024 and ~~$7.5~~$6.6 million at December 31, ~~2022~~2023 and a discount related to purchase accounting fair value adjustments of ~~$4.4~~$2.9 million at March 31, ~~2023~~2024 and ~~$4.7~~$3.1 million at December 31, ~~2022.~~2023.

The following table summarizes the composition of originated and acquired loans as of the dates presented:


(dollars in thousands)	(dollars in thousands)	March 31, 2023		December 31, 2022		(dollars in thousands)	March 31, 2024	December 31, 2023
Commercial real estate	Commercial real estate	$	2,523,434	$	2,538,839
Commercial and industrial	Commercial and industrial	1,493,519		1,510,392
Commercial construction	Commercial construction	376,855		381,963
Business banking	Business banking	1,261,842		1,205,944
Consumer real estate	Consumer real estate	1,475,575		1,421,953
Other consumer	Other consumer	119,839		124,878
Total Portfolio Loans	Total Portfolio Loans	$	7,251,064	$	7,183,969
Loans held for sale	Loans held for sale	81		16
Total Loans (1)	Total Loans (1)	$	7,251,145	$	7,183,985

(1) Excludes interest receivable of ~~$29.7~~$36.1 million at March 31, ~~2023~~2024 and ~~$28.3~~$35.3 million at December 31, ~~2022.~~2023. Interest receivable is included in other assets in the Consolidated Balance Sheets.

Modifications to Borrowers Experiencing Financial Difficulty

The following ~~table presents~~tables present the amortized cost of loans to borrowers experiencing financial difficulty by portfolio segment and type of modification during the ~~period~~periods presented:














	Three Months Ended March 31, 2024
(dollars in thousands)	Term Extension		Term Extension and Interest Rate Reduction		Total		% of Portfolio Segment
Commercial real estate	$	833	$	—	$	833	0.03	%





Total	$	833	$	—	$	833	0.01	%

Three Months Ended March 31, 2023
(dollars in thousands) Term Extension Term Extension and Interest Rate Reduction Total % of Portfolio Segment
Commercial real estate $ 15,849 $ — $ 15,849 0.63 %
Commercial industrial 594 — 594 0.04 %
Consumer real estate 63 196 259 0.02 %
Total(1)
$ 16,506 $ 196 $ 16,702 0.23 %
(1) Excludes loans that were fully paid off or fully charged-off by period end.














	Three Months Ended March 31, 2023
(dollars in thousands)	Term Extension		Term Extension and Interest Rate Reduction		Total		% of Portfolio Segment
Commercial real estate	$	15,849	$	—	$	15,849	0.63	%
Commercial and industrial	594		—		594		0.04	%


Consumer real estate	63		196		259		0.02	%

Total	$	16,506	$	196	$	16,702	0.23	%

The following ~~table describes~~tables describe the effect of loan modifications made to borrowers experiencing financial difficulty during the ~~period~~periods presented:

Three Months Ended March 31, 2023
Weighted-Average Term Extension (in Months) Weighted-Average Interest Rate Reduction
Commercial real estate 6 —
Commercial industrial 72 —
Consumer real estate 168 2%

Three Months Ended March 31, 2024

Weighted-Average Term Extension (in months)

Weighted-Average Interest Rate Reduction

Commercial real estate

—



	Three Months Ended March 31, 2023
		Weighted-Average Term Extension (in months)	Weighted-Average Interest Rate Reduction
Commercial real estate			6	—
Commercial and industrial			72	—


Consumer real estate			168	2%

1514

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We closely monitor the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of the modification efforts.

The following ~~table presents~~tables present the aging analysis of modifications to borrowers experiencing financial difficulty in the last 12 months as of the date presented:


		March 31, 2023
	March 31, 2024																		March 31, 2024
(dollars in thousands)	(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Nonaccrual		Total		(dollars in thousands)	Current	30-59 Days Past Due	60-89 Days Past Due	90+ Days Past Due		Total
Commercial real estate	Commercial real estate	$	15,849	$	—	$	—	$	—	$	—	$	15,849
Commercial and industrial	Commercial and industrial	594		—		—		—		—		594

Business banking
Business banking
Business banking

Consumer real estate		196		—		—		—		63		259

Total	Total	$	16,639	$	—	$	—	$	—	$	63	$	16,702

Total

Total


	March 31, 2023
(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total
Commercial real estate	$	15,849	$	—	$	—	$	—	$	15,849
Commercial and industrial	594		—		—		—		594


Consumer real estate	259		—		—		—		259

Total	$	16,702	$	—	$	—	$	—	$	16,702

A payment default is defined as a loan having a payment past due 90 days or more. There were no ~~loans that had a~~ payment ~~default~~defaults during the three months ended March 31, 2024 and March 31, 2023 related to loans that were modified inwithin the 12 months ~~before default~~prior to ~~borrowers experiencing financial difficulty.~~default. Additionally, we had nothree commitments to lend an additional ~~funds~~$0.5 million to borrowers experiencing financial difficulty that had a modification during the three months ended March 31, 2024 and three commitments to lend an additional $1.6 million to borrowers experiencing financial difficulty that had a modification during 2023.

The effect of modifications made to borrowers experiencing financial difficulty is already included in the ACL because of the measurement methodologies used to estimate the ACL, therefore, a change to the ACL is generally not recorded upon modification. If principal forgiveness is provided, that portion of the loan will be charged-off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the ACL. An assessment of whether the borrower is experiencing financial difficulty is made on the date of a modification.

~~Troubled Debt Restructurings~~

Prior to the adoption of ASU 2022-02, we evaluated all substandard commercial and consumer loans that had experienced a forbearance or modification of existing terms to determine if they should be designated as troubled debt restructurings, or TDRs.

TDRs returned to accruing status if the ultimate collectability of all contractual amounts due, according to the restructured agreement, was not in doubt and there was a period of a minimum of six months of satisfactory payment performance by the borrower either immediately before or after the restructuring. There was one $0.2 million TDR returned to accruing status during 2022.

~~The following tables summarize TDRs as of the dates presented:~~
December 31, 2022
(dollars in thousands) Accruing
TDRs Nonaccruing
TDRs Total
TDRs
Commercial real estate $ — $ — $ —
Commercial and industrial 626 — 626
Commercial construction 1,655 — 1,655
Business banking 438 1,087 1,525
Consumer real estate 6,168 1,798 7,966
Other consumer 4 9 13
Total $ 8,891 $ 2,894 $ 11,785

~~Table of Contents~~

~~S&T BANCORP, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~The following tables present the TDRs by portfolio segment and type of concession for the period presented:~~
Three Months Ended March 31, 2022
Number
of
Contracts Type of Modification
Total
Post-Modification Outstanding Recorded Investment(2)
Total
Pre-Modification Outstanding Recorded Investment(2)
(dollars in thousands)
Bankruptcy(1)
Other Extend
Maturity Modify
Rate Modify
Payments
Commercial real estate — $ — $ — $ — $ — $ — $ — $ —
Commercial industrial — — — — — — — —
Commercial construction — — — — — — — —
Business banking — — — — — — — —
Consumer real estate 7 766 — 1,112 — — 1,878 1,928
Other consumer — — — — — — — —
Total 7 $ 766 $ — $ 1,112 $ — $ — $ 1,878 $ 1,928
(1) Bankruptcy is consumer bankruptcy loans where the debt has been legally discharged through the bankruptcy court and not reaffirmed.
(2) Excludes loans that were fully paid off or fully charged-off by period end. The pre-modification balance represents the balance outstanding prior to modification. The post-modification balance represents the outstanding balance at period end.

~~As of December 31, 2022, we had 16 commitments to lend an additional $0.4 million on TDRs.~~

Defaulted TDRs were defined as loans having a payment default of 90 days or more after the restructuring took place that were restructured within the last 12 months prior to defaulting. There were no TDRs that defaulted during 2022.

The following table is a summary of nonperforming assets as of the dates presented:

Nonperforming Assets

(dollars in thousands)

March 31, 2023

December 31, 2022

(dollars in thousands)

March 31, 2024

December 31, 2023

Nonperforming Assets

Nonaccrual Loans

24,644

19,052

Nonaccrual Loans

OREO

3,076

3,065

Total Nonperforming Assets

27,720

22,117

Allowance for Credit Losses

We maintain an Allowance for Credit Losses, or 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) ~~Commercial Real Estate, or~~ CRE, 2) ~~Commercial and Industrial, or~~ C&I, 3) Commercial Construction, 4) Business Banking, 5) Consumer Real Estate and 6) Other Consumer.

The following are key risks within each portfolio segment:

CRE—Loans secured by commercial purpose real estate, including both owner-occupied properties and investment properties for various purposes such as hotels, retail, multifamily and health care. Operations of the individual projects and global cash flows of the debtors are the primary sources of repayment for these loans. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and the business prospects of the lessee, if the project is not owner-occupied.

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

C&I—Loans made to operating companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. Cash flow from the operations of the company is the primary source of repayment for these loans. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the industry of the company. Collateral for these types of loans often does not have sufficient value in a distressed or liquidation scenario to satisfy the outstanding debt.

Commercial Construction—Loans made to finance construction of buildings or other structures, as well as to finance the acquisition and development of raw land for various purposes. While ~~the risk of~~ these loans isare generally confined to the construction/development period, if there are problems, the project may not be completed, and as such, may not provide sufficient cash flow on its own to service the debt or have sufficient value in a liquidation to cover the outstanding principal. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the type of project and the experience and resources of the developer.

~~Table of Contents~~

~~S&T BANCORP, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

Business Banking—Commercial purpose loans made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards that meet small business market customers’ needs. The business banking portfolio is monitored by utilizing a standard and closely managed process focusing on behavioral and performance criteria. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and business.

Consumer Real Estate—Loans secured by first and second liens such as 1-4 family residential mortgages, home equity loans and home equity lines of ~~credit and 1-4 family residential mortgages.~~credit. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the local economy, in particular the unemployment rate, is an important indicator of risk for this segment. The state of the local housing market can also have a significant impact on this segment because low demand and/or declining home values can limit the ability of borrowers to sell a property and satisfy the debt.

Other Consumer—Loans made to individuals that may be secured by assets other than 1-4 family residences, as well as unsecured loans. This segment includes auto loans, ~~and~~ unsecured loans and lines of credit. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the local economy, in particular the unemployment rate, is an important indicator of risk for this segment. The value of the collateral, if there is any, is less likely to be a source of repayment due to less certain collateral values.

Management monitors various credit quality indicators for the commercial, business banking and consumer loan portfolios, including changes in risk ratings, nonperforming status and delinquency on a monthly basis.

We monitor the commercial loan portfolio through an internal risk rating system. Loan risk ratings are assigned based upon the creditworthiness of the borrower and are reviewed on an ongoing basis according to our internal policies. Loans within the pass rating generally have a lower risk of loss than loans risk rated as special mention or substandard.

Our risk ratings are consistent with regulatory guidance and are as follows:

Pass—The loan is currently performing and is of high quality.

Special Mention—A special mention loan has potential weaknesses that warrant management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects or in the strength of our credit position at some future date.

Substandard—A substandard loan is not adequately protected by the net worth and/or paying capacity of the borrower or by the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. These loans are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.

Doubtful—Loans classified doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable.

The following tables present loan balances by year of origination and internally assigned risk rating for our portfolio segments as of the dates presented:

1816

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


		March 31, 2023
		Risk Rating
	March 31, 2024																													March 31, 2024
	Risk Rating																													Risk Rating
(dollars in thousands)	(dollars in thousands)	2023		2022		2021		2020		2019		2018 and Prior		Revolving		Revolving-Term		Total		(dollars in thousands)	2024	2023	2022	2021	2020	2019 and Prior	Revolving	Revolving-Term	Total

Commercial Real Estate	Commercial Real Estate
Commercial Real Estate
Commercial Real Estate
Pass
Pass
Pass	Pass	$	59,710	$	264,611	$	379,447	$	258,879	$	409,858	$	873,354	$	21,283	$	—	$	2,267,142
Special mention	Special mention	—		—		—		497		26,721		135,007		—		—		162,225
Substandard	Substandard	—		—		—		1,293		10,965		81,391		—		—		93,649
Doubtful	Doubtful	—		—		—		—		—		418		—		—		418
Total Commercial Real Estate	Total Commercial Real Estate	59,710		264,611		379,447		260,669		447,544		1,090,170		21,283		—		2,523,434
Current Period Gross Charge-offs		—		—		—		—		—		—		—		—		—
Year-to-date Gross Charge-offs

Commercial and Industrial	Commercial and Industrial
Commercial and Industrial
Commercial and Industrial
Pass
Pass
Pass	Pass	27,936		249,713		241,929		81,722		58,291		193,317		535,107		—		1,388,015
Special mention	Special mention	—		4,325		24,761		2,336		4,740		8,156		31,111		—		75,429
Substandard	Substandard	—		353		—		—		5,517		3,742		16,679		—		26,291
Doubtful	Doubtful	—		—		—		—		—		1,325		2,459		—		3,784
Total Commercial and Industrial	Total Commercial and Industrial	27,936		254,391		266,690		84,058		68,548		206,540		585,356		—		1,493,519
Current Period Gross Charge-offs		—		—		—		—		3,412		—		—		—		3,412
Year-to-date Gross Charge-offs

Commercial Construction	Commercial Construction
Commercial Construction
Commercial Construction
Pass
Pass
Pass	Pass	5,249		142,639		153,978		25,115		3,703		4,728		25,985		—		361,397
Special mention	Special mention	—		—		5,444		—		8,153		—		—		—		13,597
Substandard	Substandard	—		—		—		—		—		1,861		—		—		1,861
Doubtful	Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Construction	Total Commercial Construction	5,249		142,639		159,422		25,115		11,856		6,589		25,985		—		376,855
Current Period Gross Charge-offs		—		—		—		—		—		—		—		—		—
Year-to-date Gross Charge-offs

Business Banking	Business Banking
Business Banking
Business Banking
Pass
Pass
Pass	Pass	68,827		282,541		228,739		92,571		104,156		351,271		104,495		631		1,233,231
Special mention	Special mention	—		—		1,940		319		—		6,415		858		95		9,627
Substandard	Substandard	—		18				3,064		3,301		11,938		114		549		18,984
Doubtful	Doubtful	—		—		—		—		—		—		—		—		—
Total Business Banking	Total Business Banking	68,827		282,559		230,679		95,954		107,457		369,624		105,467		1,275		1,261,842
Current Period Gross Charge-offs		—		67		43		—		70		447		25		—		652
Year-to-date Gross Charge-offs

Consumer Real Estate	Consumer Real Estate
Consumer Real Estate
Consumer Real Estate
Pass
Pass
Pass	Pass	51,356		313,568		146,465		90,586		72,047		213,915		552,909		21,043		1,461,889
Special mention	Special mention	—		—		—		—		—		867		—		—		867
Substandard	Substandard	—		48		204		152		427		9,030		470		2,488		12,819
Doubtful	Doubtful	—		—		—		—		—		—		—		—		—
Total Consumer Real Estate	Total Consumer Real Estate	51,356		313,616		146,669		90,738		72,474		223,812		553,379		23,531		1,475,575
Current Period Gross Charge-offs		—		—		—		3		—		25		—		49		77
Year-to-date Gross Charge-offs

Other Consumer	Other Consumer
Other Consumer
Other Consumer
Pass
Pass
Pass	Pass	4,550		16,527		9,581		4,791		2,575		1,321		78,676		1,737		119,758
Special mention	Special mention	—		—		—		—		—		—		—		—		—
Substandard	Substandard	—		—		22		1		26		21		—		11		81
Doubtful	Doubtful	—		—		—		—		—		—		—		—		—
Total Other Consumer	Total Other Consumer	4,550		16,527		9,603		4,792		2,601		1,342		78,676		1,748		119,839
Current Period Gross Charge-offs		189		9		60		—		17		3		—		40		318
Year-to-date Gross Charge-offs

Pass
Pass
Pass	Pass	217,628		1,269,599		1,160,139		553,664		650,630		1,637,906		1,318,455		23,411		6,831,432
Special mention	Special mention	—		4,325		32,145		3,152		39,614		150,445		31,969		95		261,745
Substandard	Substandard	—		419		226		4,510		20,236		107,983		17,263		3,048		153,685
Doubtful	Doubtful	—		—		—		—		—		1,743		2,459		—		4,202
Total Loan Balance	Total Loan Balance	$	217,628	$	1,274,343	$	1,192,510	$	561,326	$	710,480	$	1,898,077	$	1,370,146	$	26,554	$	7,251,064

Current Period Gross Charge-offs		$	189	$	76	$	103	$	3	$	3,499	$	475	$	25	$	89	$	4,459
Year-to-date Gross Charge-offs
Year-to-date Gross Charge-offs
Year-to-date Gross Charge-offs

1917

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


		December 31, 2022
		Risk Rating
	December 31, 2023																													December 31, 2023
	Risk Rating																													Risk Rating
(dollars in thousands)	(dollars in thousands)	2022		2021		2020		2019		2018		2017 and Prior		Revolving		Revolving-Term		Total		(dollars in thousands)	2023	2022	2021	2020	2019	2018 and Prior	Revolving	Revolving-Term	Total

Commercial Real Estate	Commercial Real Estate
Commercial Real Estate
Commercial Real Estate
Pass
Pass
Pass	Pass	$	292,732	$	360,423	$	267,743	$	422,872	$	227,006	$	704,600	$	21,666	$	—	$	2,297,042
Special mention	Special mention	—		—		—		13,187		20,090		101,112		—		—		134,389
Substandard	Substandard	—		—		1,306		13,434		14,845		77,823		—		—		107,408
Doubtful	Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Real Estate	Total Commercial Real Estate	292,732		360,423		269,049		449,493		261,941		883,535		21,666		—		2,538,839
Year-to-date Gross Charge-offs

Commercial and Industrial	Commercial and Industrial
Commercial and Industrial
Commercial and Industrial
Pass
Pass
Pass	Pass	253,324		264,012		88,544		63,190		62,874		138,250		559,777		—		1,429,971
Special mention	Special mention	—		25,436		—		5,103		1,885		7,132		19,280		—		58,836
Substandard	Substandard	372		—		—		5,705		1,152		1,891		12,465		—		21,585
Doubtful	Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial and Industrial	Total Commercial and Industrial	253,696		289,448		88,544		73,998		65,911		147,273		591,522		—		1,510,392
Year-to-date Gross Charge-offs

Commercial Construction	Commercial Construction
Commercial Construction
Commercial Construction
Pass
Pass
Pass	Pass	120,655		159,737		40,762		6,338		3,953		2,297		27,284		—		361,026
Special mention	Special mention	—		10,954		—		8,104		—		—		—		—		19,058
Substandard	Substandard	—		—		—		—		—		1,879		—		—		1,879
Doubtful	Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Construction	Total Commercial Construction	120,655		170,691		40,762		14,442		3,953		4,176		27,284		—		381,963
Year-to-date Gross Charge-offs

Business Banking	Business Banking
Business Banking
Business Banking
Pass
Pass
Pass	Pass	287,520		233,499		87,926		107,819		80,549		276,843		104,354		645		1,179,155
Special mention	Special mention	—		157		146		—		2,790		3,945		793		95		7,926
Substandard	Substandard	159		67		3,077		1,912		1,550		11,391		124		551		18,831
Doubtful	Doubtful	—		—		—		—		—		32		—		—		32
Total Business Banking	Total Business Banking	287,679		233,723		91,149		109,731		84,889		292,211		105,271		1,291		1,205,944
Year-to-date Gross Charge-offs

Consumer Real Estate	Consumer Real Estate
Consumer Real Estate
Consumer Real Estate
Pass
Pass
Pass	Pass	296,900		148,790		91,477		74,155		30,658		191,228		552,994		21,547		1,407,749
Special mention	Special mention	—		—		—		—		—		882		—		—		882
Substandard	Substandard	48		213		136		428		1,373		8,059		655		2,410		13,322
Doubtful	Doubtful	—		—		—		—		—		—		—		—		—
Total Consumer Real Estate	Total Consumer Real Estate	296,948		149,003		91,613		74,583		32,031		200,169		553,649		23,957		1,421,953
Year-to-date Gross Charge-offs

Other Consumer	Other Consumer
Other Consumer
Other Consumer
Pass
Pass
Pass	Pass	20,046		10,819		5,427		3,242		1,013		724		82,125		1,404		124,800
Special mention	Special mention	—		—		—		—		—		—		—		—		—
Substandard	Substandard	8		—		—		28		21		—		—		21		78
Doubtful	Doubtful	—		—		—		—		—		—		—		—		—
Total Other Consumer	Total Other Consumer	20,054		10,819		5,427		3,270		1,034		724		82,125		1,425		124,878
Year-to-date Gross Charge-offs

Pass

Pass

Pass	Pass	1,271,177		1,177,280		581,879		677,616		406,053		1,313,942		1,348,200		23,596		6,799,743
Special Mention	Special Mention	—		36,547		146		26,394		24,765		113,071		20,073		95		221,091
Substandard	Substandard	587		280		4,519		21,507		18,941		101,043		13,244		2,982		163,103
Doubtful	Doubtful	—		—		—		—		—		32		—		—		32
Total Loan Balance	Total Loan Balance	$	1,271,764	$	1,214,107	$	586,544	$	725,517	$	449,759	$	1,528,088	$	1,381,517	$	26,673	$	7,183,969

Year-to-date Gross Charge-offs
Year-to-date Gross Charge-offs
Year-to-date Gross Charge-offs

2018

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We monitor the delinquent status of the commercial and consumer portfolios on a monthly basis. Loans are considered nonaccrual when interest and principal are 90 days or more past due or management has determined that a material deterioration in the borrower’s financial condition exists. The risk of loss is generally highest for nonaccrual loans.

The following tables present loan balances by year of origination and accrual and nonaccrual status for our portfolio segments as of the dates presented:


		March 31, 2023
	March 31, 2024																													March 31, 2024
(dollars in thousands)	(dollars in thousands)	2023		2022		2021		2020		2019		2018 and Prior		Revolving		Revolving-Term		Total		(dollars in thousands)	2024	2023	2022	2021	2020	2019 and Prior	Revolving	Revolving-Term	Total

Commercial Real Estate	Commercial Real Estate
Commercial Real Estate
Commercial Real Estate
Accrual
Accrual
Accrual	Accrual	$	59,710	$	264,611	$	379,447	$	260,669	$	447,544	$	1,082,745	$	21,283	$	—	$	2,516,009
Nonaccrual	Nonaccrual	—		—		—		—		—		7,425		—		—		7,425
Total Commercial Real Estate	Total Commercial Real Estate	59,710		264,611		379,447		260,669		447,544		1,090,170		21,283		—		2,523,434

Commercial and Industrial	Commercial and Industrial
Commercial and Industrial
Commercial and Industrial
Accrual
Accrual
Accrual	Accrual	27,936		254,391		266,690		84,058		68,548		203,695		581,126		—		1,486,444
Nonaccrual	Nonaccrual	—		—		—		—		—		2,845		4,230		—		7,075
Total Commercial and Industrial	Total Commercial and Industrial	27,936		254,391		266,690		84,058		68,548		206,540		585,356		—		1,493,519

Commercial Construction	Commercial Construction
Commercial Construction
Commercial Construction
Accrual
Accrual
Accrual	Accrual	5,249		142,639		159,422		25,115		11,856		6,205		25,985		—		376,471
Nonaccrual	Nonaccrual	—		—		—		—		—		384		—		—		384
Total Commercial Construction	Total Commercial Construction	5,249		142,639		159,422		25,115		11,856		6,589		25,985		—		376,855

Business Banking	Business Banking
Business Banking
Business Banking
Accrual
Accrual
Accrual	Accrual	68,827		282,559		230,679		95,938		107,271		366,007		105,467		1,179		1,257,927
Nonaccrual	Nonaccrual	—		—		—		16		186		3,617		—		96		3,915
Total Business Banking	Total Business Banking	68,827		282,559		230,679		95,954		107,457		369,624		105,467		1,275		1,261,842

Consumer Real Estate	Consumer Real Estate
Consumer Real Estate
Consumer Real Estate
Accrual
Accrual
Accrual	Accrual	51,356		313,451		146,543		90,682		71,834		220,441		553,135		22,604		1,470,046
Nonaccrual	Nonaccrual	—		165		126		56		640		3,371		244		927		5,529
Total Consumer Real Estate	Total Consumer Real Estate	51,356		313,616		146,669		90,738		72,474		223,812		553,379		23,531		1,475,575

Other Consumer	Other Consumer
Other Consumer
Other Consumer
Accrual
Accrual
Accrual	Accrual	4,550		16,519		9,584		4,634		2,601		1,211		78,676		1,748		119,523
Nonaccrual	Nonaccrual	—		8		19		158		—		131		—		—		316
Total Other Consumer	Total Other Consumer	4,550		16,527		9,603		4,792		2,601		1,342		78,676		1,748		119,839

Accrual	Accrual	217,628		1,274,170		1,192,365		561,096		709,654		1,880,304		1,365,672		25,531		7,226,420
Accrual
Accrual
Nonaccrual	Nonaccrual	—		173		145		230		826		17,773		4,474		1,023		24,644
Total Loan Balance	Total Loan Balance	$	217,628	$	1,274,343	$	1,192,510	$	561,326	$	710,480	$	1,898,077	$	1,370,146	$	26,554	$	7,251,064

2119

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


		December 31, 2022
	December 31, 2023																													December 31, 2023
(dollars in thousands)	(dollars in thousands)	2022		2021		2020		2019		2018		2017 and Prior		Revolving		Revolving-Term		Total		(dollars in thousands)	2023	2022	2021	2020	2019	2018 and Prior	Revolving	Revolving-Term	Total

Commercial Real Estate	Commercial Real Estate
Commercial Real Estate
Commercial Real Estate
Accrual
Accrual
Accrual	Accrual	$	292,732	$	360,423	$	269,049	$	449,493	$	261,941	$	876,435	$	21,666	$	—	$	2,531,739
Nonaccrual	Nonaccrual	—		—		—		—		—		7,100		—		—		7,100
Total Commercial Real Estate	Total Commercial Real Estate	292,732		360,423		269,049		449,493		261,941		883,535		21,666		—		2,538,839

Commercial and Industrial	Commercial and Industrial
Commercial and Industrial
Commercial and Industrial
Accrual
Accrual
Accrual	Accrual	253,696		289,448		88,544		73,998		65,858		147,273		591,292		—		1,510,109
Nonaccrual	Nonaccrual	—		—		—		—		53		—		230		—		283
Total Commercial and Industrial	Total Commercial and Industrial	253,696		289,448		88,544		73,998		65,911		147,273		591,522		—		1,510,392

Commercial Construction	Commercial Construction
Commercial Construction
Commercial Construction
Accrual
Accrual
Accrual	Accrual	120,655		170,691		40,762		14,442		3,953		3,792		27,284		—		381,579
Nonaccrual	Nonaccrual	—		—		—		—		—		384		—		—		384
Total Commercial Construction	Total Commercial Construction	120,655		170,691		40,762		14,442		3,953		4,176		27,284		—		381,963

Business Banking	Business Banking
Business Banking
Business Banking
Accrual
Accrual
Accrual	Accrual	287,679		233,656		91,149		109,479		83,689		289,435		105,172		1,195		1,201,454
Nonaccrual	Nonaccrual	—		67		—		252		1,200		2,776		99		96		4,490
Total Business Banking	Total Business Banking	287,679		233,723		91,149		109,731		84,889		292,211		105,271		1,291		1,205,944

Consumer Real Estate	Consumer Real Estate
Consumer Real Estate
Consumer Real Estate
Accrual
Accrual
Accrual	Accrual	296,948		148,868		91,085		73,947		31,646		196,384		553,441		23,108		1,415,427
Nonaccrual	Nonaccrual	—		135		528		636		385		3,785		208		849		6,526
Total Consumer Real Estate	Total Consumer Real Estate	296,948		149,003		91,613		74,583		32,031		200,169		553,649		23,957		1,421,953

Other Consumer	Other Consumer
Other Consumer
Other Consumer
Accrual
Accrual
Accrual	Accrual	20,054		10,819		5,303		3,270		1,034		593		82,125		1,411		124,609
Nonaccrual	Nonaccrual	—		—		124		—		—		131		—		14		269
Total Other Consumer	Total Other Consumer	20,054		10,819		5,427		3,270		1,034		724		82,125		1,425		124,878

Accrual	Accrual	1,271,764		1,213,905		585,892		724,629		448,121		1,513,912		1,380,980		25,714		7,164,917
Accrual
Accrual
Nonaccrual	Nonaccrual	—		202		652		888		1,638		14,176		537		959		19,052
Total Loan Balance	Total Loan Balance	$	1,271,764	$	1,214,107	$	586,544	$	725,517	$	449,759	$	1,528,088	$	1,381,517	$	26,673	$	7,183,969

The following tables present the age analysis of past due loans segregated by class of loans as of the dates presented:


		March 31, 2023
		March 31, 2024
		March 31, 2024
		March 31, 2024
(dollars in thousands)	(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		Nonaccrual		Total Past Due Loans		Total Loans		(dollars in thousands)	Current	30-59 Days Past Due	60-89 Days Past Due	Nonaccrual	Total Past Due Loans	Total Loans
Commercial real estate	Commercial real estate	$	2,514,689	$	—	$	1,320	$	7,425	$	8,745	$	2,523,434
Commercial and industrial	Commercial and industrial	1,486,444		—		—		7,075		7,075		1,493,519
Commercial construction	Commercial construction	376,471		—		—		384		384		376,855
Business banking	Business banking	1,255,124		2,714		89		3,915		6,718		1,261,842
Consumer real estate	Consumer real estate	1,464,321		4,383		1,342		5,529		11,254		1,475,575
Other consumer	Other consumer	119,285		162		76		316		554		119,839
Total	Total	$	7,216,334	$	7,259	$	2,827	$	24,644	$	34,730	$	7,251,064


	December 31, 2023
(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		Nonaccrual		Total Past Due Loans		Total Loans
Commercial real estate	$	2,649,412	$	—	$	3,403	$	6,320	$	9,723	$	2,659,135
Commercial and industrial	1,435,301		4		—		878		882		1,436,183
Commercial construction	345,623		—		—		4,960		4,960		350,583
Business banking	1,351,048		3,525		2,045		4,147		9,717		1,360,765
Consumer real estate	1,719,751		3,352		2,363		6,312		12,027		1,731,778
Other consumer	114,138		366		63		330		759		114,897
Total	$	7,615,273	$	7,247	$	7,874	$	22,947	$	38,068	$	7,653,341

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022
(dollars in thousands) Current 30-59 Days
Past Due 60-89 Days
Past Due Nonaccrual Total Past
Due Loans Total Loans
Commercial real estate $ 2,523,315 $ 8,424 $ — $ 7,100 $ 15,524 $ 2,538,839
Commercial and industrial 1,505,805 4,304 — 283 4,587 1,510,392
Commercial construction 381,579 — — 384 384 381,963
Business banking 1,199,586 1,583 285 4,490 6,358 1,205,944
Consumer real estate 1,409,907 3,617 1,903 6,526 12,046 1,421,953
Other consumer 124,384 165 60 269 494 124,878
Total $ 7,144,576 $ 18,093 $ 2,248 $ 19,052 $ 39,393 $ 7,183,969

The following tables present loans on nonaccrual status by class of loan for the year-to-date periods presented:


		March 31, 2023
		March 31, 2024
		March 31, 2024
		March 31, 2024
(dollars in thousands)
(dollars in thousands)
(dollars in thousands)	(dollars in thousands)	Beginning of Period Nonaccrual		End of Period Nonaccrual		Nonaccrual With No Related Allowance		Interest Income Recognized on Nonaccrual(1)
Commercial real estate	Commercial real estate	$	7,100	$	7,425	$	5,442	$	1
Commercial real estate
Commercial real estate
Commercial and industrial
Commercial and industrial
Commercial and industrial	Commercial and industrial	283		7,075		—		—
Commercial construction	Commercial construction	384		384		—		—
Commercial construction
Commercial construction
Business banking
Business banking
Business banking	Business banking	4,490		3,915		—		108
Consumer real estate	Consumer real estate	6,526		5,529		—		91
Consumer real estate
Consumer real estate
Other consumer
Other consumer
Other consumer	Other consumer	269		316		—		1
Total	Total	$	19,052	$	24,644	$	5,442	$	201
Total
Total

(1) Represents only cash payments received and applied to interest on nonaccrual loans.


		December 31, 2022
		December 31, 2023
		December 31, 2023
		December 31, 2023
(dollars in thousands)	(dollars in thousands)	Beginning of Period Nonaccrual		End of Period Nonaccrual		Nonaccrual With No Related Allowance		Interest Income Recognized on Nonaccrual(1)		(dollars in thousands)	Beginning of Period Nonaccrual	End of Period Nonaccrual	Nonaccrual With No Related Allowance	Interest Income Recognized on Nonaccrual(1)
Commercial real estate	Commercial real estate	$	31,488	$	7,100	$	5,649	$	580
Commercial and industrial	Commercial and industrial	15,239		283		—		148
Commercial construction	Commercial construction	2,471		384		—		171
Business banking	Business banking	9,641		4,490		933		228
Consumer real estate	Consumer real estate	7,294		6,526		—		257
Other consumer	Other consumer	158		269		—		1
Total	Total	$	66,291	$	19,052	$	6,582	$	1,385

(1) Represents only cash payments received and applied to interest on nonaccrual loans.

The following tables present collateral-dependent loans as of the dates presented:


	March 31, 2024
	Type of Collateral
(dollars in thousands)	Real Estate		Business Assets		Other
Commercial real estate	$	16,783	$	—	$	—
Commercial and industrial	—		—		—
Commercial construction	4,576		—		—
Business banking	—		—		—
Consumer real estate	—		—		—

Total	$	21,359	$	—	$	—


	December 31, 2023
	Type of Collateral
(dollars in thousands)	Real Estate		Business Assets		Other
Commercial real estate	$	5,940	$	—	$	—
Commercial and industrial	—		—		—
Commercial construction	4,576		—		—
Business banking	—		—		—
Consumer real estate	—		—		—

Total	$	10,516	$	—	$	—

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~The following tables present collateral-dependent loans by class of loans as of the dates presented:~~
March 31, 2023
Type of Collateral
(dollars in thousands) Real Estate Business
Assets Investment/Cash Other
Commercial real estate $ 5,442 $ 595 $ — $ —
Commercial and industrial — 5,385 — —
Commercial construction — — — —
Business banking — — — —
Consumer real estate — — — —
Total $ 5,442 $ 5,980 $ — $ —

December 31, 2022
Type of Collateral
(dollars in thousands) Real Estate Business
Assets Investment/Cash Other
Commercial real estate $ 5,649 $ — $ — $ —
Commercial and industrial — 626 — —
Commercial construction 1,655 — — —
Business banking 260 1,112 — 154
Consumer real estate 561 — — —
Total $ 8,125 $ 1,738 $ — $ 154

The following tables present activity in the ACL for the periods presented:
Three Months Ended March 31, 2023
(dollars in thousands) Commercial
Real Estate Commercial and
Industrial Commercial
Construction Business Banking Consumer
Real Estate Other
Consumer Total
Loans
Allowance for credit losses on loans:
Balance at beginning of period $ 41,428 $ 25,710 $ 6,264 $ 12,547 $ 12,105 $ 3,286 $ 101,340
Impact of ASU 2022-02 — 75 215 251 278 (251) 568
Provision for credit losses on loans(1)
(1,011) (476) 412 1,497 488 180 1,090
Charge-offs — (3,412) — (652) (77) (318) (4,459)
Recoveries 9 9,400 2 37 61 65 9,574
Net Recoveries/(Charge-offs) 9 5,988 2 (615) (16) (253) 5,115
Balance at End of Period $ 40,426 $ 31,297 $ 6,893 $ 13,680 $ 12,855 $ 2,962 $ 108,113
(1) Excludes the provision for credits losses for unfunded commitments.
Three Months Ended March 31, 2022
(dollars in thousands) Commercial
Real Estate Commercial and
Industrial Commercial
Construction Business Banking Consumer
Real Estate Other
Consumer Total
Loans
Allowance for credit losses on loans:
Balance at beginning of period $ 50,700 $ 19,727 $ 5,355 $ 11,338 $ 8,733 $ 2,723 $ 98,576
Provision for credit losses on loans(1)
(1,996) (206) (27) 765 426 340 (698)
Charge-offs — — — (606) (78) (298) (982)
Recoveries 199 2,716 1 — 37 66 3,019
Net (Charge-offs)/Recoveries 199 2,716 1 (606) (41) (232) 2,037
Balance at End of Period $ 48,903 $ 22,237 $ 5,329 $ 11,497 $ 9,118 $ 2,831 $ 99,915

~~(1)~~ ~~Excludes the provision for credit losses for unfunded commitments.~~



	Three Months Ended March 31, 2024
(dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Business Banking		Consumer Real Estate		Other Consumer		Total Loans
Allowance for credit losses on loans:
Balance at beginning of period	$	37,886	$	34,538	$	5,382	$	12,858	$	14,663	$	2,639	$	107,966

Provision for credit losses on loans(1)	2,838		680		(233)		(995)		859		276		3,425
Charge-offs	(5,205)		(1,128)		—		(98)		(139)		(369)		(6,939)
Recoveries	93		117		—		33		27		80		350
Net Charge-offs	(5,112)		(1,011)		—		(65)		(112)		(289)		(6,589)
Balance at End of Period	$	35,612	$	34,207	$	5,149	$	11,798	$	15,410	$	2,626	$	104,802
(1) Excludes the provision for credits losses for unfunded commitments.


	Three Months Ended March 31, 2023
(dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Business Banking		Consumer Real Estate		Other Consumer		Total Loans
Allowance for credit losses on loans:
Balance at beginning of period	$	41,428	$	25,710	$	6,264	$	12,547	$	12,105	$	3,286	$	101,340
Impact of ASU 2022-02	—		75		215		251		278		(251)		568
Provision for credit losses on loans(1)	(1,011)		(476)		412		1,497		488		180		1,090
Charge-offs	—		(3,412)		—		(652)		(77)		(318)		(4,459)
Recoveries	9		9,400		2		37		61		65		9,574
Net Recoveries/(Charge-offs)	9		5,988		2		(615)		(16)		(253)		5,115
Balance at End of Period	$	40,426	$	31,297	$	6,893	$	13,680	$	12,855	$	2,962	$	108,113
(1) Excludes the provision for credits losses for unfunded commitments.

~~Table of Contents~~

~~S&T BANCORP, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

NOTE 6. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Derivatives Designated as Hedging Instruments

The following table indicates the amounts representing the value of derivative assets and derivative liabilities ~~for~~as of the dates presented:


	Derivative Assets (Included in Other Assets)																							Derivative Assets (Included in Other Assets)						Derivative Liabilities (Included in Other Liabilities)
	March 31, 2024																				March 31, 2024				December 31, 2023			March 31, 2024				December 31, 2023
(dollars in thousands)																		(dollars in thousands)	Notional Amount	Fair Value		Notional Amount	Fair Value			Notional Amount	Fair Value		Notional Amount		Fair Value
Derivatives Designated as Hedging Instruments
Interest rate swap contracts - cash flow hedge
Interest rate swap contracts - cash flow hedge
Interest rate swap contracts - cash flow hedge

Derivatives Not Designated as Hedging Instruments

Derivatives Not Designated as Hedging Instruments

Derivatives Not Designated as Hedging Instruments
Interest rate swap contracts - commercial loans
Interest rate swap contracts - commercial loans
Interest rate swap contracts - commercial loans

		Derivative Assets (Included in Other Assets)								Derivative Liabilities (Included in Other Liabilities)
		March 31, 2023				December 31, 2022				March 31, 2023				December 31, 2022
(dollars in thousands)		Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value
Derivatives Designated as Hedging Instruments
Interest rate swap contracts - cash flow hedge		$	—	$	—	$	—	$	—	$	500,000	$	15,288	$	500,000	$	21,368
Total Derivatives Designated as Hedging Instruments		$	—	$	—	$	—	$	—	$	500,000	$	15,288	$	500,000	$	21,368

Derivatives Not Designated as Hedging Instruments
Interest rate swap contracts - commercial loans		$	959,341	$	67,397	$	976,707	$	83,449	$	959,341	$	67,397	$	976,707	$	83,449
Interest rate lock commitments - mortgage loans		146		6		126		5		—		—		—		—
Forward sales contracts - mortgage loans		—		—		130		2		—		—		—		—
Total Derivatives Not Designated as Hedging Instruments		$	959,487	$	67,403	$	976,963	$	83,456	$	959,341	$	67,397	$	976,707	$	83,449

Total Derivatives	Total Derivatives	$	959,487	$	67,403	$	976,963	$	83,456	$	1,459,341	$	82,685	$	1,476,707	$	104,817

Total Derivatives

Total Derivatives

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table indicates the gross amounts of interest rate swap derivative assets and derivative liabilities, the amounts offset and the carrying values in the Consolidated Balance Sheets at the dates presented:


		Derivatives (included in Other Assets)				Derivatives (included in Other Liabilities)
	Derivatives (included in Other Assets)												Derivatives (included in Other Assets)		Derivatives (included in Other Liabilities)
(dollars in thousands)	(dollars in thousands)	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022		(dollars in thousands)	March 31, 2024	December 31, 2023		March 31, 2024		December 31, 2023
Gross amounts recognized	Gross amounts recognized	$	67,397	$	83,449	$	82,685	$	104,817
Gross amounts offset	Gross amounts offset	—		—		—		—
Net amounts presented in the Consolidated Balance Sheets	Net amounts presented in the Consolidated Balance Sheets	67,397		83,449		82,685		104,817
Netting adjustments (1)	Netting adjustments (1)	(11,434)		(15,196)		(11,434)		(15,196)
Cash collateral (2)	Cash collateral (2)	(55,301)		(65,065)		(4,901)		(6,307)
Net Amount	Net Amount	$	662	$	3,188	$	66,350	$	83,314
(1) Netting adjustments represent the amounts recorded to convert derivatives assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance.
(1) Netting adjustments represent the amounts recorded to convert derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance.										(1) Netting adjustments represent the amounts recorded to convert derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance.
(2) Cash collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The application of the cash collateral cannot reduce the net derivative position below zero. Therefore, excess cash collateral, if any, is not reflected above.	(2) Cash collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The application of the cash collateral cannot reduce the net derivative position below zero. Therefore, excess cash collateral, if any, is not reflected above.									(2) Cash collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The application of the cash collateral cannot reduce the net derivative position below zero. Therefore, excess cash collateral, if any, is not reflected above.

The following table presents the effect, net of tax, of the cash flow hedges on Other Comprehensive Income, or OCI and on the Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the three month periods presented:

Amount of Gain or (Loss) Recognized in Other Comprehensive Income Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Interest Income
(dollars in thousands) March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
Derivatives in Cash Flow Hedging Relationships:
Interest rate swap contracts - cash flow hedge $ 4,782 $ (2,044) $ (1,849) $ 107
Total $ 4,782 $ (2,044) $ (1,849) $ 107

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~~S&T BANCORP, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~












	Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)						Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Interest Income
(dollars in thousands)	March 31, 2024			March 31, 2023			March 31, 2024			March 31, 2023
Derivatives in Cash Flow Hedging Relationships:
Interest rate swap contracts - cash flow hedge		$	(2,838)		$	4,782		$	(2,738)		$	(1,849)

Total		$	(2,838)		$	4,782		$	(2,738)		$	(1,849)

Amounts reported in OCI related to derivatives that are designated as hedging instruments are reclassified to interest income as interest payments are received on variable rate assets. During the next twelve months, we estimate that an additional ~~$10.2~~$11.7 million will be reclassified as a decrease to interest income. Our current interest rate swap agreements have 3-5 year terms with maturity dates extending into 2027.

The following table indicates the gain ~~or loss~~(loss) recognized in income on derivatives not designated as hedging instruments for the periods presented:

Three months ended March 31,
(dollars in thousands) 2023 2022
Derivatives not Designated as Hedging Instruments
Interest rate swap contracts—commercial loans $ — $ 68
Interest rate lock commitments—mortgage loans 1 (217)
Forward sale contracts—mortgage loans (2) 188
Total Derivatives (Loss) Gain $ (1) $ 39


	Three months ended March 31,
(dollars in thousands)		2024	2023
Derivatives not Designated as Hedging Instruments
Interest rate swap contracts—commercial loans			$	34	$	—
Interest rate lock commitments—mortgage loans			—		1
Forward sale contracts—mortgage loans			—		(2)
Total Derivatives Gain (Loss)			$	34	$	(1)

NOTE 7. TAX CREDIT EQUITY INVESTMENTS

As part of our responsibilities under the Community Reinvestment Act and due to their favorable federal income tax benefits, we invest in LIHTC and HTC partnerships. As a limited partner in these operating partnerships, we receive tax credits and tax deductions for losses incurred by the underlying properties. Effective January 1, 2024, we adopted ASU 2023-02 and elected to apply the PAM to both LIHTC and HTC equity investments. The adoption of this ASU resulted in a $1.0 million cumulative effect adjustment, which decreased retained earnings and other assets. Tax credit equity investment balances of $44.4 million were included in other assets in the Consolidated Balance Sheets at March 31, 2024. Unfunded commitments of $7.2 million were included in other liabilities in the Consolidated Balance Sheets at March 31, 2024.

For the three months ended March 31, 2024, amortization expense of $0.8 million, tax credits of $0.8 million and other tax benefits of $0.1 million were recognized in income tax expense in the Condensed Consolidated Statements of Comprehensive Income. No impairment losses were recognized for the three months ended March 31, 2024.

Prior to the adoption of ASU 2023-02, we used the cost method to account for our investments in tax credit equity investments. For the three months ended March 31, 2023, amortization expense of $0.5 million was included in other expense

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

and LIH tax credits of $0.5 million was recognized as a reduction to income tax expense on our Consolidated Statements of Comprehensive Income. Other tax benefits of $3.1 million were included in deferred tax assets on our Consolidated Balance Sheets at March 31, 2023.

NOTE 7.8. COMMITMENTS AND CONTINGENCIES

Commitments

In the normal course of business, we offer off-balance sheet credit arrangements to enable our customers to meet their financing objectives. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated financial statements. Our exposure to credit loss, in the event the customer does not satisfy the terms of the agreement, equals the contractual amount of the obligation less the value of any collateral. We apply the same credit policies in making commitments and standby letters of credit that are used for the underwriting of loans to customers. Commitments generally have fixed expiration dates, annual renewals or other termination clauses and may require payment of a fee. Because many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

The following table sets forth our commitments and letters of credit as of the dates presented:


(dollars in thousands)	(dollars in thousands)	March 31, 2023			December 31, 2022			(dollars in thousands)	March 31, 2024	December 31, 2023
Commitments to extend credit	Commitments to extend credit		$	2,661,977		$	2,713,586
Standby letters of credit	Standby letters of credit		65,676			64,356
Total	Total		$	2,727,653		$	2,777,942

Allowance for Credit Losses on Unfunded Loan Commitments

We maintain an ~~allowance for credit losses~~ACL on unfunded commercial and consumer lending commitments and letters of credit to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the ~~allowance for credit losses~~ACL for loans, modified to take into account the probability of a draw-down on the commitment. The provision for credit losses on unfunded loan commitments is included in the provision for credit losses on our Condensed Consolidated Statements of Comprehensive ~~Income (Loss).~~Income. The allowance for unfunded commitments is included in other liabilities in the Consolidated Balance Sheets.

The following table presents activity in the ~~allowance for credit losses~~ACL on unfunded loan commitments for the periods presented:


		Three months ended March 31,
		Three months ended March 31,
		Three months ended March 31,
		Three months ended March 31,
(dollars in thousands)	(dollars in thousands)		2023	2022		(dollars in thousands)			2024	2023
Balance at beginning of period	Balance at beginning of period			$	8,196		$	5,189

Provision for credit losses	Provision for credit losses			(168)			186

Provision for credit losses

Provision for credit losses
Total	Total			$	8,028		$	5,375

Litigation

In the normal course of business, we are subject to various legal and administrative proceedings and claims. While any type of litigation contains a level of uncertainty, we believe that the outcome of such proceedings or claims pending will not have a material adverse effect on our consolidated financial position or results of operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8.9. OTHER ~~COMPREHENSIVE~~COMPREHENISVE INCOME (LOSS)

The following ~~table presents~~tables present the change in components of other comprehensive (loss) income ~~(loss)~~ for the periods presented, net of tax effects.


		Three Months Ended March 31, 2023									Three Months Ended March 31, 2022
	Three Months Ended March 31, 2024																							Three Months Ended March 31, 2024			Three Months Ended March 31, 2023
(dollars in thousands)	(dollars in thousands)	Pre-Tax Amount			Tax Benefit			Net of Tax Amount			Pre-Tax Amount			Tax Benefit			Net of Tax Amount			(dollars in thousands)	Pre-Tax Amount	Tax Benefit (Expense)	Net of Tax Amount		Pre-Tax Amount	Tax Benefit (Expense)		Net of Tax Amount
Change in net unrealized gains (losses) on available-for-sale debt securities	Change in net unrealized gains (losses) on available-for-sale debt securities		$	14,060		$	(3,001)		$	11,059		$	(48,261)		$	10,332		$	(37,929)

Change in interest rate swap
Change in interest rate swap
Change in interest rate swap	Change in interest rate swap		6,080			(1,298)			4,782			(2,601)			557			(2,044)
Adjustment to funded status of employee benefit plans	Adjustment to funded status of employee benefit plans		(475)			101			(374)			(12)			32			20
Other Comprehensive Income (Loss)			$	19,665		$	(4,198)		$	15,467		$	(50,874)		$	10,921		$	(39,953)
Other Comprehensive (Loss) Income

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, represents an overview of our consolidated results of operations and financial condition and highlights material changes in our financial condition and results of operations for the three months ended March 31, ~~2023~~2024 and ~~2022.~~2023. Our MD&A should be read in conjunction with our Consolidated Financial Statements and Notes. The results of operations reported in the accompanying Consolidated Financial Statements are not necessarily indicative of results to be expected in future periods.

Important Note Regarding Forward-Looking Statements

This quarterly ~~report~~Report on Form 10-Q contains or incorporates statements that we believe are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to our financial condition, results of operations, plans, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, financial position and other matters regarding or affecting S&T and its future business and operations. Forward-looking statements are typically identified by words or phrases such as “will likely result,” “expect,” “anticipate,” “estimate,” “forecast,” “project,” “intend,” “believe,” “assume,” “strategy,” “trend,” “plan,” “outlook,” “outcome,” “continue,” “remain,” “potential,” “opportunity,” “comfortable,” “current,” “position,” “maintain,” “sustain,” “seek,” ~~“achieve,”~~“achieve” and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. The matters discussed in these forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected or implied in or by the forward-looking statements depending on a variety of uncertainties or other factors including, but not limited to: credit losses and the credit risk of our commercial and consumer loan products; changes in the level of charge-offs and changes in estimates of the adequacy of the allowance for credit losses, or ACL; cyber-security concerns; rapid technological developments and changes; operational risks or risk management failures by us or critical third parties, including fraud risk; our ability to manage our reputational risks; sensitivity to the interest rate environment, a rapid increase in interest rates or a change in the shape of the yield curve; a change in spreads on interest-earning assets and interest-bearing liabilities; any remaining uncertainties with the transition from LIBOR as a reference rate; regulatory supervision and oversight, including changes in regulatory capital requirements and our ability to address those requirements; unanticipated changes in our liquidity position; unanticipated changes in regulatory and governmental policies impacting interest rates and financial markets; changes in accounting policies, practices or guidance; legislation affecting the financial services industry as a whole, and S&T, in particular; developments affecting the industry and the soundness of financial institutions and further disruption to the economy and U.S. banking system; the outcome of pending and future litigation and governmental proceedings; increasing price and product/service competition; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; managing our internal growth and acquisitions; the possibility that the anticipated benefits from acquisitions cannot be fully realized in a timely manner or at all, or that integrating the acquired operations will be more difficult, disruptive or costly than anticipated; containing costs and expenses; reliance on significant customer relationships; an interruption or cessation of an important service by a third-party provider; our ability to attract and retain talented executives and employees; general economic or business conditions, including the strength of regional economic conditions in our market area; ~~environmental, social and governance~~ESG practices and disclosures, including climate change, hiring practices, the diversity of the work force, and racial and social justice issues; deterioration of the housing market and reduced demand for mortgages; deterioration in the overall macroeconomic conditions or the state of the banking industry that could warrant further analysis of the carrying value of goodwill and could result in an adjustment to its carrying value resulting in a non-cash charge to net income; the stability of our core deposit base and access to contingency funding; re-emergence of turbulence in significant portions of the global financial and real estate markets that could impact our performance, both directly, by affecting our revenues and the value of our assets and liabilities, and indirectly, by affecting the economy generally and access to capital in the amounts, at the times and on the terms required to support our future ~~businesses.~~businesses and geopolitical tensions and conflicts between nations.

Many of these factors, as well as other factors, are described elsewhere in this report, and in our ~~2022~~2023 Form 10-K, including Part I, Item 1A, Risk Factors and any of our subsequent filings with the SEC. Forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. We caution you not to unduly rely on forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Critical Accounting Policies and Estimates

We view critical accounting policies to be those which are highly dependent on subjective or complex estimates, assumptions and judgments and where changes in those estimates and assumptions could have a significant impact on the Consolidated Financial Statements. Further, we view critical accounting estimates as those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Our critical accounting policies and estimates as of March 31, ~~2023~~2024 remained unchanged from the disclosures presented in our ~~2022~~2023 Form 10-K under Part II, Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

~~Overview~~

We are a bank holding company that is headquartered in Indiana, Pennsylvania with assets of $9.2 billion at March 31, 2023. We operate in Pennsylvania and Ohio. We provide a full range of financial services with retail and commercial banking products, cash management services, trust and brokerage services. Our common stock trades on the NASDAQ Global Select Market under the symbol “STBA”.

We earn revenue primarily from interest on loans and securities and fees charged for financial services provided to our customers. We incur expenses for the cost of deposits and other funding sources, provision for credit losses and other operating costs such as salaries and employee benefits, data processing, occupancy and tax expense.

Our purpose is building a better future together through people-forward banking. We believe that all banking should be personal. We cultivate relationships rooted in trust, strengthened by going above and beyond and renewed with every interaction. Our strategic priorities for 2023 and beyond will be focused on our deposit franchise, core profitability, asset quality and talent and engagement.

During the first quarter of 2023, the banking industry experienced significant volatility with several high-profile bank failures and industry wide concerns related to liquidity, deposit outflows, unrealized securities losses and eroding consumer confidence in the banking system. Despite these negative industry developments, our liquidity position and balance sheet remain strong. We have a well-diversified deposit base with a balance mix of 59 percent personal and 41 percent business accounts. Our total deposits decreased by less than 1 percent compared to December 31, 2022 and can be attributed to normal deposit fluctuations and competition in a higher interest rate environment. We have total uninsured deposits of $2.4 billion, or 33 percent of our total deposit base. We have a strong liquidity position. In addition to our deposit base, we had remaining borrowing availability of $2.3 billion with the FHLB of Pittsburgh, $794 million from the Federal Reserve Borrower-In-Custody program and $731 million from the Federal Reserve Bank Term Funding Program at March 31, 2023. Furthermore, our capital remains strong with a Common Equity Tier 1 Ratio of 13.10 percent and a total capital ratio of 15.09 percent at March 31, 2023.

~~Earnings Summary~~

~~The following table presents a summary of key profitability metrics for the periods presented:~~

Three Months Ended March 31,
(dollars in thousands) 2023 2022
Net income $ 39,799 $ 29,143
Earnings per share - diluted $ 1.02 $ 0.74
Return on average assets 1.77 % 1.25 %
Return on average shareholders' equity 13.38 % 9.88 %
Return on average tangible shareholders' equity (non-GAAP) 19.61 % 14.61 %

We recognized net income of $39.8 million, or $1.02 per diluted share, for the three months ended March 31, 2023 compared to net income of $29.1 million, or $0.74 per diluted share for the same period in 2022. Net income increased $10.7 million for the three months ended March 31, 2023 compared to the same period in 2022 primarily due to an increase in net interest income of $21.1 million offset by a decrease in noninterest income of $2.0 million, an increase in provision for credit losses of $1.4 million, an increase in noninterest expense of $4.3 million and an increase in income tax expense of $2.7 million.

Net interest income increased $21.1 million for the three months ended March 31, 2023 compared to the same period in 2022. Interest and dividend income increased $40.8 million for the three months ended March 31, 2023. Interest expense increased $19.7 million for the three months ended March 31, 2023. The net interest margin, or NIM, on an FTE basis (non-GAAP) increased 116 basis points to 4.32% for the three months ended March 31, 2023 compared to 3.16% for the same period in 2022. The increases in net interest income and NIM on an FTE basis (non-GAAP) were primarily due to higher interest rates

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~~S&T BANCORP, INC. AND SUBSIDIARIES~~

~~Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~during 2023. NIM is reconciled to net interest margin adjusted to an FTE basis (non-GAAP) below in the "Explanation of Use of Non-GAAP Financial Measures" section of this MD&A.~~

The increase in the provision for credit losses for the three months ended March 31, 2023 compared to the same period in 2022 was primarily related to a $4.2 million specific reserve for a C&I relationship and a $1.8 million increase in qualitative reserve related to the macro environment. Offsetting the increase in the provision for credit losses during the three months ended March 31, 2023 was a $9.3 million recovery from a customer fraud that occurred in 2020.

Noninterest income decreased $2.0 million to $13.2 million for the three months ended March 31, 2023 compared to the same period in 2022. Mortgage banking income decreased $0.7 million for the three months ended March 31, 2023 due to a decline in loan sale activity caused by rising interest rates and a shift to holding originated mortgage loans. Debit and credit card income decreased $0.7 million for the three months ended March 31, 2023 due to decreased debit card incentive income and timing of referral merchant revenue.

Noninterest expense increased $4.3 million to $51.7 million for the three months ended March 31, 2023 compared to the same period in 2022. Salaries and employee benefits increased $3.9 million for the three months ended March 31, 2023 due to decreases in the fair market value of assets in a nonqualified defined benefit plan, incentives, base rate increases and higher medical costs. Marketing costs increased $0.5 million for the three months ended March 31, 2023 due to increased marketing efforts and timing of various promotions.

The provision for income taxes increased $2.7 million to $9.6 million for the three months ended March 31, 2023 compared to $6.9 million for the same period in 2022. Our effective tax rate was 19.4 percent for the three months ended March 31, 2023 compared to 19.2 percent for the three months ended March 31, 2022. The increase in our effective tax rate for the three month period ended March 31, 2023 was primarily due to an increase in pretax income compared to the same period in 2022.

Explanation of Use of Non-GAAP Financial Measures

In addition to traditional financial measures presented in accordance with GAAP, our management uses, and this ~~quarterly~~ report contains or references, certain non-GAAP financial measures discussed below. We believe these non-GAAP financial measures provide information useful to investors in understanding our underlying business, operational performance and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Although we believe that these non-GAAP financial measures enhance investors’ understanding of our business and performance, these non-GAAP financial measures should not be considered alternatives to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with non-GAAP measures which may be presented by other companies.

The interest income on interest-earning assets, net interest income and net interest margin are presented on an FTE basis (non-GAAP). The FTE basis (non-GAAP) adjusts for the tax benefit of income on certain tax-exempt loans and securities and the dividend-received deduction for equity securities using the federal statutory tax rate of 21 percent for each period. We believe this to be the preferred industry measurement of net interest income that provides a relevant comparison between taxable and non-taxable sources of interest income.

The following table reconciles interest and dividend income and net interest income per the Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ to interest income, net interest income and net interest margin on an FTE basis (non-GAAP) for the periods presented:




	Three Months Ended March 31,
(dollars in thousands)	2024				2023
Interest and dividend income		$	127,754			$	110,903
Plus: taxable equivalent adjustment		692				555
Interest Income on an FTE Basis (Non-GAAP)		$	128,446			$	111,458

Interest and dividend income		$	127,754			$	110,903
Less: Interest expense		44,277				22,112
Net Interest Income		83,477				88,791
Plus: taxable equivalent adjustment		692				555
Net Interest Income on an FTE Basis (Non-GAAP)		$	84,169			$	89,346

Net interest margin		3.81		%		4.29		%
Plus: taxable equivalent adjustment		0.03		%		0.03		%
Net Interest Margin on an FTE Basis (Non-GAAP)		3.84		%		4.32		%

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Three Months Ended March 31,
(dollars in thousands) 2023 2022
Total interest and dividend income per Condensed Consolidated Statements of Comprehensive Income (Loss) $ 110,903 $ 70,109
Adjustment to FTE basis 555 493
Interest Income on an FTE Basis (Non-GAAP) $ 111,458 $ 70,602
Total interest and dividend income per Condensed Consolidated Statements of Comprehensive Income (Loss) $ 110,903 $ 70,109
Total interest expense 22,112 2,376
Net Interest Income per Condensed Consolidated Statements of Comprehensive Income (Loss) 88,791 67,733
Adjustment to FTE basis 555 493
Net Interest Income on an FTE Basis (Non-GAAP) $ 89,346 $ 68,226
Net interest margin 4.29 % 3.14 %
Adjustment to FTE basis 0.03 % 0.02 %
Net Interest Margin on an FTE Basis (Non-GAAP) 4.32 % 3.16 %

Return on average tangible shareholders' equity (non-GAAP) is a key profitability metric used by management to measure financial performance. The following table provides a reconciliation of return on average tangible shareholders' equity (non-GAAP) by reconciling net income (GAAP) per the Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ to net income before amortization ~~and~~of intangibles and average shareholder's equity to average tangible shareholders' equity for the periods presented:


			Three Months Ended March 31,

		Three Months Ended March 31,

		Three Months Ended March 31,

		Three Months Ended March 31,
(dollars in thousands)
(dollars in thousands)
(dollars in thousands)	(dollars in thousands)			2023	2022
Net income (annualized)	Net income (annualized)				$	161,407		$	118,192
Net income (annualized)
Net income (annualized)
Plus: amortization of intangibles (annualized), net of tax	Plus: amortization of intangibles (annualized), net of tax				1,085			1,276
Plus: amortization of intangibles (annualized), net of tax
Plus: amortization of intangibles (annualized), net of tax
Net income before amortization of intangibles (annualized)
Net income before amortization of intangibles (annualized)
Net income before amortization of intangibles (annualized)	Net income before amortization of intangibles (annualized)				$	162,492		$	119,468

Average shareholders' equity	Average shareholders' equity				$	1,206,358		$	1,196,694

Average shareholders' equity

Average shareholders' equity
Less: average goodwill and other intangible assets, net of deferred tax liability
Less: average goodwill and other intangible assets, net of deferred tax liability
Less: average goodwill and other intangible assets, net of deferred tax liability	Less: average goodwill and other intangible assets, net of deferred tax liability				(377,576)			(378,761)
Average tangible shareholders' equity	Average tangible shareholders' equity				$	828,782		$	817,933
Average tangible shareholders' equity
Average tangible shareholders' equity
Return on Average Tangible Shareholders' Equity (non-GAAP)	Return on Average Tangible Shareholders' Equity (non-GAAP)				19.61		%	14.61		%
Return on Average Tangible Shareholders' Equity (non-GAAP)
Return on Average Tangible Shareholders' Equity (non-GAAP)

Executive Overview

We are a bank holding company that is headquartered in Indiana, Pennsylvania with assets of $9.5 billion at March 31, 2024. We operate in Pennsylvania and Ohio providing a full range of financial services with retail and commercial banking products, cash management services, trust and brokerage services. Our common stock trades on the NASDAQ Global Select Market under the symbol “STBA”.

Our purpose is building a better future together through people-forward banking. We believe that all banking should be personal. We cultivate relationships rooted in trust, strengthened by going above and beyond and renewed with every interaction. Our strategic priorities for 2024 and beyond will be focused on our deposit franchise, core profitability, asset quality and talent and engagement.

Earnings Summary

The following table presents a summary of key profitability metrics for the periods presented:




	Three Months Ended March 31,
(dollars in thousands)	2024				2023
Net income		$	31,239			$	39,799
Earnings per share - diluted		$	0.81			$	1.02
Return on average assets		1.32		%		1.77		%
Return on average shareholders' equity		9.74		%		13.38		%
Return on average tangible shareholders' equity (non-GAAP)(1)		13.85		%		19.61		%
(1) Reconciled to GAAP in the "Explanation of Use of Non-GAAP Financial Measures" section of this MD&A.

We recognized net income of $31.2 million, or $0.81 per diluted share, for the three months ended March 31, 2024, compared to net income of $39.8 million, or $1.02 per diluted share, for the same period in 2023. Net income decreased by $8.6 million for the three months ended March 31, 2024, compared to the same period in 2023. The decrease in net income was primarily due to a decrease in net interest income of $5.3 million, an increase in provision for credit losses of $1.7 million and an increase in noninterest expense of $2.8 million, which was offset by a decrease in income tax expense of $1.7 million.

Net interest income decreased $5.3 million for the three months ended March 31, 2024, compared to the same period in 2023. The net interest margin, or NIM, on an FTE basis (non-GAAP) decreased 48 basis points to 3.84% for the three months ended March 31, 2024, compared to 4.32% for the same period in 2023. The decrease in net interest income and NIM on an FTE basis (non-GAAP) were primarily due to higher cost of funds in the current period compared to the same period in 2023. NIM is reconciled to net interest margin adjusted to an FTE basis (non-GAAP) in the "Explanation of Use of Non-GAAP Financial Measures" section of this MD&A.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The provision for credit losses increased $1.7 million to $2.6 million for the three months ended March 31, 2024, compared to $0.9 million for the same period in 2023. The increase in the provision for credit losses is primarily due to an increase in net loan charge-offs, which was partially offset by reductions in our specific reserve for loans individually evaluated and our qualitative reserve.

Noninterest income decreased by $0.4 million to $12.8 million for the three months ended March 31, 2024, compared to the same period in 2023. The decrease in noninterest income was primarily attributed to a decrease in service charges on deposit accounts of $0.2 million for the three months ended March 31, 2024 resulting from decreases in returned check fees and the elimination of non-sufficient funds, or NSF fees, compared to the same period in 2023. Noninterest expense increased $2.8 million to $54.5 million for the three months ended March 31, 2024, compared to the same period in 2023. The increase in noninterest expense can be attributed to increases in salaries and employee benefits of $1.9 million for the three months ended March 31, 2024 due to annual merit increases, inflationary wage pressure and the acquisition of new talent. The increase to noninterest expense is further related to increases in data processing and information technology of $0.7 million due to additional services provided through our third party provider. Furniture, equipment and software also increased $0.6 million as a result of software and technology investments.

The provision for income taxes decreased $1.7 million to $7.9 million for the three months ended March 31, 2024, compared to $9.6 million for the same period in 2023, primarily due to a $10.2 million decrease in income before taxes in 2024

compared to 2023. Our effective tax rate was 20.2 percent for the three months ended March 31, 2024 compared to 19.4 percent for the three months ended March 31, 2023. The increase in our effective tax rate for the three month period ended March 31, 2024 was primarily due to the adoption of new accounting guidance on January 1, 2024.

RESULTS OF OPERATIONS

~~Three Months Ended March 31, 2023 Compared to~~

~~Three Months Ended March 31, 2022~~


			Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

Net Interest Income

Our principal source of revenue is net interest income. Net interest income represents the difference between the interest and fees earned on interest-earning assets and the interest paid on interest-bearing liabilities. Net interest income is affected by changes in the average balance of interest-earning assets and interest-bearing liabilities and changes in interest rates and spreads. The level and mix of interest-earning assets and interest-bearing liabilities is managed by our Asset and Liability Committee, or ALCO, in order to mitigate interest rate and liquidity risks of the balance sheet. A variety of ALCO strategies were implemented, within prescribed ALCO risk parameters, to produce what we believe is an acceptable level of net interest income.

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~~S&T BANCORP, INC. AND SUBSIDIARIES~~

~~Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

Average Balance Sheet and Net Interest Income Analysis (FTE) (non-GAAP)

The following tables provide information regarding the average balances, interest and rates earned on interest-earning assets and the average balances, interest and rates paid on interest-bearing liabilities for the periods presented:

Three Months Ended March 31, 2023 Three Months Ended March 31, 2022
(dollars in thousands) Average Balance Interest Rate Average Balance Interest Rate
ASSETS
Interest-bearing deposits with banks $ 140,499 $ 1,482 4.22 % $ 756,141 $ 303 0.16 %
Securities, at fair value(1)(2)
1,000,609 6,269 2.51 % 1,002,212 5,265 2.10 %
Loans held for sale 126 2 6.39 % 1,545 14 3.51 %
Commercial real estate 3,132,382 42,104 5.45 % 3,257,238 29,345 3.65 %
Commercial and industrial 1,711,113 28,515 6.76 % 1,712,865 16,827 3.98 %
Commercial construction 388,795 6,932 7.23 % 409,264 3,329 3.30 %
Total Commercial Loans 5,232,290 77,551 6.01 % 5,379,367 49,501 3.73 %
Residential mortgage 1,144,821 12,613 4.43 % 896,268 8,962 4.02 %
Home equity 650,385 10,067 6.28 % 570,781 4,823 3.43 %
Installment and other consumer 122,873 2,364 7.80 % 109,972 1,475 5.44 %
Consumer construction 45,870 528 4.67 % 21,833 181 3.37 %
Total Consumer Loans 1,963,949 25,572 5.26 % 1,598,854 15,441 3.90 %
Total Portfolio Loans 7,196,239 103,123 5.81 % 6,978,221 64,942 3.77 %
Total Loans(1)(3)
7,196,365 103,125 5.81 % 6,979,765 64,955 3.77 %
Total other earning assets 34,720 581 6.71 % 9,280 79 3.40 %
Total Interest-earning Assets 8,372,193 111,458 5.39 % 8,747,398 70,602 3.27 %
Noninterest-earning assets 754,677 709,246
Total Assets $ 9,126,870 $ 9,456,644
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing demand $ 824,623 $ 673 0.33 % $ 986,639 $ 185 0.08 %
Money market 1,670,988 7,748 1.88 % 2,055,857 746 0.15 %
Savings 1,090,137 806 0.30 % 1,109,048 78 0.03 %
Certificates of deposit 1,052,460 5,676 2.19 % 1,070,189 844 0.32 %
Total Interest-bearing Deposits 4,638,208 14,903 1.30 % 5,221,733 1,853 0.14 %
Securities sold under repurchase agreements — — — % 81,790 20 0.10 %
Short-term borrowings 451,668 5,487 4.93 % — — — %
Long-term borrowings 14,689 98 2.71 % 22,310 107 1.95 %
Junior subordinated debt securities 54,458 1,007 7.50 % 54,398 395 2.95 %
Total Borrowings 520,815 6,592 5.13 % 158,498 523 1.34 %
Other interest-bearing liabilities 54,669 617 4.58 % — — — %
Total Interest-bearing Liabilities 5,213,692 22,112 1.72 % 5,380,231 2,376 0.18 %
Noninterest-bearing liabilities 2,706,820 2,879,718
Shareholders' equity 1,206,358 1,196,694
Total Liabilities and Shareholders' Equity $ 9,126,870 $ 9,456,644
Net Interest Income (1)(2)
$ 89,345 $ 68,226
Net Interest Margin (1)(2)
4.32 % 3.16 %

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS




	Three months ended March 31, 2024							Three months ended March 31, 2023
(dollars in thousands)	Average Balance		Interest			Rate		Average Balance		Interest			Rate
ASSETS
Interest-bearing deposits with banks	$	144,637		$	2,066	5.75	%	$	140,499		$	1,482	4.22	%
Securities, at fair value(1)(2)	966,703			6,798		2.81	%	1,000,609			6,269		2.51	%
Loans held for sale	176			3		7.12	%	126			2		6.39	%
Commercial real estate	3,365,142			49,557		5.92	%	3,132,382			42,104		5.45	%
Commercial and industrial	1,626,633			29,768		7.36	%	1,711,113			28,515		6.76	%
Commercial construction	365,088			6,993		7.70	%	388,795			6,932		7.23	%
Total Commercial Loans	5,356,863			86,318		6.48	%	5,232,290			77,551		6.01	%
Residential mortgage	1,478,609			18,187		4.93	%	1,144,821			12,613		4.43	%
Home equity	648,265			11,269		6.99	%	650,385			10,067		6.28	%
Installment and other consumer	110,899			2,384		8.64	%	122,873			2,364		7.80	%
Consumer construction	69,676			970		5.60	%	45,870			528		4.67	%
Total Consumer Loans	2,307,449			32,810		5.71	%	1,963,949			25,572		5.26	%
Total Portfolio Loans	7,664,312			119,128		6.25	%	7,196,239			103,123		5.81	%
Total Loans(1)(3)	7,664,488			119,131		6.25	%	7,196,365			103,125		5.81	%
Total other earning assets	25,335			451		7.12	%	34,720			581		6.71	%
Total Interest-earning Assets	8,801,163			$	128,446	5.86	%	8,372,193			$	111,458	5.39	%
Noninterest-earning assets	737,742							754,677
Total Assets	$	9,538,905						$	9,126,870
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing demand	$	829,095		$	2,319	1.12	%	$	824,623		$	673	0.33	%
Money market	1,920,009			15,061		3.15	%	1,670,988			7,748		1.88	%
Savings	939,467			1,483		0.63	%	1,090,137			806		0.30	%
Certificates of deposit	1,639,059			17,798		4.37	%	1,052,460			5,676		2.19	%
Total Interest-bearing Deposits	5,327,630			36,661		2.77	%	4,638,208			14,903		1.30	%

Short-term borrowings	408,351			5,460		5.37	%	451,668			5,487		4.93	%
Long-term borrowings	39,221			442		4.53	%	14,689			98		2.71	%
Junior subordinated debt securities	49,364			1,010		8.23	%	54,458			1,007		7.50	%
Total Borrowings	496,936			6,912		5.59	%	520,815			6,592		5.13	%
Other interest-bearing liabilities	52,239			703		5.42	%	54,669			617		4.58	%
Total Interest-bearing Liabilities	5,876,805			44,276		3.03	%	5,213,692			22,112		1.72	%
Noninterest-bearing liabilities	2,371,586							2,706,820
Shareholders' equity	1,290,514							1,206,358
Total Liabilities and Shareholders' Equity	$	9,538,905						$	9,126,870
Net Interest Income(1)(2)				$	84,169						$	89,346
Net Interest Margin(1)(2)						3.84	%						4.32	%

(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 $5.2 million, or 5.8 percent, for the three months ended March 31, 2024, compared to the same period in 2023. The net interest margin, or NIM, on an FTE basis (non-GAAP) decreased 48 basis points for the three months ended March 31, 2024, compared to the same period in 2023. The decreases in net interest income and NIM on an FTE basis (non-GAAP) were primarily due to higher interest rates and a shift in our funding mix to higher cost money market and certificates of deposits.

Interest income on an FTE basis (non-GAAP) increased $17.0 million for the three months ended March 31, 2024, compared to the same period in 2023. The increased interest income on an FTE basis (non-GAAP) was primarily due to higher interest rates. Average loan balances increased $468.1 million for the three months ended March 31, 2024, compared to the same period in 2023. The average yield on loan balances increased 44 basis points for the three months ended March 31, 2024 compared to the same period in 2023, due to increased interest rates. Overall, the FTE rate (non-GAAP) on interest-earning assets increased 47 basis points for the three months ended March 31, 2024, compared to the same period in 2023.

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Net interest income on an FTE basis (non-GAAP) increased $21.1 million, or 31.0%, for the three months ended March 31, 2023 compared to the same period in 2022. The net interest margin, or NIM, on an FTE basis (non-GAAP) increased 116 basis points for the three months ended March 31, 2023 compared to the same period in 2022. The increases in net interest income and NIM on an FTE basis (non-GAAP) were primarily due to higher interest rates during 2023.

Interest ~~income on an FTE basis (non-GAAP)~~expense increased ~~$40.9~~$22.2 million for the three months ended March 31, ~~2023~~2024, compared to the same period in 2022. The increase in interest income on an FTE basis (non-GAAP) was primarily due to higher interest rates. Average loan balances increased $216.6 million for the three months ended March 31, 2023 compared to the same period in 2022. The average yield on loans increased 204 basis points for the three months ended March 31, 2023 compared to the same period in 2022 due to increased interest rates. Average interest-bearing deposits with banks decreased $615.6 million for the three months ended March 31, 2023 compared to the same period in 2022 due to decreased deposit balances and increased loans. Overall, the FTE rate (non-GAAP) on interest-earning assets increased 212 basis points for the three months ended March 31, 2023 compared to the same period in 2022.

~~Interest expense increased $19.7 million for the three months ended March 31, 2023 compared to the same period in 2022.~~2023. The increase in interest expense was primarily due to higher interest ~~rates.~~rates and a shift in our funding mix to higher cost products. Average interest-bearing deposits ~~decreased $583.5~~increased $689.4 million, of which $377.8 million was brokered deposits, for the three months ended March 31, ~~2023~~2024, compared to the same period in ~~2022. The decrease was due to the competitive market driven by rising interest rates.~~2023. The average rate paid on interest-bearing deposits increased ~~116~~147 basis points for the three months ended March 31, ~~2023~~2024, compared to the same period in ~~2022. Average borrowings~~2023, due to higher interest rates. Certificates of deposits increased ~~$362.3~~$586.6 million and the average rate paid on certificates of deposits increased 218 basis points. The increase to certificate of deposits was due to higher interest rates resulting in customers moving deposits to higher yield accounts and the addition of $199.8 million of brokered certificates of deposits. The average rate paid on borrowings increased ~~379~~46 basis points for the three months ended March 31, ~~2023~~2024, compared to the same period in ~~2022~~2023, primarily due to ~~decreased deposit balances and~~ increased ~~loans.~~interest rates. Overall, the cost of interest-bearing liabilities increased ~~154~~131 basis points for the three months ended March 31, ~~2023~~2024, compared to the same period in ~~2022.~~

~~Table of Contents~~

~~S&T BANCORP, INC. AND SUBSIDIARIES~~

~~Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

2023.

The following table sets forth ~~for the periods presented~~ a summary of the changes in interest earned and interest paid resulting from changes in volume and changes in ~~rates:~~rates for the periods presented:
Three Months Ended March 31, 2023 Compared to March 31, 2022
(dollars in thousands)
Volume (4)
Rate (4)
Total
Interest earned on:
Interest-bearing deposits with banks $ (247) $ 1,426 $ 1,179
Securities, at fair value(1)(2)
(8) 1,012 1,004
Loans held for sale (12) 1 (12)
Commercial real estate (1,125) 13,884 12,759
Commercial and industrial (17) 11,705 11,688
Commercial construction (167) 3,770 3,603
Total Commercial Loans (1,309) 29,359 28,050
Residential mortgage 2,485 1,165 3,651
Home equity 673 4,571 5,244
Installment and other consumer 173 716 889
Consumer construction 200 148 347
Total Consumer Loans 3,531 6,600 10,131
Total Portfolio Loans 2,222 35,959 38,181
Total Loans (1)(3)
2,210 35,960 38,169
Total other earning assets 216 286 502
Change in Interest Earned on Interest-earning Assets $ 2,171 $ 38,684 $ 40,854
Interest paid on:
Interest-bearing demand $ (30) $ 518 $ 487
Money market (140) 7,141 7,002
Savings (1) 730 728
Certificates of deposit (14) 4,846 4,832
Total Interest-bearing Deposits (185) 13,235 13,049
Securities sold under repurchase agreements (20) — (20)
Short-term borrowings 5,487 — 5,487
Long-term borrowings (37) 28 (9)
Junior subordinated debt securities — 611 611
Total Borrowings 5,430 639 6,069
Change in Interest Paid on Interest-bearing Liabilities 5,862 13,874 19,735
Change in Net Interest Income $ (3,691) $ 24,810 $ 21,119



	Three Months Ended March 31, 2024 Compared to March 31, 2023
(dollars in thousands)		Volume (4)		Rate (4)		Total
Interest earned on:
Interest-bearing deposits with banks		$	44	$	540	$	584
Securities, at fair value(1)(2)		(212)		741		529
Loans held for sale		1		—		1
Commercial real estate		3,129		4,324		7,453
Commercial and industrial		(1,408)		2,661		1,253
Commercial construction		(423)		484		61
Total Commercial Loans		1,298		7,469		8,767
Residential mortgage		3,677		1,896		5,573
Home equity		(33)		1,236		1,203
Installment and other consumer		(230)		250		20
Consumer construction		274		167		441
Total Consumer Loans		3,688		3,549		7,237
Total Portfolio Loans		4,986		11,018		16,004
Total Loans(1)(3)		4,987		11,018		16,005
Total other earning assets		(157)		27		(130)
Change in Interest Earned on Interest-earning Assets		$	4,662	$	12,326	$	16,988
Interest paid on:
Interest-bearing demand		$	4	$	1,642	$	1,646
Money market		1,153		6,159		7,310
Savings		(111)		788		677
Certificates of deposit		3,164		8,959		12,123
Total Interest-bearing Deposits		4,210		17,548		21,756

Short-term borrowings		(526)		500		(26)
Long-term borrowings		164		179		343
Junior subordinated debt securities		(94)		97		3
Total Borrowings		(456)		776		320
Other interest-bearing liabilities		(27)		113		86
Change in Interest Paid on Interest-bearing Liabilities		3,727		18,437		22,162
Change in Net Interest Income		$	935	$	(6,111)	$	(5,174)

(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.

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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, risk ratings, net loan charge-offs/recoveries, the macro environment and our Current Expected Credit Loss, or CECL, forecast. The provision for credit losses increased ~~$1.4~~$1.7 million to ~~$0.9~~$2.6 million for the three months ended March 31, ~~2023~~2024, compared to ~~a negative $0.5~~$0.9 million for the same period in ~~2022.~~2023. The increase in the

provision for credit losses for the three months ended March 31, 2024, compared to the same period in 2023 was primarily due

to an increase in net loan charge-offs, which was partially offset by reductions in our specific reserve for loans individually

evaluated due to the resolution of a $6.0 million commercial relationship and in our healthcare segment specific reserve due to reduced exposure. The provision for credit losses included a ~~negative $0.2~~reduction of $0.8 million for the reserve for unfunded commitments for the three months ended March 31, ~~2023~~2024, compared to a reduction of $0.2 million for the same period in ~~2022.~~2023.

~~The increase in the provision for credit losses~~Net loan charge-offs for the three months ended March 31, ~~2023~~2024 were $6.6 million, or 0.35 percent of average loans, compared to net recoveries of $5.1 million, or 0.29 percent of average loans, for the same period in ~~2022 was~~2023. Net loan charge-offs for the three months ended March 31, 2024 were primarily related to two commercial real estate, or CRE, relationships totaling $5.3 million and a ~~$4.2 million specific reserve for a~~commercial and industrial, or C&I, relationship ~~and a $1.8~~totaling $1.1 million. Offsetting loan charge-offs of $4.5 million ~~increase in qualitative reserve related to the macro environment. Offsetting the increase in the provision for credit losses~~ during the three months ended March 31, 2023 was a $9.3 million recovery ~~from~~related to a 2020 customer ~~fraud in 2020.~~fraud. Refer to the "Allowance for Credit Losses" section of this MD&A for further details.

~~Net loan recoveries were $5.1~~

Noninterest Income




	Three Months Ended March 31,
(dollars in thousands)	2024			2023			$ Change			% Change

Debit and credit card		$	4,235		$	4,373		$	(138)		(3.2)	%
Service charges on deposit accounts		3,828			4,076			(248)			(6.1)	%
Wealth management		3,042			2,948			94			3.2	%
Mortgage banking		277			301			(24)			(8.0)	%

Other noninterest income		1,448			1,492			(44)			(2.9)	%
Total Noninterest Income		$	12,830		$	13,190		$	(360)		(2.7)	%

Noninterest income decreased $0.4 million to $12.8 million for the three months ended March 31, ~~2023~~2024, compared to ~~$2.0~~the same period in 2023. Service charges on deposit accounts decreased $0.2 million for the three months ended March 31, 2024 due to decreases in returned check fees and the elimination of NSF fees in April 2023. Debit and credit card income decreased $0.1 million due to decreased customer activity and merchant referral revenue.

Noninterest Expense




	Three Months Ended March 31,
(dollars in thousands)		2024	2023	$ Change			% Change
Salaries and employee benefits					$	29,512		$	27,601	$	1,911	6.9	%
Data processing and information technology					4,954			4,258		696		16.3	%
Occupancy					3,870			3,835		35		0.9	%
Furniture, equipment and software					3,472			2,861		611		21.4	%
Professional services and legal					1,720			1,821		(101)		(5.5)	%
Other taxes					1,871			1,790		81		4.5	%
Marketing					1,943			1,853		90		4.9	%
FDIC insurance					1,049			1,012		37		3.7	%

Other					6,129			6,668		(539)		(8.1)	%
Total Noninterest Expense					$	54,520		$	51,699	$	2,821	5.5	%

Noninterest expense increased $2.8 million to $54.5 million for the three months ended March 31, 2024 compared to the same period in 2023. Salaries and employee benefits increased $1.9 million for the three months ended March 31, 2024 due to annual merit increases, inflationary wage pressure and the acquisition of new talent. Data processing and information technology increased $0.7 million due to additional services provided through our third party provider. Furniture, equipment and software expenses increased $0.6 million as a result of software and technology investments, which further contributed to the overall increase in noninterest expense. Other noninterest expense decreased $0.5 million primarily due to the adoption of new accounting guidance on January 1, 2024. Amortization expense of $0.8 million related to tax credit equity investments is included in income tax expense for the three months ended March 31, 2024, compared to amortization expense of $0.5 million included in other noninterest expense for the same period in 2022. The net recovery was primarily due to the $9.3 million recovery mentioned above. Total gross charge-offs were $4.5 million primarily related to a $3.4 million charge-off related to a strategic note sale of a C&I relationship.2023.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

~~Noninterest Income~~

Three Months Ended March 31,
(dollars in thousands) 2023 2022 $ Change % Change
Debit and credit card $ 4,373 $ 5,063 $ (690) (13.6) %
Service charges on deposit accounts 4,076 3,974 102 2.6 %
Wealth management 2,948 3,242 (294) (9.1) %
Mortgage banking 301 1,015 (714) (70.3) %
Other 1,492 1,932 (440) (22.8) %
Total Noninterest Income $ 13,190 $ 15,226 $ (2,036) (13.4) %

Noninterest income decreased $2.0 million to $13.2 million for the three months ended March 31, 2023 compared to the same period in 2022. Mortgage banking decreased $0.7 million for the three months ended March 31, 2023 due to a decline in loan sale activity caused by rising interest rates and a shift to holding originated mortgage loans on our balance sheet. Debit and credit card income decreased $0.7 million for the three months ended March 31, 2023 due to decreased debit card incentive income and timing of referral merchant revenue. Wealth management income decreased $0.3 million due to lower assets under management primarily related to declines in the stock market compared to the three months ended March 31, 2022. Other noninterest income decreased $0.4 million for the three months ended March 31, 2023 primarily due to a net gain on sale of OREO in 2022.

~~Noninterest Expense~~
Three Months Ended March 31,
(dollars in thousands) 2023 2022 $ Change % Change
Salaries and employee benefits $ 27,601 $ 23,712 $ 3,889 16.4 %
Data processing and information technology 4,258 4,435 (177) (4.0) %
Occupancy 3,835 3,882 (47) (1.2) %
Furniture, equipment and software 2,861 2,777 84 3.0 %
Professional services and legal 1,821 1,949 (128) (6.6) %
Other taxes 1,790 1,537 253 16.5 %
Marketing 1,853 1,361 492 36.1 %
FDIC insurance 1,012 937 75 8.0 %
Other 6,668 6,824 (156) (2.3) %
Total Noninterest Expense $ 51,699 $ 47,414 $ 4,285 9.0 %

Noninterest expense increased $4.3 million to $51.7 million for the three months ended March 31, 2023 compared to the same period in 2022. Salaries and employee benefits increased $3.9 million for the three months ended March 31, 2023 due to increases in the fair market value of assets in a nonqualified defined benefit plan, incentives, base rate increases and higher medical costs. Marketing costs increased $0.5 million for the three months ended March 31, 2023 due to increased marketing efforts and timing of various promotions.

Provision for Income Taxes

The provision for income taxes ~~increased $2.7~~decreased $1.7 million to $7.9 million for the three months ended March 31, 2024, compared to $9.6 million for the three months ended March 31, ~~2023~~2023. The decrease in our income tax provision was primarily due to a $10.2 million decrease in income before taxes in 2024 compared to ~~$6.9 million for the same period in 2022. Our~~2023.

The effective tax rate, ~~was 19.4~~which is total tax expense as a percentage of income before taxes, increased to 20.2 percent for the three months ended March 31, ~~2023~~2024, compared to ~~19.2~~19.4 percent in the same period in 2023. The increase in the effective tax rate for the three months ended March 31, ~~2022. The increase in our effective tax rate for the three month period ended March 31, 2023~~2024 was primarily due to ~~an increase~~the adoption of the proportional amortization method, or PAM, related to tax credit equity investments on January 1, 2024. Under the PAM, amortization expense related to tax credit equity investments is included in ~~pretax~~ income tax expense for the three months ended March 31, 2024, compared to other noninterest expense for the same period in ~~2022.~~2023.

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~~S&T BANCORP, INC. AND SUBSIDIARIES~~

~~Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

Financial Condition as of March 31, ~~2023~~2024

Total assets ~~increased $82.9 million to $9.2~~were $9.5 billion at March 31, ~~2023~~2024, compared to ~~$9.1~~$9.6 billion at December 31, ~~2022.~~2023. Total portfolio loans remained unchanged at $7.7 billion at March 31, 2024, compared to December 31, 2023. ~~Cash and~~The commercial loan portfolio decreased $38.1 million at March 31, 2024, compared to December 31, 2023, primarily due ~~from banks increased~~to a decrease of $~~34.2~~45.0 million toin C&I loans, offset by an increase of $~~244.2~~10.1 million in CRE.

Securities remained unchanged at $1.0 billion at March 31, ~~2023~~2024 and ~~compared to~~ ~~$210.0 million~~ at December 31, ~~2022~~2023.. Total portfolio loans increased $67.1 million to $7.3 billion at March 31, 2023 compared to $7.2 billion at December 31, 2022. The increase in loans primarily related to consumer loan growth of $65.3 million with an increase in consumer real estate of $70.3 million compared to December 31, 2022.

~~Securities remained relatively unchanged at $998.7 million at~~ ~~March 31, 2023~~ ~~from $1.0 billion at~~ ~~December 31, 2022~~. The bond portfolio was in a net unrealized loss position of ~~$88.3~~$87.8 million at March 31, ~~2023~~2024, compared to a net unrealized loss position of ~~$102.3~~$82.0 million at December 31, ~~2022.~~2023. The increase in the net unrealized loss portion of the bond portfolio of $5.8 million was due to a change in interest rates.

Our total deposits ~~decreased $66.9~~increased $78.6 million ~~to $7.2 billion~~ at March 31, ~~2023~~2024, compared to December 31, ~~2022. Certificates of deposit~~2023. Customer deposits increased ~~$240.6 million mainly due to migration from other deposit categories. Noninterest-bearing demand deposits decreased $120.1 million, money market decreased $131.7 million and savings decreased $50.2~~$77.8 million compared to December 31, ~~2022.~~2023, as a result of our focus on deposit franchise. The ~~decreases were primarily attributed~~pace of customers moving deposits to ~~normal~~higher costing deposit ~~fluctuations and competition in a higher interest rate environment.~~types has moderated compared to the prior year

Total borrowings ~~increased $124.9~~decreased $130.1 million to ~~$564.1~~$373.5 million at March 31, ~~2023~~2024 compared to ~~$439.2~~$503.6 million at December 31, ~~2022~~2023 primarily due to ~~loan growth and lower~~ deposit ~~levels.~~growth.

Total shareholders’ equity increased by ~~$43.1~~$11.6 million to ~~$1.2~~$1.3 billion at March 31, ~~2023~~2024, compared to December 31, ~~2022.~~2023. The increase was primarily due to net income of ~~$39.8 million, other comprehensive income of $15.5~~$31.2 million, offset by other comprehensive loss of $6.8 million and dividends of ~~$12.5~~$12.7 million.

Securities Activity


(dollars in thousands)

(dollars in thousands)

(dollars in thousands)	(dollars in thousands)	March 31, 2023			December 31, 2022			$ Change			March 31, 2024	December 31, 2023	$ Change
U.S. Treasury securities	U.S. Treasury securities		$	133,704		$	131,695		$	2,009
Obligations of U.S. government corporations and agencies	Obligations of U.S. government corporations and agencies		42,095			41,811			284
Collateralized mortgage obligations of U.S. government corporations and agencies	Collateralized mortgage obligations of U.S. government corporations and agencies		432,739			428,407			4,332
Residential mortgage-backed securities of U.S. government corporations and agencies	Residential mortgage-backed securities of U.S. government corporations and agencies		41,170			41,587			(417)
Commercial mortgage-backed securities of U.S. government corporations and agencies	Commercial mortgage-backed securities of U.S. government corporations and agencies		317,099			327,313			(10,214)
Corporate obligations			—			500			(500)

Obligations of states and political subdivisions
Obligations of states and political subdivisions
Obligations of states and political subdivisions	Obligations of states and political subdivisions		30,895			30,471			424
Available-for-Sale Debt Securities	Available-for-Sale Debt Securities		997,702			1,001,784			(4,082)
Marketable equity securities			1,006			994			12
Total Securities			$	998,708		$	1,002,778		$	(4,070)
Equity securities
Total Securities Available for Sale

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. Security purchases are subject to an investment policy approved annually by our Board of Directors and administered through ALCO and our treasury function. Securities remained ~~relatively~~ unchanged at ~~$998.7 million~~$1.0 billion at March 31, ~~2023~~2024 compared to ~~$1.0 billion at~~ December 31, ~~2022.~~2023.

At March 31, ~~2023,~~2024, our bond portfolio was in a net unrealized loss position of ~~$88.3~~$87.8 million compared to a net unrealized loss position of ~~$102.3~~$82.0 million at December 31, ~~2022. The decline in our net unrealized losses was due to a decrease in long term interest rates since December 31, 2022.~~2023. At March 31, ~~2023,~~2024, our bond portfolio had gross unrealized losses of ~~$88.9~~$88.4 million and $0.6 million in gross unrealized gains, compared to December 31, 2023, when total gross unrealized losses were $83.8 million offset by gross unrealized gains of ~~$0.6 million compared to December 31, 2022, when total gross unrealized losses were $102.6 million offset by gross unrealized gains of $0.3~~$1.8 million.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Loan Composition

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


		March 31, 2024

		March 31, 2024

		March 31, 2024

(dollars in thousands)

(dollars in thousands)
		March 31, 2023				December 31, 2022
(dollars in thousands)	(dollars in thousands)	Amount		% of Loans		Amount		% of Loans		$ Change		% Change		Amount		% of Total					Amount		% of Total					$ Change					% Change
Commercial	Commercial
Commercial real estate	Commercial real estate	$	3,145,079	43.4	%	$	3,128,187	43.5	%	$	16,892	0.5	%
Commercial real estate
Commercial real estate															$	3,367,722		44.0		%		$	3,357,603		43.9		%		$	10,119					0.3		%
Commercial and industrial	Commercial and industrial	1,709,612		23.6	%	1,718,976		23.9	%	(9,364)		(0.5)	%	Commercial and industrial	1,597,119			20.9	20.9	%		1,642,106			21.5	21.5	%		(44,987)			(2.7)				(2.7)		%
Commercial construction	Commercial construction	393,658		5.4	%	399,371		5.6	%	(5,713)		(1.4)	%	Commercial construction	360,086			4.7	4.7	%		363,284			4.7	4.7	%		(3,198)			(0.9)				(0.9)		%

Total Commercial Loans	Total Commercial Loans	5,248,349		72.4	%	5,246,534		73.0	%	1,815		—	%	Total Commercial Loans	5,324,927			69.6	69.6	%		5,362,993			70.1	70.1	%		(38,066)			(0.7)				(0.7)		%
Consumer	Consumer
Consumer real estate
Consumer real estate
Consumer real estate	Consumer real estate	1,882,872		26.0	%	1,812,539		25.2	%	70,333		3.9	%	2,222,875		29.0	29.0	%			2,175,451		28.4	28.4	%			47,424			2.2			2.2		%
Other consumer	Other consumer	119,843		1.6	%	124,896		1.8	%	(5,053)		(4.0)	%	Other consumer	108,232			1.4	1.4	%		114,897			1.5	1.5	%		(6,665)			(5.8)				(5.8)		%
Total Consumer Loans	Total Consumer Loans	2,002,715		27.6	%	1,937,435		27.0	%	65,280		3.4	%	Total Consumer Loans	2,331,107			30.4	30.4	%		2,290,348			29.9	29.9	%		40,759			1.8				1.8		%
Total Portfolio Loans	Total Portfolio Loans	7,251,064		100.0	%	7,183,969		100.0	%	67,095		0.9	%	Total Portfolio Loans	$	7,656,034		100.0	100.0	%		$	7,653,341		100.0	100.0	%		2,693			—				—		%
Loans held for sale		81				16				65		406.3	%
Total Loans		$	7,251,145			$	7,183,985			$	67,160	0.9	%

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 ~~increased $67.1 million, or 0.9 percent, to $7.3~~remained unchanged at $7.7 billion at March 31, ~~2023 compared to $7.2 billion at~~2024 and December 31, ~~2022.~~

2023. As of March 31, ~~2023,~~ ~~71.0~~2024, 64 percent of our total loans were variable rate loans and ~~29.0~~36 percent were fixed rate ~~loans.~~ loans, compared to 65 percent variable rate and 35 percent fixed rate at December 31, 2023. Commercial loans, including CRE, C&I and commercial construction, comprised ~~72.4~~69.6 percent of total portfolio loans at March 31, ~~2023~~2024 and ~~73.0~~70.1 percent at December 31, ~~2022.~~2023. The commercial loan portfolio ~~increased $1.8~~decreased $38.1 million at March 31, ~~2023~~2024 compared to December 31, ~~2022~~2023, primarily due to a decrease of $45.0 million in C&I, offset by an increase of $10.1 million in CRE. Loan volume has slowed due to higher interest rates and an uncertain macro environment.

Our multifamily and office segments are the most significant CRE and commercial construction concentrations within our portfolio. Approximately 95 percent of multifamily and office CRE loans are located within our market area, which includes Pennsylvania and the contiguous states of ~~$16.9~~Ohio, New York, West Virginia, New Jersey, Delaware and Maryland

In the CRE segment, multifamily represented $580.8 million, ~~which was related~~or 7.6 percent of total portfolio loans, at March 31, 2024, compared to ~~growth~~$569.4 million, or 7.4 percent, at December 31, 2023. The average loan size of multifamily CRE is $1.0 million, with an average loan-to-value of 56 percent. There were no special mention loans and $6.9 million substandard in ~~business banking loans. C&I~~the multifamily CRE segment at March 31, 2024, compared to special mention loans ~~decreased $9.4~~of $3.8 million and ~~construction decreased $5.7~~substandard of $13.0 million at December 31, 2023.

Office CRE was $482.0 million, or 6.3 percent of total portfolio loans, at March 31, 2024, compared to $480.5 million, or 6.3 percent, at December 31, ~~2022 due~~2023. The average loan size within the office CRE portfolio is $1.1 million, with an average loan-to-value of approximately 55 percent. Special mention loans in the office CRE segment were $12.3 million and substandard were $2.1 million at March 31, 2024, compared to ~~loan pay-offs~~special mention loans of $9.1 million and ~~lower origination volume due~~substandard of $2.5 million at December 31, 2023. Approximately 90 percent of the office portfolio is located in non-central business districts, with the remaining 10 percent in central business districts within our market area.

In addition, within the commercial construction segment, multifamily represented $115.3 million, or 1.5 percent of total portfolio loans, at March 31, 2024, compared to $119.0 million, or 1.6 percent, at December 31, 2023. Commercial construction office was $29.5 million, or 0.4 percent of total portfolio loans, at December 31, 2024, compared to $36.0 million, or 0.5 percent, at December 31, 2023. There were no special mention or substandard commercial construction loans within our multifamily or office segments for the ~~current macro environment.~~periods presented.

Consumer loans represent ~~27.6~~30.4 percent of our total portfolio loans at March 31, ~~2023~~2024 and ~~27.0~~29.9 percent at December 31, ~~2022.~~2023. The consumer loan portfolio increased ~~$65.3~~$40.8 million at March 31, ~~2023~~2024, primarily due to growth in our consumer real estate portfolio of ~~$70.3~~$47.4 million compared to December 31, ~~2022.~~2023. Consistent with ~~2022,~~2023, we continue to retain consumer real estate loans on our balance sheet as portfolio loans, versus selling these loans due to the loan pricing in the secondary market ~~due to a higher volume of jumbo loans and the pricing of loans 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

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

the following portfolio segments: 1) ~~Commercial Real Estate, or~~ CRE, 2) ~~Commercial and Industrial, or~~ C&I, 3) Commercial Construction, 4) Business Banking, 5) Consumer Real Estate and 6) Other Consumer. Refer to Part 1. Financial Information, Note 5.5 Loans and Allowance for Credit Losses for details on our portfolio segments.

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~~S&T BANCORP, INC. AND SUBSIDIARIES~~

~~Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

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


		Three Months Ended March 31, 2023
	Three Months Ended March 31, 2024																					Three Months Ended March 31, 2024
(dollars in thousands)	(dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Business Banking		Consumer Real Estate		Other Consumer		Total Loans		(dollars in thousands)	Commercial Real Estate	Commercial and Industrial	Commercial Construction	Business Banking	Consumer Real Estate		Other Consumer	Total Loans
Allowance for credit losses on loans:	Allowance for credit losses on loans:
Balance at beginning of period	Balance at beginning of period	$	41,428	$	25,710	$	6,264	$	12,547	$	12,105	$	3,286	$	101,340
Impact of ASU 2022-02		—		75		215		251		278		(251)		568
Balance at beginning of period
Balance at beginning of period
Provision for credit losses on loans(1)	Provision for credit losses on loans(1)	(1,011)		(476)		412		1,497		488		180		1,090
Charge-offs	Charge-offs	—		(3,412)		—		(652)		(77)		(318)		(4,459)
Recoveries	Recoveries	9		9,400		2		37		61		65		9,574
Net Recoveries/(Charge-offs)		9		5,988		2		(615)		(16)		(253)		5,115
Net Charge-offs
Balance at End of Period	Balance at End of Period	$	40,426	$	31,297	$	6,893	$	13,680	$	12,855	$	2,962	$	108,113
(1) Excludes the provision for credit losses for unfunded commitments.	(1) Excludes the provision for credit losses for unfunded commitments.															(1) Excludes the provision for credit losses for unfunded commitments.

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


		March 31, 2023		December 31, 2022
Ratio of net (recoveries) charge-offs to average loans outstanding(1)		(0.29)	%	0.04	%
	March 31, 2024								March 31, 2024			December 31, 2023
Ratio of net charge-offs to average loans outstanding(1)						Ratio of net charge-offs to average loans outstanding(1)	0.35	%		0.18	%
Allowance for credit losses as a percentage of total portfolio loans	Allowance for credit losses as a percentage of total portfolio loans	1.49	%	1.41	%	Allowance for credit losses as a percentage of total portfolio loans	1.37	%		1.41	%
Allowance for credit losses to nonaccrual loans	Allowance for credit losses to nonaccrual loans	439	%	532	%	Allowance for credit losses to nonaccrual loans	316	%		471	%

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

~~The ACL was $108.1~~Net loan charge-offs were $6.6 million, or 1.49 percent of total portfolio loans, at March 31, 2023 compared to $101.3 million, or 1.41 percent of total portfolio loans, at December 31, 2022. The increase in the ACL of $6.8 million was related to increases in our qualitative reserve, specific reserves on loans individually assessed and loan growth. The qualitative reserve increased $1.8 million due to a $2.2 million increase in qualitative factors related to the macro environment, which was partially offset by a $0.5 million reduction in qualitative segment specific reserves primarily due to improvement in our hotel portfolio. Specific reserves on loans individually assessed increased $4.2 million, related to a $6.8 million C&I relationship, compared to December 31, 2022.

~~Net loan recoveries were $5.1 million, or negative 0.29~~0.35 percent of average loans, for the three months ended March 31, ~~2023.~~2024. Refer to the "Provision for Credit Losses" section of this MD&A for further details.

The ACL was $104.8 million, or 1.37 percent of total portfolio loans, at March 31, 2024, compared to $108.0 million, or 1.41 percent of total portfolio loans, at December 31, 2023. The decrease in the ACL of $3.2 million was primarily related to decreased exposure in our healthcare portfolio.

Substandard loans decreased ~~$9.5~~$20.3 million to ~~$153.6~~$153.0 million at March 31, ~~2023~~2024, compared to ~~$163.1~~$173.3 million at December 31, ~~2022.~~2023. The decrease in substandard loans was primarily due to loan ~~payoffs.~~payoffs and commercial charge-offs of $6.6 million. Special mention loans increased ~~$40.7~~$11.5 million to ~~$261.7~~$147.3 million at March 31, ~~2023~~2024, compared to ~~$221.0~~$135.8 million at December 31, ~~2022.~~2023. The increase in special mention loans was primarily due ~~primarily~~ to ~~$27.9 million of~~risk rating downgrades in ~~CRE and $15.2 million in~~our C~~&I.~~&I portfolio.

Our allowance ~~for credit losses~~ on unfunded ~~commercial~~ loan commitments and letters of credit provide for the risk of expected loss in these arrangements. The allowance is computed using a methodology similar to that used to determine the ACL for loans, modified to take into account the probability of a draw-down on the commitment. The provision for credit losses on unfunded loan commitments is included in the provision for credit losses on ~~our~~the Condensed Consolidated Statements of Comprehensive ~~Income (Loss).~~Income. The allowance for unfunded loan commitments decreased ~~$0.2~~$0.8 million to ~~$8.0~~$6.0 million at March 31, ~~2023~~2024, compared to ~~$8.2~~$6.8 million at December 31, ~~2022. This change~~2023. The decrease was ~~primarily related~~due to ~~lower~~decreased loss rates and a reduction in unused commitments in our construction portfolio. The allowance for unfunded commitments is included in other liabilities in the Consolidated Balance Sheets.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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


(dollars in thousands)	(dollars in thousands)	March 31, 2023				December 31, 2022				$ Change			(dollars in thousands)	March 31, 2024	December 31, 2023	$ Change
Nonaccrual Loans	Nonaccrual Loans
Commercial real estate
Commercial real estate
Commercial real estate	Commercial real estate		$	7,931			$	7,323			$	608
Commercial and industrial	Commercial and industrial		9,348				2,974				6,374
Commercial construction	Commercial construction		384				384				—
Consumer real estate	Consumer real estate		6,664				8,093				(1,429)
Other Consumer	Other Consumer		317				278				39
Total Nonaccrual Loans	Total Nonaccrual Loans		24,644				19,052				5,592
OREO	OREO		3,076				3,065				11
Total Nonperforming Assets	Total Nonperforming Assets		$	27,720			$	22,117			$	5,603
Asset Quality Ratios:	Asset Quality Ratios:
Nonaccrual loans as a percent of total portfolio loans	Nonaccrual loans as a percent of total portfolio loans		0.34		%		0.27		%
Nonaccrual loans as a percent of total portfolio loans
Nonaccrual loans as a percent of total portfolio loans
Nonperforming assets as a percent of total portfolio loans plus OREO
Nonperforming assets as a percent of total portfolio loans plus OREO
Nonperforming assets as a percent of total portfolio loans plus OREO	Nonperforming assets as a percent of total portfolio loans plus OREO		0.38		%		0.31		%

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 increased ~~$5.6~~$10.3 million ~~or 29.4 percent,~~ to ~~$24.6~~$33.2 million at March 31, ~~2023~~2024, compared to ~~$19.0~~$22.9 million at December 31, ~~2022.~~2023. The increase in nonaccrual loans primarily related to the addition of a $16.4 million CRE loan, which was written down to the ~~$6.8~~value of an asset sale agreement and a $3.2 million ~~C&I relationship.~~partial charge-off was processed. The sale is expected to take place later in 2024. Partially offsetting the increase in nonaccrual loans for the three months ended March 31, 2024, was the payoff of a $5.9 million CRE loan.

Deposits

Deposits are our primary source of funds. We have a well-diversified deposit base with a balance mix of 5958.3 percent personal, 3632.1 percent business, ~~and 5~~4.6 percent public ~~funds.~~funds and 5.0 percent brokered at March 31, 2024.


		March 31, 2024
		March 31, 2024
		March 31, 2024
(dollars in thousands)
(dollars in thousands)
(dollars in thousands)	(dollars in thousands)	March 31, 2023			%		December 31, 2022			%		$ Change			%		Amount		% of Deposits				Amount		% of Deposits				$ Change				% Change
Personal	Personal		$	4,205,608	58.8	%		$	4,171,701	57.8	%		$	33,907	0.8	%	Personal	$	4,429,093	58.3	58.3	%		$	4,244,387	56.4	56.4	%		$	184,706	4.4			4.4		%
Business	Business		2,584,246		36.1	%		2,666,995		36.9	%		(82,749)		(3.1)	%	Business	2,443,009		32.1	32.1	%		2,565,853		34.1	34.1	%		(122,844)		(4.8)			(4.8)		%
Public funds	Public funds		363,240		5.1	%		381,274		5.3	%		(18,034)		(4.7)	%	Public funds	351,806		4.6	4.6	%		335,876		4.5	4.5	%		15,930		4.7			4.7		%
Brokered																	Brokered	376,439		5.0		%		375,653		5.0		%		786				0.2		%
Total Deposits	Total Deposits		$	7,153,094	100.0	%		$	7,219,970	100.0	%		$	(66,876)	(0.9)	%	Total Deposits	$	7,600,347	100.0	100.0	%		$	7,521,769	100.0	100.0	%		$	78,578	1.0			1.0		%

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

(dollars in thousands) March 31, 2023 December 31, 2022 $ Change
Noninterest-bearing demand $ 2,468,638 $ 2,588,692 $ (120,054)
Interest-bearing demand 841,130 846,653 (5,523)
Money market 1,599,814 1,731,521 (131,707)
Savings 1,068,274 1,118,511 (50,237)
Certificates of deposit 1,175,238 934,593 240,645
Total Deposits $ 7,153,094 $ 7,219,970 $ (66,876)

Our total deposits decreased by less than 1 percent compared to December 31, 2022 and can be attributed to normal deposit fluctuations and competition in a higher interest rate environment. Certificates of deposit increased $240.6 million compared to December 31, 2022 mainly due to the migration of $153.0 million from other deposit categories as customers seek higher interest rates. We have total uninsured deposits of $2.4 billion, or 33 percent, of our total deposit base compared to $2.5 billion, or 34 percent at December 31, 2022.


(dollars in thousands)	March 31, 2024			December 31, 2023			$ Change
Customer Deposits
Noninterest-bearing demand		$	2,188,927		$	2,221,942		$	(33,015)
Interest-bearing demand		848,729			825,787			22,942
Money market		1,781,718			1,741,189			40,529
Savings		936,056			950,546			(14,490)
Certificates of deposit		1,468,478			1,406,652			61,826
Total Customer Deposits		7,223,908			7,146,116			77,792
Brokered Deposits

Money market		100,439			200,653			(100,214)
Certificates of deposit		276,000			175,000			101,000
Total Brokered Deposits		376,439			375,653			786

Total Deposits		$	7,600,347		$	7,521,769		$	78,578

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our total deposits increased $78.6 million at March 31, 2024, compared to December 31, 2023. Customer deposits increased $77.8 million compared to December 31, 2023, as a result of our focus on deposit franchise. While we are still seeing movement by customers to higher cost certificate of deposits, the rate of customers moving deposits to higher costing deposit types has moderated compared to the prior year.

As a member of the IntraFi network, we are able to offer our customers insurance coverage on interest-bearing demand, money market and certificate of deposit balances in excess of the FDIC insurance limits. IntraFi balances increased $29.1 million to $306.8 million at March 31, 2024, compared to $277.7 million at December 31, 2023. We had total uninsured deposits of $2.3 billion, or 30 percent of our total deposit base, at both March 31, 2024 and December 31, 2023.

Borrowings

(dollars in thousands) March 31, 2023 December 31, 2022 $ Change
Short-term borrowings $ 495,000 $ 370,000 $ 125,000
Long-term borrowings 14,628 14,741 (113)
Junior subordinated debt securities 54,468 54,453 15
Total Borrowings $ 564,096 $ 439,194 $ 124,902


(dollars in thousands)	March 31, 2024			December 31, 2023			$ Change

Short-term borrowings		$	285,000		$	415,000		$	(130,000)
Long-term borrowings		39,156			39,277			(121)
Junior subordinated debt securities		49,373			49,358			15
Total Borrowings		$	373,529		$	503,635		$	(130,106)

Borrowings are an additional source of funding for us. Total borrowings ~~increased $124.9~~decreased $130.1 million to ~~$564.1~~$373.5 million at March 31, 2024, compared to ~~$439.2~~$503.6 million at December 31, ~~2022~~2023, primarily due to ~~loan growth and~~ deposit ~~declines.~~growth.

Information pertaining to short-term borrowings is summarized in the table below for the three months ended March 31, ~~2023~~2024 and ~~for~~ the twelve months ended December 31, ~~2022.~~2023.


		Short-Term Borrowings
		Short-Term Borrowings
		Short-Term Borrowings
		Short-Term Borrowings
(dollars in thousands)	(dollars in thousands)	March 31, 2023			December 31, 2022
(dollars in thousands)
(dollars in thousands)
Balance at the period end
Balance at the period end
Balance at the period end	Balance at the period end	$	495,000		$	370,000
Average balance during the period	Average balance during the period	$	451,668		$	40,013
Average balance during the period
Average balance during the period
Average interest rate during the period
Average interest rate during the period
Average interest rate during the period	Average interest rate during the period	4.93		%	4.15		%
Maximum month-end balance during the period	Maximum month-end balance during the period	$	495,000		$	370,000
Maximum month-end balance during the period
Maximum month-end balance during the period
Average interest rate at the period end	Average interest rate at the period end	5.11		%	4.49		%
Average interest rate at the period end
Average interest rate at the period end

Information pertaining to long-term borrowings and junior subordinated debt securities is summarized in the tables below for the three months ended March 31, ~~2023~~2024 and ~~for~~ the twelve months ended December 31, ~~2022.~~2023.


		Long-Term Borrowings
		Long-Term Borrowings
		Long-Term Borrowings
		Long-Term Borrowings

(dollars in thousands)
(dollars in thousands)
(dollars in thousands)	(dollars in thousands)	March 31, 2023			December 31, 2022
Balance at the period end	Balance at the period end	$	14,628		$	14,741
Balance at the period end
Balance at the period end
Average balance during the period
Average balance during the period
Average balance during the period	Average balance during the period	$	14,689		$	19,090
Average interest rate during the period	Average interest rate during the period	2.71		%	2.15		%
Average interest rate during the period
Average interest rate during the period
Maximum month-end balance during the period
Maximum month-end balance during the period
Maximum month-end balance during the period	Maximum month-end balance during the period	$	14,704		$	22,344
Average interest rate at the period end	Average interest rate at the period end	2.70		%	2.61		%
Average interest rate at the period end
Average interest rate at the period end

		Junior Subordinated Debt Securities

		Junior Subordinated Debt Securities

		Junior Subordinated Debt Securities
		Junior Subordinated Debt Securities
(dollars in thousands)	(dollars in thousands)	March 31, 2023			December 31, 2022
(dollars in thousands)
(dollars in thousands)
Balance at the period end
Balance at the period end
Balance at the period end	Balance at the period end	$	54,468		$	54,453
Average balance during the period	Average balance during the period	$	54,458		$	54,421
Average balance during the period
Average balance during the period
Average interest rate during the period
Average interest rate during the period
Average interest rate during the period	Average interest rate during the period	7.50		%	4.40		%
Maximum month-end balance during the period	Maximum month-end balance during the period	$	54,468		$	54,453
Maximum month-end balance during the period
Maximum month-end balance during the period
Average interest rate at the period end	Average interest rate at the period end	7.34		%	7.09		%
Average interest rate at the period end
Average interest rate at the period end

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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. The 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. The ALCO monitors and manages liquidity through various ratios, reviewing cash flow projections, performing stress tests and having a detailed contingency funding plan. The 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

~~Table of Contents~~

~~S&T BANCORP, INC. AND SUBSIDIARIES~~

~~Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

Condition as of March 31, ~~2023~~2024 - 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 when either a structure or cost efficiency has been identified.~~program. Additional funding sources accessible to S&T include borrowing availability at the Federal Home Loan Bank of Pittsburgh, or FHLB, ~~of Pittsburgh,~~ federal funds lines with other financial institutions and the brokered deposit ~~market and borrowing~~market. We also have availability ~~through~~at the Federal Reserve ~~Borrower-In-Custody program and~~Discount Window through the ~~Bank Term Funding~~Borrower-in-Custody Program.

In response to ~~recent~~the bank failures in March 2023, the Federal Reserve authorized additional funding availability to eligible depository institutions through the Federal Reserve Bank Term Funding ~~Program.~~Program, or BTFP. The temporary program iswas intended to help assure depositors that their institutions have an additional source of liquidity to meet their needs. Under the program, any collateral eligible for purchase by the Federal Reserve Banks in open market operations ~~can~~could be pledged, including U.S. ~~Treasuries,~~Treasury securities, U.S. Agencies and U.S. Agency mortgage-backed securities. Collateral advances ~~will be~~were equal to ~~100%~~100 percent of the par value of the collateral pledged with a term of up to one year. Interest iswas charged at a fixed rate equal to the one-year overnight index swap rate plus 10 basis points with no prepayment penalty. AsThe BTFP ceased making new loans as scheduled on March 11, 2024.

Available borrowing capacity exceeds uninsured deposits of ~~March 31, 2023, we have $731 million of collateral available to pledge under the program and no outstanding balance.~~

$2.3 billion. The following table summarizes funding sources available as of the dates presented:


		March 31, 2023						December 31, 2022
	March 31, 2024																	March 31, 2024				December 31, 2023
(dollars in thousands)	(dollars in thousands)	Borrowing Capacity		Balance		Available		Borrowing Capacity		Balance		Available		(dollars in thousands)	Borrowing Capacity	Balance	Available		Borrowing Capacity	Balance	Available
FHLB	FHLB	$	2,964,932	$	624,079	$	2,340,853	$	2,925,614	$	491,288	$	2,434,326
Federal Reserve Window		794,393		—		794,393		839,836		—		839,836
Federal Reserve BTLF		730,500		—		730,500		—		—		—
Borrower-in-Custody Program
Federal Reserve BTFP(1)
Total	Total	$	4,489,825	$	624,079	$	3,865,746	$	3,765,450	$	491,288	$	3,274,162
(1) Lending program created by the Federal Reserve in March 2023, new loans under the program ended March 11, 2024.														(1) Lending program created by the Federal Reserve in March 2023, new loans under the program ended March 11, 2024.

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 portion of our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our ~~2022~~2023 Form 10-K for more information on these future cash outflows. ~~Certificates~~Customer certificates of deposit increased ~~$240.6~~$61.8 million to ~~$1.2~~$1.5 billion at March 31, ~~2023~~2024, compared to December 31, ~~2022. Short-term~~2023 and short-term borrowings ~~increased $125.0~~decreased $130.0 million to ~~$495.0~~$285.0 million at March 31, ~~2023~~2024, compared to December 31, ~~2022.~~2023. Other than these changes, there have been no material changes to the contractual obligations previously disclosed in our ~~2022~~2023 Form ~~10-K,~~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 ~~with little or no loss in value,~~ 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, ~~2023,~~2024, S&T Bank had ~~$917.9~~$711.0 million in highly liquid assets, which consisted primarily of ~~$150.7~~$143.3 million in interest-bearing deposits with banks and ~~$767.1~~$567.7 million in unpledged securities. This resulted in a highly liquid assets to total assets ratio of ~~10.0~~7.5 percent at March 31, ~~2023.~~2024.

We continue to maintain a strong capital position with ~~our~~our leverage ratio at ~~11.15~~11.30 percent at March 31, ~~2023~~2024, compared to ~~11.06~~11.21 percent at December 31, ~~2022,~~2023, 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 ~~13.10~~13.59 percent at March 31, ~~2023~~2024, compared to ~~12.81~~13.37 percent at December 31, ~~2022,~~2023, both in excess of the well-capitalized regulatory guideline of 6.50 ~~percent to be well-capitalized.~~percent.

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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


(dollars in thousands)	(dollars in thousands)	Adequately Capitalized		Well- Capitalized		March 31, 2023				December 31, 2022				(dollars in thousands)	Adequately Capitalized			Well- Capitalized				March 31, 2024								December 31, 2023
						Amount		Ratio		Amount		Ratio										Amount			Ratio					Amount			Ratio
S&T Bancorp, Inc.	S&T Bancorp, Inc.
Tier 1 leverage
Tier 1 leverage
Tier 1 leverage	Tier 1 leverage	4.00	%	5.00	%	$	989,316	11.15	%	$	967,708	11.06	%	4.00	%	5.00		%		$	1,047,165		11.30	11.30	%			$	1,034,828		11.21	11.21	%
Common equity tier 1 to risk-weighted assets	Common equity tier 1 to risk-weighted assets	4.50	%	6.50	%	960,316		13.10	%	938,708		12.81	%	Common equity tier 1 to risk-weighted assets	4.50		%	6.50	%			1,023,165			13.59	13.59	%			1,010,828			13.37	13.37	%
Tier 1 capital to risk-weighted assets	Tier 1 capital to risk-weighted assets	6.00	%	8.00	%	989,316		13.50	%	967,708		13.21	%	Tier 1 capital to risk-weighted assets	6.00		%	8.00	%			1,047,165			13.91	13.91	%			1,034,828			13.69	13.69	%
Total capital to risk-weighted assets	Total capital to risk-weighted assets	8.00	%	10.00	%	1,106,039		15.09	%	1,078,897		14.73	%	Total capital to risk-weighted assets	8.00		%	10.00	%			1,166,371			15.49	15.49	%			1,154,376			15.27	15.27	%
S&T Bank	S&T Bank
Tier 1 leverage	Tier 1 leverage	4.00	%	5.00	%	$	957,491	10.80	%	$	938,377	10.73	%
Tier 1 leverage
Tier 1 leverage															4.00		%	5.00	%			$	1,005,771		10.86		%			$	995,824		10.79		%
Common equity tier 1 to risk-weighted assets	Common equity tier 1 to risk-weighted assets	4.50	%	6.50	%	957,491		13.07	%	938,377		12.81	%	Common equity tier 1 to risk-weighted assets	4.50		%	6.50	%			1,005,771			13.37	13.37	%			995,824			13.18	13.18	%
Tier 1 capital to risk-weighted assets	Tier 1 capital to risk-weighted assets	6.00	%	8.00	%	957,491		13.07	%	938,377		12.81	%	Tier 1 capital to risk-weighted assets	6.00		%	8.00	%			1,005,771			13.37	13.37	%			995,824			13.18	13.18	%
Total capital to risk-weighted assets	Total capital to risk-weighted assets	8.00	%	10.00	%	1,074,177		14.66	%	1,049,566		14.33	%	Total capital to risk-weighted assets	8.00		%	10.00	%			1,124,941			14.95	14.95	%			1,115,315			14.76	14.76	%

On March 27, 2020, the regulators issued interim final rule, or IFR, “Regulatory Capital Rule: Revised Transition of the Current Expected Credit Losses Methodology for Allowances” in response to the disrupted economic activity due to the COVID-19 pandemic. The IFR provides financial institutions that adopted CECL during 2020 with the option to delay for two years the estimated impact of CECL on regulatory capital, followed by a three-year transition period to phase out the aggregate amount of the capital benefit provided by the initial two-year delay (“five-year transition”). We adopted CECL effective January 1, 2020 and elected to implement the five-year transition.

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. As of March 31, ~~2023,~~2024, we had not issued any securities pursuant to this shelf registration statement.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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 the ALCO. The 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.


		March 31, 2023				December 31, 2022
		1 - 12 Months	13 - 24 Months	% Change in EVE		1 - 12 Months			13 - 24 Months			% Change in EVE
	March 31, 2024															March 31, 2024				December 31, 2023
	1 - 12 Months														1 - 12 Months		13 - 24 Months	% Change in EVE	1 - 12 Months		13 - 24 Months	% Change in EVE
Change in Interest Rate (basis points)	Change in Interest Rate (basis points)	% Change in Pretax Net Interest Income	% Change in Pretax Net Interest Income		% Change in EVE		% Change in Pretax Net Interest Income			% Change in Pretax Net Interest Income				% Change in EVE
400
400
400	400	14.0	19.6	(13.6)				14.6			22.0		(13.2)
300	300	10.4	14.5	(9.1)		11.0			16.6			(8.5)
200	200	6.8	9.5	(5.1)		7.4			11.2			(4.6)
100	100	3.4	4.8	(1.8)		3.7			5.7			(1.5)
-100	-100	(5.7)	(8.2)	(2.5)		(6.1)			(8.8)			(2.6)
-200	-200	(9.6)	(13.3)	(8.0)		(10.2)			(14.8)			(7.7)
-300	-300	(13.5)	(19.0)	(18.5)		(14.1)			(21.0)			(17.0)
-400	-400	(19.5)	(25.7)	(33.1)		(21.1)			(30.1)			(32.7)

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~~Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

The results from the rate shock analyses on net interest income are 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 ~~less~~more improvement in the percentage change in pretax net interest income in the rates up scenarios when comparing March 31, ~~2023~~2024 to December 31, ~~2022~~2023 primarily ~~because we have more short-term borrowings~~.due to changes in our funding mix. The percentage change in pretax net interest income in the rates down scenario shows ~~an improvement~~a decline when comparing March 31, ~~2023~~2024 to December 31, ~~2022 because of~~2023 primarily due to changes in our ~~increased ability to cut liability costs as deposit rates have increased and we have more short-term borrowings.~~funding mix. Our EVE analyses ~~show a decline in the percentage change in EVE~~remain relatively unchanged in the rates up ~~and~~scenarios. The percentage change in our EVE show improvement in rates down scenarios when comparing March 31, ~~2023~~2024 to December 31, ~~2022 due~~2023. These changes are mainly the result of changes to ~~the impact of interest rates on the value of nonmaturity deposits.~~our funding mix.

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.

Item 4. CONTROLS AND PROCEDURES

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, ~~2023.~~2024. 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, ~~2023,~~2024, 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.

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S&T BANCORP, INC. AND SUBSIDIARIES

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

There have been no material changes to the risk factors that we have previously disclosed in Part I, Item 1A – “Risk Factors” in our ~~2022~~2023 Form 10-K for the year ended December 31, ~~2022,~~2023, as filed with the SEC on February ~~24, 2023 other than the risks described below.~~

~~Table of Contents~~

~~S&T BANCORP, INC. AND SUBSIDIARIES~~

Difficult market conditions, including rapidly rising interest rates and several bank receiverships may adversely affect our business, results of operations, liquidity and stock price. Further adverse developments affecting the financial services industry and the soundness of financial institutions and further disruption to the economy and U.S. banking system may adversely affect our business, results of operations, liquidity and stock price.

The rapid rise in interest rates during 2022, the resulting industry-wide reduction in the fair value of securities portfolios, and the related bank runs resulting in the takeover by the FDIC of two banks placed in receivership in March 2023, have caused a current state of volatility in the financial services industry and uncertainty with respect to liquidity and the health of the U.S. banking system. Although we were not directly affected by these bank receiverships, this news caused fear among depositors, which caused them to withdraw or attempt to withdraw their funds from these and other financial institutions. Uncertainty may be compounded by the reach and depth of media attention, including social media, and its ability to disseminate concerns or rumors about any events of these kinds or other similar risks, and have in the past and may in the future lead to market-wide liquidity problems. Additionally, the stock prices of many financial institutions dropped and became volatile. While the FDIC resolution of these two banks was done in a manner that fully protects depositors, it is uncertain whether the steps taken by the government will be sufficient to calm the financial markets, alleviate concerns with respect to the U.S. banking system, reduce the risk of significant depositor withdrawals at other financial institutions and thereby reduce the risk of additional banks becoming insolvent, particularly in light of an additional bank being placed in receivership in the second quarter of 2023. Furthermore, financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships, which may expose us to credit risk and losses in the event of a default by a counterparty or client. As a result of these recent events, we face the potential for reputational risk, deposit outflows and increased credit risk which, individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations and liquidity.

Furthermore, if such levels of financial market and economic disruption and volatility continue, if actual events or concerns or rumors involving limited liquidity, defaults, or other adverse developments, or if other banks and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our existing cash, cash equivalents and investments may be threatened due to market-wide liquidity problems. While we maintain liquidity primarily through customer deposits and through access to other short-term funding sources, including advances from the Federal Home Loan Bank (FHLB), our efforts to monitor and manage liquidity risk may not be successful or sufficient to deal with dramatic or unanticipated increase or reductions in our liquidity, particularly in light of the impact of increased interest rates on the market value of investment securities. This situation could have a material adverse impact on our results of operations and financial condition.

Additionally, regulatory pressures and potential additional regulation of the financial institutions as a result of the industry developments could have material adverse effects on our business, results of operations, financial condition and growth prospects.27, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities

The following table is a summary of our purchases of common stock during the first quarter of ~~2023:~~2024:


Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plan(1)	Approximate dollar value of shares that may yet be purchased under the plan
					$50,000,000
					~~$29,805,161~~
01/01/~~2023 - 01/~~2024-01/31/~~2023~~2024	—	$—		—	~~29,805,161~~50,000,000

02/01/~~2023 - 02/28/2023~~2024-02/29/2024	—	—		—	~~29,805,161~~50,000,000

03/01/~~2023 - 03/~~2024-03/31/~~2023~~2024	—	—		—	~~29,805,161~~$50,000,000
~~Total~~	—		$—		—	~~$29,805,161~~

(1)On January ~~25, 2023,~~24, 2024, our Board of Directors authorized ~~an extension of its~~a new $50 million share repurchase plan. The new plan ~~which was~~replaced the existing share repurchase plan effective immediately and is set to expire ~~March 31, 2023.~~May 30, 2025. This ~~authorization extended the expiration date of the~~ repurchase ~~plan through March 31, 2024. The plan~~authorization permits S&T to repurchase shares ~~up to the previously authorized $50 million in aggregate value~~ of S&T's common stock from time to time through a combination of open market and privately negotiated ~~repurchases.~~repurchases up to the authorized $50 million aggregate value of S&T's common stock. The specific timing, price and quantity of repurchases will be at the discretion of S&T and will depend on a variety of factors, including general market conditions, the trading price of the common stock, legal and contractual requirements ~~applicable securities laws~~ and S~~&T's~~&T’s financial performance. The repurchase plan does not obligate usS&T to repurchase any particular number of shares. ~~We expect~~S&T expects to fund any repurchases from cash on hand and internally generated funds. ~~Share~~Any share repurchases will not ~~occur unless~~begin until permissible under applicable laws.

~~Table of Contents~~

~~S&T BANCORP, INC. AND SUBSIDIARIES~~

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not Applicable

Item 5. Other Information

~~None~~(c) During the three months ended March 31, 2024, no director or Section 16 officer of the Company adopted, terminated or modified a ‘Rule 10b5-1 trading arrangement’ or ‘non-Rule 10b5-1 trading arrangement,’ as each term is defined in Item 408(a) of Regulation S-K.

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

Item 6. Exhibits






31.1			Rule 13a-14(a) Certification of the Chief Executive Officer
31.2			Rule 13a-14(a) Certification of the Chief Financial Officer
32			Rule 13a-14(b) Certification of the Chief Executive Officer and Chief Financial Officer
101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH			XBRL Taxonomy Extension Schema
101.CAL			XBRL Taxonomy Extension Calculation Linkbase
101.DEF			XBRL Taxonomy Extension Definition Linkbase
101.LAB			XBRL Taxonomy Extension Label Linkbase
101.PRE			XBRL Taxonomy Extension Presentation Linkbase
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101)

4743

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			S&T Bancorp, Inc. (Registrant)

May ~~4, 2023~~2, 2024			/s/ Mark Kochvar
			Mark Kochvar Senior Executive Vice President and Chief Financial Officer (Principal Financial Officer and Duly Authorized Signatory)

4844



		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets	2

	Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~	3

	Consolidated Statements of Changes in Shareholders' Equity	4

	Condensed Consolidated Statements of Cash Flows	5

	Notes to Consolidated Financial Statements	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2826

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4440

Item 4.	Controls and Procedures	4541

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	4542

Item 1A.	Risk Factors	4542

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4642

Item 3.	Defaults Upon Senior Securities	4742

Item 4.	Mine Safety Disclosures	4742

Item 5.	Other Information	4742

Item 6.	Exhibits	4743

	Signatures	4844


	December 31, 2022
(dollars in thousands)	Accruing TDRs		Nonaccruing TDRs		Total TDRs
Commercial real estate	$	—	$	—	$	—
Commercial and industrial	626		—		626
Commercial construction	1,655		—		1,655
Business banking	438		1,087		1,525
Consumer real estate	6,168		1,798		7,966
Other consumer	4		9		13
Total	$	8,891	$	2,894	$	11,785


	Three Months Ended March 31, 2022
	Number of Contracts	Type of Modification										Total Post-Modification Outstanding Recorded Investment(2)		Total Pre-Modification Outstanding Recorded Investment(2)
(dollars in thousands)		Bankruptcy(1)		Other		Extend Maturity		Modify Rate		Modify Payments
Commercial real estate	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial industrial	—	—		—		—		—		—		—		—
Commercial construction	—	—		—		—		—		—		—		—
Business banking	—	—		—		—		—		—		—		—
Consumer real estate	7	766		—		1,112		—		—		1,878		1,928
Other consumer	—	—		—		—		—		—		—		—
Total	7	$	766	$	—	$	1,112	$	—	$	—	$	1,878	$	1,928
(1) Bankruptcy is consumer bankruptcy loans where the debt has been legally discharged through the bankruptcy court and not reaffirmed. (2) Excludes loans that were fully paid off or fully charged-off by period end. The pre-modification balance represents the balance outstanding prior to modification. The post-modification balance represents the outstanding balance at period end.


	Amount of Gain or (Loss) Recognized in Other Comprehensive Income						Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Interest Income
(dollars in thousands)	March 31, 2023			March 31, 2022			March 31, 2023			March 31, 2022
Derivatives in Cash Flow Hedging Relationships:
Interest rate swap contracts - cash flow hedge		$	4,782		$	(2,044)		$	(1,849)		$	107

Total		$	4,782		$	(2,044)		$	(1,849)		$	107


	Three Months Ended March 31, 2023 Compared to March 31, 2022
(dollars in thousands)	Volume (4)		Rate (4)		Total
Interest earned on:
Interest-bearing deposits with banks	$	(247)	$	1,426	$	1,179
Securities, at fair value(1)(2)	(8)		1,012		1,004
Loans held for sale	(12)		1		(12)
Commercial real estate	(1,125)		13,884		12,759
Commercial and industrial	(17)		11,705		11,688
Commercial construction	(167)		3,770		3,603
Total Commercial Loans	(1,309)		29,359		28,050
Residential mortgage	2,485		1,165		3,651
Home equity	673		4,571		5,244
Installment and other consumer	173		716		889
Consumer construction	200		148		347
Total Consumer Loans	3,531		6,600		10,131
Total Portfolio Loans	2,222		35,959		38,181
Total Loans (1)(3)	2,210		35,960		38,169
Total other earning assets	216		286		502
Change in Interest Earned on Interest-earning Assets	$	2,171	$	38,684	$	40,854
Interest paid on:
Interest-bearing demand	$	(30)	$	518	$	487
Money market	(140)		7,141		7,002
Savings	(1)		730		728
Certificates of deposit	(14)		4,846		4,832
Total Interest-bearing Deposits	(185)		13,235		13,049
Securities sold under repurchase agreements	(20)		—		(20)
Short-term borrowings	5,487		—		5,487
Long-term borrowings	(37)		28		(9)
Junior subordinated debt securities	—		611		611
Total Borrowings	5,430		639		6,069
Change in Interest Paid on Interest-bearing Liabilities	5,862		13,874		19,735
Change in Net Interest Income	$	(3,691)	$	24,810	$	21,119