Company: STBA
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0000719220-25-000013
Chunk: 2

Company: S&T BANCORP INC
Filing Date: 2025-03-03
Form: 10-K
Item: Item 7A
Chunk 2
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 sensitive balance sheet will differ depending upon the change in market interest rates. For example, with an asset sensitive balance sheet in a declining interest rate environment, more assets than liabilities will decrease in rate. This situation could result in a decrease in net interest income and operating income. Conversely, with an asset sensitive balance sheet in a rising interest rate environment, more assets than liabilities will increase in rate. This situation could result in an increase in net interest income and operating income.

Our rate shock analyses show less improvement in the percentage change in pretax net interest income in the 1-12 month rates up scenarios when comparing December 31, 2024 to December 31, 2023 primarily because of changes to our funding mix. Our rate shock analyses show more improvement in the percentage change in pretax net interest income in the 13-24 month rates up scenarios when comparing December 31, 2024 to December 31, 2023 primarily because of upcoming maturities within our receive-fixed balance sheet swap portfolio. The percentage change in pretax net interest income in the rates down scenarios show a decline when comparing December 31, 2024 to December 31, 2023 primarily due to upcoming maturities within our receive-fixed balance sheet swap portfolio, enhanced loan prepayment assumptions, and changes in our bond portfolio mix. Our EVE analyses show a slight decline in the rates up scenarios when comparing December 31, 2024 to December 31, 2023 primarily because of changes to interest rates, changes to our bond portfolio mix, and changes to our funding mix. The percentage change in our EVE are smaller in the rates down scenarios when comparing December 31, 2024 to December 31, 2023. These changes are mainly the result of changes to interest rates.

In addition to rate shocks and EVE analyses, we perform a market risk stress test at least annually. The market risk stress test includes sensitivity analyses and simulations. Sensitivity analyses are performed to help us identify which model assumptions cause the greatest impact on pretax net interest income. Sensitivity analyses may include changing prepayment behavior of loans and securities with optionality and the impact of interest rate changes on non-maturity deposit products. Simulation analyses may include the potential impact of rate changes other than the policy guidelines, yield curve shape changes, significant balance mix changes and various growth scenarios.

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