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"I'm incredibly proud of our results for the fourth quarter and all that we achieved in 2024," said Chris McComish, chief executive officer. "Our performance was driven through meaningful progress on our key business drivers, including consistent growth in our customer deposit franchise and ongoing improvement in asset quality. We achieved excellent return and profitability metrics and have record levels of capital. We remain steadfast in our commitment to living our people-forward purpose every day as evidenced by our industry leading customer and employee loyalty. As we enter 2025, we do so with great momentum and optimism about S&T's growth prospects."

Fourth Quarter of 2024 Results (three months ended December 31, 2024)

Net Interest Income

Net interest income was $83.3 million for the fourth quarter of 2024 compared to $84.5 million for the third quarter of 2024. The decrease of $1.2 million in net interest income was driven by lower interest income on loans due to a decline in interest rates which was partially offset by lower funding costs. NIM (FTE) (non-GAAP) was 3.77% compared to 3.82% in the prior quarter. The yield on total average earning assets decreased 15 basis points to 5.78% compared to 5.93% in the third quarter of 2024. Total average interest-bearing liability costs decreased 14 basis points to 3.03% compared to 3.17% in the third quarter of 2024.

Asset Quality

Asset quality continued to improve in the fourth quarter of 2024. The provision for credit losses was negative $2.5 million for the fourth quarter of 2024 compared to negative $0.5 million in the third quarter of 2024. The decrease in the provision for credit losses primarily related to a lower allowance for credit losses driven by decreases in criticized and classified loans and net recoveries compared to the prior quarter. Net loan recoveries were $0.1 million for the fourth quarter of 2024 compared to net loan charge-offs of $2.1 million in the third quarter of 2024. The allowance for credit losses was $101.5 million, or 1.31% of total portfolio loans, at December 31, 2024 compared to $104.3 million, or 1.36%, at September 30, 2024. Nonperforming assets to total loans plus OREO was low at 0.36% at December 31, 2024 compared to 0.41% at September 30, 2024.

Noninterest Income and Expense

Noninterest income decreased $0.8 million to $11.1 million in the fourth quarter of 2024 compared to $11.9 million in the third quarter of 2024. The decrease was primarily due to a $2.6 million realized loss related to the repositioning of securities into longer duration, higher-yielding securities in the fourth quarter of 2024 compared to a similar $2.2 million realized loss on the sale of securities in the third quarter of 2024. Noninterest expense was $55.4 million in both the fourth and third quarters of 2024. Expenses were relatively consistent quarter over quarter with salaries and benefits lower by $0.5 million due to a decrease in incentives.

Financial Condition

Total assets were $9.7 billion at December 31, 2024 compared to $9.6 billion at September 30, 2024. Total portfolio loans increased $53.9 million, or 2.79% annualized, compared to September 30, 2024. The consumer loan portfolio increased $35.2 million with growth in residential mortgages of $37.0 million compared to September 30, 2024. The commercial loan portfolio increased $18.7 million with growth in commercial real estate of $60.1 million partially offset by a decrease in commercial construction of $33.6 million and a decrease in commercial and industrial of $7.8 million compared to September 30, 2024. Total deposits increased $128.3 million compared to September 30, 2024. Certificates of Deposits (CDs) increased $96.6 million which included $50.0 million of additional brokered CDs compared to September 30, 2024. Demand deposits increased $27.7 million, interest-bearing demand deposits increased $39.5 million and money market deposits decreased $33.8 million compared to September 30, 2024. Total borrowings decreased $88.1 million to $250.3 million compared to $338.4 million at September 30, 2024 primarily related to deposit growth.

S&T continues to maintain a strong regulatory capital position with all capital ratios above the well-capitalized thresholds of federal bank regulatory agencies.

Full Year 2024 Results (twelve months ended December 31, 2024)

Net income was $131.3 million for 2024 compared to net income of $144.8 million for 2023. EPS was $3.41 compared to $3.74 in 2023. S&T had record net income and EPS in 2023 related to the impact of rising interest rates on net interest income.

Net interest income decreased $14.6 million, or 4.18%, to $334.8 million compared to $349.4 million in 2023. NIM (FTE) (non-GAAP) decreased 31 basis points to 3.82% compared to 4.13% for 2023. The decreases in both net interest income and NIM (FTE) (non-GAAP) were primarily due to the impact of higher interest rates on funding costs in 2024. While higher interest rates positively impacted interest income, the increase in interest income was more than offset by higher interest expense. The yield on total average earning assets increased 23 basis points to 5.87% compared to 5.64% in 2023. Total average interest-bearing liability costs increased 75 basis points to 3.09% compared to 2.34% in 2023 due in part to a shift to higher-costing money market and certificates of deposit.

Noninterest income decreased $8.5 million to $49.1 million compared to $57.6 million in the prior year. The decrease was mainly related to $7.9 million of realized losses from the repositioning of securities into longer duration, higher-yielding securities. Other noninterest income decreased $0.8 million primarily related to a gain of $3.9 million on the sale of OREO in 2023 compared to a $3.5 million gain from the exchange offer for Visa Class B-1 common stock in 2024.

Noninterest expense increased $8.6 million, or 4.09%, to $218.9 million compared to $210.3 million in 2023. Salaries and employee benefits increased $10.5 million primarily due to annual merit increases, the acquisition of talent and higher incentives and medical costs. Offsetting the increase in salaries and benefits were decreases in professional services and legal of $2.4 million and other noninterest expense of $3.2 million compared to 2023. The decrease in professional services and legal was primarily due to higher consulting expense in 2023 compared to 2024. The decrease in other noninterest expense was due to a decrease of $2.1 million related to the adoption of new accounting guidance for tax credit equity investments where the amortization of these investments is now included in tax expense versus other expense in 2023 and a $2.1 million decrease in loan collection and appraisal expense compared to 2023.

Asset quality improved substantially in 2024 driving a lower allowance for credit losses and minimal provision for credit losses. The provision for credit losses was only $0.1 million compared to $17.9 million for 2023 primarily due to lower criticized and classified loans and lower net charge-offs. Net loan charge-offs were $8.3 million for 2024 compared to $13.2 million for 2023. The allowance for credit losses was 1.31% of total portfolio loans at December 31, 2024 compared to 1.41% at December 31, 2023. Nonperforming assets remained low at $27.9 million compared to $23.0 million in the prior year resulting in a nonperforming assets to total loans plus OREO ratio of 0.36% compared to 0.30% at December 31, 2023.

Dividend

S&T's Board of Directors approved a $0.34 per share cash dividend on January 29, 2025. This is an increase of $0.01, or 3.03%, compared to a $0.33 per share cash dividend declared in the same period in the prior year. The dividend is payable February 27, 2025 to shareholders of record on February 13, 2025. Dividends declared in 2024 increased $0.04, or 3.10%, to $1.33 compared to $1.29 for 2023.

Conference Call

S&T will host its fourth quarter 2024 earnings conference call live over the Internet at 1:00 p.m. ET on Thursday, January 30, 2025. To access the webcast, go to S&T Bancorp, Inc.'s Investor Relations webpage www.stbancorp.com. After the live presentation, the webcast will be archived at www.stbancorp.com for 12 months.

About S&T Bancorp, Inc. and S&T Bank

S&T Bancorp, Inc. is a $9.7 billion bank holding company that is headquartered in Indiana, Pennsylvania and trades on the NASDAQ Global Select Market under the symbol STBA. Its principal subsidiary, S&T Bank, was established in 1902 and operates in Pennsylvania and Ohio. For more information, visit stbancorp.com or stbank.com. Follow us on Facebook, Instagram and LinkedIn.

Forward-Looking Statements

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

Many of these factors, as well as other factors, are described in our Annual Report on Form 10-K for the year ended December 31, 2023, including Part I, Item 1A-"Risk Factors" and any of our subsequent filings with the SEC. Forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. We caution you not to unduly rely on forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.

Non-GAAP Financial Measures

In addition to traditional measures presented in accordance with GAAP, our management uses, and this information contains or references, certain non-GAAP financial measures, such as tangible book value, return on average tangible shareholder's equity, pre-provision net revenue to average assets, efficiency ratio, tangible common equity to tangible assets and net interest margin on an FTE basis. We believe these non-GAAP financial measures provide information useful to investors in understanding our underlying operational performance and our business and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Although we believe that these non-GAAP financial measures enhance investors' understanding of our business and performance, these non-GAAP financial measures should not be considered alternatives to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with non-GAAP measures which may be presented by other companies. See Definitions and Reconciliation of GAAP to Non-GAAP Financial Measures for more information related to these financial measures.