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What changed in S&T BANCORP INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of S&T BANCORP INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+487 added−397 removedSource: 10-K (2026-02-27) vs 10-K (2025-03-03)

Top changes in S&T BANCORP INC's 2025 10-K

487 paragraphs added · 397 removed · 305 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

79 edited+107 added−34 removed46 unchanged
Biggest changeThe following table summarizes the leverage and risk-based capital ratios for S&T and S&T Bank: Actual Minimum Regulatory Capital Requirements To be Well Capitalized Under Prompt Corrective Action Provisions (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of December 31, 2024 Leverage Ratio S&T $ 1,112,126 11.98 % $ 371,211 4.00 % $ 464,014 5.00 % S&T Bank 1,060,010 11.43 % 371,002 4.00 % 463,752 5.00 % Common Equity Tier 1 (to Risk-Weighted Assets) S&T 1,088,126 14.58 % 335,888 4.50 % 485,172 6.50 % S&T Bank 1,060,010 14.21 % 335,722 4.50 % 484,932 6.50 % Tier 1 Capital (to Risk-Weighted Assets) S&T 1,112,126 14.90 % 447,851 6.00 % 597,134 8.00 % S&T Bank 1,060,010 14.21 % 447,629 6.00 % 596,839 8.00 % Total Capital (to Risk-Weighted Assets) S&T 1,230,497 16.49 % 597,134 8.00 % 746,418 10.00 % S&T Bank 1,178,335 15.79 % 596,839 8.00 % 746,049 10.00 % The banking regulatory agencies may from time to time require that a banking organization maintain capital above the minimum prescribed levels, whether because of its financial condition or actual or anticipated growth.
Biggest changeAND SUBSIDIARIES The following table summarizes the leverage and risk-based capital ratios for S&T and S&T Bank: Actual Minimum Regulatory Capital Requirements To be Well Capitalized Under Prompt Corrective Action Provisions (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of December 31, 2025 Leverage Ratio S&T $ 1,154,736 12.18 % $ 379,316 4.00 % $ 474,146 5.00 % S&T Bank 1,128,495 11.91 % 379,139 4.00 % 473,923 5.00 % Common Equity Tier 1 (to Risk-Weighted Assets) S&T 1,130,736 14.32 % 355,419 4.50 % 513,383 6.50 % S&T Bank 1,128,495 14.30 % 355,206 4.50 % 513,076 6.50 % Tier 1 Capital (to Risk-Weighted Assets) S&T 1,154,736 14.62 % 473,892 6.00 % 631,856 8.00 % S&T Bank 1,128,495 14.30 % 473,608 6.00 % 631,478 8.00 % Total Capital (to Risk-Weighted Assets) S&T 1,278,474 16.19 % 631,856 8.00 % 789,821 10.00 % S&T Bank 1,252,175 15.86 % 631,478 8.00 % 789,347 10.00 % Payment of Dividends S&T is a legal entity separate and distinct from its banking and other subsidiaries.
The majority of our commercial and consumer loans are made to businesses and individuals in these states resulting in a geographic concentration. Our market area has a high density of financial institutions, some of which are significantly larger institutions with greater financial resources than us, and many of which are our competitors to varying degrees.
The majority of our commercial and consumer loans are made to businesses and individuals in these states resulting in geographic concentration. Our market area has a high density of financial institutions, some of which are significantly larger institutions with greater financial resources than us, and many of which are our competitors to varying degrees.
The federal banking agencies’ prompt corrective action powers, which increase depending upon the degree to which an institution is undercapitalized, can include, among other things, requiring an insured depository institution to adopt a capital restoration plan, which cannot be approved unless guaranteed by the institution’s parent company; placing limits on asset growth and restrictions on activities, including restrictions on transactions with affiliates; restricting the interest rates the institution may pay on deposits; restricting the institution from accepting brokered deposits; prohibiting the payment of principal or interest on subordinated debt; prohibiting the holding company from making capital distributions, including payment of dividends, without prior regulatory approval; and, ultimately, appointing a receiver for the institution.
AND SUBSIDIARIES Prompt Corrective Action The federal banking agencies’ prompt corrective action powers, which increase depending upon the degree to which an institution is undercapitalized, can include, among other things, requiring an insured depository institution to adopt a capital restoration plan which cannot be approved unless guaranteed by the institution’s parent company; placing limits on asset growth and restrictions on activities, including restrictions on transactions with affiliates; restricting the interest rates the institution may pay on deposits; restricting the institution from accepting brokered deposits; prohibiting the payment of principal or interest on subordinated debt; prohibiting the holding company from making capital distributions, including payment of dividends, without prior regulatory approval; and, ultimately, appointing a receiver for the institution.
Regulatory Enforcement Authority The enforcement powers available to federal banking agencies are substantial and include, among other things and in addition to other powers described herein, the ability to assess civil money penalties and impose other civil and criminal penalties, to issue cease-and-desist or removal orders, to appoint a conservator to conserve the assets of an institution for the benefit of its depositors and creditors and to initiate injunctive actions against banks and bank holding companies and “institution affiliated parties,” as defined in the Federal Deposit Insurance Act.
Regulatory Enforcement Authority The enforcement powers available to federal banking agencies are substantial and include, among other things and in addition to other powers described herein, the ability to assess civil money penalties and impose other civil and criminal penalties, to issue cease-and-desist or removal orders, to appoint a conservator to conserve the assets of an institution for the benefit of its depositors and creditors and to initiate injunctive actions against banks and bank holding companies and “institution affiliated parties,” as defined in the Federal Deposit Insurance Act, or FDIA.
Moreover, in March 2022, the Cyber Incident Reporting for Critical Infrastructure Act, or CIRCIA, was enacted and once final rules are adopted, will require certain covered entities to report a covered cyber incident to the U.S. Department of Homeland Security’s Cybersecurity & Infrastructure Security Agency, or CISA, within 72 hours after a covered entity reasonably believes an incident has occurred.
In March of 2022, the Cyber Incident Reporting for Critical Infrastructure Act, or CIRCIA, was enacted and once final rules are adopted, will require certain covered entities to report a covered cyber incident to the U.S. Department of Homeland Security’s Cybersecurity & Infrastructure Security Agency, or CISA, within 72 hours after a covered entity reasonably believes an incident has occurred.
Through S&T Bank and our non-bank subsidiaries, we offer consumer, commercial and small business banking services, which include accepting time and demand deposits and originating commercial and consumer loans, brokerage services and trust services including serving as executor and trustee under wills and deeds and as guardian and custodian of employee benefits.
Through S&T Bank and our non-bank subsidiaries, we offer consumer, commercial and small business banking services, which include accepting time and demand deposits and originating commercial and consumer loans, brokerage services and trust services including serving as executor and trustee under wills and deeds and as guardian of employee benefits.
In addition, the Dodd-Frank Act provides that the amount of any interchange fee charged for electronic debit transactions by debit card issuers having assets over $10 billion must be reasonable and proportional to the actual cost of a transaction to the issuer.
AND SUBSIDIARIES In addition, the Dodd-Frank Act provides that the amount of any interchange fee charged for electronic debit transactions by debit card issuers having assets over $10 billion must be reasonable and proportional to the actual cost of a transaction to the issuer.
We communicate, collaborate and care enough to go the extra mile for the colleagues we work alongside, the customers we serve and the communities where we live. Talent Development and Training S&T strives to provide our employees access to comprehensive training to enhance all job positions.
We communicate, collaborate and care enough to go the extra mile for the colleagues we work alongside, the customers we serve and the communities where we live. Talent Development and Training S&T strives to provide our employees with access to comprehensive training to enhance all job positions.
AND SUBSIDIARIES Interstate Banking and Branching The BHCA currently permits bank holding companies from any state to acquire banks and bank holding companies located in any other state, subject to certain conditions, including certain nationwide and state-imposed deposit concentration limits.
Interstate Banking and Branching The BHCA currently permits bank holding companies from any state to acquire banks and bank holding companies located in any other state, subject to certain conditions, including certain nationwide and state-imposed deposit concentration limits.
Access to United States Securities and Exchange Commission Filings All of our reports filed electronically with the United States Securities and Exchange Commission, or the SEC, including this Annual Report on Form 10-K for the fiscal year ended December 31, 2024, our prior annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and our annual proxy statements, as well as any amendments to those reports, are accessible at no cost on our website at www.stbancorp.com under Financials, SEC Filings.
Access to United States Securities and Exchange Commission Filings All of our reports filed electronically with the United States Securities and Exchange Commission, or the SEC, including this Annual Report on Form 10-K for the fiscal year ended December 31, 2025, our prior annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and our annual proxy statements, as well as any amendments to those reports, are accessible at no cost on our website at www.stbancorp.com under Financials, SEC Filings.
S&T Bank is subject to affiliate transaction rules in Sections 23A and 23B of the Federal Reserve Act as implemented by the FRB's Regulation W, that limit the amount of transactions between itself and S&T or any other company or entity that controls or is under common control with any company or entity that controls S&T Bank, including for most purposes any financial or depository institution subsidiary of S&T Bank.
S&T Bank is subject to affiliate transaction rules in Sections 23A and 23B of the Federal Reserve Act as implemented by the Federal Reserve's Regulation W, that limit the amount of transactions between itself and S&T or any other company or entity that controls or is under common control with any company or entity that controls S&T Bank, including for most purposes any financial or depository institution subsidiary of S&T Bank.
The extent of these powers depends upon whether the institution in question is “well-capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized,” as defined by the law. As of December 31, 2024, S&T Bank was classified as “well-capitalized.” Refer to the above section titled Capital within this Item 1. Business section for capital requirements.
The extent of these powers depends upon whether the institution in question is “well-capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized,” as defined by the law. As of December 31, 2025, S&T Bank was classified as “well-capitalized.” Refer to the above section titled Capital within this Item 1. Business section for capital requirements.
Other Dodd-Frank Provisions In December 2013, federal regulators adopted final regulations regarding the Volcker Rule established in the Dodd-Frank Act. The Volcker Rule generally prohibits banks and their affiliates from engaging in proprietary trading and investing in and sponsoring certain unregistered investment companies generally covering hedge funds and private equity funds, subject to certain exemptions.
The Volcker Rule In December 2013, federal regulators adopted final regulations regarding the Volcker Rule established in the Dodd-Frank Act. The Volcker Rule generally prohibits banks and their affiliates from engaging in proprietary trading and investing in and sponsoring certain unregistered investment companies generally covering hedge funds and private equity funds, subject to certain exemptions.
Instead, we concentrate our efforts on attracting the business of individuals, and small and medium-size businesses. We consider our competitive advantages to be customer service and responsiveness to customer needs, the convenience of banking offices and hours, access to electronic banking services and the availability and pricing of our customized banking solutions.
Instead, we concentrate our efforts on attracting the business of individuals, and small and medium-sized businesses. We consider our competitive advantages to be customer service and responsiveness to customer needs, the convenience of banking offices and hours, access to electronic banking services and the availability and pricing of our customized banking solutions.
Fair lending laws include the Equal Credit Opportunity Act and the Fair Housing Act, which outlaw discrimination in credit transactions and residential real estate on the basis of prohibited factors including, among others, race, color, national origin, sex and religion.
Fair lending laws prohibit discrimination in the lending practices, and include the Equal Credit Opportunity Act and the Fair Housing Act which outlaw discrimination in credit transactions and residential real estate on the basis of prohibited factors including, among others, race, color, national origin, sex and religion.
Among other things, these loans are limited in amount, must be approved by the bank’s board of directors in advance, and must be on terms and conditions as favorable to the bank as those available to an unrelated person.
Among other things, these loans are limited in amount, must be approved by S&T Bank’s board of directors in advance and must be on terms and conditions as favorable to the bank as those available to an unrelated person.
Community Reinvestment, Fair Lending and Consumer Protection Laws In connection with its lending activities, S&T Bank is subject to a number of state and federal laws and regulations designed to protect consumers and promote lending to various sectors of the economy and population.
Fair Lending and Consumer Protection Laws In connection with its lending activities, S&T Bank is subject to a number of state and federal laws and regulations designed to protect consumers and promote lending to various sectors of the economy and population.
State regulators have also been increasingly active in implementing privacy and cybersecurity standards and regulations, including data breach notification requirements. We actively monitor developments regarding regulatory expectations and federal and state requirements with respect to cybersecurity and data breach notifications.
State regulators have also been increasingly active in implementing privacy and cybersecurity standards and regulations, including data access requests and breach notification requirements. We actively monitor developments regarding regulatory expectations and federal and state requirements with respect to cybersecurity, data access requests and data breach notifications.
With respect to consumer protection, the Dodd-Frank Act created the Consumer Financial Protection Bureau, or the CFPB, which took over rulemaking responsibility on July 21, 2011 for the principal federal consumer financial protection laws, such as those identified above.
With respect to consumer protection, the Dodd-Frank Act created the CFPB which took over rulemaking responsibility on July 21, 2011 for the principal federal consumer financial protection laws, such as those identified above.
Other Safety and Soundness Regulations There are a number of obligations and restrictions imposed on bank holding companies such as us and our depository institution subsidiary by federal law and regulatory policy.
AND SUBSIDIARIES Safety and Soundness Regulations There are a number of obligations and restrictions imposed on bank holding companies such as us and our depository institution subsidiary by federal law and regulatory policy.
Additionally, the FDIC, OCC and FRB issued a final rule that became effective in May 2022, requiring banking organizations that experience a computer-security incident to notify certain entities and its federal regulator of the computer-security incident as soon as possible and no later than 36 hours after the bank determines a computer-security incident has occurred.
Additionally, the FDIC, OCC and Federal Reserve issued a final rule that became effective in May 2022, requiring banking organizations that experience a computer-security incident to notify certain entities and its federal regulator as soon as possible and no later than 36 hours after the bank determines a computer-security incident has occurred.
The FDIC may terminate the deposit insurance of any insured depository institution if it determines, after hearing that the institution has engaged in unsafe or unsound practices, that the institution is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC or the FRB.
The FDIC may terminate the deposit insurance of any insured depository institution if it determines, after hearing that the institution has engaged in unsafe or unsound practices, that the institution is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC or the Federal Reserve.
The increase in assessment rate schedules is intended to increase the likelihood that the reserve ratio of the DIF reaches the statutory minimum of 1.35 percent by the statutory deadline of September 30, 2028.
The increase in assessment rate schedules was intended to increase the likelihood that the reserve ratio of the DIF reaches the statutory minimum of 1.35 percent by the statutory deadline of September 30, 2028.
The FRB, the FDIC and the OCC implement the CRA through their CRA regulations, which establish the framework for how the agencies assess a bank’s record of helping to meet the credit needs of the communities that they serve, including LMI neighborhoods, consistent with safe and sound operations.
The Federal Reserve, the FDIC and the OCC implement the CRA through their CRA regulations which establish the framework for how the agencies assess a bank’s record of helping to meet the credit needs of the communities that they serve, including LMI neighborhoods, consistent with safe and sound operations.
Our commitment is to foster an inclusive workplace where everyone utilizes their knowledge, skills, abilities and unique interests to help each other find success and drive positive results. S&T fosters an inclusive work culture where employees work together to better our company, products and services and community.
Our commitment is to foster a workplace where everyone utilizes their knowledge, skills, abilities and unique interests to help each other find success and drive positive results. S&T fosters a work culture where employees work together to better our company, products and services and community.
The BHCA identifies several activities as “financial in nature” including, among others, securities underwriting; dealing and market making; sponsoring mutual funds and investment companies; insurance underwriting and sales agency; investment advisory activities; merchant banking activities and activities that the FRB has determined to be closely related to banking.
The BHCA identifies several activities as “financial in nature” including, among others, securities underwriting; dealing and market making; sponsoring mutual funds and investment companies; insurance underwriting and sales agency; investment advisory activities; merchant banking activities and activities that the Federal Reserve has determined to be closely related to banking.
We are committed to promoting a workplace that develops all people through ensuring fairness in all aspects of employment, educating our employees and fostering a culture to address employees’ and customers’ needs. As of December 31, 2024, we had approximately 1,206 full time equivalent employees. Our Team and Culture Our purpose is building a better future together through people-forward banking.
We are committed to promoting a workplace that develops all people through ensuring fairness in all aspects of employment, educating our employees and fostering a culture to address employees’ and customers’ needs. As of December 31, 2025, we had approximately 1,209 full-time-equivalent employees. Our Team and Culture Our purpose is building a better future together through people-forward banking.
Our corporate training department maintains oversight of trainings to ensure it is implemented and monitored properly and encourages career development for our employees. Our training programs offer a blended learning approach comprised of classroom, asynchronous online learning and synchronous online sessions. Our learning management systems and vendor relationships provide employees regulatory, compliance, skill-based, technology, leadership and career development trainings.
Our corporate training department maintains oversight of training to ensure it is implemented and monitored properly and encourages career development for our employees. Our training programs offer a blended learning approach comprised of classroom, asynchronous online learning and synchronous online sessions. Our learning management systems, supported by vendor partnerships provide employees regulatory, compliance, skill-based, technology, leadership and career development trainings.
Banks must also have in place appropriate “know your customer” policies and procedures which includes requirements to (1) identify and verify, subject to certain exceptions, the identity of the beneficial owners of all legal entity customers at the time a new account is opened, and (2) include in its anti-money laundering program, risk-based procedures for conducting ongoing customer due diligence, which are to include procedures that (a) assist in understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile, and (b) require ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information.
Banks must also have in place appropriate “know your customer”, or KYC, policies and procedures which includes requirements to (1) identify and verify, subject to certain exceptions, the identity of the beneficial owners of all legal entity customers at the time a new account is opened, and (2) include in its AML/CFT program, risk-based procedures for conducting ongoing customer due diligence, which are to include procedures that (a) assist in understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile, and (b) require ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information.
The FRB has adopted a rule which limits the maximum permissible interchange fees that such issuers can receive for an electronic debit transaction. This rule, Regulation II, was effective October 1, 2011, and then amended on October 3, 2022 to require debit card issuers to provide at least two unaffiliated payment card networks to process card-not-present debit card transactions.
The Federal Reserve has adopted a rule, Regulation II, which limits the maximum permissible interchange fees that such issuers can receive for an electronic debit transaction. Regulation II was effective on October 1, 2011 and amended on October 3, 2022 to require debit card issuers to provide at least two unaffiliated payment card networks to process card-not-present debit card transactions.
AND SUBSIDIARIES Insurance of Accounts; Depositor Preference The deposits of S&T Bank are insured up to applicable limits per insured depositor by the Deposit Insurance Fund, or DIF, as administered by the FDIC. The Dodd-Frank Act codified FDIC deposit insurance coverage per separately insured depositor for all account types at $250,000.
Insurance of Accounts; Depositor Preference The deposits of S&T Bank are insured up to applicable limits per insured depositor by the DIF, as administered by the FDIC. The Dodd-Frank Act codified FDIC deposit insurance coverage per separately insured depositor for all account types at $250,000.
Under the CRA, institutions are assigned a rating of “outstanding,” “satisfactory,” “needs to improve” or “unsatisfactory.” S&T Bank was rated “satisfactory” in its most recent CRA performance evaluation. More recently, on October 24, 2023, the FDIC, OCC and FRB jointly issued a final rule to the CRA designed to strengthen and modernize the regulations implementing the CRA.
Under the CRA, institutions are assigned a rating of “outstanding,” “satisfactory,” “needs to improve” or “unsatisfactory.” S&T Bank was rated “satisfactory” in its most recent CRA performance evaluation. On October 24, 2023, the FDIC, OCC and Federal Reserve jointly issued a final rule to the CRA designed to strengthen and modernize the regulations implementing the CRA.
The federal laws include, among others, the Equal Credit Opportunity Act, the Truth-in-Lending Act, the Truth-in-Savings Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the Fair Credit Reporting Act and the CRA. In addition, federal rules require disclosure of privacy policies to consumers.
The federal laws include, among others, the Equal Credit Opportunity Act, the Truth-in-Lending Act, the Truth-in-Savings Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the Fair Credit Reporting Act, Fair Housing Act and the Community Reinvestment Act, or CRA. In addition, federal rules require disclosure of privacy policies to consumers.
In the case of a bank holding company, including a financial holding company, applying for approval to acquire a bank or bank holding company, the FRB will assess the record of each subsidiary bank of the applicant bank holding company in considering the application.
In the case of a bank holding company, including a financial holding company, applying for approval to acquire a bank or bank holding company, the Federal Reserve will assess the record of each subsidiary bank of the applicant bank holding company in considering the application.
Violations of these requirements can result in substantial civil and criminal sanctions. In addition, provisions of the USA Patriot Act of 2001 require the federal financial institution regulatory agencies to consider the effectiveness of a financial institution’s anti-money laundering activities when considering applications for bank mergers and bank holding company acquisitions.
Violations of these requirements can result in substantial civil and criminal sanctions. In addition, provisions of the USA Patriot Act of 2001 require the federal financial institution regulatory agencies to consider the effectiveness of a financial institution’s AML/CFT activities when considering applications for bank mergers and bank holding company acquisitions.
Second, the proposed change in assessment rates is further intended to support growth in the DIF in progressing toward the 2 percent Designated Reserve Ratio, or DRR, established by the FDIC. The FDIC has indicated that the new assessment rate schedules will remain in effect unless and until the DRR meets or exceeds 2 percent, absent further FDIC action.
The change in assessment rates was further intended to support the growth of the DIF in progressing toward the 2 percent Designated Reserve Ratio, or DRR, established by the FDIC. The FDIC has indicated that the new assessment rate schedules will remain in effect unless and until the DRR meets or exceeds 2 percent, absent further FDIC action.
The discussion of the regulations applicable to S&T provided below is based on our status as an institution with less than $10 billion in assets. If S&T’s assets cross the $10 billion threshold, we will be subject to different and additional regulations than those described below. 3 Table of Contents S&T BANCORP, INC.
The discussion of the regulations applicable to S&T provided below is based on our status as an institution with less than $10 billion in assets. If S&T’s assets cross the $10 billion threshold, we will be subject to different and additional regulations than those described below.
In order to maintain our status as a financial holding company, we must remain “well-capitalized” and “well-managed” and the depository institutions controlled by us must remain “well-capitalized,” “well-managed” (as defined in federal law) and have at least a “satisfactory” Community Reinvestment Act, or CRA, rating. Refer to Note 23.
AND SUBSIDIARIES In order to maintain our status as a financial holding company, we must remain “well-capitalized” and “well-managed” and the depository institutions controlled by us must remain “well-capitalized,” “well-managed” (as defined in federal law) and have at least a “satisfactory” CRA rating. Refer to Note 23.
Banking entities had until July 21, 2017 to conform their activities to the requirements of the rule. Since S&T generally does not engage in the activities prohibited by the Volcker Rule, the effectiveness of the rule has not had a material effect on S&T Bank or its affiliates.
Banking entities had until July 21, 2017 to conform their activities to the requirements of the rule. Since S&T generally does not engage in the activities prohibited by the Volcker Rule, the effectiveness of the rule has not had a material effect on S&T Bank or its affiliates. 14 Table of Contents S&T BANCORP, INC.
No prior regulatory approval is required for a financial holding company with total consolidated assets less than $50 billion to acquire a company, other than a bank or savings association, engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the FRB, unless the total consolidated assets to be acquired exceed $10 billion.
No prior regulatory approval is required for a financial holding company to acquire a company, other than a bank or savings association, engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the Federal Reserve, unless the total consolidated assets to be acquired exceed $10 billion.
Among other things, these laws and regulations require S&T Bank to take steps to prevent the bank from being used to facilitate the flow of illegal or illicit money, to report large currency transactions and to file suspicious activity reports. S&T Bank is also required to develop and implement a comprehensive anti-money laundering compliance program.
Among other things, these laws and regulations require S&T Bank to take steps to prevent the bank from being used to facilitate the flow of illegal or illicit money, to report large currency transactions and to file suspicious activity reports. S&T Bank is also required to develop and implement a comprehensive AML/Countering The Financing Of Terrorism, or CFT, compliance program.
Furthermore, in September 2023, the SEC’s Cybersecurity Risk Management, Strategy, Governance and Incident Disclosure rules went into effect requiring, among other disclosure obligations, companies to publicly disclose the occurrence of a material cybersecurity incident, including the material aspects of the nature, scope and timing of the incident and the material impact on the company including financial condition and results of operation beginning with any material cybersecurity incidents occurring on or after December 18, 2023.
Furthermore, in September 2023, the SEC’s Cybersecurity Risk Management, Strategy, Governance and Incident Disclosure rules went into effect requiring, among other disclosure obligations, companies to publicly disclose the occurrence of a material cybersecurity incident, including the material aspects of the nature, scope, timing and impact of the incident on the company's financial condition and results of operations and brand beginning with any material cybersecurity incidents that occur on or after December 18, 2023.
Our multi-tier succession plan includes replacement planning of vacancies, ongoing talent development and career path design of current employees. Additional resources that support these initiatives include S&T's annual training and recruitment plans that identify specific actionable programs and efforts. In 2024, our employees logged approximately 77,290 training hours, on average 64 hours per employee.
Our multi-tier succession plan includes replacement planning of vacancies, ongoing talent development and career path design of current employees. Additional resources that support these initiatives include S&T's annual training and recruitment plans that identify specific actionable programs and efforts. In 2025, our employees logged approximately 71,798 training hours, on average 59 hours per employee.
The likelihood and timing of any changes and the impact such changes might have on S&T is impossible to determine with any certainty. S&T We are a bank holding company subject to regulation under the BHCA and the examination and reporting requirements of the FRB.
The likelihood and timing of any changes and the impact such changes might have on S&T is impossible to determine with any certainty. Regulation of S&T We are a bank holding company subject to regulation under the BHCA and the examination and reporting requirements of the Federal Reserve and have elected to be a financial holding company.
The Dodd-Frank Act also placed restrictions on certain asset sales to and from an insider to an institution, including requirements that such sales be on market terms and, in certain circumstances, approved by the institution’s board of directors. 5 Table of Contents S&T BANCORP, INC.
The Dodd-Frank Act also placed restrictions on certain asset sales to and from an insider to an institution, including requirements that such sales be on market terms and, in certain circumstances, approved by the institution’s board of directors.
The charters of the Audit Committee, the Compensation and Benefits Committee, the Credit Risk Committee, the Executive Committee, the Nominating and Corporate Governance Committee and the Risk Committee as well as the Complaints Regarding Accounting, Internal Accounting Controls or Auditing Matters ("Whistleblower Policy"), the Code of Conduct for the CEO and CFO, the General Code of Conduct, the Shareholder Communications Policy and the Corporate Governance Guidelines are also available at www.stbancorp.com under Governance.
The charters of the Audit Committee, the Compensation and Benefits Committee, the Credit Risk Committee, the Executive Committee, the Nominating and Corporate Governance Committee and the Risk Committee as well as the Complaints Regarding Accounting, Internal Accounting Controls or Auditing Matters ("Whistleblower Policy"), the Code of Conduct for the Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, the General Code of Conduct, the Shareholder Communications Policy and the Corporate Governance Guidelines are also available at www.stbancorp.com under Governance. 3 Table of Contents S&T BANCORP, INC.
As part of its semiannual update of the restoration plan established by the FDIC to facilitate restoration of the reserve ratio of the DIF to the statutory minimum in the mandated time frame, the FDIC adopted a final rule in October 2022.
Under the current system, premiums are assessed quarterly. As part of its semiannual update of the restoration plan established by the FDIC to facilitate restoration of the reserve ratio of the DIF to the statutory minimum in the mandated time frame, the FDIC adopted a final rule in October 2022.
The FRB has indicated that banking organizations should generally pay dividends only if (i) the organization’s net income available to common shareholders over the past year has been sufficient to fully fund the dividends and (ii) the prospective rate of earnings retention appears consistent with the organization’s capital needs, asset quality and overall financial condition.
The Federal Reserve has indicated that banking organizations should generally pay dividends only if (i) the organization’s net income available to common shareholders over the past year has been sufficient to fully fund the dividends, (ii) the prospective rate of earnings retention appears consistent with the organization’s capital needs, asset quality and overall financial condition and (iii) the organization will continue to meet minimum capital adequacy ratios.
Banks may also engage in, subject to limitations on investment, activities that are financial in nature, other than insurance underwriting, insurance company portfolio investment, real estate development and real estate investment, through a financial subsidiary of the bank, if the bank is “well-capitalized,” “well-managed” and has at least a “satisfactory” CRA rating.
Banks may also engage in, subject to limitations on investment, activities that are financial in nature, other than insurance underwriting, insurance company portfolio investment, real estate development and real estate investment, through a financial subsidiary of the bank, if the bank is “well-capitalized,” “well-managed” and has at least a “satisfactory” Community Reinvestment Act, or CRA, rating. 4 Table of Contents S&T BANCORP, INC.
And we always welcome an honest and open dialogue with our colleagues, customers and the community at large. Win as One Team We function as one connected team working together to deliver a seamless experience.
We listen for forward-looking ideas to better ourselves and improve our experience. And we always welcome an honest and open dialogue with our colleagues, customers and the community at large. Win as One Team We function as one connected team working together to deliver a seamless experience.
We also manage private investment accounts for individuals and institutions through our registered investment advisor. Total Wealth Management assets under administration, which are not accounted for as part of our assets, were $2.0 billion at December 31, 2024.
We also manage private investment accounts for individuals and institutions through a registered financial services entity. Total Wealth Management assets under administration, which are not accounted for as part of our assets, were $2.1 billion at December 31, 2025.
This rule also requires banking organizations to notify 10 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES their customers of a computer-security incident that has caused, or is reasonably likely to cause, a material service disruption or degradation for four or more hours.
This rule also requires banking organizations to notify their customers of a computer-security incident that has caused, or is reasonably likely to cause, a material service disruption or degradation for four or more hours.
Supervision and Regulation General S&T is extensively regulated under federal and state law. Regulation of bank holding companies and banks is intended primarily for the protection of consumers, depositors, borrowers, the Federal Deposit Insurance Fund, or DIF, and the banking system as a whole, and not for the protection of shareholders or creditors.
Regulation of bank holding companies and banks is intended primarily for the protection of consumers, depositors, borrowers, the Federal Deposit Insurance Fund, or DIF, and the banking system as a whole, and not for the protection of shareholders or creditors.
At the state level, the PADBS also has broad enforcement powers over S&T Bank, including the power to impose fines and other penalties and to appoint a conservator or receiver. 8 Table of Contents S&T BANCORP, INC.
At the state level, the PA DOBS also has broad enforcement powers over S&T Bank, including the power to impose fines and other penalties and to appoint a conservator or receiver.
In addition, proposals to change the laws and regulations governing the banking industry are frequently raised in Congress, in state legislatures and before the various bank regulatory agencies that may impact S&T.
In addition, proposals to change the laws and regulations governing the banking industry are frequently raised in Congress, in state legislatures and before the various bank regulatory agencies that may impact S&T. Bank regulatory agencies may issue policy statements, interpretive letters and similar written guidance applicable to S&T or S&T Bank.
The payment of common dividends by S&T is subject to certain requirements and limitations of Pennsylvania law. S&T Bank, in turn, is subject to federal and state laws and regulations that limit the amount of dividends it can pay to S&T.
A substantial portion of our revenues consist of dividend payments we receive from S&T Bank. The payment of common dividends by S&T is subject to certain requirements and limitations of Pennsylvania law. S&T Bank, in turn, is subject to federal and state laws and regulations that limit the amount of dividends it can pay to S&T.
The CRA requires the appropriate federal banking agency, in connection with its examination of a bank, to assess the bank’s record in meeting the credit needs of the communities served by the bank, including LMI neighborhoods.
AND SUBSIDIARIES Community Reinvestment Act The CRA requires the appropriate federal banking agency, in connection with its examination of a bank, to assess the bank’s record in meeting the credit needs of the communities served by the institution, including low- and moderate-income, or LMI, borrowers and neighborhoods.
Thus, under certain circumstances based upon our financial condition, our ability to declare and pay quarterly dividends may require consultation with the FRB and may be prohibited by applicable FRB guidance.
Thus, under certain circumstances based upon our financial condition, our ability to declare and pay quarterly dividends may require consultation with the Federal Reserve and may be prohibited by applicable Federal Reserve guidance. 9 Table of Contents S&T BANCORP, INC.
The purpose of the CRA is to help address inequities in credit access for low and moderate-income (LMI) individuals and communities. It is designed to encourage regulated banks to help meet the credit needs of the local communities in which they are chartered.
The CRA is designed to encourage regulated banks to help meet the credit needs of the local communities in which they are chartered.
S&T Bank is required to have a fair lending program that is of sufficient scope to monitor the inherent fair lending risk of the institution and that appropriately remediates issues which are identified. 9 Table of Contents S&T BANCORP, INC.
S&T Bank is required to have a fair lending program that is of sufficient scope to monitor the inherent fair lending risk of the institution and ensure compliance with all applicable fair lending laws and regulations. 11 Table of Contents S&T BANCORP, INC.
The Dodd-Frank Act expanded the affiliate transaction rules to broaden the definition of affiliate to include as covered transactions securities borrowing or lending, repurchase or reverse repurchase agreements and derivative activities, and to strengthen collateral requirements and limit Federal Reserve exemptive authority.
Dodd-Frank Wall Street Reform and Consumer Protection Act, or Dodd-Frank Act, expanded the affiliate transaction rules to broaden the definition of "covered transactions" to include securities, borrowing or lending, repurchase and reverse repurchase agreements and certain derivative transactions.
As a bank holding company, we are expected under statutory and regulatory provisions to serve as a source of financial and managerial strength to our subsidiary bank. A bank holding company is also expected to commit resources, including capital and other funds, to support its subsidiary bank.
A financial holding company is also expected to commit resources, including capital and other funds, to support its subsidiary bank.
Regulation II does not apply to a bank that, together with its affiliates, has less than $10 billion in assets, which includes S&T. Cybersecurity We are subject to a variety of regulatory expectations and requirements regarding cybersecurity and data privacy.
Regulation II does not apply to a bank that, together with its affiliates, has less than $10 billion in assets, which includes S&T. In addition, their future application is subject to uncertainty.
Do the Right Thing We are built on trust and following through on our promises. We hold ourselves accountable by delivering results, continuously learning and striving for better every day. Go Above and Beyond We go as far as we possibly can to help advance the cause of our colleagues, customers and communities.
Do the Right Thing We are built on trust and following through on our promises. We hold ourselves accountable by delivering results, continuously learning and striving for better every day. 2 Table of Contents S&T BANCORP, INC.
As an FDIC-insured bank, S&T Bank is subject to FDIC insurance assessments, which are imposed based upon the calculated risk the institution poses to the DIF.
The DIF is funded mainly through quarterly assessments on insured depository institutions, such as S&T Bank, and provides insurance coverage for certain deposits up to this maximum amount. As an FDIC-insured bank, S&T Bank is subject to FDIC insurance assessments which are imposed based upon the calculated risk the institution poses to the DIF.
Federal law also constrains the types and amounts of loans that S&T Bank may make to its executive officers, directors and principal shareholders.
The Act also strengthened collateral requirements and significantly limited the Federal Reserve's authority to grant exemptions from these rules. 5 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Federal law also constrains the types and amounts of loans that S&T Bank may make to its executive officers, directors and principal shareholders.
A lender may be liable for policies that result in a disparate treatment of or have a disparate impact on a protected class of applicants or borrowers. If a pattern or practice of lending discrimination is alleged by a regulator, then that agency is required to refer the matter to the U.S. Department of Justice, or DOJ, for investigation.
If a pattern or practice of lending discrimination is alleged by a regulator, then that agency is required to refer the matter to the DOJ for investigation.
As of December 31, 2024, we had approximately $9.7 billion in assets, $7.7 billion in total loans, $7.8 billion in deposits and $1.4 billion in shareholders’ equity. S&T Bank is a full-service bank that operates in Pennsylvania and Ohio. S&T Bank deposits are insured by the Federal Deposit Insurance Corporation, or FDIC, to the maximum extent provided by law.
As of December 31, 2025, we had approximately $9.9 billion in assets, $8.1 billion in total loans, $8.0 billion in deposits and $1.5 billion in shareholders’ equity. S&T Bank is a full-service Pennsylvania chartered bank that is headquartered in Indiana, Pennsylvania. S&T Bank operates in Pennsylvania and Ohio through it's 72 branches.
In every case, we seek the right solutions based on a holistic understanding of the opportunities ahead of us. 2 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Value Every Voice We stand for inclusivity, accessibility and opportunity. We listen for forward-looking ideas to better ourselves and improve our experience.
AND SUBSIDIARIES Go Above and Beyond We go as far as we possibly can to help advance the cause of our colleagues, customers and communities. In every case, we seek the right solutions based on a holistic understanding of the opportunities ahead of us. Value Every Voice We stand for inclusivity, accessibility and opportunity.
Separate reporting to CISA will also be required within 24 hours if a ransom payment is made as a result of a ransomware attack. In April 2024, the CISA issued proposed rules under the CIRCIA that would clarify the scope of cyber incidents to be reported and would further define covered entities subject to the CIRCIA.
Separate reporting to CISA will also be required within 24 hours if a ransom payment is made as a result of a ransomware attack.
Most of the final rule’s requirements will be applicable beginning in January 2026, while the remaining requirements, including data reporting requirements, will be applicable in January 2027.
Most of the final rule’s requirements were applicable beginning in January 2026, while the remaining requirements, including data reporting requirements, will be applicable in January 2027. The 2023 CRA final rule has been subject to legal challenge, and its effectiveness and implementation have been enjoined by a federal court.
Federal regulators have issued statements regarding cybersecurity addressing the controls that financial institutions should design and business continuity planning and recovery processes that should be in place.
The federal government also is considering, and may pass, additional data privacy and cybersecurity legislation, to which we may become subject if passed. Federal and state regulators of financial institutions have issued guidance regarding cybersecurity, addressing the scope of controls that financial institutions should implement and maintain and business continuity planning and recovery processes that should be in place.
As a result, since 2019, a banking organization has been required to maintain a common equity Tier 1 risk-based capital ratio greater than 7.00 percent, a Tier 1 risk-based capital ratio greater than 8.50 percent and a Total risk-based capital ratio greater than 10.50 percent; otherwise, it will be subject to restrictions on capital distributions and discretionary bonus payments.
The capital conservation buffer is 2.50 percent, so a banking organization needs to maintain a CET1 capital ratio of at least 7 percent, a total Tier 1 capital ratio of at least 8.5 percent and a total risk-based capital ratio of at least 10.5 percent or it would be subject to restrictions on capital distributions and discretionary bonus payments to its executive management.
The compliance date of the final rules was October 1, 2022. These rules did not have a material impact on our mortgage business. Anti-Money Laundering Rules S&T Bank is subject to the Bank Secrecy Act, its implementing regulations and other anti-money laundering laws and regulations, including the USA Patriot Act of 2001.
S&T Bank continues to comply with all applicable consumer protection laws and regulations. Anti-Money Laundering Rules S&T Bank is subject to the Bank Secrecy Act, or BSA, its implementing regulations and other anti-money laundering, or AML, laws and regulations, including the USA Patriot Act of 2001.
Such priority creditors would include the FDIC. 6 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Capital The FRB and the FDIC have issued substantially similar minimum risk-based and leverage capital rules applicable to the banking organizations they supervise. On December 31, 2024, both S&T and S&T Bank met the applicable minimum regulatory capital requirements.
The Federal Reserve and the FDIC have issued substantially similar minimum risk-based and leverage capital rules applicable to the banking organizations they supervise.
S&T Bank has four active wholly-owned operating subsidiaries including S&T Insurance Group, LLC, S&T Bancholdings, Inc., Stewart Capital Advisors, LLC and DN Acquisition Company, Inc.
S&T Bank's primary regulators are the Federal Deposit Insurance Corporation, or FDIC, and the Pennsylvania Department of Banking and Securities, or PA DOBS. S&T Bank deposits are insured by the FDIC to the maximum extent provided by law. S&T Bank has three active wholly-owned operating subsidiaries including S&T Insurance Group, LLC, S&T Bancholdings, Inc. and DN Acquisition Company, Inc.
We elected to become a financial holding company under the BHCA in 2001 and thereby may engage in a broader range of financial activities than are permissible for traditional bank holding companies.
Under the BHCA, a financial holding company is restricted in the types of activities in which it may engage and subject to a range of supervisory requirements and activities, including regulatory enforcement actions for violations of laws and regulations.
Under the current system, premiums are assessed quarterly. Assessments are calculated as a percentage of average consolidated total assets less average tangible equity during the assessment period.
S&T Bank’s assessment is determined each quarter in accordance with the FDIC’s standardized risk-based methodology by multiplying its assessment rate by its assessment base. The assessment base is calculated as a percentage of average consolidated total assets less average tangible equity during the assessment period.
S&T’s total assets were below $10 billion at December 31, 2024. In November 2023, the FDIC approved a final rule to implement special assessments to recover the loss to the DIF associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.
In addition to regular assessments, the FDIC has authority to impose special assessments on insured depository institutions, including to recover losses to the DIF associated with bank failures. In November 2023, the FDIC finalized a special assessment to recover DIF losses related to the closures of Silicon Valley Bank and Signature Bank.
Removed
AND SUBSIDIARIES The Dodd-Frank Wall Street Reform and Consumer Protection Act, or Dodd-Frank Act, enacted in July 2010, has had and will continue to have a broad impact on the financial services industry, including significant regulatory and compliance changes addressing, among other things: (i) enhanced resolution authority of troubled and failing banks and their holding companies; (ii) increased capital and liquidity requirements; (iii) increased regulatory examination fees; (iv) changes to assessments to be paid to the FDIC for federal deposit insurance; (v) enhanced corporate governance and executive compensation requirements and disclosures; and (vi) numerous other provisions designed to improve supervision and oversight of, and strengthen safety and soundness for, the financial services sector.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe ramifications and uncertainties of the level of government intervention and regulatory changes in the U.S. financial system could also adversely affect us. The regulations that we are subject to at this time relate to institutions with assets less than $10 billion. Should our assets cross the $10 billion threshold, we will be subject to different and additional regulations.
Biggest changeThe regulations that we are subject to at this time are generally tailored to institutions with less than $10 billion in total consolidated assets. Should our total consolidated assets exceed the $10 billion threshold, we would be subject to additional regulatory requirements and supervisory oversight applicable to larger institutions.
Our ability to meet contingency funding needs, in the event of a crisis that causes a disruption to our core deposit base, is dependent on access to wholesale markets, including funds provided by the Federal Reserve Borrower-in-Custody Program, the FHLB of Pittsburgh and other short-term funding sources, including brokered deposits.
Our ability to meet contingency funding needs, in the event of a crisis that causes a disruption to our core deposit base, is dependent on access to wholesale markets, including funds provided by the FHLB of Pittsburgh, Federal Reserve Borrower-in-Custody Program and other short-term funding sources, including brokered deposits.
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.
AND SUBSIDIARIES 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.
Risks Related to General Economic Conditions General economic conditions may adversely impact our business, financial condition, results of operations or cash flows. Various aspects of our business could be impacted by general macroeconomic conditions including, among others, inflation, interest rates, rising or elevated unemployment, declines in GDP, consumer spending, property values, supply chain complications and economic uncertainty.
AND SUBSIDIARIES Risks Related to General Economic Conditions General economic conditions may adversely impact our business, financial condition, results of operations or cash flows. Various aspects of our business could be impacted by general macroeconomic conditions including, among others, inflation, interest rates, rising or elevated unemployment, declines in GDP, consumer spending, property values, supply chain complications and economic uncertainty.
Decreases in collateral values, particularly with respect to our commercial real estate, or CRE, and commercial and industrial, or C&I, could adversely affect our customers’ ability to repay these loans, which in turn could impact our profitability. Repayment of our commercial loans is often dependent on the cash flow of the borrower, which may become unpredictable.
Decreases in collateral values underlying our loans, particularly with respect to our commercial real estate, or CRE, and commercial and industrial, or C&I, could adversely affect our customers’ ability to repay these loans which in turn could impact our profitability. Repayment of our commercial loans is often dependent on the cash flow of the borrower which may become unpredictable.
AND SUBSIDIARIES Risks Related to Credit Our ability to assess the credit-worthiness of our customers may diminish, which may adversely affect our results of operations. We incur credit risk by virtue of making loans and extending loan commitments and letters of credit. Credit risk is one of our most significant risks.
Risks Related to Credit Our ability to assess the credit-worthiness of our customers may diminish which may adversely affect our results of operations. We incur credit risk by virtue of making loans and extending loan commitments and letters of credit. Credit risk is one of our most significant risks.
Risks Related to Regulatory Compliance and Legal Matters We are subject to extensive governmental regulation and supervision. As discussed above, under "Supervision and Regulation" in Item 1, we are subject to extensive state and federal regulation, supervision and legislation that govern nearly every aspect of our operations.
AND SUBSIDIARIES Risks Related to Regulatory Compliance and Legal Matters We are subject to extensive governmental regulation and supervision. As discussed above, under "Supervision and Regulation" in Item 1, we are subject to extensive state and federal regulation, supervision and legislation that govern nearly every aspect of our operations.
There can be no assurance we will not suffer material losses or other material consequences relating to technology failure, cyber incidents or other information or security breaches experienced by us or the third parties whom we interact.
There can be no assurance we will not suffer material losses or other material consequences relating to technology failure, cyber incidents or other information or security breaches experienced by us or the third parties whom we interact with.
We are dependent on these critical third-party providers securing their information systems, over which we have limited control, and a breach of their information systems could adversely affect our ability to process transactions, service our clients or manage our exposure to risk and could result in the disclosure of sensitive, personal customer information, which could have a material adverse impact on our business through damage to our reputation, loss of business, remedial costs, additional regulatory scrutiny or exposure to civil litigation and possible financial liability.
We are dependent on these critical third-party providers securing their information systems, over which we have limited control, and a breach of their information systems could adversely affect our ability to process transactions, service our clients or manage our exposure to risk and could result in the disclosure of sensitive, personal customer information which could have a material adverse impact on our business through damage to our brand, loss of business, remedial costs, additional regulatory scrutiny or exposure to civil litigation and possible financial liability.
Cybersecurity.” Fraudulent activity associated with our products and services could adversely affect our results of operations, financial condition and stock price, negatively impact our brand and reputation and result in regulatory intervention or sanctions.
Cybersecurity.” Fraudulent activity associated with our products and services could adversely affect our results of operations, financial condition and stock price, negatively impact our brand and result in regulatory intervention or sanctions.
The value of the collateral used to secure our loans may not be sufficient to compensate for the amount of unpaid loans and we may be unsuccessful in recovering the remaining balances from our customers.
AND SUBSIDIARIES The value of the collateral used to secure our loans may not be sufficient to compensate for the amount of unpaid loans and we may be unsuccessful in recovering the remaining balances from our customers.
Furthermore, we may in the future discover areas of our internal controls, disclosure controls and procedures, or operating, risk management and corporate governance policies and procedures that need improvement.
AND SUBSIDIARIES Furthermore, we may in the future discover areas of our internal controls, disclosure controls and procedures, or operating, risk management and corporate governance policies and procedures that need improvement.
While we believe we have operational risk controls in place to prevent or detect fraud or to mitigate the impact of any fraud, we cannot provide assurance that we can prevent or detect fraud or that we will not experience future fraud losses or incur costs or other damage related to such fraud, at levels that adversely affect our results of operation, financial condition or stock price.
While we believe we have operational risk controls in place to prevent or detect fraud or to mitigate the impact of any fraud, we cannot provide assurance that we can prevent or detect fraud or that we will not experience future fraud losses or incur costs or other damage related to such fraud, at levels that adversely affect our results of operations, financial condition or stock price.
Additionally, our stock price can fluctuate significantly in response to a variety of factors including, among other things: • volatility of stock market prices and volumes in general; • changes in market valuations of similar companies; • the nature and composition of our ownership base; • investor views on the attractiveness of a given sector in the market; • the flow of capital among market sectors; • changes in the conditions of credit markets; • changes in accounting policies or procedures as required by the Financial Accounting Standards Board, or FASB, or other regulatory agencies; • legislative and regulatory actions, including the impact of the Dodd-Frank Act and related regulations, that may subject us to additional regulatory oversight which may result in increased compliance costs and/or require us to change our business model; • government intervention in the U.S. financial system and the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the FRB; • additions or departures of key members of management; • fluctuations in our quarterly or annual operating results; and • changes in analysts’ estimates of our financial performance. 20 Table of Contents S&T BANCORP, INC.
Additionally, our stock price can fluctuate significantly in response to a variety of factors including, among other things: • volatility of stock market prices and volumes in general; • changes in market valuations of similar companies; • the nature and composition of our ownership base; • investor views on the attractiveness of a given sector in the market; • the flow of capital among market sectors; • changes in the conditions of credit markets; • changes in accounting policies or procedures as required by the Financial Accounting Standards Board, or FASB, or other regulatory agencies; • legislative and regulatory actions, including the impact of the Dodd-Frank Act and related regulations, that may subject us to additional regulatory oversight which may result in increased compliance costs and/or require us to change our business model; • government intervention in the U.S. financial system and the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve; • additions or departures of key members of management; • fluctuations in our quarterly or annual operating results; and • changes in analysts’ estimates of our financial performance. 27 Table of Contents S&T BANCORP, INC.
Financial companies are highly vulnerable to reputational damage when they are found to have harmed customers, particularly retail customers, through conduct that is illegal or viewed as unfair, deceptive, manipulative or otherwise wrongful. We are dependent on third-party providers for a number of services that are important to our business.
Financial companies are highly vulnerable to brand damage when they are found to have harmed customers, particularly retail customers, through conduct that is illegal or viewed as unfair, deceptive, manipulative or otherwise wrongful. We are dependent on third-party providers for a number of services that are important to our business.
Moreover, we cannot give any assurance that we will benefit from any market growth or favorable economic conditions in our primary market area. 12 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Our loan portfolio has a significant concentration of commercial loans that have a higher risk of loss.
Moreover, we cannot give any assurance that we will benefit from any market growth or favorable economic conditions in our primary market area. 17 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Our loan portfolio has a significant concentration of commercial loans that have a higher risk of loss.
Financial services institutions, and third parties whom they conduct business with, have been subject to, and are likely to continue to be the target of, cyber attacks, including computer viruses, malicious or destructive code, phishing attacks, denial of service or other security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary and other information of the institution, its employees or customers or of third parties, or otherwise materially disrupt network access or business operations.
Financial services institutions, and third parties whom they conduct business with, have been subject to, and are likely to continue to be the target of, cyber attacks, including computer viruses, malicious or destructive code, phishing attacks, denial of service, adversarial artificial intelligence or other security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary and other information of the institution, its employees or customers or of third parties, or otherwise materially disrupt network access or business operations.
Failure to comply with applicable laws, regulations, policies or supervisory guidance could lead to enforcement and other legal actions by federal or state authorities, including criminal or civil penalties, the loss of FDIC insurance, the revocation of a banking charter, other sanctions by regulatory agencies, and/or damage to our reputation.
Failure to comply with applicable laws, regulations, policies or supervisory guidance could lead to enforcement and other legal actions by federal or state authorities, including criminal or civil penalties, the loss of FDIC insurance, the revocation of a banking charter, other sanctions by regulatory agencies and/or damage to our brand.
Our ability to maintain a stable core deposit base is a function of our financial performance, our reputation and the security provided by FDIC insurance, which combined, gives customers confidence in us. If any of these considerations deteriorates, the stability of our core deposits could be harmed.
Our ability to maintain a stable core deposit base is a function of our financial performance, our brand and the security provided by FDIC insurance, which combined, gives customers confidence in us. If any of these considerations deteriorates, the stability of our core deposits could be harmed.
Examples of such material losses include, but are not limited to: (1) remediation costs, such as liability for stolen assets or information, repairs of system damage, and incentives to customers in an effort to maintain relationships after an attack; (2) violations of applicable privacy and other laws; (3) loss of confidence in its security measures; (4) increased cybersecurity protection costs, such as organizational changes, deploying additional personnel and protection technologies, training employees, and engaging third party experts and consultants; (5) significant litigation exposure; (6) harm to our reputation; (7) financial loss; and (8) damage to our competitiveness, stock price, and long-term shareholder values.
Examples of such material losses include, but are not limited to: (1) remediation costs, such as liability for stolen assets or information, repairs of system damage and incentives to customers in an effort to maintain relationships after an attack; (2) violations of applicable privacy and other laws; (3) loss of confidence in its security measures; (4) increased cybersecurity protection costs, such as organizational changes, deploying additional personnel and protection technologies, training employees and engaging third party experts and consultants; (5) significant litigation exposure; (6) negative public opinion; (7) financial loss; and (8) damage to our competitiveness, stock price and long-term shareholder values.
Any financial liability or reputational damage could have a material adverse effect on our business, which, in turn, could have a material adverse effect on our financial condition and results of operations. Item 1B. UNRESOLVED STAFF COMMENTS There are no unresolved SEC staff comments.
Any financial liability or brand damage could have a material adverse effect on our business which in turn could have a material adverse effect on our financial condition and results of operations. Item 1B. UNRESOLVED STAFF COMMENTS There are no unresolved SEC staff comments.
Any of these matters could result in failure, circumvention of our security systems, or significant disruptions to us or third parties with whom we interact, misappropriation or destruction of our confidential information and/or that of our customers, or damage to our customers’ and/or third parties’ computers or systems, loss of our customers and business opportunities, and could result in a violation of applicable privacy laws and other laws, litigation exposure, regulatory fines, penalties or intervention, loss of confidence in our security measures, reputational damage, reimbursement or other compensatory costs, and additional compliance costs.
Any of these matters could result in failure, circumvention of our security systems or significant disruptions to us or third parties with whom we interact, misappropriation or destruction of our confidential information and/or that of our customers, or damage to our customers’ and/or third parties’ computers or systems, loss of our customers and business opportunities, and could result in a violation of applicable privacy laws and other laws, litigation exposure, regulatory fines, penalties or intervention, loss of confidence in our security measures, negative public opinion, reimbursement or other compensatory costs and additional compliance costs.
A failure by any of these third-party service providers could cause a disruption in our operations, which could result in negative public opinion about us or damage to our reputation. We expend significant resources to comply with regulatory requirements, and the failure to comply with such regulations could result in reputational harm or significant legal or remedial costs.
A failure by any of these third-party service providers could cause a disruption in our operations which could result in negative public opinion about us or damage to our brand. We expend significant resources to comply with regulatory requirements, and the failure to comply with such regulations could result in brand harm or significant legal or remedial costs.
Furthermore, as cybersecurity incidents increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as adequate for our operations. For more information on how the Company manages cybersecurity risk, please refer to the discussion provided below under “Part I, Item 1C.
Furthermore, as cybersecurity incidents increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as adequate for our operations. For more information on how S&T manages cybersecurity risk, please refer to the discussion provided below under “Part I, Item 1C.
Our ability to raise additional capital at any given time is dependent on capital market conditions at that time and on our financial performance and outlook. Risks Related to Interest Rates and Investments Our net interest income could be negatively affected by interest rate changes which may adversely affect our financial condition.
Our ability to raise additional capital at any given time is dependent on capital market conditions at that time and on our financial performance and outlook. Risks Related to Interest Rates and Investments Our net interest income could be negatively affected by interest rate changes which may adversely affect our financial condition and results of operations.
Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards with respect to ESG matters or failure to successfully manage varied stakeholder expectations could have a material adverse impact on our future results of operations, financial position, cash flows, ability to do business with certain third parties and our stock price. 19 Table of Contents S&T BANCORP, INC.
Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards with respect to ESG matters or failure to successfully manage varied stakeholder expectations could have a material adverse impact on our future results of operations, financial condition, cash flows, ability to do business with certain third parties and our stock price. 26 Table of Contents S&T BANCORP, INC.
The majority of our loans are to commercial borrowers including commercial and industrial, or C&I, CRE and construction loans. The commercial loan portfolio typically involves a higher degree of credit risk than other types of loans.
The majority of our loans are to commercial borrowers including C&I, Commercial Real Estate, or CRE, and construction loans. The commercial loan portfolio typically involves a higher degree of credit risk than other types of loans.
A cyber attack, information or security breach, or a failure of ours or of a third-party's infrastructure, computer and data management systems could adversely affect our ability to conduct our business or manage our exposure to risk, result in the disclosure or misuse of confidential or proprietary information, increase our costs to maintain and update our operational and security systems and infrastructure, and adversely impact our results of operations, liquidity and financial condition, as well as cause reputational harm.
A cyber attack, information or security breach, or a failure of ours or of a third-party's infrastructure, computer and data management systems could adversely affect our ability to conduct our business or manage our exposure to risk, result in the disclosure or misuse of confidential or proprietary information, increase our costs to maintain and update our operational and security systems and infrastructure, and adversely impact our results of operations, liquidity and financial condition, as well as cause diminished customer, employee or investor confidence.
Management determines the amount of allowance for credit losses, or ACL, through undergoing a periodic review of the loan portfolio, where it considers historical losses, the national unemployment forecast produced by the Federal Reserve combined with qualitative factors around current conditions including changes in lending policies and practices, economic conditions, changes in the loan portfolio, changes in lending management, results of internal loan reviews, asset quality trends, collateral values, concentrations of credit risk and other external factors.
Management determines the amount of allowance for credit losses, or ACL, through undergoing a periodic review of the loan portfolio, where it considers historical losses, forward-looking information including management's assessment of the macroeconomic conditions, including the national unemployment forecast produced by the Federal Reserve and qualitative factors around current conditions including changes in lending policies and practices, economic conditions, changes in the loan portfolio, changes in lending management, results of internal loan reviews, asset quality trends, collateral values, concentrations of credit risk and other external factors.
Although the extent and duration of these military conflicts and any future escalation of such hostilities, market disruptions and volatility, and the result of any diplomatic negotiations remains uncertain, these consequences, including those we cannot yet predict, may cause our business, financial condition, results of operations and the price of our common stock to be adversely affected.
Although the extent and duration of these military conflicts and any future escalation of such hostilities, market disruptions and volatility and the result of any diplomatic negotiations remains uncertain, these consequences, including those we cannot yet predict, may cause our business, financial condition, results of operations and the price of our common stock to be adversely affected. 20 Table of Contents S&T BANCORP, INC.
Failure to successfully keep pace with technological change affecting the financial services industry, including but not limited to changes affecting our information systems resulting in incidents, attacks or breaches in cybersecurity , could have a material adverse impact on our business, financial condition and results of operations.
Failure to successfully keep pace with technological change affecting the financial services industry, including but not limited to changes affecting our information systems resulting in incidents, attacks or breaches in cybersecurity; or utilize system enhancements that are implemented in the future, could have a material adverse impact on our business, financial condition and results of operations.
Any failure or circumvention of internal controls, disclosure controls and procedures, or operating, risk management and corporate governance policies and procedures, whether as a result of human error, misconduct or malfeasance, or failure to comply with regulations related to controls and policies and procedures could have a material adverse effect on our business, results of operations and financial condition.
Any failure or circumvention of internal controls, disclosure controls and procedures, or operating, risk management and corporate governance policies and procedures, whether as a result of human error, misconduct or malfeasance, or failure to comply with regulations related to controls and policies and procedures could have a material adverse effect on our business, results of operations and financial condition. 25 Table of Contents S&T BANCORP, INC.
Volatile market conditions may detrimentally affect the value of these securities, such as through reduced valuations due to the perception of heightened credit or liquidity risks. Changes in the value of these instruments may result in a reduction to earnings and/or capital, which may adversely affect our results of operations and financial condition.
Volatile market conditions may detrimentally affect the value of these securities, such as through reduced valuations due to the perception of heightened credit or liquidity risks. Changes in the value of these instruments may result in a reduction to earnings and/or capital which may adversely affect our results of operations and financial condition. 24 Table of Contents S&T BANCORP, INC.
Failure to maintain effective controls or to timely implement any necessary improvement of our internal and disclosure controls, or operating, risk management and corporate governance policies and procedures, could, among other things, result in losses from errors, harm our reputation, or cause investors to lose confidence in our reported financial information, all of which could have a material adverse effect on our results of operations and financial condition. 18 Table of Contents S&T BANCORP, INC.
Failure to maintain effective controls or to timely implement any necessary improvement of our internal and disclosure controls, or operating, risk management and corporate governance policies and procedures, could, among other things, result in losses from errors, harm our brand, or cause investors to lose confidence in our reported financial information, all of which could have a material adverse effect on our results of operations and financial condition.
However, other factors not discussed below or elsewhere in this Annual Report on Form 10-K could adversely affect our businesses, results of operations and financial condition. Therefore, the risk factors below do not necessarily include all risks that we may face. 11 Table of Contents S&T BANCORP, INC.
However, other factors not discussed below or elsewhere in this Annual Report on Form 10-K could adversely affect our businesses, results of operations and financial condition. Therefore, the risk factors below do not necessarily include all risks that we may face.
Further, an individual commercial loan balance is typically larger than other loans in our portfolio, creating the potential for larger credit losses on an individual loan. The deterioration of one or a few of these loans could have a material adverse effect on our financial condition and results of operations.
Further, an individual commercial loan balance is typically larger than other loans in our portfolio, creating the potential for larger credit losses on an individual loan. The deterioration of one or a few of these loans could have a material adverse effect on our financial condition and results of operations. 18 Table of Contents S&T BANCORP, INC.
This conflict, as well as further escalation of tensions between Israel and various countries in the Middle East and North Africa may cause additional detrimental effects on the global economy, including financial and capital markets, which could adversely impact our earnings.
This conflict, as well as further escalation of tensions between Israel and various countries in the Middle East, North Africa and rising tensions between United States and Venezuela, may cause additional detrimental effects on the global economy, including financial and capital markets which could adversely impact our results of operations.
Damage to our reputation could adversely affect our ability to retain and attract new customers and employees, expose us to litigation and regulatory action and adversely impact our earnings and liquidity. Our ability to pay dividends on our common stock may be limited.
Damage to our brand could adversely affect our ability to retain and attract new customers and employees, expose us to litigation and regulatory action and adversely impact our results of operations and liquidity. Our ability to pay dividends on our common stock may be limited.
AND SUBSIDIARIES increased in recent years in part because of the proliferation of new technologies, the use of the Internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties, including foreign state actors.
Cybersecurity risks for financial institutions have significantly increased in recent years in part because of the proliferation of new technologies, the use of the Internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties, including foreign state actors.
We may not be able to integrate efficiently or operate profitably any entity we may acquire. We may experience disruption and incur unexpected expenses in integrating acquisitions. These failures could adversely impact our future prospects and results of operation. We are subject to competition from both banks and non-banking companies.
We may not be able to integrate efficiently or operate profitably any entity we may acquire. We may experience disruption and incur unexpected expenses in integrating acquisitions. These failures could adversely impact our future prospects and results of operations. 23 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES We are subject to competition from both banks and non-banking companies.
Any breach of our system security 15 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES could result in disruption of our operations, unauthorized access to confidential customer information, significant regulatory costs, litigation exposure and other possible damages, loss or liability. Such costs or losses could exceed the amount of available insurance coverage, if any, and would adversely affect our earnings.
Any breach of our system security could result in disruption of our operations, unauthorized access to confidential customer information, significant regulatory costs, litigation exposure and other possible damages, loss or liability. Such costs or losses could exceed the amount of available insurance coverage, if any, and would adversely affect our results of operations.
As a result of these 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.
As a result of these events, we face the potential for brand 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. 19 Table of Contents S&T BANCORP, INC.
Any of these developments could adversely impact our business, financial condition, results of operations or cash flows. We may not accurately predict the nature and timing of the policies of the Federal Reserve and other governmental agencies and their impact on interest rates and financial markets, which could negatively impact our financial condition and results of operations.
We may not accurately predict the nature and timing of the policies of the Federal Reserve and other governmental agencies and their impact on interest rates and financial markets which could negatively impact our financial condition and results of operations.
Furthermore, fraudulent activity could negatively impact our brand and reputation, which could also adversely affect our results of operation, financial condition or stock price. Fraudulent activity could also lead to regulatory intervention or regulatory sanctions. We rely on certain critical third-party providers for a number of services that are important to our business.
Furthermore, fraudulent activity could negatively impact our brand which could also adversely affect our results of operations, financial condition or stock price. Fraudulent activity could also lead to regulatory intervention or regulatory sanctions. 22 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES We rely on certain critical third-party providers for a number of services that are important to our business.
Incorrect assumptions could lead to material underestimates of expected losses and an inadequate ACL. As our assessment of expected losses changes, we may need to increase or decrease our ACL, which could significantly impact our financial results and profitability. Our loan portfolio is concentrated within our market area, and our lack of geographic diversification increases our risk profile.
As our assessment of expected losses changes, we may need to increase or decrease our ACL which could significantly impact our operating results and financial condition. Our loan portfolio is concentrated within our market area, and our lack of geographic diversification increases our risk profile.
A significant reduction in our net interest income will adversely affect our business and results of operations. If we are unable to manage interest rate risk effectively, our business, financial condition and results of operations could be materially harmed. 17 Table of Contents S&T BANCORP, INC.
A significant reduction in our net interest income will adversely affect our business and results of operations. If we are unable to manage interest rate risk effectively, our business, financial condition and results of operations could be materially impacted.
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 13 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES financial institutions.
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.
AND SUBSIDIARIES Declines in the value of investment securities held by us could require write-downs, which would reduce our earnings. In order to diversify earnings and enhance liquidity, we own debt instruments of the U.S. government, U.S.government agencies and U.S. municipalities.
Declines in the value of investment securities held by us could require write-downs which may adversely affect our financial condition and results of operations. In order to diversify earnings and enhance liquidity, we own debt instruments of the U.S. government, U.S. government agencies and U.S. municipalities.
The effective use of technology increases efficiency and enables financial institutions to better service customers and reduce costs. Our future success depends, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy their demands, as well as create additional efficiencies within our operations.
Our future success depends, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy their demands, as well as create additional efficiency within our operations.
We have policies, procedures, and controls in place designed to prevent or limit this risk, but we cannot guarantee that these policies, procedures and controls fully mitigate this risk.
We have policies, procedures and controls in place designed to prevent or limit this risk, but we cannot guarantee that these policies, procedures and controls fully mitigate this risk. 21 Table of Contents S&T BANCORP, INC.
Management regularly reviews and updates our internal controls, disclosure controls and procedures and operating, risk management and corporate governance policies and procedures. Any system of controls, policies and procedures, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met.
Any system of controls, policies and procedures, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met.
Although we have policies and procedures in place to determine future losses, due to the subjective nature of this area, there can be no assurance that our management has accurately assessed the level of allowances reflected in our consolidated financial statements. We may underestimate our expected credit losses and fail to hold an ACL sufficient to account for these losses.
Although we have policies and procedures in place to determine future losses, due to the subjective nature of this area, there can be no assurance that our management has accurately assessed the level of allowance reflected in our consolidated financial statements.
Financial challenges at other banking institutions and 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.
Financial challenges at other banking institutions; adverse developments affecting the financial services industry; concerns regarding the soundness of financial institutions; and further disruption to the economy and the U.S. banking system may adversely affect our business, results of operations, liquidity and stock price Several bank receiverships in 2023 caused a state of volatility in the financial services industry and uncertainty with respect to liquidity and the health of the U.S. banking system.
AND SUBSIDIARIES Negative public opinion could damage our reputation and adversely impact our earnings and liquidity. Reputational risk, or the risk to our business, earnings, liquidity and capital from negative public opinion, is inherent in our operations.
Negative public opinion could damage our brand and adversely impact our results of operations and liquidity. Brand impacts to strategic risk, including the risk to our business, earnings, liquidity and capital from negative public opinion, is inherent in our operations.
Changes to United States tariffs and/or other trade policies may have a negative effect on the underlying credit quality of our customers, and increase the risk of our customers defaulting or becoming delinquent in their obligations to us. If the macroeconomic environment worsens, our credit portfolio and ACL could be adversely impacted.
Additional changes to United States tariffs and/or other trade policies, retaliatory measures and the effect of cost increases and continued uncertainty may have a negative effect on the underlying credit quality of our customers, and increase the risk of our customers defaulting or becoming delinquent in their obligations to us.
We intend to continue pursuing a growth strategy through organic growth within our current footprint and through market expansion. We also actively evaluate acquisition opportunities as another source of growth.
Our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively. We intend to continue pursuing a growth strategy through organic growth within our current footprint and through market expansion. We also actively evaluate acquisition opportunities as another source of growth.
Geopolitical tensions and conflicts between nations has created significant economic and financial disruptions and uncertainties, which could adversely affect our business, financial condition and results of operations.
Such actions, regardless of merit, could have material adverse effects on our business, results of operations, financial condition and growth prospects. Geopolitical tensions and conflicts between nations have created significant economic and financial disruptions and uncertainties which could adversely affect our business, financial condition and results of operations.
While we believe we currently have sufficient capital, if we cannot raise additional capital when needed, we may not be able to meet these requirements. In addition, our ability to further expand our operations through organic growth, which includes growth within our current footprint and growth through market expansion, may be adversely affected by any inability to raise necessary capital.
In addition, our ability to further expand our operations through organic growth, which includes growth within our current footprint and growth through market expansion, may be adversely affected by any inability to raise necessary capital.
Our business is highly dependent on the security and efficacy of our infrastructure, computer and data management systems, as well as those of third parties with whom we interact. Cybersecurity risks for financial institutions have significantly 14 Table of Contents S&T BANCORP, INC.
Our business is highly dependent on the security and efficacy of our infrastructure, computer and data management systems, as well as those of third parties with whom we interact.
Additionally, a number of our employees have shifted to working from remote locations, which we expect to remain high for the foreseeable future, increasing the number of surfaces that require protection and the overall risks and exposures to cyber threats.
AND SUBSIDIARIES Additionally, a number of our employees have the ability to work from remote locations, increasing the number of surfaces that require protection and the overall risks and exposures to cyber threats.
There can be no assurance that such measures will be effective in avoiding undue credit risk. If the models and approaches that we use to select, manage and underwrite our consumer and commercial loan products change and our underwriting standards do not reflect or capture the rapid changes in the economy, we may have higher credit losses.
If the models and approaches that we use to select, manage and underwrite our consumer and commercial loan products change and our underwriting standards do not reflect or capture the rapid changes in the economy, we may have higher credit losses. 16 Table of Contents S&T BANCORP, INC.
Changes in the overall credit quality of our portfolio can have a significant impact on our earnings. Like other lenders, we face the risk that our customers will not repay their loans. We reserve for losses in our loan portfolio based on our assessment of expected credit losses.
Changes to our provision for credit losses or ACL could significantly impact our operating results and financial condition. Like other lenders, we face the risk that our customers will not repay their loans. We reserve for losses in our loan portfolio based on our assessment of expected credit losses.
Based on current conditions in the labor market, we have experienced some difficulty in retaining and attracting personnel and there is no assurance that we will be able to continue to successfully do so. 16 Table of Contents S&T BANCORP, INC.
Based on current conditions in the labor market, we have experienced some difficulty in retaining and attracting personnel and there is no assurance that we will be able to continue to successfully do so. Risks Related to Our Business Strategy Our strategy includes growth plans through organic growth and by means of acquisitions.
Our results of operations are largely dependent on net interest income, which is the difference between the interest and fees earned on interest-earning assets and the interest paid on interest-bearing liabilities. Therefore, any change in general market interest rates, including changes resulting from the FRB’s policies, can have a significant effect on our net interest income and total income.
Our results of operations are largely dependent on net interest income which is the difference between the interest and fees earned on interest-earning assets and the interest paid on interest-bearing liabilities.
Risks Related to Our Operations Failure to keep pace with technological changes could have a material adverse effect on our results of operations and financial condition. The financial services industry is constantly undergoing rapid technological change with frequent introductions of new technology-driven products and services.
AND SUBSIDIARIES Risks Related to Our Operations Failure to keep pace with technological changes and successfully implement current or future information technology system enhancements could have a material adverse effect on our results of operations and financial condition.
This situation could have a material adverse impact on our results of operations and financial condition. Additionally, regulatory pressures and additional regulation of 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.
This situation could have a material adverse impact on our results of operations and financial condition.
Our business could be negatively impacted by environmental, social and governance, or ESG, matters, including climate change and related legislative and regulatory initiatives. ESG standards, expectations and norms are constantly changing.
Our business could be negatively impacted by complex, evolving, and conflicting environmental, social and governance, or ESG, regulations and expectations, including climate change and related legislative and regulatory initiatives. Certain federal actions have created a complex environment with respect to ESG.
Failure to comply with the different or additional regulations could further adversely affect us. Our controls and policies and procedures may fail or be circumvented, which may result in a material adverse effect on our business, financial condition and results of operations.
Our controls and policies and procedures may fail or be circumvented which may result in a material adverse effect on our business, financial condition and results of operations. Management regularly reviews and updates our internal controls, disclosure controls and procedures and operating, risk management and corporate governance policies and procedures.
Many of our large competitors have substantially greater resources to invest in technological improvements. We may not be able to effectively implement new technology-driven products and services quickly or be successful in marketing these products and services to our customers.
We continue to invest in information technology systems in order to provide functionality to improve our operating efficiency and to streamline our client experience. We may not be able to effectively implement new technology-driven products, enhancements and services quickly or be successful in marketing these products and services to our customers.
Fraudulent activity has escalated, become more sophisticated, and continues to evolve, as there are more options to access financial services.
Fraudulent activity has escalated, become more sophisticated, and continues to evolve, as there are more options to access financial services. The sophistication of generative artificial intelligence enables the automation and refinement of fraudulent schemes, including the creation of deceptive financial records, synthetic media and highly persuasive social engineering attacks.
We may be required to raise capital in the future, but that capital may not be available or may not be on acceptable terms when it is needed. We are required by federal regulatory authorities to maintain adequate capital levels to support operations.
We are required by federal regulatory authorities to maintain adequate capital levels to support operations. While we believe we currently have sufficient capital, if we cannot raise additional capital when needed, we may not be able to meet these requirements.
Removed
Furthermore, the United States has recently enacted significant new tariffs and may enact additional tariffs. Additionally, federal agencies have been instructed to evaluate key aspects of U.S. trade policy and issue reports to the president no later than April 30, 2025.
Added
There can be no assurance that such measures will be effective in avoiding undue credit risk.
Removed
Several bank receiverships in 2023 caused a state of volatility in the financial services industry and uncertainty with respect to liquidity and the health of the U.S. banking system.
Added
We may underestimate our expected credit losses and fail to hold an ACL sufficient to account for these losses or we may overestimate expected credit losses and maintain an ACL in excess of what is required. Incorrect assumptions could lead to material underestimates or overestimates of expected losses and an inadequate or excessive ACL.
Removed
AND SUBSIDIARIES Risks Related to Our Business Strategy Our strategy includes growth plans through organic growth and by means of acquisitions. Our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.
Added
Furthermore, the United States has recently enacted significant new tariffs and may enact additional tariffs. There continues to be significant uncertainty and concern about the future relationship between the U.S. and other countries, including with respect to trade policies, treaties, government regulations, sanctions, tariffs, and application thereof, since the imposition of tariffs that began in April 2025.
Removed
There has been an increased focus from regulators, investors, customers, employees and other stakeholders concerning ESG practices and disclosure, including climate change, hiring practices, the diversity of the work force, diversity, equity and inclusion practices, racial and social justice issues and shareholder rights.
Added
We are continuing to evaluate the impact of tariffs and trade policies on our business and our customers; however, we cannot provide any assurance about the ultimate outcome or impact of these measures.
Removed
Environmental focus and concern over the effects of climate change have resulted in increased political and social initiatives directed toward climate change.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

10 edited+1 added−1 removed17 unchanged
Biggest changeOur CSO reports to the CRO and has 18 years of information technology and cybersecurity experience, including prior roles as chief information officer, assistant director of information technology, chief information security officer and chief security officer in federal law enforcement and banking organizations. Our Director of Information Technology has 25 years of information technology and cybersecurity experience.
Biggest changeOur CSO reports to the CRO and has 18 years of information technology and cybersecurity experience, including prior roles as chief information officer, assistant director of information technology, chief information security officer and chief security officer in federal law enforcement and banking organizations. Our CIO has over 25 years of financial services, information technology, cybersecurity and emerging technologies experience.
AND SUBSIDIARIES have escalation procedures to notify members of senior and executive management, the Board (or an applicable subset) and regulators in a timely manner based on the criticality of the cybersecurity incident. S&T also has in place incident response and business continuity plans.
AND SUBSIDIARIES escalation procedures to notify members of senior and executive management, the Board (or an applicable subset) and regulators in a timely manner based on the criticality of the cybersecurity incident. S&T also has in place incident response and business continuity plans.
When a cybersecurity incident occurs, whether detected internally or from third-party cybersecurity incidents, we evaluate the incident for criticality across a range of contributing indicators, including service availability, impact to operations, reputational impact, regulatory and legal considerations, data sensitivity and direct financial impact.
When a cybersecurity incident occurs, whether detected internally or from third-party cybersecurity incidents, we evaluate the incident for criticality across a range of contributing indicators, including service availability, impact to operations, and brand, regulatory and legal considerations, data sensitivity and direct financial impact.
The Risk Committee regularly reviews reports from, and has discussions with, S&T’s Chief Risk Officer, or CRO, Chief Operating Officer, or COO, CSO, and Director of Operational Risk Management regarding cybersecurity risks, the threat landscape, updates on incidents and reports on our investments in cybersecurity risk mitigation and governance.
The Risk Committee regularly reviews reports from, and has discussions with, S&T’s Chief Risk Officer, or CRO, Chief Operating Officer, or COO, Chief Information Officer, or CIO, CSO, and Director of Operational Risk Management regarding cybersecurity risks, the threat landscape, updates on incidents and reports on our investments in cybersecurity risk mitigation and governance.
The ERM Committee reports information to the Risk Committee on a quarterly basis, or more often as needed. Risk Management leadership, which assists the ERM Committee in assessing and managing cybersecurity threats, include our CRO, COO, CSO, Director of Information Technology and Director of Operational Risk Management.
The ERM Committee reports information to the Risk Committee on a quarterly basis, or more often as needed. Risk Management leadership, which assists the ERM Committee in assessing and managing cybersecurity threats, include our CRO, COO, CIO, CSO and Director of Operational Risk Management.
The policies, procedures and practices applicable to the cybersecurity components of the third-party risk management program were developed and are maintained consistent with the FFEIC IT Examination Handbook, as well as guidance from our prudential regulators.
The policies, procedures and practices applicable to the cybersecurity components of the third-party risk management program were developed and are maintained consistent with the FFIEC IT Examination Handbook, as well as guidance from our prudential regulators.
Our Director of Operational Risk Management has 11 years of information technology and cybersecurity experience, including serving as a former chief information officer for a financial institution. For more information regarding the risks associated with cybersecurity that may impact our business strategy, results of operations or financial condition, see “ Part I, “Item 1A.
Our Director of Operational Risk Management has over 25 years of information technology and cybersecurity experience, including serving as a former chief information officer for a financial institution. For more information regarding the risks associated with cybersecurity that may impact our business strategy, results of operations or financial condition, see “ Part I, “Item 1A.
At December 31, 2024, management has assessed known cybersecurity incidents for potential materiality and disclosure using formal documented processes and has determined that there have been no material cybersecurity incidents, individually or in aggregate.
At December 31, 2025, management has assessed known cybersecurity incidents for potential materiality and disclosure using formal documented processes and has determined that there have been no material cybersecurity incidents, individually or in aggregate.
A special meeting of the Board will be held, as deemed necessary by the Chairperson of the Board in consultation with the Chair of the Risk Committee. Management’s Role At the management level, the ERM Committee, CRO, COO, CSO, Director of Information Technology and Director of Operational Risk Management are responsible for assessing and managing material risks from cybersecurity threats.
A special meeting of the Board will be held, as deemed necessary by the Chairperson of the Board in consultation with the Chair of the Risk Committee. Management’s Role At the management level, the ERM Committee, CRO, COO, CIO, CSO and Director of Operational Risk Management are responsible for assessing and managing material risks from cybersecurity threats.
The potential impact of the incident, individually or in aggregate, is evaluated by the Chief Security Officer, or CSO, continuously across these criteria. We 21 Table of Contents S&T BANCORP, INC.
The potential impact of the incident, individually or in aggregate, is evaluated by the Chief Security Officer, or CSO, continuously across these criteria. We have 28 Table of Contents S&T BANCORP, INC.
Removed
Risk Factors” of this Annual Report on Form10-K. Item 2. PROPERTIES S&T Bancorp, Inc. headquarters is located in Indiana, Pennsylvania. We operate in Pennsylvania and Ohio. At December 31, 2024, we operate 71 banking branches and three loan production offices, of which 41 are leased facilities.
Added
Risk Factors” of this Annual Report on Form10-K.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeIn addition, no material proceedings are pending nor are known to be threatened or contemplated against us by governmental authorities or other parties. 22 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 4. MINE SAFETY DISCLOSURES Not applicable. 23 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES PART II
Biggest changeIn addition, no material proceedings are pending nor are known to be threatened or contemplated against us by governmental authorities or other parties. Item 4. MINE SAFETY DISCLOSURES Not applicable. 30 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

45 edited+8 added−8 removed30 unchanged
Biggest changeThe following table reconciles interest and dividend income and net interest income per the Consolidated Statements of Net Income to interest income, net interest income and net interest margin on an FTE basis (non-GAAP) for the periods presented: Years ended December 31, (dollars in thousands) 2024 2023 2022 Total Interest and Dividend Income $ 515,872 $ 477,901 $ 340,751 Plus: taxable equivalent adjustment 2,706 2,550 2,052 Interest and Dividend Income on an FTE Basis (Non-GAAP) $ 518,578 $ 480,451 $ 342,803 Total Interest and Dividend Income $ 515,872 $ 477,901 $ 340,751 Less: Interest expense (181,066) (128,491) (24,968) Net Interest Income 334,806 349,410 315,783 Plus: taxable equivalent adjustment 2,706 2,550 2,052 Net Interest Income on an FTE Basis (Non-GAAP) $ 337,512 $ 351,960 $ 317,835 Net interest margin 3.79 % 4.10 % 3.74 % Plus: taxable equivalent adjustment 0.03 % 0.03 % 0.02 % Net Interest Margin on an FTE Basis (Non-GAAP) 3.82 % 4.13 % 3.76 % 28 Table of Contents S&T BANCORP, INC.
Biggest changeYears ended December 31, (dollars in thousands) 2025 2024 2023 Total Interest and Dividend Income $ 516,490 $ 515,872 $ 477,901 Plus: taxable equivalent adjustment 2,415 2,706 2,550 Interest and Dividend Income on an FTE Basis (Non-GAAP) $ 518,905 $ 518,578 $ 480,451 Total Interest and Dividend Income $ 516,490 $ 515,872 $ 477,901 Less: Interest expense (166,394) (181,066) (128,491) Net Interest Income 350,096 334,806 349,410 Plus: taxable equivalent adjustment 2,415 2,706 2,550 Net Interest Income on an FTE Basis (Non-GAAP) $ 352,511 $ 337,512 $ 351,960 Net interest margin 3.87 % 3.79 % 4.10 % Plus: taxable equivalent adjustment 0.03 % 0.03 % 0.03 % Net Interest Margin on an FTE Basis (Non-GAAP) 3.90 % 3.82 % 4.13 % 35 Table of Contents S&T BANCORP, INC.
Certain information relating to securities authorized for issuance under equity compensation plans is set forth under the heading Equity Compensation Plan Information in Part III, Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters of this Report.
Securities Authorized for Issuance under Equity Compensation Plans Certain information relating to securities authorized for issuance under equity compensation plans is set forth under the heading Equity Compensation Plan Information in Part III, Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters of this Report.
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; cybersecurity 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; 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 other employees; general economic or business conditions, including the strength of regional economic conditions in our market area; 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 and geopolitical tensions and conflicts between nations.
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; cybersecurity concerns; rapid technological developments and changes, including the use of artificial intelligence and digital assets; operational risks or risk management failures by us or critical third parties, including fraud risk; our ability to manage our brand 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; 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 other employees; general economic or business conditions, including the strength of regional economic conditions in our market area; 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 and geopolitical tensions and conflicts between nations.
The carrying value of goodwill is tested annually for impairment each October 1st or more frequently if events and circumstances indicate that it may be impaired. We test for impairment by comparing the fair value of the reporting unit with its 27 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
The carrying value of goodwill is tested annually for impairment each October 1st or more frequently if events and circumstances indicate that it may be impaired. We test for impairment by comparing the fair value of the reporting unit with its 34 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
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 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 our future together through people-forward banking. We believe that all banking should be personal.
The fair values of each method are then weighted based on the relevance and reliability in the current economic environment. Based upon our qualitative assessment performed for our annual impairment analysis as of October 1, 2024, we concluded that goodwill is not impaired. Recent Accounting Pronouncements and Developments Note 1.
The fair values of each method are then weighted based on the relevance and reliability in the current economic environment. Based upon our qualitative assessment performed for our annual impairment analysis as of October 1, 2025, we concluded that goodwill is not impaired. Recent Accounting Pronouncements and Developments Note 1.
Among other balance sheet and income statement changes, our severely adverse scenario would have resulted in an increase to the ACL of approximately 75 percent. This severely adverse scenario shows how sensitive the ACL can be to key qualitative and quantitative assumptions underlying the overall ACL calculation.
Among other balance sheet and income statement changes, our severely adverse scenario would have resulted in an increase to the ACL of approximately 107 percent. This severely adverse scenario shows how sensitive the ACL can be to key qualitative and quantitative assumptions underlying the overall ACL calculation.
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 interest and rates paid on interest-bearing liabilities for the periods presented: 31 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES
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 interest and rates paid on interest-bearing liabilities for the periods presented: 38 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES
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. 26 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
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. 33 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
AND SUBSIDIARIES Five-Year Cumulative Total Return The following chart compares the cumulative total shareholder return on our common stock with the cumulative total shareholder return of the NASDAQ Composite Index (1) and the NASDAQ Bank Index (2) assuming a $100 investment in each on December 31, 2019 and the reinvestment of dividends.
AND SUBSIDIARIES Five-Year Cumulative Total Return The following chart compares the cumulative total shareholder return on our common stock with the cumulative total shareholder return of the NASDAQ Composite Index (1) and the NASDAQ Bank Index (2) assuming a $100 investment in each on December 31, 2020 and the reinvestment of dividends.
We did not significantly change the manner in which we applied our critical accounting policies or developed related assumptions or estimates during 2024. We have reviewed these critical accounting estimates and related disclosures with the Audit Committee.
We did not significantly change the manner in which we applied our critical accounting policies or developed related assumptions or estimates during 2025. We have reviewed these critical accounting estimates and related disclosures with the Audit Committee.
The number of record-holders does not reflect the number of persons or entities holding stock in nominee name through banks, brokerage firms and other nominees. As discussed under "Our ability to pay dividends on our common stock may be limited." included in Item 1A.
The number of record-holders does not reflect the number of persons or entities holding stock through mutual funds, exchange traded funds or in nominee name through banks, brokerage firms and other nominees. Dividends As discussed under "Our ability to pay dividends on our common stock may be limited." included in Item 1A.
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.
We believe this to be the preferred industry measurement of net interest income that provides a relevant comparison combining both taxable and non-taxable sources of interest income.
The Company's discussion and analysis focuses on significant factors impacting the financial condition and results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023. This discussion and analysis should be read in conjunction with our Consolidated Financial Statements and Supplementary Data and related notes within this Annual Report on Form 10-K.
Management's discussion and analysis focuses on significant factors impacting the financial condition and results of operations for the year ended December 31, 2025 as compared to the year ended December 31, 2024. This discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related notes within this Annual Report on Form 10-K.
The amount of any future dividends will depend on economic and market conditions, our financial condition and operating results and other factors, including applicable government regulations and policies. S&T’s Board of Directors approved a quarterly cash dividend of $0.34 per share on January 29, 2025.
The amount of any future dividends will depend on economic and market conditions, our financial condition and operating results and other factors, including applicable government regulations and policies. S&T’s Board of Directors approved a quarterly cash dividend of $0.36 per share on January 28, 2026.
Certain reclassifications have been made to prior periods to place them on a basis comparable with the current period presentation. Important Note Regarding Forward-Looking Statements This Annual Report on Form 10-K contains or incorporates statements that we believe are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
Certain reclassifications have been made to prior periods to conform to the current period presentation. Important Note Regarding Forward-Looking Statements This Annual Report on Form 10-K contains or incorporates statements that we believe are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
A similar discussion and analysis that compares the year ended December 31, 2023 to the year ended December 31, 2022 may be found in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations” on our Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission, or SEC, on February 27, 2024.
A similar discussion and analysis that compares the year ended December 31, 2024 to the year ended December 31, 2023 may be found in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations” on our Form 10-K for the year ended December 31, 2024 accepted by the Securities and Exchange Commission, or SEC, on February 28, 2025.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Earnings Summary The following table presents a summary of key profitability metrics for the periods presented: Years ended December 31, (dollars in thousands) 2024 2023 2022 Net income $ 131,265 $ 144,781 $ 135,520 Earnings per share - diluted $ 3.41 $ 3.74 $ 3.46 Return on average assets 1.37 % 1.56 % 1.48 % Return on average shareholders' equity 9.86 % 11.80 % 11.47 % Return on average tangible shareholders' equity (non-GAAP) (1) 13.84 % 17.15 % 17.02 % (1) Reconciled to GAAP in the "Explanation of Use of Non-GAAP Financial Measures" section of this MD&A.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Earnings Summary The following table presents a summary of key profitability metrics for the periods presented: Years ended December 31, (dollars in thousands) 2025 2024 2023 Net income $ 134,230 $ 131,265 $ 144,781 Earnings per share - diluted $ 3.49 $ 3.41 $ 3.74 Return on average assets 1.38 % 1.37 % 1.56 % Return on average shareholders' equity 9.29 % 9.86 % 11.80 % Return on average tangible shareholders' equity (non-GAAP) (1) 12.62 % 13.84 % 17.15 % (1) Reconciled to GAAP in the "Explanation of Use of Non-GAAP Financial Measures" section of this MD&A.
Interest rates increased substantially in 2022 and 2023 followed by decreases in 2024 resulting in an unrealized loss on the cash flow hedges of $7.5 million at December 31, 2024, which is reported in Other Comprehensive Income (Loss), or OCI, net of applicable taxes.
Interest rates increased substantially in 2022 and 2023 followed by decreases in 2024 and 2025 resulting in an unrealized loss on the cash flow hedges of $1.6 million at December 31, 2025 which is reported in Accumulated Other Comprehensive Income (Loss), or AOCI, net of applicable taxes.
We cultivate relationships rooted in trust, strengthened by going above and beyond and renewed with every interaction. Our strategic priorities for 2025 and beyond will be focused on growing our deposit franchise, core profitability, asset quality and talent and engagement. 29 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
We cultivate relationships rooted in trust, strengthened by going above and beyond and renewed with every interaction. Our strategic priorities for 2026 and beyond will be focused on growing our deposit franchise, improving core profitability, maintaining asset quality and ensuring a high level of talent and engagement. 36 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stock Prices and Dividend Information Our common stock is listed on the NASDAQ Global Select Market System, or NASDAQ, under the symbol STBA. As of the close of business on January 31, 2025, we had approximately 2,328 shareholders of record.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stock Information Our common stock is listed on the NASDAQ Global Select Market System, or NASDAQ, under the symbol STBA. As of the close of business on February 24, 2026 we had approximately 2,194 shareholders of record.
The following table provides a reconciliation of return on average tangible shareholders' equity (non-GAAP) by reconciling net income (GAAP) per the Consolidated Statements of Net Income to net income before amortization of intangibles and average shareholder's equity to average tangible shareholders' equity for the periods presented: Years ended December 31, (dollars in thousands) 2024 2023 2022 Net income $ 131,265 $ 144,781 $ 135,520 Plus: amortization of intangibles net of tax 904 1,042 1,199 Net income before amortization of intangibles $ 132,169 $ 145,823 $ 136,719 Average shareholders' equity $ 1,330,870 $ 1,227,332 $ 1,181,788 Less: average goodwill and other intangible assets, net of deferred tax liability (376,181) (377,157) (378,303) Average tangible shareholders' equity $ 954,689 $ 850,175 $ 803,485 Return on Average Tangible Shareholders' Equity (non-GAAP) 13.84 % 17.15 % 17.02 % Executive Overview We are a bank holding company that is headquartered in Indiana, Pennsylvania with assets of $9.7 billion at December 31, 2024.
The following table provides a reconciliation of return on average tangible shareholders' equity (non-GAAP) by reconciling net income (GAAP) per the Consolidated Statements of Net Income to net income before amortization of intangibles and average shareholder's equity to average tangible shareholders' equity for the periods presented: Years ended December 31, (dollars in thousands) 2025 2024 2023 Net income $ 134,230 $ 131,265 $ 144,781 Plus: amortization of intangibles net of tax 674 904 1,042 Net income before amortization of intangibles (non-GAAP) $ 134,904 $ 132,169 $ 145,823 Average shareholders' equity $ 1,444,322 $ 1,330,870 $ 1,227,332 Less: average goodwill and other intangible assets, net of deferred tax liability (375,508) (376,181) (377,157) Average tangible shareholders' equity (non-GAAP) $ 1,068,814 $ 954,689 $ 850,175 Return on Average Tangible Shareholders' Equity (non-GAAP) 12.62 % 13.84 % 17.15 % Executive Overview We are a bank holding company that is headquartered in Indiana, Pennsylvania with assets of $9.9 billion at December 31, 2025.
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.
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.
AND SUBSIDIARIES Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The efficiency ratio is noninterest expense divided by noninterest income plus net interest income, on an FTE basis (non-GAAP), which ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The efficiency ratio is noninterest expense divided by net interest income on an FTE basis (non-GAAP) which ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice, plus noninterest income adjusted to exclude losses on sales of securities and gains on Visa exchange.
Years ended December 31, (dollars in thousands) 2024 2023 2022 Efficiency Ratio (Non-GAAP) Noninterest expense $218,938 $210,334 $196,746 Net interest income $334,806 $349,410 $315,783 Plus: taxable equivalent adjustment 2,706 2,550 2,052 Net interest income (FTE) (non-GAAP) 337,512 351,960 317,835 Noninterest income 49,083 57,620 58,259 Plus: net losses (gains) on sale of securities 7,938 — (198) Less: gain on Visa class B-1 exchange (3,492) — — Net interest income (FTE) (non-GAAP) plus noninterest income $391,041 $409,580 $375,896 Efficiency Ratio (Non-GAAP) 55.99 % 51.35 % 52.34 % Return on average tangible shareholders' equity (non-GAAP) is a key profitability metric used by management to measure financial performance.
Years ended December 31, (dollars in thousands) 2025 2024 2023 Efficiency Ratio (Non-GAAP) Noninterest expense $226,757 $218,938 $210,334 Net interest income $350,096 $334,806 $349,410 Plus: taxable equivalent adjustment 2,415 2,706 2,550 Net interest income (FTE) (non-GAAP) 352,511 337,512 351,960 Noninterest income 52,023 49,083 57,620 Plus: net losses on sale of securities 2,295 7,938 — Less: gain on Visa class B-1 exchange — (3,492) — Net interest income (FTE) (non-GAAP) plus noninterest income $406,829 $391,041 $409,580 Efficiency Ratio (Non-GAAP) 55.74 % 55.99 % 51.35 % Return on average tangible shareholders' equity (non-GAAP) is a key profitability metric used by management to measure financial performance.
We earned net income of $131.3 million for 2024 compared to net income of $144.8 million in 2023. Diluted earnings per share, or EPS, was $3.41 in 2024 compared to $3.74 in 2023.
We earned net income of $134.2 million for 2025 compared to net income of $131.3 million in 2024. Diluted earnings per share, or EPS, was $3.49 in 2025 compared to $3.41 in 2024.
The new plan replaced the existing share repurchase plan effective immediately and is set to expire May 30, 2025. This repurchase authorization permits S&T to repurchase shares of S&T's common stock from time to time through a combination of open market and privately negotiated repurchases up to the authorized $50 million aggregate value of S&T's common stock.
This repurchase authorization permits S&T to repurchase shares of S&T's common stock from time to time through a combination of open market and privately negotiated repurchases up to the authorized $50 million aggregate value of S&T's common stock.
Our strategy is to reduce our exposure to variability in expected future cash flows related to interest payments on commercial loans that are currently indexed to the 1-month SOFR rate.
There were no new interest rates swaps entered into in 2023, 2024 or 2025. Our strategy is to reduce our exposure to variability in expected future cash flows related to interest payments on commercial loans that are currently indexed to the 1-month SOFR rate.
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” and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may.
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” 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.
A reconciliation of the efficiency ratio (non-GAAP) is provided above in the "Explanation of Use of Non-GAAP Financial Measures" section of this MD&A. The provision for income taxes decreased $0.4 million to $33.6 million in 2024 compared to $34.0 million in 2023.
The efficiency ratio (non-GAAP) for 2025 was 55.74 percent compared to 55.99 percent for 2024. A reconciliation of the efficiency ratio (non-GAAP) is provided above in the "Explanation of Use of Non-GAAP Financial Measures" section of this MD&A. The provision for income taxes remained relatively unchanged at $33.7 million in 2025 compared to $33.6 million in 2024.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Twelve Months Ended December 31, 2024 Compared to Twelve Months Ended December 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.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Twelve months ended months ended December 31, 2025 Compared to Twelve months ended months ended December 31, 2024 Net Interest Income Our principal source of revenue is net interest income.
This is an improvement of $4.1 million compared to the $11.6 million unrealized loss at December 31, 2023.
This is an improvement of $5.9 million compared to the $7.5 million unrealized loss at December 31, 2024.
S&T expects to fund any repurchases from cash on hand and internally generated funds. Any share repurchases will not begin until permissible under applicable laws. (2 ) Includes excise tax on repurchases, net of issuances for restricted stock awards. 24 Table of Contents S&T BANCORP, INC.
S&T expects to fund any repurchases from cash on hand and internally generated funds. Any share repurchases will not begin until permissible under applicable laws.
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.
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.
While higher interest rates positively impacted interest income and rates on interest-earning assets, it was more than offset by higher interest expense and rates on interest-bearing liabilities. NIM is reconciled to net interest margin adjusted to an FTE basis (non-GAAP) above in the "Explanation of Use of Non-GAAP Financial Measures" section of this Management’s Discussion and Analysis, or MD&A.
The higher NIM (FTE) (non-GAAP), despite the declining interest rate environment, reflects the strategic repositioning of the balance sheet to be more interest rate neutral. NIM is reconciled to net interest margin adjusted to an FTE basis (non-GAAP) above in the "Explanation of Use of Non-GAAP Financial Measures" section of this Management’s Discussion and Analysis, or MD&A.
Other noninterest income decreased $0.8 million in 2024 compared to 2023 primarily due to a $3.9 million gain on the sale of other real estate owned, or OREO, in 2023 compared to a gain of $3.5 million from the exchange offer for Visa Class B-1 common stock in 2024.
Noninterest income increased $2.9 million, or 6.0 percent, to $52.0 million in 2025 compared to $49.1 million in 2024. The increase primarily related to lower security losses of $2.3 million in 2025 compared to $7.9 million in 2024 offset by a $3.5 million gain from the exchange offer for Visa Class B-1 common stock in 2024.
Purchases of Equity Securities The following table is a summary of our purchases of common stock during the fourth quarter of 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 (2) 10/1/2024 - 10/31/2024 — $ — — $ 50,000,000 11/1/2024 - 11/30/2024 — — — 50,000,000 12/1/2024 - 12/31/2024 — — — 50,000,000 Total — $ — — $ 50,000,000 ( 1) On January 24, 2024, our Board of Directors authorized a new $50 million share repurchase plan.
The following table is a summary of our purchases of common stock during the fourth quarter of 2025: Period Total number of shares purchased Average price paid per share (1) Total number of shares purchased as part of publicly announced plan Approximate dollar value of shares that may yet be purchased under the plan (1) 10/1/2025 - 10/31/2025 160,000 $ 36.70 160,000 $ 44,127,510 11/1/2025 - 11/30/2025 739,900 38.42 739,900 15,703,407 12/1/2025 - 12/31/2025 48,370 39.90 48,370 13,773,624 Total 948,270 $ 38.20 948,270 $ 13,773,624 (1 ) Excludes excise tax and commissions.
Explanation of Use of Non-GAAP Financial Measures In addition to traditional financial measures presented in accordance with GAAP, our management uses, and this report contains or references, certain non-GAAP financial measures discussed below.
Explanation of Use of Non-GAAP Financial Measures In addition to traditional financial measures presented in accordance with GAAP, our management uses, and this report contains or references, certain non-GAAP financial measures, such as interest income on interest-earning assets, net interest income and net interest margin presented on a fully taxable equivalent, or FTE, basis (non-GAAP), the efficiency ratio (non-GAAP) and return on tangible shareholders' equity (non-GAAP).
During 2022, we entered into interest rate swaps with a total notional amount of $500.0 million with original maturities ranging from three to five years. There were no new interest rates swaps entered into in 2024 or 2023.
As part of our interest rate risk management strategy, we use interest rate swaps to add stability to net interest income by managing our exposure to interest rate movements. During 2022, we entered into interest rate swaps with a total notional amount of $500.0 million with maturities ranging from three to five years.
Net loan charge-offs were $8.3 million, or 0.11 percent of average loans, in 2024 compared to $13.2 million, or 0.18 percent of average loans, in 2023. Noninterest income decreased $8.5 million to $49.1 million in 2024 compared to $57.6 million in 2023.
Net loan charge-offs were $14.5 million, or 0.18 percent of average loans, in 2025 compared to $8.3 million, or 0.11 percent of average loans, in 2024. Higher net charge-offs were primarily due to the resolution of nonperforming assets during the fourth quarter of 2025.
The increase in the effective tax rate was primarily due to the adoption of PAM. 30 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
The effective tax rate decreased to 20.1 percent in 2025 compared to 20.4 percent in 2024. The decrease in the effective tax rate was primarily due to an increase in low income housing tax credits, or LIHTC, net of amortization. 37 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
The net interest margin, or NIM, on an FTE basis (non-GAAP) decreased 31 basis points to 3.82 percent in 2024 compared to 4.13 percent in 2023. The decreases in net interest income and NIM on an FTE basis (non-GAAP) were primarily due to the impact of higher interest rates on total interest-bearing liabilities.
Net interest income on an FTE basis (non-GAAP) increased $15.0 million, or 4.44 percent, compared to 2024. The net interest margin, or NIM, on an FTE basis (non-GAAP) increased 8 basis points to 3.90 percent in 2025 compared to 3.82 percent in 2024.
Noninterest expense increased $8.6 million to $218.9 million in 2024 compared to $210.3 million in 2023. Salaries and employee benefits increased $10.5 million primarily due to higher salaries related to annual merit increases, the acquisition of new talent and higher incentives and medical costs.
Noninterest expense increased $7.9 million, or 3.6 percent, to $226.8 million in 2025 compared to $218.9 million in 2024. Expenses remained relatively stable with the most significant increase related to salaries and employee benefits which increased $5.7 million primarily due to higher salary and incentive costs.
Source: Bloomberg Period Ending Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 S&T Bancorp, Inc. 100.00 64.60 85.06 95.79 97.79 116.09 NASDAQ Composite (1) 100.00 145.05 177.27 119.63 173.11 224.34 NASDAQ Bank (2) 100.00 92.50 132.19 110.67 106.87 128.85 (1) The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on the Nasdaq Stock Market.
Source: Bloomberg Period Ending Index 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 S&T Bancorp, Inc. 100.00 131.67 148.28 151.37 179.69 191.69 NASDAQ Composite (1) 100.00 122.22 82.48 119.35 154.67 187.42 NASDAQ Bank (2) 100.00 142.91 119.65 115.54 139.30 149.15 (1) The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on the Nasdaq Stock Market.
The provision for credit losses decreased $17.8 million to $0.1 million for 2024 compared to $17.9 million for 2023. The significant decline in the provision for credit losses was mainly due to a lower level of ACL related to decreases in our criticized and classified loans and a decrease in net loan charge-offs.
The provision for credit losses increased $7.3 million to $7.4 million for 2025 compared to $0.1 million for 2024. The increase primarily related to higher net loan charge-offs offset by a lower required level of ACL.
Removed
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.
Added
Purchases of Equity Securities On May 13, 2025, our Board of Directors authorized an extension of its $50 million share repurchase plan. The new repurchase authorization will expire July 31, 2026.
Removed
The decrease in both net income and EPS in 2024 can be attributed to declining interest rates, as compared to 2023 when we had record net income and EPS due to the impact of rising interest rates on our net income.
Added
On January 22, 2026, our Board of Directors authorized a new $100 million share repurchase program which replaced the existing share repurchase program effective January 26, 2026 and is set to expire February 1, 2027. The remaining capacity of $13.8 million under the existing share repurchase program was terminated.
Removed
Net interest income decreased $14.6 million, or 4.18 percent, to $334.8 million in 2024 compared to $349.4 million in 2023. Net interest income on an FTE basis (non-GAAP) decreased $14.4 million, or 4.11 percent, compared to 2023.
Added
The new program authorizes the share repurchase of S&T's common stock from time to time through a combination of open market and privately negotiated transactions up to the authorized $100 million aggregate value of S&T's common stock.
Removed
The decrease was mainly related to $7.9 million of realized losses in 2024 from the repositioning of securities into longer duration, higher-yielding securities.
Added
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, applicable securities laws and other legal and contractual requirements, as well as S&T’s financial performance.
Removed
Professional services and legal decreased $2.4 million primarily due to higher consulting expenses in 2023 compared to 2024. Other noninterest expense decreased $3.2 million primarily due to the adoption of PAM and a $2.1 million decrease in loan collection and appraisal expense compared to 2023.
Added
The repurchase program does not obligate S&T to repurchase any particular number of shares and may be extended, modified or discontinued at any time. As of February 25, 2026, 856,900 shares were repurchased under the new plan, at an average price of $43.45, for $37.2 million. 31 Table of Contents S&T BANCORP, INC.
Removed
As a result of adopting PAM, amortization expense related to tax credit equity investments of $4.3 million is included in income tax expense for 2024 compared to $2.1 million included in other noninterest expense in 2023. The efficiency ratio (non-GAAP) for 2024 was 55.99 percent compared to 51.35 percent for 2023.
Added
The following table reconciles interest and dividend income and net interest income per the Consolidated Statements of Net Income to interest income, net interest income and net interest margin on an FTE basis (non-GAAP) for the periods presented.
Removed
The decrease in our income tax provision was primarily due to a $14.0 million decrease in income before taxes in 2024 compared to 2023 partially offset by the adoption of PAM as explained above. The effective tax rate increased to 20.4 percent in 2024 compared to 19.0 percent in 2023.
Added
The increase in both net income and EPS in 2025 can be attributed to an increase in net interest income offset by an increase in the provision for credit losses and noninterest expenses. Net interest income increased $15.3 million, or 4.57 percent, to $350.1 million in 2025 compared to $334.8 million in 2024.
Removed
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. As part of our interest rate risk management strategy, we use interest rate swaps to add stability to net interest income by managing our exposure to interest rate movements.
Added
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.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

99 edited+36 added−37 removed34 unchanged
Biggest changeMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2024 2023 2022 (dollars in thousands) Average Balance Interest Rate Average Balance Interest Rate Average Balance Interest Rate ASSETS Interest-bearing deposits with banks $ 165,275 $ 8,855 5.36 % $ 141,954 $ 7,344 5.17 % $ 378,323 $ 2,952 0.78 % Securities, at fair value (1)(2) 977,896 29,860 3.05 % 976,095 25,445 2.61 % 1,017,471 22,880 2.25 % Loans held for sale 85 6 6.95 % 121 8 6.71 % 1,115 49 4.38 % Commercial real estate 3,334,518 197,406 5.92 % 3,216,593 183,204 5.70 % 3,182,821 139,575 4.39 % Commercial and industrial 1,584,309 115,061 7.26 % 1,665,630 118,221 7.10 % 1,706,861 83,568 4.90 % Commercial construction 378,755 29,677 7.84 % 381,838 28,835 7.55 % 401,780 18,795 4.68 % Total Commercial Loans 5,297,582 342,144 6.46 % 5,264,061 330,260 6.27 % 5,291,462 241,938 4.57 % Residential mortgage 1,558,277 78,676 5.05 % 1,282,078 59,170 4.62 % 980,134 40,146 4.10 % Home equity 646,085 44,695 6.92 % 648,525 43,158 6.65 % 611,134 25,887 4.24 % Installment and other consumer 106,260 9,058 8.52 % 117,807 9,929 8.43 % 119,703 7,177 6.00 % Consumer construction 65,402 4,015 6.14 % 51,146 2,462 4.81 % 33,922 1,198 3.53 % Total Consumer Loans 2,376,024 136,444 5.74 % 2,099,556 114,719 5.46 % 1,744,893 74,408 4.26 % Total Portfolio Loans 7,673,606 478,588 6.24 % 7,363,617 444,979 6.04 % 7,036,355 316,346 4.50 % Total Loans (1)(3) 7,673,691 478,594 6.24 % 7,363,738 444,987 6.04 % 7,037,470 316,395 4.50 % Total other earning assets 18,606 1,269 6.82 % 37,988 2,675 7.04 % 12,694 576 4.54 % Total Interest-earning Assets 8,835,468 $ 518,578 5.87 % 8,519,775 $ 480,451 5.64 % 8,445,958 $ 342,803 4.06 % Noninterest-earning assets 737,366 756,481 721,080 Total Assets $ 9,572,834 $ 9,276,256 $ 9,167,038 LIABILITIES AND SHAREHOLDERS’ EQUITY Interest-bearing demand $ 804,387 $ 8,837 1.10 % $ 844,588 $ 6,056 0.72 % $ 918,222 $ 1,025 0.11 % Money market 1,993,053 64,666 3.24 % 1,677,584 39,480 2.33 % 1,909,208 11,948 0.63 % Savings 905,351 6,273 0.69 % 1,020,314 4,352 0.43 % 1,121,818 1,121 0.10 % Certificates of deposit 1,764,661 79,635 4.51 % 1,302,478 42,948 3.30 % 993,722 5,813 0.58 % Total Interest-bearing Deposits 5,467,452 159,411 2.92 % 4,844,964 92,836 1.92 % 4,942,970 19,907 0.40 % Short-term borrowings 257,524 13,206 5.12 % 500,421 27,238 5.44 % 75,849 1,695 2.23 % Long-term borrowings 46,306 1,964 4.24 % 31,706 1,332 4.20 % 19,090 411 2.15 % Junior subordinated debt securities 49,386 3,976 8.05 % 52,215 4,110 7.87 % 54,420 2,395 4.40 % Total Borrowings 353,216 19,146 5.41 % 584,342 32,680 5.59 % 149,359 4,501 3.01 % Other interest-bearing liabilities 47,727 2,509 5.26 % 58,135 2,975 5.12 % 15,163 560 3.69 % Total Interest-bearing Liabilities 5,868,395 181,066 3.09 % 5,487,441 128,491 2.34 % 5,107,492 24,968 0.49 % Noninterest-bearing liabilities 2,373,569 2,561,483 2,877,758 Shareholders' equity 1,330,870 1,227,332 1,181,788 Total Liabilities and Shareholders' Equity $ 9,572,834 $ 9,276,256 $ 9,167,038 Net Interest Income (FTE) (non-GAAP) (1)(2) $ 337,512 $ 351,960 $ 317,835 Net Interest Margin (FTE) (non-GAAP) (1)(2) 3.82 % 4.13 % 3.76 % (1) Tax-exempt interest income is on an FTE basis (non-GAAP) using the statutory federal corporate income tax rate of 21 percent.
Biggest changeMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2025 2024 2023 (dollars in thousands) Average Balance Interest Rate Average Balance Interest Rate Average Balance Interest Rate ASSETS Interest-bearing deposits with banks $ 122,385 $ 5,311 4.34 % $ 165,275 $ 8,855 5.36 % $ 141,954 $ 7,344 5.17 % Securities, at fair value (1)(2) 999,735 37,437 3.74 % 977,896 29,860 3.05 % 976,095 25,445 2.61 % Loans held for sale 230 14 6.39 % 85 6 6.95 % 121 8 6.71 % Commercial real estate 3,516,374 205,978 5.86 % 3,334,518 197,406 5.92 % 3,216,593 183,204 5.70 % Commercial and industrial 1,507,852 100,726 6.68 % 1,584,309 115,061 7.26 % 1,665,630 118,221 7.10 % Commercial construction 371,300 26,156 7.04 % 378,755 29,677 7.84 % 381,838 28,835 7.55 % Total Commercial Loans 5,395,526 332,860 6.17 % 5,297,582 342,144 6.46 % 5,264,061 330,260 6.27 % Residential mortgage 1,681,229 88,801 5.28 % 1,558,277 78,676 5.05 % 1,282,078 59,170 4.62 % Home equity 677,909 42,780 6.31 % 646,085 44,695 6.92 % 648,525 43,158 6.65 % Installment and other consumer 98,051 7,708 7.86 % 106,260 9,058 8.52 % 117,807 9,929 8.43 % Consumer construction 41,900 2,846 6.79 % 65,402 4,015 6.14 % 51,146 2,462 4.81 % Total Consumer Loans 2,499,089 142,135 5.69 % 2,376,024 136,444 5.74 % 2,099,556 114,719 5.46 % Total Portfolio Loans 7,894,615 474,995 6.02 % 7,673,606 478,588 6.24 % 7,363,617 444,979 6.04 % Total Loans (1)(3) 7,894,845 475,009 6.02 % 7,673,691 478,594 6.24 % 7,363,738 444,987 6.04 % Total other earning assets 15,611 1,148 7.35 % 18,606 1,269 6.82 % 37,988 2,675 7.04 % Total Interest-earning Assets 9,032,576 $ 518,905 5.74 % 8,835,468 $ 518,578 5.87 % 8,519,775 $ 480,451 5.64 % Noninterest-earning assets 707,961 737,366 756,481 Total Assets $ 9,740,537 $ 9,572,834 $ 9,276,256 LIABILITIES AND SHAREHOLDERS’ EQUITY Interest-bearing demand $ 763,929 $ 7,520 0.98 % $ 804,387 $ 8,837 1.10 % $ 844,588 $ 6,056 0.72 % Money market 2,182,107 64,460 2.95 % 1,993,053 64,666 3.24 % 1,677,584 39,480 2.33 % Savings 874,528 6,014 0.69 % 905,351 6,273 0.69 % 1,020,314 4,352 0.43 % Certificates of deposit 1,893,648 76,576 4.04 % 1,764,661 79,635 4.51 % 1,302,478 42,948 3.30 % Total Interest-bearing Deposits 5,714,212 154,570 2.70 % 5,467,452 159,411 2.92 % 4,844,964 92,836 1.92 % Short-term borrowings 111,453 5,048 4.53 % 257,524 13,206 5.12 % 500,421 27,238 5.44 % Long-term borrowings 50,856 1,932 3.80 % 46,306 1,964 4.24 % 31,706 1,332 4.20 % Junior subordinated debt securities 49,446 3,482 7.04 % 49,386 3,976 8.05 % 52,215 4,110 7.87 % Total Borrowings 211,755 10,462 4.94 % 353,216 19,146 5.41 % 584,342 32,680 5.59 % Other interest-bearing liabilities 31,660 1,362 4.31 % 47,727 2,509 5.26 % 58,135 2,975 5.12 % Total Interest-bearing Liabilities 5,957,627 166,394 2.79 % 5,868,395 181,066 3.09 % 5,487,441 128,491 2.34 % Noninterest-bearing liabilities 2,338,588 2,373,569 2,561,483 Shareholders' equity 1,444,322 1,330,870 1,227,332 Total Liabilities and Shareholders' Equity $ 9,740,537 $ 9,572,834 $ 9,276,256 Net Interest Income (FTE) (non-GAAP) (1)(2) $ 352,511 $ 337,512 $ 351,960 Net Interest Margin (FTE) (non-GAAP) (1)(2) 3.90 % 3.82 % 4.13 % (1) Tax-exempt interest income is on an FTE basis (non-GAAP) using the statutory federal corporate income tax rate of 21 percent.
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.
In order to manage liquidity risk, our Board of Directors has delegated authority to ALCO for the formulation, implementation and oversight of liquidity risk management for S&T. ALCO’s goal is to maintain adequate levels of liquidity at a reasonable cost to meet funding needs in both a normal operating environment and for potential liquidity stress events.
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.
ALCO monitors and manages liquidity through various ratios, reviewing cash flow projections, performing stress tests and having a detailed contingency funding plan. ALCO policy guidelines define graduated risk tolerance levels.
We may use the proceeds from the sale of securities for general corporate purposes, which could include investments 46 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS at the holding company level, investing in, or extending credit to subsidiaries, possible acquisitions and stock repurchases.
We may use the proceeds from the sale of securities for general corporate purposes which could include investments 51 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS at the holding company level, investing in, or extending credit to subsidiaries, possible acquisitions and stock repurchases.
Unlike equity securities of traditional for-profit enterprises, the stock of the FHLB does not provide its holders with an opportunity for capital appreciation because, by regulation, FHLB stock can only be purchased, redeemed and transferred at par value. We reviewed and evaluated the FHLB capital stock for impairment at December 31, 2024. The FHLB exceeds all required capital ratios.
Unlike equity securities of traditional for-profit enterprises, the stock of the FHLB does not provide its holders with an opportunity for capital appreciation because, by regulation, FHLB stock can only be purchased, redeemed and transferred at par value. We reviewed and evaluated the FHLB capital stock for impairment at December 31, 2025. The FHLB exceeds all required capital ratios.
As of December 31, 2024, we had not issued any securities pursuant to the shelf registration statement. Inflation Inflation can have a significant impact on interest rates and, accordingly, can impact our financial performance. Inflation can influence our asset growth, deposits, noninterest income and expense and credit quality.
As of December 31, 2025, we had not issued any securities pursuant to the shelf registration statement. Inflation Inflation can have a significant impact on interest rates and, accordingly, can impact our financial performance. Inflation can influence our asset growth, deposits, noninterest income and expense and credit quality.
We believe S&T has the ability to retain existing deposits and attract new deposits, mitigating any funding dependency on other more volatile funding sources. Refer to the "Financial Condition as of December 31, 2024 - Deposits" section of this MD&A, for additional discussion on deposits.
We believe S&T has the ability to retain existing deposits and attract new deposits, mitigating any funding dependency on other more volatile funding sources. Refer to the "Financial Condition as of December 31, 2025 - Deposits" section of this MD&A, for additional discussion on deposits.
Derivative contracts are carried at fair value representing the net present value of expected future cash receipts or payments based on market rates as of the balance sheet date. 45 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
Derivative contracts are carried at fair value representing the net present value of expected future cash receipts or payments based on market rates as of the balance sheet date. 50 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
Many of the commitments are expected to expire without being drawn upon, therefore, the total commitment amounts do not necessarily represent future cash requirements. 38 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
Many of the commitments are expected to expire without being drawn upon, therefore, the total commitment amounts do not necessarily represent future cash requirements. 44 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
We did not record an ACL related to the securities portfolio at December 31, 2024 or December 31, 2023. The unrealized losses on debt securities were primarily attributable to changes in interest rates and not related to the credit quality of these securities.
We did not record an ACL related to the securities portfolio at December 31, 2025 or December 31, 2024. The unrealized losses on debt securities were primarily attributable to changes in interest rates and not related to the credit quality of these securities.
All debt securities were determined to be investment grade and paying principal and interest according to the contractual terms of the security at December 31, 2024.
All debt securities were determined to be investment grade and paying principal and interest according to the contractual terms of the security at December 31, 2025.
Federal Home Loan Bank and Other Restricted Stock At December 31, 2024, we held FHLB of Pittsburgh stock of $15.2 million compared to $24.0 million at December 31, 2023. This investment is carried at cost and evaluated for impairment based on the ultimate recoverability of the par value.
Federal Home Loan Bank and Other Restricted Stock At December 31, 2025, we held FHLB of Pittsburgh stock of $16.0 million compared to $15.2 million at December 31, 2024. This investment is carried at cost and evaluated for impairment based on the ultimate recoverability of the par value.
When concentrations exist in certain segments, we assess the credit risk within those segments to determine if additional reserve is needed in the qualitative portion of the ACL. Total commercial loans represented 68.2 percent of total portfolio loans at December 31, 2024 compared to 70.1 percent at December 31, 2023.
When concentrations exist in certain segments, we assess the credit risk within those segments to determine if additional reserve is needed in the qualitative portion of the ACL. Total commercial loans represented 68.5 percent of total portfolio loans at December 31, 2025 compared to 68.2 percent at December 31, 2024.
We have generated an annual effective tax rate that is less than the statutory rate of 21 percent due to benefits resulting from tax-exempt interest, excludable dividend income, tax-exempt income on Bank Owned Life Insurance, or BOLI, and tax benefits associated with Low Income Housing Tax Credits, or LIHTC, which is partially offset by PAM.
We have generated an annual effective tax rate that is less than the statutory rate of 21 percent due to benefits resulting from tax-exempt interest, excludable dividend income, tax-exempt income on Bank Owned Life Insurance, or BOLI, and tax benefits associated with LIHTC which is partially offset by the proportional amortization method, or PAM.
We adopted CECL effective January 1, 2020 and elected to implement the five-year transition. Banking organizations are required to maintain a capital conservation buffer composed of common equity tier 1 capital in an amount greater than 2.50 percent of total risk-weighted assets.
We adopted CECL effective January 1, 2020 and elected to implement the five-year transition. As of December 31, 2025 we are fully transitioned. Banking organizations are required to maintain a capital conservation buffer composed of common equity tier 1 capital in an amount greater than 2.50 percent of total risk-weighted assets.
Although deposits are the primary source of funds, we have identified various other funding sources that can be used as part of our normal funding program. Additional funding sources accessible to S&T include borrowing availability at the FHLB, federal funds lines with other financial institutions and the brokered deposit market.
Although deposits are the primary source of funds, we have identified various other funding sources that can be used as part of our normal funding program. Additional funding sources accessible to S&T include borrowing availability at the FHLB, Federal Reserve Discount Window through the Borrower-in-Custody Program, federal funds lines with other financial institutions and the brokered deposit market.
Our risk-based Tier 1 and Total capital ratios were 14.90 percent and 16.49 percent, which places us above the federal bank regulatory agencies’ well-capitalized guidelines of 8.00 percent and 10.00 percent, respectively.
Our risk-based Tier 1 and Total capital ratios were 14.62 percent and 16.19 percent which places us above the federal bank regulatory agencies’ well-capitalized guidelines of 8.00 percent and 10.00 percent.
Higher LTV loans may be approved within unique program guidelines. We may originate home equity loans with a lien position that is second to unrelated third-party lenders, but normally only to the extent that the combined LTV considering both the first and second liens does not exceed 100 percent of the fair value of the property.
We may originate home equity loans with a lien position that is second to unrelated third-party lenders, but normally only to the extent that the combined LTV considering both the first and second liens does not exceed 100 percent of the fair value of the property.
We continue to maintain a strong capital position with a leverage ratio of 11.98 percent as compared to the regulatory guideline of 5.00 percent to be well-capitalized and a risk-based Common Equity Tier 1 ratio of 14.58 percent compared to the regulatory guideline of 6.50 percent to be well-capitalized.
We continue to maintain a strong capital position with a leverage ratio of 12.18 percent as compared to the regulatory guideline of 5.00 percent to be well-capitalized and a risk-based Common Equity Tier 1 ratio of 14.32 percent compared to the regulatory guideline of 6.50 percent to be well-capitalized.
At December 31, 2024, our bond portfolio had gross unrealized losses of $72.7 million offset by $1.0 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 $1.8 million. Management evaluates the securities portfolio to determine if an ACL is needed each quarter.
At December 31, 2025, our securities portfolio had gross unrealized losses of $42.4 million offset by $7.5 million in gross unrealized gains compared to December 31, 2024, when total gross unrealized losses were $72.7 million offset by gross unrealized gains of $1.0 million. Management evaluates the securities portfolio to determine if an ACL is needed each quarter.
We do not intend to sell and it is more likely than not that we will not be required to sell any of the securities in an unrealized loss position before recovery of their amortized cost. We did not recognize any impairment charges on our securities portfolio in 2024, 2023 or 2022.
We do not intend to sell and it is more likely than not that we will not be required to sell any of the securities in an unrealized loss position before recovery of their amortized cost. We did not recognize any impairment charges on our securities portfolio in 2025, 2024 or 2023. 42 Table of Contents S&T BANCORP, INC.
Within our commercial portfolio, the CRE and commercial construction portfolios combined comprised $3.7 billion, or 70.8 percent, of total commercial loans and 48.3 percent of total portfolio loans at December 31, 2024 compared to $3.7 billion, or 69.4 percent, of total commercial loans and 48.6 percent of total portfolio loans at December 31, 2023.
Within our commercial portfolio, the CRE and commercial construction portfolios combined comprised $4.0 billion, or 72.5 percent, of total commercial loans and 49.6 percent of total portfolio loans at December 31, 2025 compared to $3.7 billion, or 70.8 percent, of total commercial loans and 48.3 percent of total portfolio loans at December 31, 2024.
The other comprehensive income was primarily due to a $8.2 million improvement in unrealized losses on our available-for-sale debt securities, net of tax and an improvement of $4.1 million in unrealized losses on our interest rate swaps, net of tax.
The other comprehensive income was primarily due to a $28.9 million improvement in unrealized losses on our available-for-sale debt securities, net of tax and an improvement of $5.9 million in unrealized losses on our interest rate swaps, net of tax.
(2) Tax-exempt income is on an FTE basis using the statutory federal corporate income tax rate of 21 percent. (3) Taxable investment income is adjusted for the dividend-received deduction for equity securities. (4) Changes to rate/volume are allocated to both rate and volume on a proportionate dollar basis. 33 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
(2) Tax-exempt income is on an FTE basis using the statutory federal corporate income tax rate of 21 percent. (3) Taxable investment income is adjusted for the dividend-received deduction for equity securities. (4) Changes to rate/volume are allocated to both rate and volume on a proportionate dollar basis.
Available borrowing capacity exceeds uninsured deposits of $2.6 billion at December 31, 2024 and $2.3 billion at December 31, 2023.
Available borrowing capacity exceeds uninsured deposits of $2.7 billion at December 31, 2025 and $2.6 billion at December 31, 2024.
At December 31, 2024, S&T Bank had $938.2 million in highly liquid assets, which consisted primarily of $175.2 million in interest-bearing deposits with banks and $763.0 million in unpledged securities. This resulted in a highly liquid assets to total assets ratio of 9.7 percent at December 31, 2024 compared to 9.4 percent at December 31, 2023. Refer to Note 12.
At December 31, 2025, S&T Bank had $852.2 million in highly liquid assets which consisted primarily of $105.2 million in interest-bearing deposits with banks and $746.0 million in unpledged securities. This resulted in a highly liquid assets to total assets ratio of 8.6 percent at December 31, 2025 compared to 9.7 percent at December 31, 2024. Refer to Note 12.
(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 $14.4 million, or 4.11 percent to $337.5 million in 2024 compared to $351.9 million in 2023.
(2) Taxable investment income is adjusted for the dividend-received deduction for equity securities. (3) Nonaccruing loans are included in the daily average loan amounts outstanding. Net interest income on an FTE basis (non-GAAP) increased $15.0 million, or 4.44 percent, to $352.5 million in 2025 compared to $337.5 million in 2024.
The credit risk review function has the primary responsibility for assessing commercial credit administration and credit decision functions of consumer and mortgage underwriting, as well as providing input to the loan risk rating process. Nonperforming assets, or NPAs, consist of nonaccrual loans and OREO.
The credit risk review function has the primary responsibility for assessing commercial credit administration and credit decision functions of consumer and mortgage underwriting, as well as providing input to the loan risk rating process.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table sets forth our commitments and letters of credit as of the dates presented: December 31, (dollars in thousands) 2024 2023 Commitments to extend credit $ 2,382,847 $ 2,566,154 Standby letters of credit 69,558 61,889 Total $ 2,452,405 $ 2,628,043 See Note 16.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table sets forth our commitments and letters of credit as of the dates presented: December 31, (dollars in thousands) 2025 2024 Commitments to extend credit $ 2,644,139 $ 2,382,847 Standby letters of credit 67,452 69,558 Total $ 2,711,591 $ 2,452,405 See Note 16.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Loan Composition The following table summarizes our loan portfolio as of the dates presented: 2024 2023 2022 2021 2020 (dollars in thousands) Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total Commercial Commercial real estate $ 3,388,017 43.8 % $ 3,357,603 43.9 % $ 3,128,187 43.5 % $ 3,236,653 46.2 % $ 3,244,974 44.9 % Commercial and industrial 1,540,397 19.9 % 1,642,106 21.5 % 1,718,976 23.9 % 1,728,969 24.7 % 1,954,453 27.0 % Commercial construction 352,886 4.5 % 363,284 4.7 % 399,371 5.6 % 440,962 6.3 % 474,280 6.6 % Total Commercial Loans 5,281,300 68.2 % 5,362,993 70.1 % 5,246,534 73.0 % 5,406,584 77.2 % 5,673,706 78.5 % Consumer Consumer real estate 2,356,901 30.4 % 2,175,451 28.4 % 1,812,539 25.2 % 1,485,478 21.2 % 1,471,238 20.4 % Other consumer 104,757 1.4 % 114,897 1.5 % 124,896 1.7 % 107,928 1.5 % 80,915 1.1 % Total Consumer Loans 2,461,658 31.8 % 2,290,348 29.9 % 1,937,435 27.0 % 1,593,406 22.8 % 1,552,153 21.5 % Total Portfolio Loans $ 7,742,958 100.0 % $ 7,653,341 100.0 % $ 7,183,969 100.0 % $ 6,999,990 100.0 % $ 7,225,859 100.0 % The loan portfolio represents the most significant source of interest income for us.
Loan Composition The following table summarizes our loan portfolio as of the dates presented: 2025 2024 2023 2022 2021 (dollars in thousands) Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total Commercial Commercial real estate $ 3,626,784 44.9 % $ 3,388,017 43.8 % $ 3,357,603 43.9 % $ 3,128,187 43.5 % $ 3,236,653 46.2 % Commercial and industrial 1,519,336 18.9 % 1,540,397 19.9 % 1,642,106 21.5 % 1,718,976 23.9 % 1,728,969 24.7 % Commercial construction 380,091 4.7 % 352,886 4.5 % 363,284 4.7 % 399,371 5.6 % 440,962 6.3 % Total Commercial Loans 5,526,211 68.5 % 5,281,300 68.2 % 5,362,993 70.1 % 5,246,534 73.0 % 5,406,584 77.2 % Consumer Consumer real estate 2,454,466 30.4 % 2,356,901 30.4 % 2,175,451 28.4 % 1,812,539 25.2 % 1,485,478 21.2 % Other consumer 91,280 1.1 % 104,757 1.4 % 114,897 1.5 % 124,896 1.7 % 107,928 1.5 % Total Consumer Loans 2,545,746 31.5 % 2,461,658 31.8 % 2,290,348 29.9 % 1,937,435 27.0 % 1,593,406 22.8 % Total Portfolio Loans $ 8,071,957 100.0 % $ 7,742,958 100.0 % $ 7,653,341 100.0 % $ 7,183,969 100.0 % $ 6,999,990 100.0 % The loan portfolio represents the most significant source of interest income for us.
Additional credit risk management practices include periodic loan reviews, at least annually, and updates of our lending policies and procedures to support sound underwriting practices and portfolio management through portfolio stress testing.
Additional credit risk management practices include periodic loan reviews, at least annually, and updates of our lending policies and procedures to support sound underwriting practices and portfolio management through portfolio stress testing. Our business banking relationships are monitored through portfolio management software that identifies credit risk indicators.
Consumer loans are evaluated for charge-off after the loan becomes 90 days past due. Unsecured loans are fully charged off and secured loans are charged down to the estimated fair value of the collateral less the cost to sell. 40 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
Consumer loans are evaluated for charge-off after the loan becomes 90 days past due. Unsecured loans are fully charged off and secured loans are charged down to the estimated fair value of the collateral less the cost to sell.
IntraFi balances increased $47.1 million to $324.8 million at December 31, 2024 compared to $277.7 million at December 31, 2023. We have total uninsured deposits of $2.6 billion, or 33.5 percent of our total deposit base, compared to $2.3 billion, or 30.0 percent, at December 31, 2023.
IntraFi balances decreased $7.6 million to $317.3 million at December 31, 2025 compared to $324.8 million at December 31, 2024. We have total uninsured deposits of $2.7 billion, or 33.7 percent of our total deposit base compared to $2.6 billion, or 33.5 percent, at December 31, 2024.
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.
Liquidity and Capital Resources Liquidity is defined as a financial institution’s ability to meet its cash and collateral obligations at a reasonable cost.
Consumer loans represented 31.8 percent of our total portfolio loans at December 31, 2024 and 29.9 percent at December 31, 2023.
Consumer loans represented 31.5 percent of our total portfolio loans at December 31, 2025 and 31.8 percent at December 31, 2024.
Our access to and the availability of funds in the future will be affected by many factors, including, but not limited to our financial condition and prospects, the liquidity of the overall capital markets and the current state of the economy.
In addition, our ability to access capital markets provides additional sources of funding with respect to strategic investing opportunities. Our access to and the availability of funds in the future will be affected by many factors, including, but not limited to our financial condition and prospects, the liquidity of the overall capital markets and the current state of the economy.
Short-Term Borrowings (dollars in thousands) December 31, 2024 December 31, 2023 Balance at the period end $ 150,000 $ 415,000 Average balance during the period $ 257,524 $ 500,421 Average interest rate during the period 5.12 % 5.44 % Maximum month-end balance during the period $ 465,000 $ 630,000 Average interest rate at the period end 4.60 % 5.65 % Information pertaining to long-term borrowings and junior subordinated debt securities is summarized in the tables below for the years ended December 31, 2024 and December 31, 2023.
Short-Term Borrowings (dollars in thousands) December 31, 2025 December 31, 2024 Balance at the period end $ 165,000 $ 150,000 Average balance during the period $ 111,453 $ 257,524 Average interest rate during the period 4.53 % 5.12 % Maximum month-end balance during the period $ 165,000 $ 465,000 Average interest rate at the period end 3.93 % 4.60 % Information for long-term borrowings and junior subordinated debt securities is summarized in the tables below for the years ended December 31, 2025 and December 31, 2024.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table presents activity in the ACL for each of the three years presented below: Years Ended December 31, (dollars in thousands) 2024 2023 2022 ACL Balance at Beginning of Year: $ 107,966 $ 101,340 $ 98,576 Charge-offs: Commercial real estate (5,390) (1,706) (1,820) Commercial and industrial (3,898) (20,535) (7,801) Commercial construction — (451) — Consumer real estate (1,446) (446) (621) Other consumer (1,454) (1,500) (1,375) Total (12,188) (24,638) (11,617) Recoveries: Commercial real estate 1,921 1,084 1,052 Commercial and industrial 1,133 9,796 7,366 Commercial construction — 2 1 Consumer real estate 329 214 203 Other consumer 524 360 400 Total 3,907 11,456 9,022 Net Charge-offs (8,281) (13,182) (2,595) Impact of adoption of ASU 2022-02 — 568 — Provision for credit losses 1,809 19,240 5,359 ACL Balance at End of Year: $ 101,494 $ 107,966 $ 101,340 Net loan charge-offs for 2024 were $8.3 million, or 0.11 percent of average loans, compared to $13.2 million, or 0.18 percent of average loans for 2023.
The following table presents activity in the ACL for each of the three years presented below: Years Ended December 31, (dollars in thousands) 2025 2024 2023 ACL Balance at Beginning of Year: $ 101,494 $ 107,966 $ 101,340 Charge-offs: Commercial real estate (7,640) (5,390) (1,706) Commercial and industrial (7,532) (3,898) (20,535) Commercial construction (118) — (451) Consumer real estate (832) (1,446) (446) Other consumer (1,953) (1,454) (1,500) Total (18,075) (12,188) (24,638) Recoveries: Commercial real estate 186 1,921 1,084 Commercial and industrial 1,772 1,133 9,796 Commercial construction 9 — 2 Consumer real estate 641 329 214 Other consumer 969 524 360 Total 3,577 3,907 11,456 Net Charge-offs (14,498) (8,281) (13,182) Impact of adoption of ASU 2022-02 — — 568 Provision for credit losses 6,182 1,809 19,240 ACL Balance at End of Year: $ 93,178 $ 101,494 $ 107,966 Net loan charge-offs for 2025 were $14.5 million, or 0.18 percent of average loans compared to $8.3 million, or 0.11 percent of average loans, for 2024.
Treasury securities $ 92,768 2.72 % $ 133,786 1.71 % $ 131,695 1.71 % Obligations of U.S. government corporations and agencies 15,071 2.14 % 32,513 2.28 % 41,811 2.32 % Collateralized mortgage obligations of U.S. government corporations and agencies 596,284 3.62 % 460,939 3.04 % 428,407 2.56 % Residential mortgage-backed securities of U.S. government corporations and agencies 33,207 1.86 % 38,177 1.86 % 41,587 1.86 % Commercial mortgage-backed securities of U.S. government corporations and agencies 224,798 3.08 % 273,425 2.42 % 327,313 2.28 % Corporate obligations — — % — — % 500 7.67 % Obligations of states and political subdivisions 24,287 3.17 % 30,468 3.34 % 30,471 3.35 % Available-for-Sale Debt Securities 986,415 969,308 1,001,784 Equity securities 1,176 2.59 % 1,083 3.06 % 994 3.32 % Total Securities Available for Sale $ 987,591 3.32 % $ 970,391 2.62 % $ 1,002,778 2.34 % 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.
Treasury securities $ 84,507 2.55 % $ 92,768 2.72 % $ 133,786 1.71 % Obligations of U.S. government corporations and agencies — — % 15,071 2.14 % 32,513 2.28 % Collateralized mortgage obligations of U.S. government corporations and agencies 624,263 3.78 % 596,284 3.62 % 460,939 3.04 % Residential mortgage-backed securities of U.S. government corporations and agencies 31,336 1.86 % 33,207 1.86 % 38,177 1.86 % Commercial mortgage-backed securities of U.S. government corporations and agencies 241,262 3.43 % 224,798 3.08 % 273,425 2.42 % Obligations of states and political subdivisions 4,909 3.32 % 24,287 3.17 % 30,468 3.34 % Available-for-Sale Debt Securities 986,277 986,415 969,308 Equity securities 1,382 2.23 % 1,176 2.59 % 1,083 3.06 % Total Securities Available for Sale $ 987,659 3.53 % $ 987,591 3.32 % $ 970,391 2.62 % 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.
The following table sets forth the maturities of securities at December 31, 2024 and the weighted average yields of such securities. Taxable-equivalent adjustments for 2024 have been made in calculating yields on obligations of state and political subdivisions.
AND SUBSIDIARIES Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table sets forth the maturities of securities at December 31, 2025 and the weighted average yields of such securities. Taxable-equivalent adjustments for 2025 have been made in calculating yields on obligations of state and political subdivisions.
Consumer loans increased $171.3 million to $2.5 billion at December 31, 2024 compared to $2.3 billion at December 31, 2023 primarily due to an increase of $181.4 million in consumer real estate offset by a decrease of $10.1 million in consumer installment loans.
Consumer loans increased $84.1 million to $2.5 billion at December 31, 2025 compared to $2.5 billion at December 31, 2024 primarily due to an increase of $97.6 million in consumer real estate offset by a decrease of $13.5 million in consumer installment loans.
Included in uninsured deposits is $297.5 million of fully collateralized, municipal deposits, or 3.8 percent of our total deposit base.
Included in uninsured deposits is $333.6 million of fully collateralized, municipal deposits, or 4.2 percent of our total deposit base.
(dollars in thousands) December 31, 2024 December 31, 2023 $ Change Short-term borrowings $ 150,000 $ 415,000 $ (265,000) Long-term borrowings 50,896 39,277 11,619 Junior subordinated debt securities 49,418 49,358 60 Total Borrowings $ 250,314 $ 503,635 $ (253,321) Information pertaining to short-term borrowings is summarized in the table below for the years ended December 31, 2024 and December 31, 2023.
(dollars in thousands) December 31, 2025 December 31, 2024 $ Change Short-term borrowings $ 165,000 $ 150,000 $ 15,000 Long-term borrowings 50,815 50,896 (81) Junior subordinated debt securities 49,478 49,418 60 Total Borrowings $ 265,293 $ 250,314 $ 14,979 Information pertaining to short-term borrowings is summarized in the table below for the years ended December 31, 2025 and December 31, 2024.
Financial Condition as of December 31, 2024 Total assets were $9.7 billion at December 31, 2024 compared to $9.6 billion at December 31, 2023. Total portfolio loans increased $89.6 million, or 1.2 percent, to $7.7 billion at December 31, 2024 compared to December 31, 2023.
Financial Condition as of December 31, 2025 Total assets increased $213.0 million to $9.9 billion at December 31, 2025 compared to $9.7 billion at December 31, 2024. Total portfolio loans increased $329.0 million, or 4.3 percent, to $8.1 billion at December 31, 2025 compared to December 31, 2024.
The bond portfolio was in a net unrealized loss position of $71.7 million at December 31, 2024 compared to a net unrealized loss position of $82.0 million at December 31, 2023.
At December 31, 2025, our securities portfolio was in a net unrealized loss position of $34.9 million compared to a net unrealized loss position of $71.7 million at December 31, 2024.
Capital Resources Shareholders’ equity increased $96.8 million, or 7.6 percent, to $1.4 billion at December 31, 2024 compared to $1.3 billion at December 31, 2023. The increase was primarily due to net income of $131.3 million and other comprehensive income of $13.9 million, partially offset by dividends of $51.1 million.
Capital Resources Shareholders’ equity increased $83.6 million, or 6.1 percent, to $1.5 billion at December 31, 2025 compared to $1.4 billion at December 31, 2024. The increase was primarily due to net income of $134.2 million and other comprehensive income of $35.3 million partially offset by dividends of $53.0 million and share repurchases of $36.6 million.
The following table summarizes borrowing funding sources available as of the dates presented: December 31, 2024 December 31, 2023 (dollars in thousands) Borrowing Capacity Balance (1) Available Borrowing Capacity Balance Available FHLB $ 1,980,615 $ 304,565 $ 1,676,050 $ 3,241,098 $ 552,136 $ 2,688,962 Borrower-in-Custody Program $ 1,995,489 $ — $ 1,995,489 769,653 — 769,653 Federal Reserve BTFP (2) $ — $ — $ — 636,963 — 636,963 Total $ 3,976,104 $ 304,565 $ 3,671,539 $ 4,647,714 $ 552,136 $ 4,095,578 (1) FHLB balances include advances, letters of credit, interest due on advances and the credit enhancement obligation on mortgages sold to the FHLB.
The following table summarizes borrowing funding sources available as of the dates presented: December 31, 2025 December 31, 2024 (dollars in thousands) Borrowing Capacity Balance (1) Available Borrowing Capacity Balance (1) Available FHLB (1) $ 2,132,446 $ 339,614 $ 1,792,832 $ 1,980,615 $ 304,565 $ 1,676,050 Borrower-in-Custody Program $ 2,124,366 $ — $ 2,124,366 1,995,489 — 1,995,489 Total $ 4,256,812 $ 339,614 $ 3,917,198 $ 3,976,104 $ 304,565 $ 3,671,539 (1) FHLB balances include advances, letters of credit, interest due on advances and the credit enhancement obligation on mortgages sold to the FHLB.
At December 31, 2024, assets under administration consisted of $0.7 billion in S&T Trust and $1.3 billion in S&T Financial Services. 44 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
At December 31, 2025, assets under administration consisted of $0.6 billion in S&T Trust and $1.5 billion in S&T Financial Services compared to $0.7 billion in S&T Trust and $1.3 billion in S&T Financial Services at December 31, 2024.
Beginning in 2022, we shifted from selling mortgages in the secondary market to holding mortgages in our portfolio. We originate traditional fixed rate mortgage loans and adjustable rate mortgages with a maximum amortization term of 30 years. The loan to value, or LTV, policy guideline is 80 percent for residential first lien mortgages.
We originate traditional fixed rate mortgage loans and adjustable rate mortgages with a maximum amortization term of 30 years. The loan to value, or LTV, policy guideline is 80 percent for residential first lien mortgages. Higher LTV loans may be approved within unique program guidelines.
As of December 31, 2024, 62.0 percent of our total loans were variable rate loans and 38.0 percent were fixed rate loans compared to 65.0 percent variable rate loans and 35.0 percent fixed rate loans at December 31, 2023.
As of December 31, 2025, 60.0 percent of our total loans were variable rate loans and 40.0 percent were fixed rate loans compared to 62.0 percent variable rate loans and 38.0 percent fixed rate loans at December 31, 2024. Commercial loans represented 68.5 percent of our total portfolio loans at December 31, 2025 and 68.2 percent at December 31, 2024.
Additionally, we considered that the FHLB has been paying dividends and actively redeeming stock throughout 2024 and 2023. Accordingly, we believe sufficient evidence exists to conclude that no impairment existed at December 31, 2024. Deposits Deposits are our primary source of funds.
Additionally, we considered that the FHLB has been paying dividends and actively redeeming stock throughout 2025 and 2024. Accordingly, we believe sufficient evidence exists to conclude that no impairment existed at December 31, 2025. 47 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
The following table summarizes net charge-offs as a percentage of average loans for the years presented: 2024 2023 2022 Commercial real estate 0.10 % 0.02 % 0.02 % Commercial and industrial 0.17 % 0.64 % 0.03 % Commercial construction — % 0.12 % — % Consumer real estate 0.05 % 0.01 % 0.03 % Other consumer 0.88 % 0.97 % 0.81 % Net charge-offs to average loans outstanding 0.11 % 0.18 % 0.04 % Allowance for credit losses as a percentage of total portfolio loans 1.31 % 1.41 % 1.41 % Allowance for credit losses to total nonaccrual loans 363 % 471 % 532 % The following is the ACL balance by portfolio segment as of December 31: 2024 2023 (dollars in thousands) Amount % of Total Amount % of Total Commercial real estate $ 30,254 29.8 % $ 37,886 35.1 % Commercial and industrial 37,084 36.5 % 34,538 32.0 % Commercial construction 4,893 4.8 % 5,382 5.0 % Business banking 10,681 10.6 % 12,858 11.9 % Consumer real estate 15,776 15.5 % 14,663 13.6 % Other consumer 2,806 2.8 % 2,639 2.4 % Total $ 101,494 100.0 % $ 107,966 100.0 % 41 Table of Contents S&T BANCORP, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table summarizes net charge-offs as a percentage of average loans for the years presented: 2025 2024 2023 Commercial real estate 0.21 % 0.10 % 0.02 % Commercial and industrial 0.38 % 0.17 % 0.64 % Commercial construction 0.03 % — % 0.12 % Consumer real estate 0.01 % 0.05 % 0.01 % Other consumer 1.00 % 0.88 % 0.97 % Net charge-offs to average loans outstanding 0.18 % 0.11 % 0.18 % Allowance for credit losses as a percentage of total portfolio loans 1.15 % 1.31 % 1.41 % Allowance for credit losses to total nonaccrual loans 168 % 363 % 471 % The following is the ACL balance by portfolio segment as of December 31: 2025 2024 (dollars in thousands) Amount % of Total Amount % of Total Commercial real estate $ 29,357 31.5 % $ 30,254 29.8 % Commercial and industrial 29,142 31.3 % 37,084 36.5 % Commercial construction 4,400 4.7 % 4,893 4.8 % Business banking 11,335 12.2 % 10,681 10.6 % Consumer real estate 16,297 17.5 % 15,776 15.5 % Other consumer 2,647 2.8 % 2,806 2.8 % Total $ 93,178 100.0 % $ 101,494 100.0 % Significant to our ACL is a higher concentration of commercial loans.
The daily average balance of deposits and rates paid on deposits are summarized in the following table for the years ended December 31: 2024 2023 2022 (dollars in thousands) Amount Rate Amount Rate Amount Rate Noninterest-bearing demand $ 2,163,902 — $ 2,349,919 — $ 2,705,210 — Interest-bearing demand 804,387 1.10 % 844,588 0.72 % 918,222 0.11 % Money market 1,873,629 3.11 % 1,638,947 2.28 % 1,909,209 0.63 % Savings 905,351 0.69 % 1,020,314 0.43 % 1,121,818 0.10 % Certificates of deposit 1,580,025 4.41 % 1,226,989 3.17 % 991,396 0.58 % Brokered deposits 304,060 5.35 % 114,322 5.43 % 2,323 2.10 % Total $ 7,631,354 2.09 % $ 7,195,079 1.29 % $ 7,648,178 0.26 % CDs of $250,000 and over accounted for 6.2 percent and 4.7 percent of total deposits at December 31, 2024 and December 31, 2023.
The daily average balance of deposits and rates paid on deposits are summarized in the following table for the years ended December 31: 2025 2024 2023 (dollars in thousands) Amount Rate Amount Rate Amount Rate Noninterest-bearing demand $ 2,166,015 — $ 2,163,902 — $ 2,349,919 — Interest-bearing demand 763,929 0.98 % 804,387 1.10 % 844,588 0.72 % Money market 2,024,626 2.84 % 1,873,629 3.11 % 1,638,947 2.28 % Savings 874,528 0.69 % 905,351 0.69 % 1,020,314 0.43 % Certificates of deposit 1,851,353 4.03 % 1,580,025 4.41 % 1,226,989 3.17 % Brokered deposits 199,776 4.43 % 304,060 5.35 % 114,322 5.43 % Total $ 7,880,227 1.96 % $ 7,631,354 2.09 % $ 7,195,079 1.29 % 48 Table of Contents S&T BANCORP, INC.
We monitor the mix of interest-rate sensitive assets and liabilities through our management committee, ALCO, in order to manage the impact of inflation and the level of interest rates on net interest income.
We monitor the mix of interest-rate sensitive assets and liabilities through ALCO in order to manage the impact of inflation and the level of interest rates on net interest income. We also manage the effects of inflation on S&T by reviewing the prices of our products and services, by introducing new products and services and by controlling overhead expenses.
Long-term borrowings are for original terms greater than one year and are comprised of FHLB advances and finance leases. Total borrowings decreased $253.3 million to $250.3 million at December 31, 2024 compared to $503.6 million at December 31, 2023, primarily due to strong growth in customer deposits.
Short-term borrowings are for terms under or equal to one year and are comprised of FHLB Advances. Long-term borrowings are for original terms greater than one year and are comprised of FHLB advances and finance leases. Total borrowings were $265.3 million at December 31, 2025 compared to $250.3 million at December 31, 2024.
Average interest-bearing deposits increased $0.7 billion to $5.5 billion in 2024, with $189.7 million of brokered deposits compared to $4.8 billion in 2023. Average borrowings decreased $231.1 million to $353.2 million in 2024 compared to $584.3 in 2023 primarily due to an increase in deposits. Overall, the cost of interest-bearing liabilities increased 75 basis points in 2024 compared to 2023.
Average borrowings decreased $141.5 million to $211.8 million in 2025 compared to $353.2 in 2024 primarily due to an increase in deposits. Overall, the cost of interest-bearing liabilities decreased 30 basis points in 2025 compared to 2024.
We sell these loans in order to mitigate interest-rate risk associated with holding lower rate, long-term residential mortgages in the loan portfolio and to generate fee revenue from sales and servicing of the loans. Beginning in 2023, our strategy changed whereby we held more mortgages on our balance sheet versus selling these loans in the secondary market.
We had historically originated and sold loans to the secondary market, primarily to Fannie Mae, in order to mitigate interest-rate risk associated with holding lower rate, long-term residential mortgages in the loan portfolio and to generate fee revenue from sales and servicing of the loans.
The net interest margin, or NIM, on an FTE basis (non-GAAP) decreased 31 basis points to 3.82 percent compared to 4.13 percent in 2023. The decreases in net interest income and NIM on an FTE basis (non-GAAP) were primarily due to the impact of higher interest rates on total interest-bearing liabilities.
NIM on an FTE basis (non-GAAP) increased 8 basis points to 3.90 percent compared to 3.82 percent in 2024. The increases in net interest income on a FTE basis (non-GAAP) and NIM on an FTE basis (non-GAAP) were primarily due to the impact of lower interest rates on total interest-bearing liabilities and an improvement in our overall funding mix.
At December 31, 2024, our servicing portfolio of mortgage loans that we originated and sold into the secondary market was $648.9 million at December 31, 2024 compared to $707.8 million at December 31, 2023.
We continue to monitor our strategy and may shift back to selling more residential mortgages into the secondary market in future periods. At December 31, 2025, our servicing portfolio of mortgage loans that we originated and sold into the secondary market was $591.6 million compared to $648.9 million at December 31, 2024.
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: 2024 Compared to 2023 Increase (Decrease) Due to 2023 Compared to 2022 Increase (Decrease) Due to (dollars in thousands) Volume (4) Rate (4) Total Volume (4) Rate (4) Total Interest earned on: Interest-bearing deposits with banks $ 1,207 $ 304 $ 1,511 $ (1,845) $ 6,236 $ 4,392 Securities, at fair value (2)(3) 47 4,368 4,415 (930) 3,495 2,565 Loans held for sale (2) — (2) (44) 3 (41) Commercial real estate 6,717 7,487 14,204 1,481 42,149 43,630 Commercial and industrial (5,772) 2,612 (3,160) (2,019) 36,671 34,653 Commercial construction (233) 1,075 842 (933) 10,973 10,040 Total Commercial Loans 712 11,174 11,886 (1,471) 89,793 88,322 Residential mortgage 12,747 6,759 19,506 12,368 6,656 19,024 Home equity (162) 1,699 1,537 1,584 15,688 17,272 Installment and other consumer (973) 102 (871) (114) 2,866 2,752 Consumer construction 686 868 1,554 608 654 1,263 Total Consumer Loans 12,298 9,428 21,726 14,446 25,864 40,311 Total Portfolio Loans 13,010 20,602 33,612 12,976 115,657 128,633 Total Loans (1)(2) 13,008 20,602 33,610 12,932 115,660 128,592 Total other earning assets (1,365) (42) (1,407) 1,149 950 2,099 Change in Interest Earned on Interest-earning Assets $ 12,897 $ 25,232 $ 38,129 $ 11,306 $ 126,341 $ 137,647 Interest paid on: Interest-bearing demand $ (288) $ 3,069 $ 2,781 $ (82) $ 5,114 $ 5,031 Money market 7,424 17,763 25,187 (1,449) 28,981 27,532 Savings (490) 2,411 1,921 (101) 3,332 3,231 Certificates of deposit 15,240 21,447 36,687 1,806 35,329 37,135 Total Interest-bearing Deposits 21,886 44,690 66,576 173 72,756 72,929 Short-term borrowings (13,221) (811) (14,032) 19,058 6,484 25,542 Long-term borrowings 614 18 632 272 650 921 Junior subordinated debt securities (223) 89 (134) (97) 1,811 1,714 Total Borrowings (12,830) (704) (13,534) 19,233 8,945 28,178 Other interest-bearing liabilities (533) 66 (467) 1,587 829 2,416 Change in Interest Paid on Interest-bearing Liabilities 8,523 44,052 52,575 20,993 82,530 103,523 Change in Net Interest Income $ 4,374 $ (18,820) $ (14,446) $ (9,687) $ 43,812 $ 34,124 (1) Nonaccruing loans are included in the daily average loan amounts outstanding.
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: 2025 Compared to 2024 Increase (Decrease) Due to 2024 Compared to 2023 Increase (Decrease) Due to (dollars in thousands) Volume (4) Rate (4) Total Volume (4) Rate (4) Total Interest earned on: Interest-bearing deposits with banks $ (2,298) $ (1,246) $ (3,544) $ 1,207 $ 304 $ 1,511 Securities, at fair value (2)(3) 667 6,911 7,578 47 4,368 4,415 Loans held for sale 10 (1) 9 (2) — (2) Commercial real estate 10,766 (2,197) 8,569 6,717 7,487 14,204 Commercial and industrial (5,553) (8,782) (14,335) (5,772) 2,612 (3,160) Commercial construction (584) (2,936) (3,520) (233) 1,075 842 Total Commercial Loans 4,629 (13,915) (9,286) 712 11,174 11,886 Residential mortgage 6,208 3,918 10,126 12,747 6,759 19,506 Home equity 2,202 (4,117) (1,915) (162) 1,699 1,537 Installment and other consumer (700) (651) (1,351) (973) 102 (871) Consumer construction (1,443) 274 (1,169) 686 868 1,554 Total Consumer Loans 6,267 (576) 5,691 12,298 9,428 21,726 Total Portfolio Loans 10,896 (14,491) (3,595) 13,010 20,602 33,612 Total Loans (1)(2) 10,906 (14,492) (3,586) 13,008 20,602 33,610 Total other earning assets (204) 83 (121) (1,365) (42) (1,407) Change in Interest Earned on Interest-earning Assets $ 9,071 $ (8,744) $ 327 $ 12,897 $ 25,232 $ 38,129 Interest paid on: Interest-bearing demand $ (444) $ (873) $ (1,317) $ (288) $ 3,069 $ 2,781 Money market 6,134 (6,341) (207) 7,424 17,763 25,187 Savings (214) (45) (259) (490) 2,411 1,921 Certificates of deposit 5,821 (8,880) (3,059) 15,240 21,447 36,687 Total Interest-bearing Deposits 11,297 (16,139) (4,842) 21,886 44,690 66,576 Short-term borrowings (7,491) (667) (8,158) (13,221) (811) (14,032) Long-term borrowings 193 (225) (32) 614 18 632 Junior subordinated debt securities 5 (500) (495) (223) 89 (134) Total Borrowings (7,293) (1,392) (8,685) (12,830) (704) (13,534) Other interest-bearing liabilities (845) (301) (1,146) (533) 66 (467) Change in Interest Paid on Interest-bearing Liabilities 3,159 (17,832) (14,673) 8,523 44,052 52,575 Change in Net Interest Income $ 5,912 $ 9,088 $ 15,000 $ 4,374 $ (18,820) $ (14,446) (1) Nonaccruing loans are included in the daily average loan amounts outstanding.
Combo mortgage loans consisting of a residential first mortgage and a home equity second mortgage are also available. We typically originate and sell loans into the secondary market, primarily to Fannie Mae.
Combo mortgage loans consisting of a residential first mortgage and a home equity second mortgage are also available.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table summarizes our material contractual obligations as of December 31, 2024: Payments Due In (dollars in thousands) 2025 2026-2027 2028-2029 Later Years Total Certificates of deposit (1) 1,745,518 104,794 13,844 2,807 1,866,963 Short-term borrowings (1) 150,000 — — — 150,000 Long-term borrowings (1) 81 50,180 122 513 50,896 Junior subordinated debt securities (1) — — — 49,418 49,418 Operating and finance leases 5,052 9,648 9,254 55,724 79,678 Funding commitments on Low Income Housing Partnerships 5,887 — — — 5,887 Total $ 1,906,538 $ 164,622 $ 23,220 $ 108,462 $ 2,202,842 (1) Excludes interest An important component of our ability to effectively respond to potential liquidity stress events is maintaining a cushion of highly liquid assets.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table summarizes our material contractual obligations as of December 31, 2025: Payments Due In (dollars in thousands) 2026 2027-2028 2029-2030 Later Years Total Certificates of deposit (1) $ 1,732,058 $ 185,717 $ 27,932 $ 3,085 $ 1,948,792 Short-term borrowings (1) 165,000 — — — 165,000 Long-term borrowings (1) 50,087 187 60 481 50,815 Junior subordinated debt securities (1) — — — 49,478 49,478 Operating and finance leases 5,007 9,336 9,116 53,202 76,661 Funding commitments on Low Income Housing Partnerships 3,514 — — — 3,514 Total $ 1,955,666 $ 195,240 $ 37,108 $ 106,246 $ 2,294,260 (1) Excludes interest An important component of our ability to effectively respond to potential liquidity stress events is maintaining a cushion of highly liquid assets.
The provision for credit losses fluctuates based on changes in loan balances, loan risk ratings, net loan charge-offs/recoveries, the macro environment and our Current Expected Credit Loss, or CECL, forecast. The provision for credit losses decreased $17.8 million to $0.1 million for 2024 compared to $17.9 million for 2023.
Provision for Credit Losses The provision for credit losses includes a provision for losses on loans and on unfunded loan commitments. The provision for credit losses fluctuates based on changes in loan balances, loan risk ratings, net loan charge-offs and recoveries, the macro environment and our CECL forecast.
Additionally, the provision for credit losses for the reserve for unfunded commitments was a negative $1.7 million for 2024 compared to a negative $1.4 million for 2023. The decrease in the reserve for unfunded commitments for 2024 was primarily due to lower loss rates and fewer unused commitments in the construction portfolio.
The provision for credit losses increased $7.3 million to $7.4 million for 2025 compared to $0.1 million for 2024. The increase was primarily due to higher net loan charge-offs and a $2.9 million increase in the reserve for unfunded loan commitments due to higher unused commitments in the construction portfolio.
Our CRE and commercial construction portfolios have exposure outside this geography of 3.9 percent of the combined portfolios and 1.9 percent of total portfolio loans at December 31, 2024 and 2023. Total portfolio loans increased $89.6 million, or 1.2 percent, to $7.7 billion at December 31, 2024 compared to $7.7 billion at December 31, 2023.
Our CRE and commercial construction portfolios have exposure outside of the primary states in which we operate of 3.5 percent of the combined portfolios and 1.7 percent of total portfolio loans at December 31, 2025 and 3.9 percent of the combined portfolios and 1.9 percent of total portfolio loans at December 31, 2024.
Total deposits increased $261.3 million with customer deposits increasing $411.7 million, or 5.8 percent, to $7.6 billion at December 31, 2024 compared to $7.1 billion at December 31, 2023. Brokered deposits decreased $150.4 million, or 40.0 percent, to $225.3 million at December 31, 2024 compared to $375.7 million at December 31, 2023.
Total deposits increased $175.7 million, or 2.3 percent, to $8.0 billion at December 31, 2025 compared to $7.8 billion at December 31, 2024. Customer deposits increased $220.5 million to $7.8 billion at December 31, 2025 compared to $7.6 billion at December 31, 2024.
The effective tax rate, which is total tax expense as a percentage of income before taxes, increased to 20.4 percent in 2024 compared to 19.0 percent in 2023. The increase in the effective tax rate in 2024 compared to 2023 was primarily due to the adoption of PAM.
Provision for Income Taxes The provision for income taxes was unchanged at $33.7 million in 2025 compared to $33.6 million in 2024. The effective tax rate, which is total tax expense as a percentage of income before taxes, decreased to 20.1 percent in 2025 compared to 20.4 percent in 2024.
We also have a portfolio management group that utilizes multiple data sources including 37 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
Our operating knowledge at the local and regional level is derived from our front-line connection to the customer and our understanding of their businesses. We also have a portfolio management group that utilizes multiple data sources including 43 Table of Contents S&T BANCORP, INC. AND SUBSIDIARIES Item 7.
The decrease was mainly related to $7.9 million of realized losses from the repositioning of securities into longer duration, higher-yielding securities. Other noninterest income decreased $0.8 million primarily related to a gain of $3.9 million on the sale of OREO in 2023 compared to a $3.5 million gain from the exchange offer for Visa Class B-1 common stock in 2024.
The increase primarily related to lower security losses of $2.3 million in 2025 compared to $7.9 million in 2024 offset by a $3.5 million gain from the exchange offer for Visa Class B-1 common stock recognized in other noninterest income in 2024.
Total deposits increased $261.3 million, or 3.5 percent, at December 31, 2024 compared to December 31, 2023. Total customer deposits increased $411.7 million, or 5.8 percent, from December 31, 2023, as a result of our focus on our deposit franchise. Total brokered deposits decreased $150.4 million from December 31, 2023 due to strong growth in customer deposits.
Total deposits increased $175.7 million, or 2.3 percent, at December 31, 2025 compared to December 31, 2024. Total customer deposits increased $220.5 million, or 2.9 percent, from December 31, 2024 due to growth in certificates of deposit and money market. Total brokered deposits decreased $44.8 million from December 31, 2024 due to growth in customer deposits.
Our credit risk review process serves to independently monitor credit quality and assess the effectiveness of credit risk management practices to provide oversight of all corporate lending activities.
We have portfolio monitoring groups that perform annual reviews of all commercial and business banking relationships greater than $1.5 million and a quarterly review of our watch rated portfolio. Our credit risk review process serves to independently monitor credit quality and assess the effectiveness of credit risk management practices to provide oversight of all corporate lending activities.
Noninterest Income Years Ended December 31, (dollars in thousands) 2024 2023 $ Change % Change Net loss on sale of securities $ (7,938) $ — $ (7,938) — % Debit and credit card 18,263 18,248 15 0.1 % Service charges on deposit accounts 16,273 16,193 80 0.5 % Wealth management 12,259 12,186 73 0.6 % Other noninterest income 10,226 10,993 (767) (7.0) % Total Noninterest Income $ 49,083 $ 57,620 $ (8,537) (14.8) % Noninterest income decreased $8.5 million to $49.1 million compared to $57.6 million in 2023.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Noninterest Income Twelve Months Ended December 31, (dollars in thousands) 2025 2024 $ Change % Change Net loss on sale of securities $ (2,295) $ (7,938) $ 5,643 (71.1) % Debit and credit card 18,303 18,263 40 0.2 % Service charges on deposit accounts 16,433 16,273 160 1.0 % Wealth management 12,447 12,259 188 1.5 % Other noninterest income 7,135 10,226 (3,091) (30.2) % Total Noninterest Income $ 52,023 $ 49,083 $ 2,940 6.0 % Noninterest income increased $2.9 million, or 6.0 percent, to $52.0 million compared to $49.1 million in 2024.
The majority of our commercial and consumer loans are made to businesses and individuals in these states resulting in a geographic concentration. We believe our knowledge of these markets outweighs the geographic concentration risk. Our operating knowledge at the local and regional level is derived from our front-line connection to the customer and our understanding of their businesses.
We lend primarily in Pennsylvania and the contiguous states of Ohio, New York, West Virginia, New Jersey, Delaware and Maryland. The majority of our commercial and consumer loans are made to businesses and individuals in these states resulting in a geographic concentration. We believe our knowledge of these markets outweighs the geographic concentration risk.
Noninterest Expense Years Ended December 31, (dollars in thousands) 2024 2023 $ Change % Change Salaries and employee benefits $ 121,990 $ 111,462 $ 10,528 9.4 % Data processing and information technology 19,510 17,437 2,073 11.9 % Occupancy 15,102 14,814 288 1.9 % Furniture, equipment and software 13,559 12,912 647 5.0 % Marketing 6,351 6,488 (137) (2.1) % Other taxes 7,452 6,813 639 9.4 % Professional services and legal 5,468 7,823 (2,355) (30.1) % FDIC insurance 4,201 4,122 79 1.9 % Other 25,305 28,463 (3,158) (11.1) % Total Noninterest Expense $ 218,938 $ 210,334 $ 8,604 4.1 % Noninterest expense increased $8.6 million to $218.9 million compared to $210.3 million in 2023.
Noninterest Expense Twelve Months Ended December 31, (dollars in thousands) 2025 2024 $ Change % Change Salaries and employee benefits $ 127,647 $ 121,990 $ 5,657 4.6 % Data processing and information technology 19,757 19,510 247 1.3 % Occupancy 16,195 15,102 1,093 7.2 % Furniture, equipment and software 13,513 13,559 (46) (0.3) % Other taxes 7,601 7,452 149 2.0 % Marketing 5,906 6,351 (445) (7.0) % Professional services and legal 5,452 5,468 (16) (0.3) % FDIC insurance 4,235 4,201 34 0.8 % Other 26,451 25,305 1,146 4.5 % Total Noninterest Expense $ 226,757 $ 218,938 $ 7,819 3.6 % Noninterest expense was well controlled with an increase of $7.8 million, or 3.6 percent, to $226.8 million compared to $218.9 million in 2024.
Due to the greater potential for loss within our commercial portfolio, 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.
The ability of borrowers to repay commercial loans is dependent upon the success of their business and general economic conditions. Due to the greater potential for loss within our commercial portfolio, we monitor the commercial loan portfolio through an internal risk rating system.
Office CRE was $453.3 million, or 5.9 percent of total portfolio loans, at December 31, 2024 compared to $480.5 million, or 6.3 percent, at December 31, 2023.
The ACL was $93.2 million, or 1.15 percent of total portfolio loans, at December 31, 2025 compared to $101.5 million, or 1.31 percent of total portfolio loans, at December 31, 2024.
Long-Term Borrowings (dollars in thousands) December 31, 2024 December 31, 2023 Balance at the period end $ 50,896 $ 39,277 Average balance during the period $ 46,306 $ 31,706 Average interest rate during the period 4.24 % 4.20 % Maximum month-end balance during the period $ 64,015 $ 39,589 Average interest rate at the period end 3.75 % 4.52 % Junior Subordinated Debt Securities (dollars in thousands) December 31, 2024 December 31, 2023 Balance at the period end $ 49,418 $ 49,358 Average balance during the period $ 49,386 $ 52,215 Average interest rate during the period 8.05 % 7.87 % Maximum month-end balance during the period $ 49,418 $ 54,483 Average interest rate at the period end 6.96 % 7.98 % Wealth Management Assets The fair value of the S&T Bank Wealth Management assets under administration, which are not accounted for as part of our assets, amounted to $2.0 billion at December 31, 2024 and $2.2 billion at December 31, 2023.
Long-Term Borrowings (dollars in thousands) December 31, 2025 December 31, 2024 Balance at the period end $ 50,815 $ 50,896 Average balance during the period $ 50,856 $ 46,306 Average interest rate during the period 3.80 % 4.24 % Maximum month-end balance during the period $ 50,890 $ 64,015 Average interest rate at the period end 3.75 % 3.75 % Junior Subordinated Debt Securities (dollars in thousands) December 31, 2025 December 31, 2024 Balance at the period end $ 49,478 $ 49,418 Average balance during the period $ 49,446 $ 49,386 Average interest rate during the period 7.04 % 8.05 % Maximum month-end balance during the period $ 49,478 $ 49,418 Average interest rate at the period end 6.33 % 6.96 % 49 Table of Contents S&T BANCORP, INC.
We seek to minimize the various inflationary inputs through a robust annual review process and sensitivity analysis when considering extensions of credit. Additionally, we leverage our internal credit risk review in support of the current economic cycle. We continuously monitor our portfolio for potential and emerging risks.
Additionally, management is aware of the potential impacts that inflation can have on our loan portfolio and our customer's ability to operate their businesses. We seek to minimize the various inflationary inputs through a robust annual review process and sensitivity analysis when considering extensions of credit.
Commercial loans decreased $81.7 million to $5.3 billion at December 31, 2024, related to decreases of $101.7 million in C&I and $10.4 million in commercial construction offset by an increase of $30.4 million in CRE compared to $5.4 billion at December 31, 2023.
Commercial loans increased $244.9 million to $5.5 billion at December 31, 2025 compared to $5.3 billion at December 31, 2024 related to increases of $238.8 million in CRE and $27.2 million in commercial construction offset by a decrease of $21.1 million in C&I.
In the CRE segment, multi-family represented $640.1 million, or 8.3 percent of total portfolio loans, at December 31, 2024 compared to $569.4 million, or 7.4 percent, at December 31, 2023.
Total portfolio loans increased $329.0 million, or 4.2 percent, to $8.1 billion at December 31, 2025 compared to $7.7 billion at December 31, 2024.

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