Company: STBA
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000719220-25-000053
Chunk: 28

Company: S&T BANCORP INC
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 28
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 amount of $3.9 million in the six months ended June 30, 2025 compared to none in the same periods in 2024. Additionally, we had 11 commitments to lend an additional $0.1 million to borrowers experiencing financial difficulty that had a modification during the twelve months ended June 30, 2025 and three commitments to lend an additional $1.2 million to borrowers experiencing financial difficulty that had a modification during the same period in 2024.The effect of modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses, or 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.

Allowance for Credit LossesWe maintain an ACL, at a level determined to be adequate to absorb estimated expected credit losses within the loan portfolio over the contractual life of an instrument that considers our historical loss experience, current conditions and forecasts of future economic conditions as of the balance sheet date. We develop and document a systematic ACL methodology based on the following portfolio segments: 1) CRE, 2) C&I, 3) Commercial Construction, 4) Business Banking, 5) Consumer Real Estate and 6) Other Consumer. The following are key risks within each portfolio segment:CRE—Loans secured by commercial purpose real estate, including both owner-occupied properties and investment properties for various purposes such as hotels, retail, multifamily and health care. Operations of the individual projects and global cash flows of the debtors are the primary sources of repayment for these loans. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and the business prospects of the lessee, if the project is not owner-occupied.C&I—Loans made to operating companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. Cash flow from the operations of the company is the primary source of repayment for these loans. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the industry of the company. Collateral for these types of loans often does not have sufficient value in a distressed