What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-27 compared with 2023-02-24 · 471 added, 463 removed, 1776 unchanged (34% of the section changed)

15 unchanged sentences

$ 233,612 $ 210,009

Securities, at fair value 1,002,778 910,793

Securities available for sale, at fair value 970,391 1,002,778

Loans held for sale 153 16

46 unchanged sentences

Total Interest and Dividend Income

477,901 340,751 289,262

INTEREST EXPENSE

2 unchanged sentences

Total Interest Expense

128,491 24,968 13,150

NET INTEREST INCOME

349,410 315,783 276,112

Provision for credit losses 17,892 8,366 16,215

Net Interest Income After Provision for Credit Losses

331,518 307,417 259,897

NONINTEREST INCOME

6 unchanged sentences

Total Noninterest Income

57,620 58,259 64,696

NONINTEREST EXPENSE

7 unchanged sentences

FDIC insurance 4,122 2,854 4,224

Merger related expenses — — 2,342

Other 28,463 26,797 25,013

Total Noninterest Expense

210,334 196,746 188,925

Income Before Taxes

Income tax expense (benefit) 33,410 25,325 ( 1 )

Net Income $ 135,520 $ 110,343 $ 21,040

Earnings per common share—basic $ 3.47 $ 2.81 $ 0.54

Earnings per common share—diluted $ 3.46 $ 2.81 $ 0.53

Dividends declared per common share $ 1.20 $ 1.13 $ 1.12

178,804 168,930 135,668

Income tax expense 34,023 33,410 25,325

$ 144,781 $ 135,520 $ 110,343

Earnings per share—basic $ 3.76 $ 3.47 $ 2.81

Earnings per share—diluted $ 3.74 $ 3.46 $ 2.81

Dividends declared per share $ 1.29 $ 1.20 $ 1.13

See Notes to Consolidated Financial Statements

6 unchanged sentences

Available-for-Sale Debt Securities

Net change in unrealized gains (losses) on available-for-sale debt securities ( 111,539 ) ( 23,972 ) 22,683

Net change in fair value of available-for-sale debt securities 20,317 ( 111,539 ) ( 23,972 )

Tax effect ( 4,407 ) 23,805 5,115

11 unchanged sentences

Tax effect ( 32 ) 608 ( 78 )

Net employee benefit plan (gains) losses reclassified into earnings (3)

Net employee benefit plan losses reclassified into earnings (3)

— 2,080 3,198

12 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(dollars in thousands, except share and per share data) Common

(dollars in thousands, except share and per share data)

Stock Additional

1 unchanged sentence

Earnings Accumulated

Comprehensive Income/(Loss) Treasury

Balance at December 31, 2019 $ 103,623 $ 399,944 $ 761,083 $ ( 11,670 ) $ ( 60,982 ) $ 1,191,998

Net income for 2020 — — 21,040 — — 21,040

Other comprehensive income, net of tax — — — 20,641 — 20,641

Impact of adoption of CECL — — ( 22,590 ) — ( 22,590 )

Cash dividends declared ($ 1.12 )

Comprehensive Loss Treasury

Balance at January 1, 2021 $ 103,623 $ 400,668 $ 710,061 $ 8,971 $ ( 68,612 ) $ 1,154,711

Net income for the year ended December 31, 2021 — — 110,343 — — 110,343

Other comprehensive loss, net of tax — — — ( 16,061 ) — ( 16,061 )

Cash dividends declared ($ 1.13 per share)

— — ( 44,336 ) — — ( 44,336 )

3 unchanged sentences

— — 1,754 — ( 2,384 ) ( 630 )

Repurchase of S&T Stock ( 411,430 shares)

— — — — ( 12,559 ) ( 12,559 )

Recognition of restricted stock compensation expense — 2,427 — — — 2,427

Balance at December 31, 2021 $ 103,623 $ 403,095 $ 773,659 $ ( 7,090 ) $ ( 66,833 ) $ 1,206,454

Net income for 2021 — — 110,343 — — 110,343

Net income for the year ended December 31, 2022 — — 135,520 — — 135,520

Other comprehensive loss, net of tax — — — ( 105,035 ) — ( 105,035 )

5 unchanged sentences

— — 1,927 — ( 2,735 ) ( 808 )

Repurchase of S&T stock ( 268,503 shares)

— — — — ( 7,637 ) ( 7,637 )

Recognition of restricted stock compensation expense — 3,188 — — — 3,188

Balance at December 31, 2022 $ 103,623 $ 406,283 $ 863,948 $ ( 112,125 ) $ ( 77,070 ) $ 1,184,659

Net income for 2022 — — 135,520 — — 135,520

Other comprehensive loss, net of tax — — — ( 105,035 ) — ( 105,035 )

Net income for the year ended December 31, 2023 — — 144,781 — — 144,781

Other comprehensive income, net of tax — — — 21,224 — 21,224

Impact of adoption of ASU 2022-02 — — ( 447 ) — — ( 447 )

Cash dividends declared ($ 1.29 per share)

15 unchanged sentences

OPERATING ACTIVITIES

Net Income $ 135,520 $ 110,343 $ 21,040

$ 144,781 $ 135,520 $ 110,343

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for credit losses 17,892 8,366 16,215

Depreciation and amortization 9,027 11,480 12,066

Net amortization of discounts and premiums 6,062 5,482 4,205

Net depreciation, amortization and accretion 7,520 9,027 11,480

Net amortization of discounts and premiums on securities 4,666 6,062 5,482

Stock-based compensation expense 3,874 3,188 2,427

Securities (gains) losses ( 198 ) ( 29 ) ( 142 )

Gain on sale of securities

— ( 198 ) ( 29 )

Deferred income taxes 601 ( 2,932 ) 2,383

Loss (gain) on sale of fixed assets 61 30 ( 23 )

Gain on sale and fair value adjustments of other real estate owned, net ( 3,119 ) 420 108

Gain on the sale of loans, net ( 1,229 ) ( 8,856 ) ( 8,998 )

Pension contribution — — ( 115 )

Net change in:

(Gain) loss on sale of fixed assets

( 100 ) 61 30

Gain on sale of loans, net

( 81 ) ( 1,229 ) ( 8,856 )

(Gain) loss on sale and fair value adjustments of other real estate owned, net

( 3,898 ) ( 3,119 ) 420

Proceeds from the sale of mortgage loans 3,839 38,583 311,479

Mortgage loans originated for sale ( 3,895 ) ( 35,848 ) ( 286,257 )

Proceeds from sale of mortgage loans 38,583 311,479 357,613

Net change in:

Net (increase) decrease in interest receivable ( 7,094 ) ( 10,033 ) 3,561

Net increase (decrease) in interest payable

Net (increase) decrease in other assets ( 24,628 ) 83,830 ( 144,898 )

Net increase (decrease) in other liabilities 114,713 ( 35,569 ) 50,392

17,763 2,901 ( 2,087 )

Net decrease (increase) in other assets

14,311 ( 24,628 ) 83,830

Net (decrease) increase in other liabilities

( 28,430 ) 114,804 ( 35,569 )

Net Cash Provided by Operating Activities

$ 171,749 $ 240,525 $ 214,852

INVESTING ACTIVITIES

2 unchanged sentences

Proceeds from sales of securities — 30,490 1,917

Purchases of Federal Home Loan Bank stock ( 48,272 ) ( 22,515 ) ( 33,755 )

Proceeds from redemption of Federal Home Loan Bank stock 34,757 26,026 43,702

(Purchases) redemption of Federal Home Loan Bank stock

( 2,047 ) ( 13,515 ) 3,511

Net (increase) decrease in loans

Proceeds from the sale of portfolio loans 8,024 5,107 547

( 492,795 ) ( 192,403 ) 173,401

Proceeds from sale of portfolio loans 11,641 8,024 5,107

Proceeds from sale of other real estate owned 7,051 12,529 1,259

Purchases of premises and equipment ( 6,219 ) ( 3,863 ) ( 3,611 )

Proceeds from the sale of premises and equipment 710 161 14

Proceeds from sale of other real estate owned 12,529 1,259 1,899

Proceeds from settlement of bank owned life insurance 214 353 —

Net Cash Provided by (Used in) Investing Activities ( 398,587 ) 13,239 ( 159,202 )

Proceeds from life insurance settlement 1,696 214 353

Net payments from cash flow hedge ( 12,383 ) ( 91 ) —

Net Cash (Used in) Provided by Investing Activities

( 444,219 ) ( 398,678 ) 13,239

FINANCING ACTIVITIES

Net (decrease) increase in core deposits ( 623,076 ) 875,378 591,932

Net (decrease) in certificates of deposit ( 153,400 ) ( 299,292 ) ( 207,106 )

Net (decrease) increase in securities sold under repurchase agreements ( 84,491 ) 19,328 45,275

Net (decrease) increase in demand, money market and savings deposits

( 345,260 ) ( 623,076 ) 875,378

Net increase (decrease) in certificates of deposit

647,111 ( 153,400 ) ( 299,292 )

Net increase (decrease) in short-term borrowings

Repayments of long-term borrowings ( 7,689 ) ( 11,001 ) ( 27,187 )

45,000 285,509 ( 55,672 )

Proceeds from long-term borrowings 25,000 — —

Repayments on long-term borrowings ( 5,464 ) ( 7,689 ) ( 11,001 )

Repurchase of shares for taxes on restricted stock ( 798 ) ( 808 ) ( 630 )

Repurchase of S&T stock ( 7,637 ) — ( 12,559 )

Cash dividends paid to common shareholders ( 49,708 ) ( 46,952 ) ( 44,325 )

Net Cash Provided by Financing Activities ( 554,053 ) 464,458 139,493

Net (decrease) increase in cash and cash equivalents ( 712,206 ) 692,549 31,843

Cash and cash equivalents at beginning of year 922,215 229,666 197,823

Cash and Cash Equivalents at End of Year $ 210,009 $ 922,215 $ 229,666

Repurchase of common stock ( 19,808 ) ( 7,637 ) —

Net Cash Provided by (Used in) Financing Activities

296,073 ( 554,053 ) 464,458

Net increase (decrease) in cash and due from banks

23,603 ( 712,206 ) 692,549

Cash and due from banks at beginning of period 210,009 922,215 229,666

Cash and Due From Banks at End of Period $ 233,612 $ 210,009 $ 922,215

See Notes to Consolidated Financial Statements

S&T BANCORP, INC.

4 unchanged sentences

Supplemental Disclosures

Loans transferred to portfolio from held for sale $ — $ — $ 4,467

Right of use assets obtained in exchange for lease obligations $ 2,009 $ — $ 2,987

Cash paid for interest $ 111,303 $ 22,068 $ 15,236

Cash paid for income taxes, net of refunds $ 36,886 $ 31,175 $ 24,213

Loans transferred to held for sale $ — $ 4,467 $ 640

Leased right-of-use operating assets and lease liabilities added to Balance Sheet $ — $ 2,987 $ 91

Transfers to other real estate owned and other repossessed assets $ 23 $ 12,392 $ 631

Transfers of loans to other real estate owned $ 163 $ 23 $ 12,392

See Notes to Consolidated Financial Statements

4 unchanged sentences

Nature of Operations

S&T Bancorp, Inc., or S&T, was incorporated on March 17, 1983 under the laws of the Commonwealth of Pennsylvania as a bank holding company and has five active direct wholly owned subsidiaries, S&T Bank, 9th Street Holdings, Inc., STBA Capital Trust I, DNB Capital Trust I and DNB Capital Trust II, and owns a 50 percent interest in Commonwealth Trust Credit Life Insurance Company, or CTCLIC.

S&T Bancorp, Inc., or S&T, was incorporated on March 17, 1983 under the laws of the Commonwealth of Pennsylvania as a bank holding company and has four active direct wholly owned subsidiaries, S&T Bank, 9th Street Holdings, Inc., STBA Capital Trust I and DNB Capital Trust II, and owns a 50 percent interest in Commonwealth Trust Credit Life Insurance Company, or CTCLIC.

We are presently engaged in non-banking activities through the following six entities:

3 unchanged sentences

Stewart Capital Advisors, LLC;

DN Acquisition Company, Inc.

and DN Acquisition Company, Inc.

Our investment holding companies are 9th Street Holdings, Inc.

4 unchanged sentences

DN Acquisition Company, Inc.

was acquired with the DNB merger and was incorporated for the purpose of acquiring and holding Other Real Estate Owned, or OREO, acquired through foreclosure or deed in-lieu-of foreclosure, as well as Bank-occupied real estate.

was acquired with the DNB merger and was incorporated for the purpose of acquiring and holding OREO acquired through foreclosure or deed in-lieu-of foreclosure, as well as Bank-occupied real estate.

Accounting Policies

Our consolidated financial statements have been prepared in accordance with U.S.

generally accepted accounting principles, or GAAP.

Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles, or GAAP.

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as well as disclosures of contingent assets and liabilities as of the dates of the balance sheets and revenues and expenses for the periods then ended.

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Reclassification

Amounts in prior years' financial statements and footnotes are reclassified whenever necessary to conform to the current year’s presentation.

Amounts in prior years' financial statements and footnotes are reclassified whenever necessary to conform to the current period presentation.

Reclassifications had no effect on our results of operations or financial condition.

4 unchanged sentences

Results of operations of the acquired entities are included in the Consolidated Statement of Net Income from the date of acquisition.

Acquired loans are recorded at fair value on the date of acquisition with no carryover of the related allowance for credit losses, or ACL.

Acquired loans are recorded at fair value on the date of acquisition with no carryover of the related ACL.

Determining the fair value of acquired loans involves estimating the principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest.

In estimating the fair value of our acquired loans, we considered a number of factors including loss rates, internal risk rating, delinquency status, loan type, loan term, prepayment rates, recovery periods and the current interest rate environment.

In estimating the fair value of our acquired loans, we consider a number of factors including loss rates, internal risk rating, delinquency status, loan type, loan term, prepayment rates, recovery periods and the current interest rate environment.

The premium or discount estimated through the loan fair value calculation is recognized into interest income on a level yield basis over the remaining life of the loans.

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Available-for-sale debt securities, equity securities, trading securities held in a deferred compensation plan and derivative financial instruments are recorded at fair value on a recurring basis.

Additionally, from time to time, we may be required to record other assets at fair value on a nonrecurring basis, such as loans held for sale, individually assessed loans, OREO and other repossessed assets, mortgage servicing rights, or MSRs, and certain other assets.

Additionally, from time to time, we may be required to record other assets at fair value on a nonrecurring basis, such as loans held for sale, individually assessed loans, other real estate owned, or OREO, and other repossessed assets, mortgage servicing rights, or MSRs, and certain other assets.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants at the measurement date.

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The service provider utilizes pricing models that vary by asset class and include available trade, bid and other market information.

Generally, the methodologies include broker quotes, proprietary models and extensive quality control programs.

Equity Securities

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Loans that are individually evaluated to determine whether a specific allocation of ACL is needed are reported at the lower of amortized cost or fair value.

Fair value is determined using either the loan’s observable market price or the fair value of the collateral less estimated selling costs when the loan is collateral dependent and we expect to liquidate the collateral.

Fair value is determined using either the present value of expected future cash flows discounted at the loan's original effective interest rate, the loan’s observable market price or the fair value of the collateral less estimated selling costs when the loan is collateral dependent and we expect to liquidate the collateral.

However, if repayment is expected to come from the operation of the collateral, rather than liquidation, then we do not consider estimated selling costs in determining the fair value of the collateral.

4 unchanged sentences

OREO and Other Repossessed Assets

OREO and other repossessed assets obtained in partial or total satisfaction of a loan are recorded at the lower of recorded investment in the loan or fair value less cost to sell.

Subsequent to foreclosure, these assets are carried at the lower of the amount recorded at acquisition date or fair value less cost to sell.

Accordingly, it may be necessary to record nonrecurring fair value adjustments.

OREO and other repossessed assets obtained in partial or total satisfaction of a loan are recorded at fair value less cost to sell.

Fair value, when recorded, is generally based upon appraisals by approved, independent state certified appraisers.

22 unchanged sentences

Our methodology to fair value loans includes an exit price notion.

The fair value of variable rate loans that may reprice frequently at short-term market rates is based on carrying values adjusted for liquidity and credit risk.

The fair value of variable rate loans that reprice at intervals of one year or longer, such as adjustable rate mortgage products, is estimated using discounted cash flow analyses that utilize interest rates currently being offered for similar loans and adjusted for liquidity and credit risk.

The fair value of fixed rate loans is estimated using a discounted cash flow analysis that utilizes interest rates currently being offered for similar loans adjusted for liquidity and credit risk.

The fair value of loans is estimated using discounted cash flow analyses that utilize interest rates currently being offered for similar loans and adjusted for liquidity and credit risk.

The valuation models include significant unobservable inputs;

22 unchanged sentences

therefore, these are classified as Level 2.

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Junior Subordinated Debt Securities

3 unchanged sentences

therefore, these are classified as Level 2.

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Collateral Payable

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Both the allowance and the adjustment to net income can be reversed if conditions change.

Our policy for credit impairment within the debt securities portfolio is based upon a number of factors, including but not limited to, the financial condition of the underlying issuer, the ability of the issuer to meet contractual obligations, the likelihood of the security’s ability to recover any decline in its estimated fair value and whether management intends to sell the security or if it is more likely than not that management will be required to sell the investment security prior to the security’s recovery of any decline in its estimated fair value.

Our policy for credit impairment within the available-for-sale debt securities portfolio is based upon a number of factors, including but not limited to, the financial condition of the underlying issuer, the ability of the issuer to meet contractual obligations, the likelihood of the security’s ability to recover any decline in its estimated fair value and whether management intends to sell the security or if it is more likely than not that management will be required to sell the investment security prior to the security’s recovery of any decline in its estimated fair value.

Realized gains and losses on the sale of these securities are determined using the specific-identification method and are recorded within noninterest income in the Consolidated Statements of Net Income.

9 unchanged sentences

Loans are reported at the principal amount outstanding net of unearned income.

Unearned income consists of net deferred loan fees and costs and a discount or premium related to purchase accounting fair value adjustments.

We defer certain nonrefundable loan origination and commitment fees.

Accretion of discounts and amortization of premiums on loans are included in interest income in the Consolidated Statements of Net Income.

Unearned income consists of net deferred loan origination fees and costs and a discount or premium on acquired loans.

Loan origination fees and direct loan origination costs are deferred and amortized as an adjustment of loan yield over the lives of the loans without consideration of anticipated prepayments.

If a loan is paid off, the remaining unaccreted or unamortized net origination fees and costs are immediately recognized into income or expense.

If a loan is paid off, the remaining unaccreted or unamortized net origination fees and costs are immediately recognized into income.

Accretion of discounts and amortization of premiums on loans are included in interest income in the Consolidated Statements of Net Income.

Interest is accrued and interest income is recognized on loans as earned.

Closed-end installment loans, amortizing loans secured by real estate and any other loans with payments scheduled monthly are reported past due when the borrower is in arrears two or more monthly payments.

Other multi-payment obligations with payments scheduled other than monthly are reported past due when one scheduled payment is due and unpaid for 30 days

Other multi-payment obligations with payments scheduled other than monthly are reported past due when one scheduled payment is due and unpaid for 30 days or more.

Generally, consumer loans are charged off against the ACL upon the loan reaching 90 days past due.

Commercial loans are charged off as management becomes aware of facts and circumstances that raise doubt as to the collectability of all or a portion of the principal and when we believe a confirmed loss exists.

S&T BANCORP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Generally, consumer loans are charged off against the ACL upon the loan reaching 90 days past due.

Nonaccrual Loans

3 unchanged sentences

As a general rule, a nonaccrual loan may be restored to accrual status when its principal and interest is paid current and the bank expects repayment of the remaining contractual principal and interest, or when the loan otherwise becomes well secured and in the process of collection.

Troubled Debt Restructurings

Troubled debt restructurings, or TDRs, are loans where we, for economic or legal reasons related to a borrower’s financial difficulties, grant a concession to the borrower that we would not otherwise consider.

We strive to identify borrowers with financial difficulty early and work with them to come to a mutual resolution to modify the terms of their loan before the loan reaches nonaccrual status.

These modified terms generally include extensions of maturity dates at a stated interest rate lower than the current market rate for new debt with similar risk characteristics, reductions in contractual interest rates or principal deferment.

While unusual, there may be instances of principal forgiveness.

These modifications are generally for longer term periods that would not be considered insignificant.

Additionally, we classify loans where the debt obligation has been discharged through a Chapter 7 Bankruptcy and not reaffirmed as TDRs.

We individually evaluate all substandard commercial loans that have experienced a forbearance or change in terms agreement, and all substandard consumer and residential mortgage loans that entered into an agreement to modify their existing loan, to determine if they should be designated as TDRs.

TDRs can be returned to accruing status if the ultimate collectability of all contractual amounts due, according to the restructured agreement, is not in doubt and there is a period of a minimum of six months of satisfactory payment performance by the borrower either immediately before or after the restructuring.

Allowance for Credit Losses

The allowance for credit losses, ACL, is a valuation reserve established and maintained by charges against operating income and is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans.

The ACL is a valuation reserve established and maintained by charges against operating income and is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans.

Loans, or portions thereof, are charged off against the ACL when they are deemed uncollectible.

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The methodology for determining the ACL has two main components:

evaluation of expected credit losses for certain groups of homogeneous loans that share similar risk characteristics and evaluation of loans that do not share similar risk characteristics with other loans.

The ACL for homogeneous loans is calculated using a life-time loss rate methodology with both a quantitative and a qualitative analysis that is applied on a quarterly basis.

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Each segment has a distinct set of risk characteristics monitored by management.

We further evaluate the ACL at a disaggregated level which includes type of collateral and our internal risk rating system for the commercial segments and type of collateral, lien position, and FICO score, for the consumer segments.

We further evaluate the ACL at a disaggregated level which includes type of collateral and our internal risk rating system for the commercial and business banking segments and type of collateral, lien position and FICO score, for the consumer segments.

Historical credit loss experience is the basis for the estimation of expected credit losses.

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The qualitative adjustments for current conditions are based upon changes in lending policies and practices, experience and ability of lending staff, quality of the bank’s loan review system, value of underlying collateral, the existence of and changes in concentrations, other external factors and segment specific risks.

These modified

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

historical loss rates are multiplied by the outstanding principal balance of each loan to calculate a required reserve.

These modified historical loss rates are multiplied by the outstanding principal balance of each loan to calculate a required reserve.

The ACL for individual loans begins with the use of normal credit review procedures to identify whether a loan no longer shares similar risk characteristics with other pooled loans and therefore, should be individually assessed.

We evaluate all commercial loans greater than $ 1.0 million that meet the following criteria:

1) when it is determined that foreclosure is probable, 2) substandard, doubtful and nonaccrual loans when repayment is expected to be provided substantially through the operation or sale of the collateral, 3) any commercial TDR, or any loan reasonably expected to become a TDR whether on accrual or nonaccrual status and 4) when it is determined by management that a loan does not share similar risk characteristics with other loans.

1) when it is determined that foreclosure is probable, 2) substandard, doubtful and nonaccrual loans when repayment is expected to be provided substantially through the operation or sale of the collateral, 3) when it is determined by management that a loan does not share similar risk characteristics with other loans.

Specific reserves are established based on the following three acceptable methods for measuring the ACL:

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We receive the cash surrender value of each policy upon its termination or benefits are payable to us upon the death of the insured.

Changes in net cash surrender value are recognized in noninterest income in the Consolidated Statements of Net Income.

Changes in net cash surrender value are recognized in other noninterest income in the Consolidated Statements of Net Income.

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Premises and Equipment

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Depreciation expense is included in occupancy on the Consolidated Statements of Net Income.

Management reviews long-lived assets using events and circumstances to determine if and when an asset is evaluated for recoverability.

Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

No events or changes in circumstances occurred during the years ended December 31, 2023 and 2022.

The estimated useful lives for the various asset categories are as follows:

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Interest and amortization expenses are recognized for finance leases over the lease term.

Leases with an initial term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term in occupancy on our Consolidated Statements

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of Net Income.

Lease and amortization expenses are included in occupancy expense and interest on finance lease liabilities is included in borrowings interest expense in our Consolidated Statements of Net Income.

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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.

A qualitative assessment is performed to determine whether it is more likely than not that the reporting unit's fair value is less than it's carrying value.

A qualitative assessment is performed to determine whether it is more likely than not that the reporting unit's fair value is less than its carrying value.

We perform a quantitative impairment test only if we conclude that it is more likely than not that a reporting unit's fair value is less than the carrying amount.

Determining the fair value of a reporting unit is judgmental and involves the use of significant estimates and assumptions.

The fair value of the reporting unit is determined by using both a discounted cash flow model and a market based model.

The fair value of the

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

reporting unit is determined by using both a discounted cash flow model and a market based model.

The discounted cash flow model has many assumptions including future earnings projections, a long-term growth rate and discount rate.

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The company with a controlling financial interest, the primary beneficiary, is required to consolidate the VIE into its Consolidated Balance Sheets.

S&T has three wholly-owned trust subsidiaries, STBA Capital Trust I, DNB Capital Trust I and DNB Capital Trust II, or the Trusts, for which it does not absorb a majority of expected losses or receive a majority of the expected residual returns.

The DNB Capital Trust I and DNB Capital Trust II were acquired with the DNB merger.

S&T has two wholly-owned trust subsidiaries, STBA Capital Trust I and DNB Capital Trust II, or the Trusts, for which it does not absorb a majority of expected losses or receive a majority of the expected residual returns.

DNB Capital Trust II was acquired with the DNB merger.

At inception, these Trusts issued floating rate trust preferred securities to the Trustees and used the proceeds from the sale to invest in junior subordinated debt securities issued by us.

1 unchanged sentence

The Trusts are VIEs with the third-party investors as their primary beneficiaries, and accordingly, the Trusts and their net assets are not included in our consolidated financial statements.

However, the junior subordinated debt securities issued by S&T are included in our Consolidated Balance Sheets.

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

However, the junior subordinated debt securities issued by S&T are included in liabilities in our Consolidated Balance Sheets.

Qualified Affordable Housing

2 unchanged sentences

These investments are amortized over a maximum of 10 years, which represents the period over which the tax credits will be utilized.

Our investments in Low Income Housing Partnerships, or LIHPs, represent unconsolidated variable interest entities, or VIEs, and the assets and liabilities of the partnerships are not recorded on our balance sheet.

We have determined that we are not the primary beneficiary of these VIEs because we do not have the power to direct the activities that most significantly impact the economic performance of the partnership and have both the obligation to absorb expected losses and the right to receive benefits.

Our investments in Low Income Housing Partnerships, or LIHPs, represent unconsolidated VIEs and the assets and liabilities of the partnerships are not recorded on our balance sheet.

We have determined that we are not the primary beneficiary of these VIEs because we do not have the power to direct the activities that most significantly impact the economic performance of the partnership nor do we have both the obligation to absorb expected losses and the right to receive benefits.

We use the cost method to account for these partnerships.

3 unchanged sentences

OREO and other repossessed assets are included in other assets in the Consolidated Balance Sheets and are comprised of properties acquired through foreclosure proceedings or acceptance of a deed in lieu of a foreclosure.

At the time of foreclosure or acceptance of a deed in lieu of foreclosure, these properties are recorded at the lower of the recorded investment in the loan or fair value less cost to sell.

OREO and other repossessed assets are recorded at fair value less cost to sell at the time of acquisition and when subsequent declines in fair value occur.

Subsequent declines in the fair value of OREO are recorded through a valuation allowance.

Subsequent increases in the fair value reduce the valuation allowance, but only to the amount that does not exceed the OREO foreclosure date cost basis.

Loan losses arising from the acquisition of any such property initially are charged against the ACL.

Subsequently, these assets are carried at the lower of carrying value or current fair value less cost to sell.

Gains or losses realized upon disposition of these assets are recorded in other noninterest income or expense in the Consolidated Statements of Net Income depending on whether the net position is a gain or loss.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Securities Held in a Deferred Compensation Plan

A nonqualified deferred compensation plan is offered to certain management employees providing an opportunity to continue to defer income on a tax deferred basis in excess of annual contribution or compensation limits for qualified plans.

The plan assets are held in a grantor trust, are legally assets of S&T and are beneficially owned by the participants.

The assets are available to satisfy the claims of general creditors in the event we would need to file bankruptcy.

Securities held in the nonqualified deferred compensation plan are recorded in other assets in the Consolidated Balance Sheets at fair value.

A corresponding deferred compensation liability is recorded in other liabilities in the Consolidated Balance Sheets.

Gains and losses related to the change in value of plan assets are recorded in other noninterest income and salaries and employee benefits expense in our Consolidated Statements of Net Income, resulting in no impact to net income.

Mortgage Servicing Rights

Mortgage servicing rights, or MSRs, are recognized as separate assets when a mortgage loan is sold.

MSRs are recognized as separate assets when a mortgage loan is sold.

MSRs represents the estimated fair value of future net cash flows expected to be realized for performing the servicing activities.

3 unchanged sentences

MSRs are reported in other assets in the Consolidated Balance Sheets and are amortized into mortgage banking in noninterest income in the Consolidated Statements of Net Income in proportion to, and over the period of, the estimated future net servicing income of the underlying mortgage loans.

MSRs are regularly evaluated for impairment based on the estimated fair value of those rights.

MSRs are evaluated for impairment based on the estimated fair value of those rights.

MSRs are stratified by certain risk characteristics, primarily loan term and note rate.

2 unchanged sentences

Derivative Financial Instruments

Derivatives are recognized as either assets or liabilities on the balance sheet at fair value.

Derivatives are recognized as either other assets or other liabilities on the balance sheet at fair value.

All derivatives are evaluated at inception to determine whether it is a hedging or non-hedging activity.

The accounting for changes in the fair value of derivatives depends on whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting.

The accounting for changes in the fair value of derivatives depends on whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting based on whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting.

Pursuant to our agreements with various financial institutions, we may receive collateral or may be required to post collateral based upon mark-to-market positions.

Beyond unsecured threshold levels, collateral in the form of cash or securities may be made available to counterparties of interest rate swap transactions.

Interest income on collateral receivable is included in loan interest income in the Consolidated Statements of Net Income.

Interest expense on collateral payable is included in borrowings, junior subordinated debt securities and other interest expense in the Consolidated Statements of Net Income.

Derivatives contain an element of credit risk, the possibility that we will incur a loss because a counterparty, which may be a financial institution or a customer, fails to meet its contractual obligations.

1 unchanged sentence

We have entered into agreements with counterparty financial institutions, which include master netting agreements that provide for the net settlement of all contracts with a single counterparty in the event of default.

We elect, however, to account for all derivatives with counterparty institutions on a gross basis.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We elect, however, to account for all derivatives with counterparty institutions on a gross basis in the Consolidated Balance Sheets.

Interest Rate Swaps Designated as Hedging Instruments

4 unchanged sentences

As long as the cash flow hedge continues to qualify for hedge accounting, the entire change in the fair value of the hedging instrument is recognized in OCI, net of applicable taxes, and reclassified into interest income as interest payments are received.

The change in the fair value is included in the change in other liabilities in the Consolidated Statements of Cash Flows.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Interest Rate Contracts with Customers

7 unchanged sentences

Interest rate swaps with customers and the corresponding offsetting interest rate swap with a financial institution are considered derivatives, but are not accounted for using hedge accounting.

As such, changes in the estimated fair value of the derivatives are recorded in current earnings and included in other noninterest income in the Consolidated Statements of Net Income.

As such, changes in the estimated fair value of the derivatives are recorded in current earnings and included in other noninterest income in the Consolidated Statements of Net Income and included in the change in other assets and other liabilities in the Consolidated Statements of Cash Flows.

Interest Rate Lock Commitments and Forward Sale Contracts

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At the time of reissuance, the treasury stock account is reduced using the average cost method.

Gains and losses on the reissuance of common stock are recorded in additional paid-in capital, to the extent additional paid-in capital from previous treasury share transactions exists.

Any deficiency is charged to retained earnings.

Gains and losses on the reissuance of common stock are recorded in additional paid-in capital.

The Inflation Reduction Act of 2022 created a new excise tax equal to 1 percent of the fair value of shares repurchased, effective after December 31, 2022.

The excise tax is included in the cost of treasury stock with an offset to other liabilities in the Consolidated Balance Sheets.

The excise tax liability is reduced by the fair market value of any reissuance occurring in the same taxable year.

Revenue Recognition - Contracts with Customers

5 unchanged sentences

These costs are primarily salaries and employee benefits recognized as expense in the period incurred.

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Service charges on deposit accounts - We recognize monthly service charges for both commercial and personal banking customers based on account fee schedules.

8 unchanged sentences

Wealth management services - Wealth management services are primarily comprised of fees earned from the management and administration of trusts, assets under administration and other financial advisory services.

Generally, wealth management fees are earned over a period of time between monthly and annually, per the related fee schedules.

Generally, wealth

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management fees are earned over a period of time between monthly and annually, per the related fee schedules.

Our performance obligations with our customers are generally satisfied when we provide the services as stated in the customers' agreements.

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Stock-based compensation includes restricted stock awards and restricted stock units, which are measured using the fair value at the time of issuance.

A Monte Carlo simulation is used to estimate the fair value of performance-based restricted stock with a market condition.

The grant date fair value is recognized over the period during which the recipient is required to provide service in exchange for the award.

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The plan was previously closed to new participants effective December 31, 2007.

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Marketing Costs

3 unchanged sentences

We classify interest and penalties as an element of tax expense.

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Deferred income tax assets and liabilities are determined using the asset and liability method and are reported in other assets or other liabilities, as appropriate, in the Consolidated Balance Sheets.

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Earnings Per Share

Basic earnings per share, or EPS, is calculated using the two-class method to determine income allocated to common shareholders.

Basic and diluted earnings per share, or EPS, are calculated using the more dilutive of either the treasury stock method or the two-class method.

Unvested share-based payment awards that contain nonforfeitable rights to dividends are considered participating securities under the two-class method.

1 unchanged sentence

Potentially dilutive securities are excluded from the basic EPS calculation.

Diluted EPS is calculated under the more dilutive of either the treasury stock method or the two-class method.

Under the treasury stock method, the weighted average number of common shares outstanding is increased by the potentially dilutive common shares.

1 unchanged sentence

Potentially dilutive common shares are related to restricted stock.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recently Adopted Accounting Standards Updates, or ASU, or Updated

3 unchanged sentences

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

The amendments in this ASU provide optional guidance for a limited period of time to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting.

The amendments provide optional expedients and exceptions for applying GAAP to loan and lease agreements, derivative contracts, and other transactions affected by the anticipated transition away from LIBOR toward new interest rate benchmarks.

The optional guidance generally allows for the modified contract to be accounted for as a continuation of the existing contract and does not require contract remeasurement at the modification date or reassessment of a previous accounting determination.

The amendments in this ASU are effective as of March 12, 2020 through December 31, 2022.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Addendum (Topic 848) which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition.

Specifically, certain provisions in Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform.

The guidance is effective for all entities as of March 12, 2020 through December 31, 2022.

The amendments in this ASU provided optional guidance for a limited period of time to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting.

The amendments provided optional expedients and exceptions for applying GAAP to loan and lease agreements, derivative contracts and other transactions affected by the anticipated transition away from the London Inter-Bank Offered Rate, or LIBOR, toward new interest rate benchmarks.

The optional guidance generally allowed for the modified contract to be accounted for as a continuation of the existing contract and does not require contract remeasurement at the modification date or reassessment of a previous accounting determination.

The amendments in this ASU were effective as of March 12, 2020 through December 31, 2022.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Addendum (Topic 848) which clarified that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition.

The guidance was effective for all entities as of March 12, 2020 through December 31, 2022.

In December 2022, the FASB issued ASU No 2022-06, Reference Rate Reform (Topic 848):

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We adopted ASU 2020-04 and ASU 2021-01 on January 1, 2022 and ASU 2022-06 upon issuance.

We are utilizing the LIBOR transition relief as contract modifications are made during the course of the reference rate reform transition period.

We utilized the LIBOR transition relief as contract modifications were made during the course of the reference rate reform transition period.

ASU 2020-04, ASU 2021-01 and ASU 2022-06 did not have a material impact on our consolidated financial statements.

Accounting Standards Issued But Not Yet Adopted

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

2 unchanged sentences

The guidance eliminates the “once a TDR, always a TDR” requirement for loan disclosures and requires disclosures about the performance of modified loans to borrowers experiencing financial difficulty in the 12 months following the modification.

ASU 2022-02 eliminates the recognition and measurement guidance related to TDRs for creditors that have adopted ASC 326 Financial Instruments - Credit Losses.

The amendments eliminate the recognition and measurement guidance related to TDRs for creditors that have adopted ASC 326 Financial Instruments - Credit Losses.

We adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, on January 1, 2020.

The required accounting and disclosures for a loan modified in a TDR no longer provide decision-useful information.

ASC 326 requires the recognition of lifetime expected credit losses when a loan is originated or acquired, so the effect of credit losses that occur in loans modified in TDRs is already included in the ACL.

ASC 326 requires the recognition of lifetime

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expected credit losses when a loan is originated or acquired, so the effect of credit losses that occur in loans modified in TDRs is already included in the allowance for credit losses.

ASU 2022-02 requires a creditor to apply the loan refinancing and restructuring guidance in ASC 310-20 (consistent with the accounting for other loan modifications) to determine whether a modification results in a new loan or a continuation of an existing loan.

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The objective of the disclosures is to provide information about the type and magnitude of modifications and the degree of their success in mitigating potential credit losses.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, and interim periods therein.

Early adoption is permitted, however, we have not elected to do so.

We have developed new reporting and processes in order to adhere to the new disclosure requirements.

We adopted this ASU, as of January 1, 2023, using a modified retrospective transition approach, which resulted in a cumulative effect adjustment being recorded to retained earnings related to the elimination of TDRs.

It did not have a material impact on our consolidated financial statements.

The amendments in this ASU were effective for fiscal years beginning after December 15, 2022, and interim periods therein.

We adopted ASU 2022-02, as of January 1, 2023, using a modified retrospective transition approach.

Results for reporting periods beginning after January 1, 2023 are presented under ASU 2022-02 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

Under the previously applicable accounting guidance, commercial TDRs were individually assessed to determine if a specific reserve was required in the allowance for credit losses, or ACL.

The elimination of TDRs resulted in these loans being included in homogenous pools.

The adoption of this ASU resulted in a day one cumulative effective adjustment of $ 0.6 million which increased our ACL and decreased retained earnings.

Refer to Note 6 Loans and Allowance for Credit Losses for additional disclosures related to modifications of loans to borrowers experiencing financial difficulty as well as gross charge-off vintage disclosures.

Accounting Standards Issued But Not Yet Adopted

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

In March 2023, the FASB issued ASU 2023-02, Investments Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method to allow reporting entities to consistently account for equity investments made primarily for the purpose of receiving income tax credits and other income tax benefits.

If certain conditions are met, a reporting entity may elect to account for its tax equity investments by using the proportional amortization method regardless of the program from which it receives income tax credits, instead of only low-income-housing tax credit, or LIHTC, structures.

This amendment also eliminates certain LIHTC specific guidance aligning the accounting with other equity investments in tax credit structures.

Under the proportional amortization method, the equity investment is amortized in proportion to the income tax credits and other income tax benefits received, Amortization expense and the income tax benefits are required to be presented on a net basis in income tax expense on the Consolidated Statements of Net Income.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.

We adopted this ASU, as of January 1, 2024, using a modified retrospective transition approach, which resulted in an immaterial cumulative effect adjustment being recorded to retained earnings related to the transition of the cost method to the proportional amortization method on LIHTC partnerships.

Additional disclosure requirements will have minimal impact to our consolidated financial statements.

Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures to improve disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This update does not change how a public entity identifies its operating segments;

however, it does require that an entity that has single reportable segment provide all the disclosures required by the amendments in this update.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

A public entity should apply the amendments in this update retrospectively to all prior periods presented in the consolidated financial statements.

Early adoption is permitted.

We currently have one reportable operating segment, Community Banking.

This ASU will not impact our consolidated financial statements and will have minimal impact to to our disclosures, requiring identification of the chief operating decision maker and the information used to make operating decisions and to allocate resources.

Income Taxes (Topic 740) Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures to enhance the transparency and decision usefulness of the disclosures.

The amendments in this update address investor requests for more transparency about income tax information through improvements to disclosures primarily related to the rate reconciliation and income taxes paid information.

The amendments in this update are effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted for annual consolidated financial statements that have not yet been issued.

This ASU is not expected to have a significant impact on disclosures, and will not impact our consolidated financial statements.

S&T BANCORP, INC.

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EARNINGS PER SHARE

Earnings per share is calculated using both the two-class and the treasury stock methods with the more dilutive method used to determine reported basic and diluted earnings per share.

The two-class method was more dilutive in 2022, 2021 and 2020 and therefore was used to determine earnings per share.

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

Years ended December 31,

(dollars in thousands, except share and per share data) 2022 2021 2020

Diluted EPS is calculated using both the two-class and the treasury stock methods with the more dilutive method used to determine diluted EPS.

The two-class method was used to determine EPS for the twelve months ended December 31, 2023, 2022 and 2021.

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

Twelve months ended December 31,

(in thousands, except share and per share data) 2023 2022 2021

Numerator for Earnings per Share—Basic and Diluted:

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Net Income Allocated to Shareholders $ 144,625 $ 135,139 $ 109,851

Denominator for Earnings per Share—Basic and Diluted:

Denominator for Earnings per Share—Basic:

Weighted Average Shares Outstanding—Basic 38,432,447 38,988,174 39,050,241

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

Weighted Average Shares Outstanding—Basic 38,432,447 38,988,174 39,050,241

Average participating shares outstanding 222,958 42,760 2,720

Denominator for Two-Class Method—Diluted 38,655,405 39,030,934 39,052,961

39,030,934 39,052,961 39,073,219

Earnings per share—basic $ 3.76 $ 3.47 $ 2.81

1 unchanged sentence

Restricted stock considered anti-dilutive excluded from potentially dilutive shares 293 12,654 793

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FAIR VALUE MEASUREMENTS

The following tables present our assets and liabilities that are measured at fair value on a recurring basis by fair value hierarchy level at December 31, 2022 and 2021.

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

The following tables present our assets and liabilities that are measured at fair value on a recurring basis by fair value hierarchy level at the dates presented:

December 31, 2023

10 unchanged sentences

government corporations and agencies — 273,425 — 273,425

Corporate obligations — 500 — 500

Obligations of states and political subdivisions — 30,468 — 30,468

Total Available-for-Sale Debt Securities 133,786 835,522 — 969,308

Marketable equity securities 952 42 — 994

Total Securities 132,647 870,131 — 1,002,778

Trading securities held in a deferred compensation plan 8,087 — — 8,087

Equity securities 1,010 73 — 1,083

Total Securities Available for Sale 134,796 835,595 — 970,391

Securities held in a deferred compensation plan 9,399 — — 9,399

Derivative financial assets:

Interest rate swaps - commercial loans — 63,018 — 63,018

Interest rate lock commitments — — 5 5

Forward sale contracts - mortgage loans — — 2 2

Total Assets $ 144,195 $ 898,613 $ — $ 1,042,808

3 unchanged sentences

Total Liabilities $ — $ 78,293 $ — $ 78,293

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December 31, 2022

13 unchanged sentences

Total Available-for-Sale Debt Securities 131,695 870,089 — 1,001,784

Marketable equity securities 1,061 81 — 1,142

Total Securities 96,388 814,405 — 910,793

Trading securities held in a deferred compensation plan 10,230 — — 10,230

Equity securities 952 42 — 994

Total Securities Available for Sale 132,647 870,131 — 1,002,778

Securities held in a deferred compensation plan 8,087 — — 8,087

Derivative financial assets:

5 unchanged sentences

Interest rate swaps - commercial loans $ — $ 83,449 $ — $ 83,449

Interest rate swaps - cash flow hedge — 21,368 — 21,368

Total Liabilities $ — $ 104,817 $ — $ 104,817

Assets Recorded at Fair Value on a Nonrecurring Basis

We may be required to measure certain assets and liabilities at fair value on a nonrecurring basis.

Nonrecurring assets are recorded at the lower of cost or fair value in our financial statements.

There were no liabilities measured at fair value on a nonrecurring basis at either December 31, 2022 or December 31, 2021.

For Level 3 assets measured at fair value on a nonrecurring basis at December 31, 2022 and 2021, the significant unobservable inputs used in the fair value measurements were as follows:

December 31, 2022 Valuation Technique Significant Unobservable Inputs Range Weighted Average

(dollars in thousands)

Other real estate owned $ 3,060 Collateral method Discount rate 13.00 % 13.00 %

December 31, 2021 Valuation Technique Significant

Unobservable Inputs Range Weighted Average

(dollars in thousands)

Other real estate owned $ 1,011 Collateral method Appraisal adjustment - cost to sell 2.53 % 2.53 %

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The carrying values and fair values of our financial instruments at December 31, 2022 and 2021 are presented in the following tables:

Assets Recorded at Fair Value on a Nonrecurring Basis

We may be required to measure certain assets and liabilities at fair value on a nonrecurring basis.

Nonrecurring assets are recorded at the lower of cost or fair value in our consolidated financial statements.

There were no liabilities measured at fair value on a nonrecurring basis at either December 31, 2023 or December 31, 2022.

There were no Level 3 assets and one Level 2 individually assessed loan measured at fair value on a nonrecurring basis as of December 31, 2023 for $ 5.9 million.

At December 31, 2022, there was one Level 3 OREO property measured at fair value for $ 3.1 million which was sold in 2023.

Fair Value of Financial Instruments

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

Fair Value Measurements at December 31, 2023

(dollars in thousands) Carrying

Total Level 1 Level 2 Level 3

(dollars in thousands) Total Level 1 Level 2 Level 3

Cash and due from banks, including interest-bearing deposits $ 233,612 $ 233,612 $ 233,612 $ — $ —

Securities 1,002,778 1,002,778 132,647 870,131 —

Securities available for sale 970,391 970,391 134,796 835,595 —

Loans held for sale 153 153 — 153 —

4 unchanged sentences

Interest rate swaps - commercial loans 63,018 63,018 — 63,018 —

Interest rate lock commitments 5 5 — — 5

Forward sale contracts 2 2 — — 2

Deposits $ 7,521,769 $ 7,511,598 $ 5,940,117 $ 1,571,481 $ —

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Fair Value Measurements at December 31, 2022

(dollars in thousands) Carrying

Total Level 1 Level 2 Level 3

(dollars in thousands) Total Level 1 Level 2 Level 3

Cash and due from banks, including interest-bearing deposits $ 210,009 $ 210,009 $ 210,009 $ — $ —

Securities 910,793 910,793 96,388 814,405 —

Securities available for sale 1,002,778 1,002,778 132,647 870,131 —

Loans held for sale 16 16 — 16 —

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Interest rate lock commitments 5 5 — — 5

Forward sale contracts - mortgage loans 4 4 — — 4

Forward sale contracts 2 2 — — 2

Deposits $ 7,219,970 $ 7,194,225 $ 6,285,377 $ 908,848 $ —

Securities sold under repurchase agreements 84,491 84,491 84,491 — —

Collateral payable 65,065 65,065 65,065 — —

Short-term borrowings 370,000 370,000 — 370,000 —

Long-term borrowings 14,741 14,174 — 14,174 —

1 unchanged sentence

Interest rate swaps - commercial loans 83,449 83,449 — 83,449 —

Interest rate swaps - cash flow hedge 21,368 21,368 — 21,368 —

(1) As reported in the Consolidated Balance Sheets

RESTRICTIONS ON CASH AND DUE FROM BANK ACCOUNTS

The Board of Governors of the Federal Reserve System, or the Federal Reserve, imposes certain reserve requirements on all depository institutions.

These reserves are maintained in the form of vault cash or as an interest-bearing balance with the Federal Reserve.

There were no required reserves for 2022 and 2021.

The Federal Reserve reduced the reserve requirement ratio to zero percent effective March 26, 2020.

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

(dollars in thousands) 2022 2021

Available-for-sale debt securities $ 1,001,784 $ 909,651

Marketable equity securities 994 1,142

Total Securities $ 1,002,778 $ 910,793

Available-for-Sale Debt Securities

The following tables present the amortized cost and fair value of available-for-sale debt securities as of December 31, 2022 and December 31, 2021:

(dollars in thousands) December 31, 2023 December 31, 2022

Debt securities $ 969,308 $ 1,001,784

Equity securities 1,083 994

Total Securities Available for Sale $ 970,391 $ 1,002,778

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

December 31, 2023 December 31, 2022

(dollars in thousands) Amortized

Losses Fair Value Amortized

Losses Fair Value

Value Amortized

Cost Gross Unrealized Gains Gross

Treasury securities $ 144,292 $ — $ ( 10,506 ) $ 133,786 $ 145,416 $ — $ ( 13,721 ) $ 131,695

13 unchanged sentences

Interest receivable is included in other assets in the Consolidated Balance Sheets.

The following table shows the composition of gross and net realized gains and losses for the periods presented:

Years ended December 31,

(dollars in thousands) 2022 2021 2020

Gross realized gains $ 198 $ 29 $ 219

Gross realized losses — — ( 77 )

Net Realized Gains $ 198 $ 29 $ 142

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Less Than 12 Months 12 Months or More Total

(dollars in thousands) Number

Securities Fair

Value Unrealized

Losses Number

Securities Fair

Value Unrealized

Losses Number

Securities Fair

Value Unrealized

(dollars in thousands) Number of Securities Fair Value Unrealized

Losses Number of Securities Fair Value Unrealized

Treasury securities 1 $ 10,036 $ ( 52 ) 13 $ 123,750 $ ( 10,454 ) 14 $ 133,786 $ ( 10,506 )

7 unchanged sentences

government corporations and agencies — — — 29 249,005 ( 17,808 ) 29 249,005 ( 17,808 )

Corporate Obligations — — — — — — — — —

Obligations of states and political subdivisions — — — — — — —

2 unchanged sentences

Less Than 12 Months 12 Months or More Total

(dollars in thousands) Number

Securities Fair

Value Unrealized

Losses Number

Securities Fair

Value Unrealized

Losses Number

Securities Fair

Value Unrealized

(dollars in thousands) Number of Securities Fair Value Unrealized

Losses Number of Securities Fair Value Unrealized

Treasury securities 6 $ 57,057 $ ( 3,363 ) 8 $ 74,638 $ ( 10,358 ) 14 $ 131,695 $ ( 13,721 )

7 unchanged sentences

government corporations and agencies 30 241,009 ( 11,975 ) 7 86,304 ( 13,177 ) 37 327,313 ( 25,152 )

Corporate Obligations — — — — — — — — —

Obligations of states and political subdivisions 2 20,127 ( 372 ) — — — 2 20,127 ( 372 )

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

We evaluate securities with unrealized losses quarterly to determine if the decline in fair value has resulted from credit losses or other factors.

We evaluate securities with unrealized losses quarterly to determine if the decline in fair value has resulted from credit impairment or other factors.

We do not believe any individual unrealized loss as of December 31, 2023 represents a credit impairment.

There were 133 debt securities in an unrealized loss position at December 31, 2023 and 147 debt securities in an unrealized loss position at December 31, 2022.

The unrealized losses on debt securities were primarily attributable to changes in interest rates and not related to the credit quality of the issuers.

All debt securities are determined to be investment grade and paying principal and interest according to the contractual terms of the security.

We do not intend to sell and it is more likely

The unrealized losses on debt securities were attributable to changes in interest rates and not related to the credit quality of the issuers.

All debt securities were determined to be investment grade and paying principal and interest according to the contractual terms of the security.

We do not intend to sell, and it is more likely than not that we will not be required to sell, the securities in an unrealized loss position before recovery of their amortized cost.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

The following table presents net unrealized gains and losses, net of tax, on available-for-sale debt securities included in accumulated OCI, for the periods presented:

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

December 31, 2023 December 31, 2022

(dollars in thousands) Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Gains (Losses) Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Gains (Losses)

(dollars in thousands) Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Losses Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Losses

Total unrealized gains (losses) on available-for-sale debt securities $ 1,746 $ ( 83,751 ) $ ( 82,005 ) $ 261 $ ( 102,582 ) $ ( 102,321 )

14 unchanged sentences

Available-for-Sale Debt Securities With Fixed Maturities 207,889 196,767

Debt Securities without a single maturity date

Collateralized mortgage obligations of U.S.

4 unchanged sentences

government corporations and agencies 290,775 273,425

Corporate Obligations 500 500

Total Available-for-Sale Debt Securities $ 1,051,313 $ 969,308

4 unchanged sentences

Approval is not required for unrestricted pledged securities.

LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans and Loans Held for Sale

Loans are presented net of unearned income.

Unearned income consists of net deferred loan fees and costs of $ 7.5 million at December 31, 2022 and $ 14.1 million at December 31, 2021 and a discount related to purchase accounting fair value adjustments of $ 4.7 million at December 31, 2022 and $ 6.7 million at December 31, 2021.

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unearned income consisted of net deferred loan fees and costs of $ 6.6 million at December 31, 2023 and $ 7.4 million at December 31, 2022 and a discount related to purchase accounting fair value adjustments of $ 3.1 million at December 31, 2023 and $ 4.5 million at December 31, 2022.

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

12 unchanged sentences

Interest receivable is included in other assets in the Consolidated Balance Sheets.

C&I, included $ 4.0 million of loans originated under the Paycheck Protection Program, or PPP, at December 31, 2022 compared to $ 88.3 million at December 31, 2021.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security, or CARES Act was signed into law.

The CARES Act included the PPP, a program designed to aid small and medium sized businesses through federally guaranteed loans distributed through banks.

PPP loans are forgivable, in whole or in part, if the proceeds are used for payroll and other permitted expenses in accordance with the requirements of the PPP.

The loans are 100 percent guaranteed by the Small Business Administration, or SBA.

These loans carry a fixed rate of 1.00 percent and a term of two years, or five years for loans approved by the SBA, on or after June 5, 2020.

Payments are deferred for at least six months of the loan.

The SBA pays us a processing fee ranging from 1 percent to 5 percent based on the size of the loan.

Interest is accrued as earned and loan origination fees and direct costs are deferred and accreted or amortized into interest income over the life of the loan using the level yield method.

When a PPP loan is paid off or forgiven by the SBA, the remaining unaccreted or unamortized net origination fees or costs will be immediately recognized into income.

Business banking consists of commercial loans made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards that meet small business market customers’ needs.

S&T BANCORP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes our TDRs as of the dates presented:

December 31, 2022 December 31, 2021

(dollars in thousands) Accruing

TDRs Nonaccruing

TDRs Accruing

TDRs Nonaccruing

Modifications to Borrowers Experiencing Financial Difficulty

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

Twelve Months Ended December 31, 2023

(dollars in thousands) Term Extension Term Extension and Interest Rate Reduction Total % of Portfolio Segment

Commercial real estate $ 13,836 $ — $ 13,836 0.52 %

Commercial and industrial 626 — 626 748 14,889 15,637

Commercial industrial 16,877 — 16,877 1.18 %

Commercial construction — — — — %

1 unchanged sentence

Consumer real estate 61 189 250 0.01 %

Other consumer 4 9 13 3 — 3

Total $ 8,891 $ 2,894 $ 11,785 $ 9,921 $ 21,774 $ 31,695

There was one $ 0.2 million TDR returned to accruing status during 2022 compared to no TDRs returned to accruing status during 2021.

The following tables present the TDRs by portfolio segment and by type of concession for the years ended:

$ 30,894 $ 189 $ 31,083 0.41 %

(1) Excludes loans that were fully paid off or fully charged-off by period end.

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

Twelve Months Ended December 31, 2023

Weighted-Average Term Extension (in months) Weighted-Average Interest Rate Reduction

Commercial real estate 4 —

Commercial industrial 5 —

Commercial construction — —

Business banking 19 —

Consumer real estate 168 2 %

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

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

December 31, 2023

Contracts Type of Modification Total

Post-Modification Outstanding Recorded Investment (2)

Pre-Modification Outstanding Recorded Investment (2)

(dollars in thousands) Bankruptcy (1)

Maturity Modify

(dollars in thousands) Current 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due Total

Commercial real estate $ 13,836 $ — $ — $ — $ 13,836

3 unchanged sentences

Consumer real estate 250 — — — 250

Other consumer 2 11 — — — — 11 15

Total $ 30,674 $ — $ — $ 409 $ 31,083

(1) Bankruptcy is consumer bankruptcy loans where the debt has been legally discharged through the bankruptcy court and not reaffirmed.

(2) Excludes loans that were fully paid off or fully charged-off by period end.

The pre-modification balance represents the balance outstanding prior to modification.

The post-modification balance represents the outstanding balance at period end.

A payment default is defined as a loan having a payment past due 90 days or more after a modification took place.

There were no loans that were modified within the last 12 months that had a payment default during the twelve months ended December 31, 2023.

Additionally, we had three commitments to lend an additional $ 1.6 million to borrowers experiencing financial difficulty that had a modification during 2023.

The effect of modifications made to borrowers experiencing financial difficulty is already included in the ACL because of the measurement methodologies used to estimate the ACL, therefore, a change to the ACL is generally not recorded upon modification.

If principal forgiveness is provided, that portion of the loan will be charged-off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the ACL.

An assessment of whether the borrower is experiencing financial difficulty is made on the date of a modification .

Troubled Debt Restructurings

Prior to the adoption of ASU 2022-02, Financial Instruments Credit Losses (Topic 326):

Troubled Debt Restructuring and Vintage Disclosures , we evaluated all substandard commercial and consumer loans that had experienced a forbearance or modification of existing terms to determine if they should be designated as troubled debt restructurings, or TDRs.

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TDRs were returned to accruing status when the ultimate collectability of all contractual amounts due, according to the restructured agreement, was not in doubt and there was a period of a minimum of six months of satisfactory payment performance by the borrower either immediately before or after the restructuring.

There was one $ 0.2 million TDR returned to accruing status during 2022.

The following table summarizes TDRs as of the date presented:

December 31, 2022

(dollars in thousands) Accruing

TDRs Nonaccruing

Commercial real estate $ — $ — $ —

Commercial and industrial 626 — 626

Commercial construction 1,655 — 1,655

Business banking 438 1,087 1,525

Consumer real estate 6,168 1,798 7,966

Other consumer 4 9 13

Total $ 8,891 $ 2,894 $ 11,785

The following table presents the TDRs by portfolio segment and type of concession for the periods presented:

Twelve Months Ended December 31, 2022

Contracts Type of Modification Total

14 unchanged sentences

The post-modification balance represents the outstanding balance at period end.

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In response to the coronavirus, or COVID-19 pandemic, and its economic impact on our customers, we implemented a short-term modification program that complied with the CARES Act to provide temporary payment relief to those borrowers directly impacted by the COVID-19 pandemic who were not more than 30 days past due as of December 31, 2019.

This program allowed for a deferral of payments for 90 days and up to a maximum of 180 days for our commercial customers.

The customer remained responsible for deferred payments along with any additional interest accrued during the deferral period.

For our consumer customers, interest did not accrue during the deferral period and the maturity date was extended by the length of the deferral period.

Under the applicable guidance none of these loans were considered restructured.

The program ended January 1, 2022 and we had no loans modified at December 31, 2022, compared to eight loans that were modified totaling $ 28.8 million at December 31, 2021.

As of December 31, 2022, we had 16 commitments to lend an additional $ 0.4 million on TDRs compared to 12 commitments to lend an additional $ 2.6 million at December 31, 2021.

Defaulted TDRs are defined as loans having a payment default of 90 days or more after the restructuring takes place that were restructured within the last 12 months prior to defaulting.

There were no TDRs that defaulted during 2022 or 2021.

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

Defaulted TDRs were defined as loans having a payment default of 90 days or more after the restructuring takes place that were restructured within the last 12 months prior to defaulting.

There were no TDRs that defaulted during 2022.

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

(dollars in thousands) 2022 2021

Nonperforming Assets

(dollars in thousands) December 31, 2023 December 31, 2022

Nonperforming Assets

Nonaccrual Loans $ 22,947 $ 19,052

Nonaccrual TDRs 2,894 21,774

Total Nonaccrual loans 19,052 66,291

OREO 75 3,065

Total Nonperforming Assets $ 23,022 $ 22,117

The following table presents a summary of the aggregate amount of loans to certain officers, directors of S&T or any affiliates of such persons as of the dates presented:

The following table presents a summary of the aggregate amount of loans to certain officers and directors of S&T or any affiliates of such persons as of the dates presented:

(dollars in thousands) 2023 2022

3 unchanged sentences

Balance at End of Year $ 4,183 $ 4,128

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Allowance for Credit Losses

4 unchanged sentences

CRE —Loans secured by commercial purpose real estate, including both owner-occupied properties and investment properties for various purposes such as hotels, retail, multifamily and health care.

The primary sources of repayment for these loans are the operations of the individual projects and global cash flows of the debtors.

Operations of the individual projects and global cash flows of the debtors are the primary sources of repayment for these loans.

The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and the business prospects of the lessee, if the project is not owner-occupied.

C&I —Loans made to operating companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing.

The primary source of repayment for these loans is cash flow from the operations of the company.

Cash flow from the operations of the company is the primary source of repayment for these loans.

The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the industry of the company.

Collateral for these types of loans often does not have sufficient value in a distressed or liquidation scenario to satisfy the outstanding debt.

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Commercial Construction —Loans made to finance construction of buildings or other structures, as well as to finance the acquisition and development of raw land for various purposes.

While the risk of these loans is generally confined to the construction period, if there are problems, the project may not be completed, and as such, may not provide sufficient cash flow on its own to service the debt or have sufficient value in a liquidation to cover the outstanding principal.

While these loans are generally confined to the construction/development period, if there are problems, the project may not be completed, and as such, may not provide sufficient cash flow on its own to service the debt or have sufficient value in a liquidation to cover the outstanding principal.

The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the type of project and the experience and resources of the developer.

Business Banking —Commercial loans made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards that meet small business market customers’ needs.

Business Banking —Commercial purpose loans made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards that meet small business market customers’ needs.

The business banking portfolio is monitored by utilizing a standard and closely managed process focusing on behavioral and performance criteria.

The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and business.

Consumer Real Estate —Loans secured by first and second liens such as home equity loans, home equity lines of credit and 1-4 family residential mortgages.

Consumer Real Estate —Loans secured by first and second liens such as 1-4 family residential mortgages, home equity loans and home equity lines of credit.

The primary source of repayment for these loans is the income and assets of the borrower.

2 unchanged sentences

Other Consumer —Loans made to individuals that may be secured by assets other than 1-4 family residences, as well as unsecured loans.

This segment includes auto loans, unsecured loans and lines.

This segment includes auto loans, unsecured loans and lines of credit.

The primary source of repayment for these loans is the income and assets of the borrower.

1 unchanged sentence

The value of the collateral, if there is any, is less likely to be a source of repayment due to less certain collateral values.

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

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

We monitor the commercial loan portfolio through an internal risk rating system.

6 unchanged sentences

Substandard —A substandard loan is not adequately protected by the net worth and/or paying capacity of the borrower or by the collateral pledged, if any.

Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.

Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

These loans are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.

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

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

S&T BANCORP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

December 31, 2023

6 unchanged sentences

Total Commercial Real Estate 276,677 324,469 439,308 240,256 419,371 926,636 32,418 — 2,659,135

Year-to-date Gross Charge-offs — — — — — 1,706 — — 1,706

Commercial and Industrial

4 unchanged sentences

Total Commercial and Industrial 171,861 231,978 210,636 54,696 52,858 193,905 520,249 — 1,436,183

Year-to-date Gross Charge-offs — — — — 3,412 15,842 — — 19,254

Commercial Construction

4 unchanged sentences

Total Commercial Construction 75,596 154,456 82,313 14,845 4,727 4,438 14,208 — 350,583

Year-to-date Gross Charge-offs — — — — 451 — — — 451

Business Banking

4 unchanged sentences

Total Business Banking 270,129 262,606 207,611 88,018 99,574 334,766 96,754 1,307 1,360,765

Year-to-date Gross Charge-offs — 67 43 1 88 1,073 34 — 1,306

Consumer Real Estate

4 unchanged sentences

Total Consumer Real Estate 311,887 335,462 147,850 102,041 67,890 189,794 552,080 24,774 1,731,778

Year-to-date Gross Charge-offs — 1 — 5 1 43 75 296 421

Other Consumer

4 unchanged sentences

Total Other Consumer 11,286 11,965 6,507 3,847 1,082 672 76,426 3,112 114,897

Year-to-date Gross Charge-offs 830 146 175 19 37 5 — 288 1,500

Pass 1,117,247 1,318,412 1,060,514 499,034 595,848 1,473,853 1,253,528 25,838 7,344,274

3 unchanged sentences

Total Loan Balance $ 1,117,436 $ 1,320,936 $ 1,094,225 $ 503,703 $ 645,502 $ 1,650,211 $ 1,292,135 $ 29,193 $ 7,653,341

Current Year-to-date Gross Charge-offs $ 830 $ 214 $ 218 $ 25 $ 3,989 $ 18,669 $ 109 $ 584 $ 24,638

S&T BANCORP, INC.

112 unchanged sentences

Total Loan Balance $ 1,271,764 $ 1,214,107 $ 586,544 $ 725,517 $ 449,759 $ 1,528,088 $ 1,381,517 $ 26,673 $ 7,183,969

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

2 unchanged sentences

Past Due 60-89 Days

Past Due Nonaccrual Total

Loans Total Loans

Past Due Nonaccrual Total Past

Due Loans Total Loans

Commercial real estate $ 2,649,412 $ — $ 3,403 $ 6,320 $ 9,723 $ 2,659,135

8 unchanged sentences

Past Due 60-89 Days

Past Due Nonaccrual Total

Loans Total Loans

Past Due Nonaccrual Total Past

Due Loans Total Loans

Commercial real estate $ 2,523,315 $ 8,424 $ — $ 7,100 $ 15,524 $ 2,538,839

5 unchanged sentences

Total $ 7,144,576 $ 18,093 $ 2,248 $ 19,052 $ 39,393 $ 7,183,969

(1) We had eight loans that were modified totaling $ 28.8 million under the CARES act at December 31, 2021.

These customers were not considered past due as a result of their delayed payments.

Upon exiting the loan modification deferral program, the measurement of loan delinquency resumed where it left off upon entry into the program.

S&T BANCORP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables present loans on nonaccrual status by class of loan:

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

December 31, 2023

December 31, 2022 For the twelve months ended

(dollars in thousands) Beginning of Period Nonaccrual End of Period Nonaccrual Nonaccrual With No Related Allowance Interest Income Recognized on Nonaccrual (1)

(dollars in thousands) Beginning of Period Nonaccrual End of Period Nonaccrual Nonaccrual With No Related Allowance Interest Income

on Nonaccrual (1)

Commercial real estate $ 7,100 $ 6,320 $ 5,940 $ 46

7 unchanged sentences

December 31, 2022

December 31, 2021 For the twelve months ended

(dollars in thousands) Beginning of Period Nonaccrual End of Period Nonaccrual Nonaccrual With No Related Allowance Interest Income Recognized on Nonaccrual (1)

(dollars in thousands) Beginning of Period Nonaccrual End of Period Nonaccrual Nonaccrual With No Related Allowance Interest Income

on Nonaccrual (1)

Commercial real estate $ 31,488 $ 7,100 $ 5,649 $ 580

6 unchanged sentences

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

The following tables present collateral-dependent loans by class of loan:

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents collateral-dependent loans as of December 31, 2023:

December 31, 2023

Type of Collateral

(dollars in thousands) Real Estate Blanket Lien Other

(dollars in thousands) Real Estate Business

Commercial real estate $ 5,940 $ — $ —

4 unchanged sentences

Total $ 10,516 $ — $ —

The following table presents collateral-dependent loans by class of loans as of December 31, 2022:

December 31, 2022

Type of Collateral

(dollars in thousands) Real Estate Blanket Lien Other

(dollars in thousands) Real Estate Business

Commercial real estate $ 5,649 $ — $ —

4 unchanged sentences

Total $ 8,125 $ 1,738 $ 154

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables present activity in the ACL for the periods presented:

5 unchanged sentences

Real Estate Other

Consumer Total

Consumer Total Loans

Allowance for credit losses on loans:

Balance at beginning of period $ 41,428 $ 25,710 $ 6,264 $ 12,547 $ 12,105 $ 3,286 $ 101,340

Impact of ASU 2022-02 — 75 215 251 278 ( 251 ) 568

Provision for credit losses on loans (1)

4 unchanged sentences

Balance at End of Period $ 37,886 $ 34,538 $ 5,382 $ 12,858 $ 14,663 $ 2,639 $ 107,966

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

(1) Excludes the provision for credits losses for unfunded commitments.

Twelve Months Ended December 31, 2022

13 unchanged sentences

Balance at End of Period $ 41,428 $ 25,710 $ 6,264 $ 12,547 $ 12,105 $ 3,286 $ 101,340

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

The C&I portfolio included $ 4.0 million of loans originated under the PPP at December 31, 2022 compared to $ 88.3 million at December 31, 2021.

The loans are 100 percent guaranteed by the SBA, therefore, we have not assigned any ACL to these loans at December 31, 2022.

(1) Excludes the provision for credits losses for unfunded commitments.

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

We have 47 lease contracts, including 45 operating leases and two finance leases at December 31, 2022.

We have 42 lease contracts, including 40 operating leases and 2 finance leases at December 31, 2023.

These leases are for our branch, loan production and support services facilities.

Included in the lease expense for premises are leases with one S&T director, which totaled approximately $ 0.2 million for each of the three years 2023, 2022 and 2021.

No new lease agreements were entered into in 2022.

One new lease agreement was entered into in 2023.

The following table presents our lease expense for finance and operating leases for the years ended December 31:

4 unchanged sentences

Total Lease Expense $ 5,349 $ 5,413 $ 5,433

(1) Included in occupancy expense in our Consolidated Statements of Net Income.

(2) Included in borrowings interest expense in our Consolidated Statements of Net Income.

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents our ROU assets, weighted average term and the discount rates for finance and operating leases as of December 31:

14 unchanged sentences

The following table presents the maturity analysis of lease liabilities for finance and operating leases as of December 31, 2023:

(dollars in thousands)

Maturity Analysis Finance Operating Total

(dollars in thousands) Finance Operating Total

Maturity Analysis

2024 $ 130 $ 4,865 $ 4,995

21 unchanged sentences

Depreciation expense related to premises and equipment was $ 6.5 million in 2023, $ 6.4 million in 2022 and $ 6.6 million in 2021.

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLES

The following table presents goodwill as of the dates presented:

4 unchanged sentences

Goodwill is reviewed for impairment annually or more frequently if it is determined that a triggering event has occurred.

Based upon our qualitative assessment performed for our annual impairment analysis as of October 1, 2022, we concluded that goodwill was not impaired.

In our qualitative assessment performed for our annual impairment analysis as of October 1, 2023, we concluded that it is not more likely than not that fair value is less than carrying value.

Based on this conclusion, a quantitative impairment test was not performed and we concluded that goodwill was not impaired.

No events or circumstances since the October 1, 2023 annual impairment test were noted that would indicate goodwill was impaired at December 31, 2023.

18 unchanged sentences

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

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

Derivatives Designated as Hedging Instruments

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

Derivative Assets

15 unchanged sentences

Total Derivatives $ 892,712 $ 63,018 $ 976,963 $ 83,456 $ 1,392,712 $ 78,293 $ 1,476,707 $ 104,817

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

11 unchanged sentences

Net Amount $ 1,674 $ 3,188 $ 62,513 $ 83,314

(1) Netting adjustments represents the amounts recorded to convert derivatives assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance.

(1) Netting adjustments represent the amounts recorded to convert derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance.

(2) Cash collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance.

1 unchanged sentence

Therefore, excess cash collateral, if any, is not reflected above.

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the effect of the cash flow hedges on OCI and on the Consolidated Statements of Comprehensive Income for the twelve month periods presented:

Amount of Loss Recognized in Other Comprehensive Income (Loss) Amount of Loss Reclassified from Accumulated Other Comprehensive Income (Loss) into Interest Income

The following table presents the effect, net of tax, of the cash flow hedges on OCI and on the Consolidated Statements of Comprehensive Income for the years presented:

Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Interest Income

(dollars in thousands) December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022

4 unchanged sentences

During the next twelve months, we estimate that an additional $ 10.6 million will be reclassified as a decrease to interest income.

The following table indicates the gain or (loss) recognized in income on derivatives not designated as hedging instruments for the years ended December 31:

Our current interest rate swap agreements have 3 - 5 year terms with maturity dates extending into 2027.

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

Twelve months ended December 31,

(dollars in thousands) 2023 2022 2021

4 unchanged sentences

Total Derivatives (Loss) Gain $ ( 561 ) $ ( 295 ) $ ( 1,500 )

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MORTGAGE SERVICING RIGHTS

For the years ended December 31, 2023, 2022 and 2021, the 1-4 family mortgage loans that were sold to Fannie Mae amounted to $ 0.2 million, $ 28.6 million and $ 287.9 million.

At December 31, 2022, 2021 and 2020 our servicing portfolio totaled $ 772.9 million, $ 841.7 million and $ 718.2 million.

At December 31, 2023, 2022 and 2021, our servicing portfolio unpaid principal balance was $ 707.8 million, $ 772.9 million and $ 841.7 million,.

The following table indicates MSRs and the net carrying values:

12 unchanged sentences

QUALIFIED AFFORDABLE HOUSING

As part of our responsibilities under the Community Reinvestment Act and due to their favorable federal income tax benefits, we invest in Low Income Housing partnerships, or LIHPs.

As part of our responsibilities under the Community Reinvestment Act and due to their favorable federal income tax benefits, we invest in LIHPs.

As a limited partner in these operating partnerships, we receive tax credits and tax deductions for losses incurred by the underlying properties.

1 unchanged sentence

We do not have any loss reserves recorded related to these investments because we believe the likelihood of any loss to be remote.

Our investments in LIHPs represent unconsolidated variable interest entities, or VIEs, and the assets and liabilities of the partnerships are not recorded on our balance sheet.

We have determined that we are not the primary beneficiary of these VIEs because we do not have the power to direct the activities that most significantly impact their economic performance.

Our total investment in qualified affordable housing projects was $ 33.5 million at December 31, 2023 and $ 23.6 million at December 31, 2022.

Amortization expense, included in other noninterest expense in the Consolidated Statements of Net Income was $ 2.0 million, $ 1.4 million and $ 1.2 million for the twelve months ended December 31, 2023, 2022 and 2021.

The amortization expense was offset by tax credits of $ 1.2 million, $ 2.0 million and $ 2.2 million for the twelve months ended

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022, 2021 and 2020 as a reduction to our federal tax provision.

In 2022, we entered into three new qualified affordable housing projects and committed to a total investment of $ 20.1 million for these new projects.

As of December 31, 2022, $ 4.4 million of funds were invested into these new projects.

No amortization expense or tax credits will be recognized for these new projects until complete.

The amortization expense was offset by tax credits of $ 2.6 million, $ 1.2 million and $ 2.0 million for the twelve months ended December 31, 2023, 2022 and 2021 as a reduction to our federal tax provision.

We did not invest in any new qualified affordable housing projects in 2023.

As of December 31, 2023, the aggregate commitment for existing projects was $ 12.0 million.

No amortization expense or tax credits will be recognized for these projects until complete.

The following table presents the composition of deposits at December 31 and interest expense for the years ended December 31:

9 unchanged sentences

Total $ 7,521,769 $ 92,836 $ 7,219,970 $ 19,907 $ 7,996,524 $ 10,757

The aggregate of all certificates of deposits over $250,000, including brokered CDs, were $ 219.2 million and $ 243.4 million at December 31, 2022 and 2021.

The aggregate of all certificates of deposits over $250,000, including brokered CDs, were $ 350.7 million at December 31, 2023 and $ 219.2 million at December 31, 2022.

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table indicates the scheduled maturities of certificates of deposit at December 31, 2023:

6 unchanged sentences

FHLB advances are for various terms and are secured by a blanket lien on residential mortgages and other real estate secured loans.

During 2022, we discontinued our REPO product.

All REPOs were overnight short-term investments not insured by the Federal Deposit Insurance Corporation, or FDIC.

During 2021, securities pledged as collateral under these REPO financing arrangements could not be sold or repledged by the secured party and, therefore, the REPOs were accounted for as secured borrowings.

Mortgage-backed securities with amortized cost of $ 86.3 million and carrying value of $ 88.4 million at December 31, 2021 were pledged as collateral for these secured transactions.

The pledged securities were held in safekeeping at the Federal Reserve.

Due to the overnight short-term nature of REPOs, potential risk due to a decline in the value of the pledged collateral was low.

Collateral pledging requirements with REPOs were monitored daily.

The following table presents the composition of short-term borrowings, the weighted average interest rate as of December 31, 2023 and interest expense for the years ended December 31:

6 unchanged sentences

Rate Interest

REPOs $ — — % $ 36 $ 84,491 0.10 % $ 79 $ 65,163 0.25 % $ 169

FHLB advances 415,000 5.65 % 27,234 370,000 4.49 % 1,649 — — % 12

Total Short-term Borrowings $ 415,000 5.65 % $ 27,234 $ 370,000 4.49 % $ 1,649 $ — — % $ 12

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LONG TERM BORROWINGS AND SUBORDINATED DEBT

18 unchanged sentences

Total $ 39,277 4.52 %

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Junior Subordinated Debt Securities

8 unchanged sentences

The following table summarizes the key terms of our junior subordinated debt securities:

(dollars in thousands) 2001 Trust

Preferred Securities 2005 Trust

Preferred Securities 2006 Junior

Subordinated Debt 2008 Trust

Preferred Securities

(dollars in thousands) 2006 Junior Subordinated Debt

Junior Subordinated Debt $ 25,000

1 unchanged sentence

Stated Maturity Date 12/15/2036

Optional redemption date at par Any time after 7/25/2011 Any time after 5/23/2010 Any time after 9/15/2011 Any time after 3/15/2013

Regulatory Capital Tier 1 Tier 1 Tier 2 Tier 1

Interest Rate 6 Month LIBOR plus 375 bps

3 Month LIBOR plus 177 bps

3 month LIBOR plus 160 bps

3 month LIBOR plus 350 bps

Optional redemption date at par Any time after 9/15/2011

Regulatory Capital Tier 2

Interest Rate 3 month CME Term SOFR plus 186 bps

Interest Rate at December 31, 2023 7.25 %

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We have completed three private placements of trust preferred securities to financial institutions.

As a result, we own 100 percent of the common equity of STBA Capital Trust I, DNB Capital Trust I and DNB Capital Trust II, or the Trusts.

In 2023, we redeemed $ 5.0 million of junior subordinated debt securities, along with $ 0.2 million in common equity issued by DNB Capital Trust I and held by us.

As a result, DNB Capital Trust I has been paid off in its entirety, and we own 100 percent of the common equity of STBA Capital Trust I and DNB Capital Trust II, or the Trusts.

The Trusts were formed to issue mandatorily redeemable capital securities to third-party investors.

1 unchanged sentence

The third-party investors are considered the primary beneficiaries of the Trusts;

therefore, the Trusts qualify as variable interest entities, but are not consolidated into our financial statements.

therefore, the Trusts qualify as VIEs, but are not consolidated into our financial statements.

The Trusts pay dividends on the securities at the same rate as the interest paid by us on the junior subordinated debt held by the Trusts.

DNB Capital Trust I and DNB Capital Trust II were acquired with the DNB merger.

DNB Capital Trust II was acquired with the DNB merger.

COMMITMENTS AND CONTINGENCIES

In the normal course of business, we offer off-balance sheet credit arrangements to enable our customers to meet their financing objectives.

These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated financial statements.

Our exposure to credit loss, in the event the customer does not satisfy the terms of the agreement, equals the contractual amount of the obligation less the value of any collateral.

We apply the same credit policies in making commitments and standby letters of credit that are used for the underwriting of loans to customers.

Commitments generally have fixed expiration dates, annual renewals or other termination clauses and may require payment of a fee.

Because many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

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

(dollars in thousands) 2022 2021

(dollars in thousands) December 31, 2023 December 31, 2022

Commitments to extend credit $ 2,566,154 $ 2,713,586

2 unchanged sentences

Allowance for Credit Losses on Unfunded Loan Commitments

We maintain an allowance for credit losses on unfunded commercial and consumer lending commitments and letters of credit to provide for the risk of loss in these arrangements.

The activity in the unfunded loan commitments reserve is summarized as of the dates presented:

We maintain an allowance for credit losses on unfunded commercial and consumer lending commitments and letters of credit to provide for the risk of loss inherent in these arrangements.

The allowance is computed using a methodology similar to that used to determine the allowance for credit losses for loans, modified to take into account the probability of a draw-down on the commitment.

The provision for credit losses on unfunded loan commitments is included in the provision for credit losses on

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

our Consolidated Statements of Net Income.

The allowance for unfunded commitments is included in other liabilities in the Consolidated Balance Sheets.

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

Twelve months ended December 31,

(dollars in thousands) 2023 2022

2 unchanged sentences

Total $ 6,848 $ 8,196

Contractual Obligations

Contractual obligations represent future cash commitments and liabilities under agreements with third parties and exclude contingent contractual liabilities for which we cannot reasonably predict future payments.

We have various financial obligations, including contractual obligations and commitments that may require future cash payments.

The following table presents as of December 31, 2022 significant fixed and determinable contractual obligations to third parties by payment date:

Payments Due In

(dollars in thousands) 2023 2024-2025 2026-2027 Later Years Total

Deposits without a stated maturity (1)

$ 6,285,377 $ — $ — $ — $ 6,285,377

Certificates of deposit (1)

733,285 161,343 38,711 1,254 934,593

Short-term borrowings (1)

370,000 — — — 370,000

Long-term borrowings (1)

464 13,461 180 636 14,741

Junior subordinated debt securities (1)

— — — 54,453 54,453

Operating and finance leases 5,053 9,984 9,587 60,837 85,461

Purchase obligations 32,555 62,656 53,190 — 148,401

Total $ 7,426,734 $ 247,444 $ 101,668 $ 117,180 $ 7,893,026

(1) Excludes interest

Operating lease obligations represent lease arrangements as described in Note 10 Premises and Equipment, to the consolidated financial statements.

Purchase obligations primarily represent obligations under agreement with our third-party data processing servicer, low income housing obligations and communications charges.

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In the normal course of business, we are subject to various legal and administrative proceedings and claims.

11 unchanged sentences

$ 16,193 $ 16,829 $ 15,040

Debit and credit card Over a period time $ 1,709 $ 919 $ 738

Debit and credit card Over a period of time $ 1,288 $ 1,709 $ 919

At a point in time 16,960 17,299 17,033

14 unchanged sentences

Total Federal and State $ 34,023 $ 33,410 $ 25,325

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before income taxes.

We ordinarily generate an annual effective tax rate that is less than the statutory rate of 21 percent primarily due to benefits resulting from certain partnership investments, such as low income housing and historic rehabilitation projects, tax-exempt interest, excludable dividend income and tax-exempt income on BOLI.

The state tax provision is due to taxable business activities conducted at our loan production office in New York.

S&T BANCORP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before income taxes.

The following table presents a reconciliation of the statutory tax rate to the effective tax rate for the years ended December 31:

9 unchanged sentences

Deferred Tax Assets:

Allowance for loan losses $ 23,383 $ 22,083

Allowance for loan losses and other reserves $ 24,465 $ 23,421

Net unrealized holding losses on securities available-for-sale 17,452 21,843

3 unchanged sentences

Cumulative adjustment to funded status of pension 3,987 4,029

Low income housing partnerships 3,098 3,270

Low income housing partnerships and other investments 174 2,692

Other employee benefits 3,740 4,181

Capital loss carryforward 2,092 2

Other 1,202 549

4 unchanged sentences

Right-of-use lease assets ( 9,127 ) ( 9,385 )

Deferred loan income ( 6,113 ) ( 6,697 )

Deferred loan income, net ( 4,633 ) ( 4,533 )

Prepaid pension ( 3,360 ) ( 3,706 )

1 unchanged sentence

Depreciation on premises and equipment ( 1,182 ) ( 629 )

Net unrealized holding gains on securities available-for-sale — ( 2,004 )

Other ( 1,428 ) ( 240 )

16 unchanged sentences

Balance at End of Year $ 1,940 $ 1,648 $ 1,331

Amount That Would Impact the Effective Tax Rate if Recognized $ 1,148 $ 1,069 $ 1,027

Amount That Would Affect the Effective Tax Rate if Recognized $ 1,551 $ 1,148 $ 1,069

As of December 31, 2023, we had $ 1.9 million of unrecognized gross tax benefits.

Gross tax benefits do not reflect the federal tax effect associated with state income tax amounts.

The total amount of the net unrecognized tax benefits at December 31, 2023 that would have affected the effective tax rate, if recognized, was $ 1.6 million.

We classify interest and penalties as an element of tax expense.

2 unchanged sentences

however, tax audit examinations are possible.

As of December 31, 2022, all income tax returns filed for the tax years 2019 - 2021 remain subject to examination by the Internal Revenue Service and the New York State Department of Taxation and Finance.

As of December 31, 2023, all income tax returns filed for the tax years 2020 - 2022 remain subject to examination by the respective taxing authorities.

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table presents the changes in the components of Accumulated Other Comprehensive Income for the periods presented:

Available-for-Sale Debt Securities Interest Rate Swaps Employee Benefit Plans Total

The following table presents the changes in the components of Accumulated Other Comprehensive Income (Loss) for the periods presented:

(dollars in thousands) Available-for-Sale Debt Securities Interest Rate Swaps Employee Benefit Plans Total

Balance at December 31, 2020 $ 26,284 $ — $ ( 17,313 ) $ 8,971

21 unchanged sentences

Interest cost 3,812 3,160

Actuarial gain ( 23,020 ) ( 2,136 )

Actuarial gain/(loss) 2,248 ( 23,020 )

Benefits paid ( 6,239 ) ( 10,871 )

2 unchanged sentences

Fair value of plan assets at beginning of year $ 73,086 $ 107,525

Actual loss on plan assets ( 23,568 ) ( 596 )

Actual gain/(loss) on plan assets 4,727 ( 23,568 )

Benefits paid ( 6,239 ) ( 10,871 )

19 unchanged sentences

Other Changes in Plan Assets and Benefit Obligation Recognized in Other Comprehensive Income (Loss)

Net actuarial loss/(gain) $ 3,706 $ 1,137 $ ( 1,282 )

Net actuarial loss

$ 1,453 $ 3,706 $ 1,137

Recognized net actuarial loss ( 1,725 ) ( 1,229 ) ( 1,051 )

Settlement loss recognized

— $ ( 1,097 ) ( 1,629 )

Total Changes in Plan Assets and Benefit Obligation Before Tax Effects $ ( 272 ) $ 1,380 $ ( 1,543 )

Total Recognized in Net Benefit Cost and Other Comprehensive Income/(Loss) (Before Tax Effects) $ 3,708 $ 1,410 $ ( 1,751 )

Total Recognized in Net Benefit Cost and Other Comprehensive Income (Before Tax Effects)

$ 1,333 $ 3,708 $ 1,410

The following table summarizes the actuarial weighted average assumptions used in determining net periodic pension cost:

4 unchanged sentences

(1) Rate of compensation increase is not applicable due to the plan amendment to freeze benefit accruals under the qualified and nonqualified defined benefit pension plans effective March 31, 2016.

The accumulated benefit obligation for the Plan was $ 73.2 million at December 31, 2023 and $ 73.4 million at December 31, 2022.

S&T BANCORP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The accumulated benefit obligation for the Plan was $ 73.4 million at December 31, 2022 and $ 104.1 million at December 31, 2021.

We consider many factors when setting the assumed rate of return on Plan assets.

11 unchanged sentences

We make matching contributions to the Thrift Plan up to 3.5 percent of participants’ eligible compensation and may make additional profit-sharing contributions as provided by the Thrift Plan.

Expense related to these contributions amounted to $ 2.5 million in 2022 and $ 2.4 million in 2021 and 2020.

Expense related to these contributions amounted to $ 2.7 million in 2023, $ 2.5 million in 2022 and $ 2.4 million in 2021.

Fair Value Measurements

61 unchanged sentences

The awards are granted in accordance with performance levels set by the Compensation and Benefits Committee.

During 2022 and 2021, we granted 181,392 and 30,959 restricted stock awards of common stock under the 2021 Stock Plan.

During 2022, we did no t grant any shares under the 2014 stock plan.

In 2021 and 2020, we granted, 99,711 and 230,703 restricted shares of common stock under the 2014 Stock Plan.

Under the 2021 plan, we issued 162,677 restricted stock awards during 2023, 181,392 restricted stock awards in 2022 and 30,959 restricted stock awards in 2021.

During 2023 and 2022, no restricted stock awards were granted under the 2014 stock plan.

In 2021, we granted 99,711 restricted stock awards under the 2014 plan.

The following table provides information about restricted stock awards granted under the plans for the periods presented:

5 unchanged sentences

2014 Stock Plan

Directors One year — — 23,153

Other Awards Three years — — 99,711

1 unchanged sentence

Common stock is issued as vesting restrictions lapse, which varies according to the terms of the vesting schedules in the award agreements.

The vesting of time based awards is generally 1 to 3 years.

The vesting of performance-based awards is based on S&T's achievement of relative return on average equity and total shareholder return, over a three year performance period compared to a peer group as defined in the award agreements.

Restricted stock grants are forfeited if a grantee leaves S&T before the end of the vesting period except where accelerated vesting provisions are defined with the award agreements.

4 unchanged sentences

The following table provides information about restricted stock granted under the plans for the years ended December 31:

(dollars in thousands), except per share data

Stock Weighted Average

8 unchanged sentences

Non-vested at December 31, 2023 315,710 $ 27.75

The maximum number of shares that can be issued if performance is achieved at the maximum level is approximately 438,000 shares at December 31, 2023.

As of December 31, 2023, there was $ 4.4 million of total unrecognized compensation cost related to restricted stock that will be recognized as compensation expense over a weighted average period of 1.84 years.

2 unchanged sentences

The plan administrator and transfer agent may purchase shares directly from us from shares held in treasury or purchase shares in the open market to fulfill the Dividend Plan’s needs.

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PARENT COMPANY CONDENSED FINANCIAL INFORMATION

6 unchanged sentences

Bank subsidiary 1,268,441 1,184,327

Non-bank subsidiaries 4,662 5,684

Nonbank subsidiaries 4,658 4,662

Other assets 14,695 11,819

5 unchanged sentences

Total Liabilities and Shareholders’ Equity $ 1,308,527 $ 1,214,625

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS OF NET INCOME

6 unchanged sentences

Other expenses 4,764 4,112 3,947

Total Expense 5,657 5,347 6,160

Tax expense 7,136 5,657 5,347

Income before income tax and undistributed net income of subsidiaries 79,814 55,769 56,986

3 unchanged sentences

Bank subsidiary 63,337 79,566 57,025

Non-bank subsidiaries ( 1,023 ) ( 4,808 ) ( 5,901 )

Nonbank subsidiaries 152 ( 1,023 ) ( 4,808 )

Net Income $ 144,781 $ 135,520 $ 110,343

S&T BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS OF CASH FLOWS

27 unchanged sentences

We currently have $ 25.0 million in junior subordinated debt which is included in Tier 2 capital for S&T in accordance with current regulatory reporting requirements.

Quantitative measures established by regulation to ensure capital adequacy require us to maintain minimum amounts and ratios of Total, Tier 1 and Common Equity Tier 1 capital to risk-weighted assets and Tier 1 capital to average assets.

As of December 31, 2022 and 2021, we met all capital adequacy requirements to which we are subject.

S&T BANCORP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2023 and 2022, we met all capital adequacy requirements to which we are subject.

The following table summarizes risk-based capital amounts and ratios for S&T and S&T Bank:

9 unchanged sentences

S&T Bank 995,824 10.79 % 369,133 4.00 % 461,416 5.00 %

Common Equity Tier 1 (to Risk-Weighted Assets)

Common Equity Tier 1 ratio

S&T 1,010,828 13.37 % 340,159 4.50 % 491,341 6.50 %

10 unchanged sentences

S&T Bank 938,377 10.73 % 349,746 4.00 % 437,182 5.00 %

Common Equity Tier 1 (to Risk-Weighted Assets)

Common Equity Tier 1 ratio

S&T 938,708 12.81 % 329,701 4.50 % 476,235 6.50 %

12 unchanged sentences

This authorization extended the expiration date of the repurchase plan through March 31, 2024.

The plan permits S&T to repurchase shares up to the previously authorized $ 50 million in aggregate value of S&T's common stock through a combination of open market and privately negotiated repurchases.

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 common stock, legal and contractual requirements, applicable securities laws and S&T's financial performance.

The repurchase plan does not obligate us to repurchase any particular number of shares.

We expect to fund any repurchases from cash on hand and internally generated funds.

The plan permitted S&T to repurchase shares up to the previously authorized $ 50 million in aggregate value of S&T's common stock through a combination of open market and privately negotiated repurchases.

At December 31, 2023, there was $ 9.8 million in capacity remaining under the existing plan.

On January 24, 2024, our Board authorized a new $ 50 million share repurchase plan.

The new plan is set to expire May 30, 2025 and replaced the existing share repurchase plan effective immediately.

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.

The specific timing, price and quantity of repurchases will be at the discretion of S&T and will depend on a variety of factors, including general market conditions, the trading price of the common stock, legal and contractual requirements and S&T’s financial performance.

The repurchase plan does not obligate S&T to repurchase any particular number of shares.

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.

7 unchanged sentences

Total cost of repurchases (1)

$ 19,998 $ 7,637

Remaining plan capacity at the end of the period $ 9,808 $ 29,805

(1) Includes excise tax on repurchases, net of issuances for restricted stock awards.

S&T BANCORP, INC.

22 unchanged sentences

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the account or disclosures to which it relates.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

S&T BANCORP, INC.

10 unchanged sentences

Management’s identification and measurement of the segment specific risk and the reasonable and supportable forecast are highly judgmental and could have a significant effect on the ACL.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over the ACL process, which include, among others, management’s review and approval controls designed to assess the need for and level of the segment specific risk and the reasonable and supportable forecast, which are both part of the qualitative allowance and the reliability of the data utilized to support management’s assessment.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over the ACL process, which include, among others, management’s review and approval controls designed to assess the need for and level of the segment specific risk and the reasonable and supportable forecast, which are both part of the qualitative allowance, and the controls related to the reliability of the data utilized to support management’s assessment.

To test the segment specific risk and reasonable and supportable forecast, which are both part of the qualitative allowance, we evaluated the appropriateness of management’s methodology and assessed the basis for the adjustments and whether all relevant risks were reflected in the ACL.

Regarding the measurement of the segment specific risk and the reasonable and supportable forecast, which are both part of the qualitative allowance, we evaluated the completeness, accuracy and relevance of the underlying internal and external data utilized in management’s estimate and considered the existence of additional or contrary information.

Regarding the measurement of the segment specific risk and the reasonable and supportable forecast, we evaluated the completeness, accuracy and relevance of the underlying internal and external data utilized in management’s estimate and considered the existence of additional or contrary information.

We evaluated the overall ACL, inclusive of the qualitative adjustments, and whether the amount appropriately reflects a reasonable estimate of lifetime losses by comparing the overall ACL to historical losses and ACL reserves established by peer banking institutions.

36 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data