S&T BANCORP INC

Previous wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, represents an overview of our consolidated results of operations and financial condition and highlights material changes in our financial condition and results of operations for the three and nine months ended September 30, 2024 and 2023. Our MD&A should be read in conjunction with our Consolidated Financial Statements and Notes. The results of operations reported in the accompanying Consolidated Financial Statements are not necessarily indicative of results to be expected in future periods.

Current wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, represents an overview of our consolidated results of operations and financial condition and highlights material changes in our financial condition and results of operations for the three months ended March 31, 2025 and 2024. Our MD&A should be read in conjunction with our Consolidated Financial Statements and Notes. The results of operations reported in the accompanying Consolidated Financial Statements are not necessarily indicative of results to be expected in future periods.

Previous wording

This quarterly Report on Form 10-Qcontains or incorporates statements that we believe are “forward-looking statements”within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to our financial condition, results of operations, plans, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, financial position and other matters regarding or affecting S&T and its future business and operations. Forward-looking statements are typically identified by words or phrases such as “will likely result,” “expect,” “anticipate,” “estimate,” “forecast,” “project,” “intend,” “believe,” “assume,” “strategy,” “trend,” “plan,” “outlook,” “outcome,” “continue,” “remain,” “potential,” “opportunity,” “comfortable,” “current,” “position,” “maintain,” “sustain,” “seek,” “achieve” and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. The matters discussed in these forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected or implied in or by the forward-looking statements depending on a variety of uncertainties or other factors including, but not limited to: credit losses and the credit risk of our commercial and consumer loan products; changes in the level of charge-offs and changes in estimates of the adequacy of the allowance for credit losses, or ACL; cyber-security concerns; rapid technological developments and changes; operational risks or risk management failures by us or critical third parties, including fraud risk; our ability to manage our reputational risks; sensitivity to the interest rate environment, a rapid increase in interest rates or a change in the shape of the yield curve; a change in spreads on interest-earning assets and interest-bearing liabilities; any remaining uncertainties with the transition from LIBOR as a reference rate; regulatory supervision and oversight, including changes in regulatory capital requirements and our ability to address those requirements; unanticipated changes in our liquidity position; unanticipated changes in regulatory and governmental policies impacting interest rates and financial markets; changes in accounting policies, practices or guidance; legislation affecting the financial services industry as a whole, and S&T, in particular; developments affecting the industry and the soundness of financial institutions and further disruption to the economy and U.S. banking system; the outcome of pending and future litigation and governmental proceedings; increasing price a…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Quarterly Report on Form 10-Qcontains or incorporates statements that we believe are “forward-looking statements”within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to our financial condition, results of operations, plans, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, financial position and other matters regarding or affecting S&T and its future business and operations. Forward-looking statements are typically identified by words or phrases such as “will likely result,” “expect,” “anticipate,” “estimate,” “forecast,” “project,” “intend,” “believe,” “assume,” “strategy,” “trend,” “plan,” “outlook,” “outcome,” “continue,” “remain,” “potential,” “opportunity,” “comfortable,” “current,” “position,” “maintain,” “sustain,” “seek,” “achieve” and variations of such words and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. The matters discussed in these forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected or implied in or by the forward-looking statements depending on a variety of uncertainties or other factors including, but not limited to: credit losses and the credit risk of our commercial and consumer loan products; changes in the level of charge-offs and changes in estimates of the adequacy of the allowance for credit losses, or ACL; 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 co…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

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

Current wording

Many of these factors, as well as other factors, are described elsewhere in this report, and under Part I, Item 1A - “Risk Factors” of our 2024 Form 10-K, and any of our subsequent filings with the SEC. Forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. We caution you not to unduly rely on forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.

Previous wording

We are a bank holding company that is headquartered in Indiana, Pennsylvania with assets of $9.6 billion at September 30, 2024. We operate in Pennsylvania and Ohio providing a full range of financial services with retail and commercial banking products, cash management services, trust and brokerage services. Our common stock trades on the NASDAQ Global Select Market under the symbol “STBA”.

Current wording

We are a bank holding company that is headquartered in Indiana, Pennsylvania with assets of $9.7 billion at March 31, 2025. We operate in Pennsylvania and Ohio providing a full range of financial services with retail and commercial banking products, cash management services, trust and brokerage services. Our common stock trades on the NASDAQ Global Select Market under the symbol “STBA.”

Previous wording

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

Current wording

Our purpose is building a better future together through people-forward banking. We believe that all banking should be personal. We cultivate relationships rooted in trust, strengthened by going above and beyond and renewed with every interaction. Our strategic priorities for 2025 and beyond will be focused on growing our deposit franchise, core profitability, asset quality and talent and engagement.

Previous wording

We recognized net income of $32.6 million, or $0.85 per diluted share, for the three months ended September 30, 2024 compared to net income of $33.5 million, or $0.87 per diluted share, for the same period in 2023 and net income of $98.2 million, or $2.55 per diluted share, for the nine months ended September 30, 2024 compared to net income of $107.7 million, or $2.78 per diluted share, for the same period in 2023.

Current wording

We recognized net income of $33.4 million, or $0.87 per diluted share, for the three months ended March 31, 2025 compared to net income of $31.2 million, or $0.81 per diluted share, for the same period in 2024. Net income increased by $2.2 million for the three months ended March 31, 2025 compared to the same period in 2024.

Previous wording

The provision for credit losses decreased $6.0 million and $14.3 million to a negative $0.5 million and $2.6 million for the three and nine months ended September 30, 2024 compared to amounts of $5.5 million and $16.9 million for the same periods in 2023. The decrease in the provision for credit losses for the three and nine months ended September 30, 2024 compared to the same periods in 2023 was primarily due to a lower level of ACL and a decrease in loan charge-offs. The lower level of ACL was primarily related to a decrease in qualitative reserve as asset quality continues to improve.

Current wording

The provision for credit losses decreased $5.6 million to negative $3.0 million for the three months ended March 31, 2025 compared to $2.6 million for the same period in 2024. The decrease in the provision for credit losses was primarily due to a lower level of ACL and a decrease in net loan charge-offs. The decrease in ACL was due to a $4.2 million reduction in specific reserves for individually evaluated loans.

Previous wording

Three and Nine Months Ended September 30, 2024 Compared to Three and Nine Months Ended September 30, 2023

Current wording

Three months ended March 31, 2025 Compared to Three months ended March 31, 2024

Previous wording

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

Current wording

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:

Previous wording

Net interest income on an FTE basis (non-GAAP) decreased $2.9 million, or 3.3 percent, and $12.6 million, or 4.7 percent, for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The net interest margin, or NIM, on an FTE basis (non-GAAP) decreased 27 and 37 basis points for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The decreases in both 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. While higher interest rates positively impacted interest income and rates on interest-earning assets, the increase in interest income was more than offset by higher interest expense and rates on interest-bearing liabilities. Our cost of interest-bearing liabilities benefited from strong customer deposit growth in 2024, which has helped to improve our overall funding mix by reducing wholesale funding sources of brokered deposits and borrowings.

Current wording

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

Previous wording

Interest income on an FTE basis (non-GAAP) increased $8.5 million and $37.0 million for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The increase in interest income on an FTE basis (non-GAAP) was primarily due to higher interest rates on interest-earning assets. The average yield on loan balances increased 15 and 29 basis points for the three and nine months ended September 30, 2024 compared to the same periods in 2023 due to higher interest rates. Average loan balances increased $260.0 million and $373.7 million for the three and nine months ended September 30, 2024 compared to the same periods in 2023. Overall, the FTE rate (non-GAAP) on interest-earning assets increased 19 and 32 basis points for the three and nine months ended September 30, 2024 compared to the same periods in 2023.

Current wording

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

Previous wording

Interest expense increased $11.4 million and $49.6 million for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The increase in interest expense was primarily due to higher interest rates and a shift in our customer deposit mix to higher costing products. Average interest-bearing deposits increased $710.8 million and $710.1 million, of which $89.8 million and $173.2 million were brokered deposits, for the three and nine months ended September 30, 2024 compared to the same periods in 2023. Average borrowings decreased $383.0 million and $225.2 million for the three and nine months ended September 30, 2024 compared to the same periods in 2023 primarily due to increased deposit balances. Overall, the cost of interest-bearing liabilities increased 64 and 95 basis points for the three and nine months ended September 30, 2024 compared to the same periods in 2023.

Current wording

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

Previous wording

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:

Current wording

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

Previous wording

The provision for credit losses decreased $6.0 million and $14.3 million to a negative $0.5 million and $2.6 million for the three and nine months ended September 30, 2024, compared to $5.5 million and $16.9 million for the same periods in 2023. The decrease in the provision for credit losses for the three and nine months ended September 30, 2024 compared to the same periods in 2023 was primarily due to a lower level of ACL and a decrease in loan charge-offs. The lower level of ACL was primarily related to a decrease in qualitative reserve as asset quality continues to improve. Additionally, the provision for credit losses included reductions of $0.8 million and $2.1 million in the reserve for unfunded commitments for the three and nine months ended September 30, 2024 compared to a reduction of $0.7 million and an increase of $1.1 million for the same periods in 2023. The decrease in the reserve for unfunded commitments for the three and nine months ended September 30, 2024 was primarily due to lower loss rates and fewer unused commitments in the construction portfolio.

Current wording

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

Previous wording

For the three and nine months ended September 30, 2024, we had net loan charge-offs of $2.1 million and $8.3 million compared to net loan charge-offs of $3.7 million and $9.6 million for the same periods in 2023. Offsetting loan charge-offs of $20.8 million during the nine months ended September 30, 2023 was a $9.3 million recovery related to a 2020 customer fraud. Refer to the "Allowance for Credit Losses" section of this MD&A for further details.

Current wording

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

Previous wording

Total assets were $9.6 billion at both September 30, 2024 and December 31, 2023. Total portfolio loans remained relatively unchanged at $7.7 billion at September 30, 2024 and December 31, 2023. Loan growth has slowed due to higher interest rates and an uncertain macro environment along with elevated loan pay-offs. Securities remained unchanged at $1.0 billion at September 30, 2024 and December 31, 2023. The bond portfolio was in a net unrealized loss position of $52.3 million at September 30, 2024, compared to a net unrealized loss position of $82.0 million at December 31, 2023. The decrease in the net unrealized loss position of the bond portfolio of $29.7 million was primarily due to a decline in interest rates from December 31, 2023 to September 30, 2024, as well as the repositioning of our debt securities portfolio during 2024, resulting in a recognized loss of $5.3 million.

Current wording

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

Previous wording

Customer deposit growth continues to be strong allowing for a reduction in higher costing borrowings and brokered deposits. Total deposits increased $133.1 million with customer deposits increasing $333.4 million, or 4.7 percent, at September 30, 2024 compared to December 31, 2023. Brokered deposits decreased $200.4 million, or 53.3 percent, at September 30, 2024 compared to December 31, 2023. The increase in customer deposits is the result of our continued focus on growing our deposit franchise.Total borrowings decreased $165.2 million, or 32.8 percent, to $338.4 million at September 30, 2024 compared to $503.6 million at December 31, 2023.

Current wording

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

Previous wording

Total shareholders’ equity increased by $92.3 million to $1.4 billion at September 30, 2024, compared to December 31, 2023. The increase was primarily due to net income of $98.2 million and other comprehensive income of $30.4 million, offset by dividends of $38.0 million.

Current wording

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

Previous wording

Our bond portfolio was in a net unrealized loss position of $52.3 million at September 30, 2024, compared to a net unrealized loss position of $82.0 million at December 31, 2023. At September 30, 2024, our bond portfolio had gross unrealized losses of $57.9 million offset by $5.6 million of gross unrealized gains, compared to gross unrealized losses of $83.8 million offset by gross unrealized gains of $1.8 million at December 31, 2023.

Current wording

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

Previous wording

Total portfolio loans were $7.7 billion at both September 30, 2024 and December 31, 2023. As of September 30, 2024, 38 percent of our total loans were floating rate, 25 percent were adjustable rate and 37 percent were fixed rate, compared to 40 percent floating rate, 24 percent adjustable rate and 35 percent fixed rate at December 31, 2023. Commercial loans, including CRE, C&I and commercial construction, comprised 68.4 percent of total portfolio loans at September 30, 2024 and 70.1 percent at December 31, 2023. The commercial loan portfolio decreased $100.4 million at September 30, 2024 compared to December 31, 2023, primarily due to decreases of $93.9 million in C&I and $29.7 million in CRE offset by an increase of $23.2 million in commercial construction. Loan growth has slowed primarily due to elevated loan pay-offs.

Current wording

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

Previous wording

Consumer loans represent 31.6 percent of our total portfolio loans at September 30, 2024 and 29.9 percent at December 31, 2023. The consumer loan portfolio increased $136.1 million at September 30, 2024 compared to December 31, 2023, primarily due to growth in our consumer real estate portfolio of $145.8 million. Consistent with 2023, we continue to retain consumer real estate loans on our balance sheet as portfolio loans, versus selling these loans due to the loan pricing in the secondary market.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Net loan charge-offs were $8.3 million, or 0.15 percent of average loans, for the nine months ended September 30, 2024. Refer to the "Provision for Credit Losses" section of this MD&A for further details.

Current wording

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

Previous wording

Substandard loans decreased $16.6 million to $156.7 million at September 30, 2024, compared to $173.3 million at December 31, 2023. The decrease in substandard loans was primarily due to loan payoffs and commercial charge-offs. Special mention loans decreased $39.5 million to $96.3 million at September 30, 2024, compared to $135.8 million at December 31, 2023. The decrease in special mention loans was primarily due to risk rating upgrades in our CRE healthcare portfolio which was partially offset by three C&I relationships totaling $18.5 million downgraded from special mention to substandard in the three months ended September 30, 2024.

Current wording

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

Previous wording

Our policy is to place loans in all categories in nonaccrual status when collection of interest or principal is doubtful, or generally when interest or principal payments are 90 days or more past the contractual due date. Nonaccrual loans increased $9.0 million to $31.9 million at September 30, 2024, compared to $22.9 million at December 31, 2023. The increase in nonaccrual loans primarily related to the addition of a $16.3 million CRE relationship, which had a $3.7 million partial charge-off during the nine months ended September 30, 2024. A specific reserve of $2.2 million was added for this relationship based on the uncertainty of timing surrounding the execution of the resolution strategy. Partially offsetting the increase in nonaccrual loans were payoffs in our CRE portfolio.

Current wording

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

Previous wording

Our total deposits increased $133.1 million at September 30, 2024, compared to December 31, 2023. Customer deposit growth continues to be strong allowing for a reduction in higher costing brokered deposits. Customer deposits increased $333.4 million, or 4.7 percent, compared to December 31, 2023, as a result of our focus on growing our deposit franchise.

Current wording

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

Previous wording

As a member of the IntraFi network, we are able to offer our customers insurance coverage on interest-bearing demand, money market and certificates of deposit balances in excess of the FDIC insurance limits. IntraFi balances decreased $1.9 million to $275.8 million at September 30, 2024, compared to $277.7 million at December 31, 2023. We had total uninsured deposits of $2.6 billion, or 34 percent of our total deposit base, at September 30, 2024 compared to $2.3 billion, or 30 percent or our total deposit base, at December 31, 2023.

Current wording

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

Previous wording

Borrowings are an additional source of funding for us. Total borrowings decreased $165.2 million to $338.4 million at September 30, 2024, compared to $503.6 million at December 31, 2023, primarily due to strong growth in customer deposits.

Current wording

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

Previous wording

Information pertaining to short-term borrowings is summarized in the table below for the nine months ended September 30, 2024 and the twelve months ended December 31, 2023.

Current wording

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

Previous wording

Information pertaining to long-term borrowings and junior subordinated debt securities is summarized in the tables below for the three months ended September 30, 2024 and the twelve months ended December 31, 2023.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Our primary funding and liquidity source is a stable customer deposit base. We believe S&T has the ability to retain existing deposits and attract new deposits, mitigating any funding dependency on other more volatile funding sources. Refer to the "Financial Condition as of September 30, 2024 - Deposits" section of this MD&A, for additional discussion on deposits. Although deposits are the primary source of funds, we have identified various other funding sources that can be used as part of our normal funding program. Additional funding sources accessible to S&T include borrowing availability at the Federal Home Loan Bank of Pittsburgh, or FHLB, federal funds lines with other financial institutions and the brokered deposit market. We also have availability at the Federal Reserve Discount Window through the Borrower-in-Custody Program.

Current wording

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

Previous wording

Available borrowing capacity exceeds uninsured deposits of $2.6 billion at September 30, 2024. The following table summarizes funding sources available as of the dates presented:

Current wording

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

Previous wording

We have contractual obligations representing required future payments on certificates of deposit, junior subordinated debt securities, short-term borrowings, long-term borrowings, operating and capital leases, funding commitments on tax credit equity investments and purchase obligations. See the Liquidity and Capital Resources portion of our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Form 10-K for more information on these future cash outflows. Total certificates of deposit increased $188.7 million to $1.8 billion at September 30, 2024, compared to December 31, 2023 and short-term borrowings decreased $190.0 million to $225.0 million at September 30, 2024, compared to December 31, 2023. Other than these changes, there have been no material changes to the contractual obligations previously disclosed in our 2023 Form 10-K.

Current wording

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

Previous wording

An important component of our ability to effectively respond to potential liquidity stress events is maintaining a cushion of highly liquid assets. Highly liquid assets are those that can be converted to cash quickly to meet financial obligations. ALCO policy guidelines define a ratio of highly liquid assets to total assets by graduated risk tolerance levels of minimal, moderate and high. At September 30, 2024, S&T Bank had $682.5 million in highly liquid assets, which consisted primarily of $139.2 million in interest-bearing deposits with banks and $543.0 million in unpledged securities. This resulted in a highly liquid assets to total assets ratio of 7.1 percent at September 30, 2024.

Current wording

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

Previous wording

We continue to maintain a strong capital position with our leverage ratio at 11.70 percent at September 30, 2024, compared to 11.21 percent at December 31,2023, both in excess of the well-capitalized regulatory guideline of 5.00 percent. We continue to be well-capitalized with a risk-based Common Equity Tier 1 ratio of 14.37 percent at September 30, 2024, compared to 13.37 percent at December 31,2023, both in excess of the well-capitalized regulatory guideline of 6.50 percent.

Current wording

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

Previous wording

We have filed a shelf registration statement on Form S-3 under the Securities Act of 1933, as amended, with the SEC, which allows for the issuance of a variety of securities including debt and capital securities, preferred and common stock and warrants. We may use the proceeds from the sale of securities for general corporate purposes, which could include investments at the holding company level, investing in, or extending credit to subsidiaries, possible acquisitions and stock repurchases. As of September 30, 2024, we had not issued any securities pursuant to this shelf registration statement.

Current wording

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