S&T Bancorp, Inc. Announces Earnings

Jan 25, 2010, 09:00 ET from S&T Bancorp, Inc.

INDIANA, Pa., Jan. 25 /PRNewswire-FirstCall/ --- S&T Bancorp, Inc. (Nasdaq: STBA) today announced earnings for the fourth quarter and the year ended December 31, 2009.  Diluted earnings per share for the fourth quarter of 2009 were $0.28 per share compared to $0.57 per share in the fourth quarter of 2008.  Net income for the fourth quarter of 2009 decreased to $7.6 million as compared to $15.8 million in the comparable period one year ago.  For the year ended December 31, 2009, diluted earnings per share were $0.07 as compared to $2.28 in 2008, and net income decreased from $60.2 million in 2008 to $2.0 million in 2009.  

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Todd D. Brice, president and chief executive officer, commented, "The economic events of 2009 presented previously unknown performance challenges and credit quality stresses that significantly affected our earnings this year.  I couldn't be more proud of how the S&T organization responded to these challenges and strategically positioned the bank to take advantage of market opportunities that are sure to be presented in 2010."

Net interest income, on a fully taxable equivalent basis, decreased approximately $4.2 million or 10 percent for the quarter ending December 31, 2009, and increased $2.1 million or 1 percent for the 12 months of 2009, as compared to the same periods of 2008.  A higher level of nonaccrual loans in 2009 negatively affected net interest income by $3.1 million.  Net interest margin on a fully taxable equivalent basis was 3.94 percent, 3.94 percent and 3.89 percent for the third quarter, fourth quarter and full year of 2009, respectively.  For the same periods of 2008, the net margin on a fully taxable equivalent basis was 4.07 percent, 4.13 percent and 4.07 percent, respectively.

Earning assets have decreased $262 million over the past 12 months, driven by a $164 million decrease in loans and $98 million decrease in investment securities. The loan decrease is primarily due to reduced demand for commercial real estate financing and development in the market, and less credit demand and utilization by businesses responding to the recessionary economic environment.  A significant portion of maturing investment securities were not replaced in 2009 as the risk/reward for leveraging activities was significantly reduced in a volatile interest rate environment.

Deposits increased $76 million or 2 percent during the 12-month period ending December 31, 2009.  Particularly noteworthy and beneficial to performance was a $112 million or 19 percent increase in noninterest-bearing deposit accounts.  Brice commented, "Increasing core deposits, especially cash management relationships with our commercial customers, has been an ongoing strategic focus.  The combination of reduced loan demand, lower investment securities and increased deposits has contributed to a $420 million reduction in borrowings over the past 12 months.  We believe that strong liquidity and capital positions are important for these uncertain economic times, and to take advantage of market opportunities when the economy does turn positive."

Noninterest income, excluding investment security gains and losses, increased $4.6 million for the 12-month period ended December 31, 2009, as compared to 2008, primarily due to increases of $0.6 million for deposit fees, $1.0 million of debit/credit card activities, $3.0 million of mortgage banking revenues and $2.2 million of fair market valuations for the deferred compensation plan trust.  These noninterest revenue increases were partially offset by decreases in insurance, wealth management, and commercial loan swap activities of $0.3 million, $0.5 million and $1.4 million, respectively. The commercial loan swap results were negatively affected by a $0.6 million charge related to a troubled loan relationship in the third quarter 2009.  Also affecting year-over-year comparisons is a $0.4 million non-recurring gain in the first quarter 2008 from the VISA initial public offering.

Investment security losses for 2009 were $5.1 million, a $3.4 million increase from the $1.7 million of losses during 2008.  Included in the 2009 results is $5.3 million of other-than-temporary impairment charges on 17 bank equity holdings.  Five of these charges totaling $0.5 million occurred in the fourth quarter 2009.  The equity securities portfolio currently has a market value of $12.2 million at December 31, 2009, as compared to $14.9 million at December 31, 2008.  During the past two years, S&T has implemented a strategy to methodically sell holdings in this portfolio and only retain strategic positions in bank holding companies within our market area.

Noninterest expense increased $24.3 million or 29 percent for the full year 2009, as compared to the 2008 period.  Salaries and employee benefits increased $6.1 million, primarily due to the addition of 56 average full-time equivalent staff, mostly due to the IBT acquisition in the second quarter of 2008, a $3.0 million increase in pension expense, offset by a $3.9 million reduction in incentives and profit sharing.  Salaries and benefits expense was also negatively affected by the aforementioned fair market valuations for the deferred compensation plan trust.  Other significant increases affecting noninterest expense in 2009 included $8.0 million of FDIC insurance premium, $1.9 million of reserve for unfunded commitments, $1.6 million of affordable housing project amortization and impairments, $3.8 million in legal, consulting, and loan collection costs, primarily due to resolving troubled loans, and $1.3 million of amortization of acquisition intangibles.

The efficiency ratio, which measures noninterest expense to noninterest income, excluding net security gains and losses, plus net interest income on a fully taxable equivalent basis, was 55 percent and 45 percent for the twelve-month periods ended December 31, 2009 and 2008, respectively.

Nonperforming assets totaled $95.4 million or 2.29 percent of total assets at December 31, 2009, as compared to $91.2 million or 2.17 percent at September 30, 2009 and $43.3 million or 0.98 percent at December 31, 2008.  During the fourth quarter of 2009, two significant relationships were placed into nonperforming status:

  • A $9.7 million relationship for a resort in central Pennsylvania that has experienced a decline in bookings and cash flows.  The relationship has a partial United States Department of Agriculture guarantee, and no specific reserve has been established.
  • A $5.2 million loan for an industrial warehouse property located in the southeast United States.  Slowness in achieving target occupancy has created cash flow shortfalls that historically have been supplemented by the owners. Because continued owners' support is uncertain, a specific reserve of $1.5 million was established based upon a fourth quarter 2009 appraisal. The property is scheduled for auction during the first quarter of 2010.

The allowance for loan losses at December 31, 2009 was $59.6 million or 1.75 percent of total loans as compared to $42.7 million or 1.20 percent at December 31, 2008.  In the fourth quarter of 2009, S&T recorded a provision for loan losses of $10.4 million as compared to $5.6 million in the fourth quarter of 2008.  Included in the allowance is $17.0 million of specifically assigned reserves.  For the 12 months ended December 31, 2009, the provision for loan losses was $72.4 million as compared to $12.9 million for the 12 months ended December 31, 2008.  The provision for loan losses is based upon management's detailed quarterly analysis of the adequacy of the allowance for loan losses.

During the fourth quarter 2009, net charge-offs were $11.7 million.  The most significant charged off loans were:

  • $5.0 million for two commercial real estate projects in the New York and Connecticut region.  Projects include a mixed-use commercial property and a new condominium project.  Specific reserves of $4.2 million had been previously established for these projects.  The mixed-use commercial property was fully charged-off, and the condominium project has an outstanding balance of $3.9 million.
  • $2.5 million for a commercial and industrial loan secured by assignment of partnership interests.  Unresolved legal issues among the partners makes the value of the partnership interest uncertain and the loan has been fully charged-off.  A specific reserve of $2.1 million had been previously established.
  • $0.6 million for condominium construction loans in western Pennsylvania.  The remaining balance of $1.0 million is believed to be adequately collateralized based upon values established by previous unit sales.  A specific reserve of $0.6 million had been previously established.

On January 16, 2009, S&T received $108.7 million of funds from the U.S. Treasury's Capital Purchase Program through the issuance of preferred stock and warrants for common stock.  The purpose of the government program was to promote lending by healthy banks to individuals and businesses in order to stimulate the economy. Dividends and amortization associated with this preferred stock were $5.9 million for the twelve-month period ending December 31, 2009.  Brice commented, "Participation in the Capital Purchase Program was a difficult decision for S&T, since we were already designated as 'well capitalized' by regulatory guidelines. While the additional capital is comforting during these times, our intention is to obtain regulatory approval for returning these funds in the most shareholder-friendly manner possible once a positive direction in the economy becomes more clear."  S&T's capital ratios for leverage, Total, Tier I and tangible common capital to tangible assets at December 31, 2009 were 10.26 percent, 15.43 percent, 12.10 percent and 6.84 percent, respectively.

S&T Bancorp, Inc. declared a common stock quarterly dividend of $0.15 per share on January 18, 2010 which is payable on February 25, 2010 to shareholders of record as of February 1, 2010.  This dividend represents a 3.5 percent projected annual yield utilizing the December 31, 2009 closing market price of $17.01.

Headquartered in Indiana, PA, S&T Bancorp, Inc. operates 55 offices within Allegheny, Armstrong, Blair, Butler, Cambria, Clarion, Clearfield, Indiana, Jefferson, and Westmoreland counties.  With assets of $4.2 billion, S&T Bancorp, Inc. stock trades on the NASDAQ Global Select Market System under the symbol STBA.

This information may contain forward-looking statements regarding future financial performance which are not historical facts and which involve risks and uncertainties. Actual results and performance could differ materially from those anticipated by these forward-looking statements.  Factors that could cause such a difference include, but are not limited to, general economic conditions, change in interest rates, deposit flows, loan demand, asset quality, including real estate and other collateral values, and competition.  In addition to the results of operations presented in accordance with GAAP, S&T management uses, and this press release contains or references, certain non-GAAP financial measures, such as net interest income on a fully tax-equivalent basis. S&T believes 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 others in the financial services industry.  Although S&T believes that these non-GAAP financial measures enhance investors' understanding of S&T's business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP.  A reconciliation of these non-GAAP financial measures are presented in the attached financial data spreadsheet.  This information should be read in conjunction with the audited financial statements and analysis as presented in the Annual Report on Form 10-K for S&T Bancorp, Inc. and subsidiaries.


    S&T Bancorp, Inc.
    Consolidated Selected Financial Data
    December 31, 2009
    (Dollars in thousands, except per share data)

                                                  2008
                                                  ----
                       March          June           Sept.               Dec.
                       -----          ----           -----               ----
                         1Q            2Q              3Q                 4Q
                        ---           ---              ---               ---
    For the period:

    Interest
     Income           $50,458       $50,433         $57,416            $57,811
    Interest
     Expense           19,909        16,791          18,245             17,226
                       ------        ------          ------             ------
          Net Interest
           Income      30,549        33,642          39,171             40,585
          Taxable
           Equivalent
           Adjustment   1,148         1,227           1,385              1,388
                        -----         -----           -----              -----
          Net Interest
           Income
           (FTE)       31,697        34,869          40,556             41,973

    Provision
     For Loan
     Losses             1,279          (118)          6,156              5,561
                        -----          ----           -----              -----
          Net
           Interest
           Income
           After
           Provisions
           (FTE)       30,418        34,987          34,400             36,412
                       ------        ------          ------             ------

    Security
     Gains and
     Losses,
     Net                 611        (1,829)           (341)               (92)

    Service
     Charges
     and Fees          2,402         2,754           3,599              3,567
    Wealth
     Management        1,862         1,907           2,118              2,081
    Insurance          1,997         2,042           2,073              1,984
    Other              2,638         3,100           2,811              2,168
                       -----         -----           -----              -----

          Total
           Noninterest
           Income     8,899         9,803          10,601              9,800

    Salaries
     and
     Employee
     Benefits        10,060        10,514          11,725             10,409
    Occupancy
     and Equip.
     Expense,
     Net              2,660         2,636           2,761              2,838
    Data
     Processing
     Expense          1,071         1,668           1,365              1,384
    FDIC
     Expense             75            74             131                129
    Other             4,089         7,492           6,358              6,363
                      -----         -----           -----              -----

          Total
           Noninterest
           Expense     17,955        22,384          22,340             21,123
                       ------        ------          ------             ------

    Income
     (Loss)
     Before
     Taxes            21,973        20,577          22,320             24,997
    Taxable
     Equivalent
     Adjustment       1,148         1,227           1,385              1,388
    Applicable
     Income
     Taxes            5,969         5,489           5,249              7,809
                     -----         -----           -----              -----

          Net Income
           (Loss)    14,856        13,861          15,686             15,800
    Preferred
     Stock
     Dividends            -             -               -                  -
                       ---           ---             ---                ---
    Net Income
     (Loss)
     Available
     to Common
     Shareholders   $14,856      $13,861         $15,686            $15,800
                    =======      =======         =======            =======

    Per Common
     Share
     Data:

    Shares
     Outstanding
     at End of
     Period     24,615,136    27,408,633      27,588,510         27,632,928
    Average
     Shares
     Outstanding
     -Diluted   24,680,484    25,503,920      27,602,216         27,722,550
    Net Income
     (Loss) -
     Diluted         $0.60         $0.54           $0.57              $0.57
    Dividends
     Declared        $0.31         $0.31           $0.31              $0.31
    Common Book
     Value          $14.18        $16.00          $16.34             $16.24
    Tangible
     Common
     Book Value
     (5)            $12.04         $9.52           $9.97              $9.87
    Market
     Value          $32.17        $29.06          $36.83             $35.50



                                                    2009
                                                    ----
                          March         June       September         December
                           -----         ----       ---------         --------
                           1Q           2Q            3Q               4Q
                           ---          ---           ---              ---
    For the period:

    Interest
     Income                $50,424      $49,226       $48,310          $47,126
    Interest
     Expense                14,279       12,677        11,477           10,671
                            ------       ------        ------           ------
              Net
               Interest
               Income       36,145       36,549        36,833           36,455
              Taxable
               Equivalent
               Adjustment    1,334        1,311         1,284            1,274
                             -----        -----         -----            -----
              Net
               Interest
               Income
               (FTE)        37,479       37,860        38,117           37,729

    Provision
     For Loan
     Losses                 21,389       32,184         8,382           10,399
                            ------       ------         -----           ------
              Net
               Interest
               Income
                After
                 Provisions
                 (FTE)      16,090        5,676        29,735           27,330
                            ------        -----        ------           ------

    Security
     Gains and
     Losses,
     Net                   (1,246)      (1,296)       (2,059)            (487)

    Service
     Charges
     and Fees               3,056        3,232         3,305            3,349
    Wealth
     Management             1,743        1,912         1,920            1,924
    Insurance               1,862        1,985         2,020            1,884
    Other                   3,601        4,624         3,038            4,213
                            -----        -----         -----            -----

              Total
               Noninterest
               Income      10,262       11,753        10,283           11,370

    Salaries
     and
     Employee
     Benefits              11,655       12,698        12,284           12,211
    Occupancy
     and Equip.
     Expense,
     Net                    3,082        3,023         2,882            2,898
    Data
     Processing
     Expense                1,468        1,542         1,565            1,473
    FDIC
     Expense                1,941        3,447         1,526            1,475
    Other                   7,292       12,052         6,582            7,031
                            -----       ------         -----            -----

              Total
               Noninterest
               Expense     25,438       32,762        24,839           25,088
                           ------       ------        ------           ------

    Income
     (Loss)
     Before
     Taxes                   (332)     (16,629)       13,120           13,125
    Taxable
     Equivalent
     Adjustment             1,334        1,311         1,284            1,274
    Applicable
     Income
     Taxes                    176       (9,284)        2,578            2,660
                              ---       ------         -----            -----

               Net Income
                (Loss)     (1,842)      (8,656)        9,258            9,191
    Preferred
     Stock
     Dividends              1,283        1,541         1,543            1,545
                            -----        -----         -----            -----
    Net Income
     (Loss)
     Available
     to Common
     Shareholders        ($3,125)     ($10,197)       $7,715           $7,646
                          =======     ========        ======           ======

    Per Common
     Share
     Data:

    Shares
     Outstanding
     at End of
     Period           27,637,317    27,654,530    27,684,807       27,746,554
    Average
     Shares
     Outstanding
     -Diluted         27,637,292    27,650,937    27,716,134       27,701,846
    Net Income
     (Loss) -
     Diluted              ($0.11)       ($0.37)        $0.28            $0.28
    Dividends
     Declared              $0.31         $0.15         $0.15            $0.00
    Common Book
     Value                $16.01        $15.48        $15.77           $16.14
    Tangible
     Common
     Book Value
     (5)                   $9.68         $9.17         $9.44            $9.85
    Market
     Value                $21.21        $12.16        $12.96           $17.01



                                              Twelve months ended
                                              -------------------
                                           December          December
                                           --------          --------
                                              2009               2008
                                              ----               ----
    For the period:

    Interest Income                       $195,087             $216,118
    Interest Expense                        49,105               72,171
                                            ------               ------
              Net Interest Income          145,982              143,947
              Taxable Equivalent
               Adjustment                    5,202                5,147
                                             -----                -----
              Net Interest Income (FTE)    151,184              149,094

    Provision For Loan Losses               72,354               12,878
                                            ------               ------
              Net Interest Income
                After Provisions (FTE)      78,830              136,216
                                            ------              -------

    Security Gains and
     Losses, Net                            (5,088)              (1,651)

    Service Charges and Fees                12,942               12,322
    Wealth Management                        7,500                7,967
    Insurance                                7,751                8,096
    Other                                   15,475               10,718
                                            ------               ------

              Total Noninterest Income      43,668               39,103

    Salaries and Employee
     Benefits                               48,848               42,708
    Occupancy and Equip.
     Expense, Net                           11,886               10,895
    Data Processing Expense                  6,048                5,488
    FDIC Expense                             8,388                  409
    Other                                   32,956               24,301
                                            ------               ------

              Total Noninterest Expense    108,126               83,801
                                           -------               ------

    Income (Loss) Before
     Taxes                                   9,284               89,867
    Taxable Equivalent
     Adjustment                              5,202                5,147
    Applicable Income Taxes                 (3,869)              24,517
                                            ------               ------

               Net Income (Loss)             7,951               60,203
    Preferred  Stock
     Dividends                               5,913
                                             -----                  ---
    Net Income (Loss)
     Available to Common
     Shareholders                           $2,038              $60,203
                                            ======              =======

    Per Common Share Data:

    Shares Outstanding at End
     of Period                          27,746,554           27,632,928
    Average Shares
     Outstanding -Diluted               27,658,861           26,384,309
    Net Income (Loss) -
     Diluted                                 $0.07                $2.28
    Dividends Declared                       $0.61                $1.24
    Common Book Value                       $16.14               $16.24
    Tangible Common Book
     Value (5)                               $9.85                $9.87
    Market Value                            $17.01               $35.50


    S&T Bancorp, Inc.
    Consolidated Selected Financial Data
    December 31, 2009
    (Dollars in thousands)
                                               2008
                                               ----

                                March        June     September    December
    Asset Quality Data            1Q          2Q          3Q          4Q
    ------------------           ---         ---         ---         ---

    Nonaccrual Loans and
     Nonperforming Loans          $23,212     $15,959     $32,793     $42,466
    Assets Acquired through
     Foreclosure or
     Repossession                     630       1,884       1,111         851
    Nonperforming Assets           23,842      17,843      33,904      43,317
    Allowance for Loan
     Losses                        35,717      38,796      43,235      42,689
    Nonperforming Loans /
     Loans                           0.81%       0.46%       0.92%       1.19%
    Allowance for Loan
     Losses /Loans                   1.25%       1.12%       1.21%       1.20%
    Allowance for Loan
     Losses /Nonperforming
     Loans                            154%        243%        132%        101%
    Net Loan Charge-offs
     (Recoveries)                     (94)      2,224       1,717       6,107
    Net Loan Charge-offs
     (Recoveries)
     (annualized)/Average
     Loans                          -0.01%       0.29%       0.20%       0.68%

    Balance Sheet (Period-
     End)
    ----------------------

    Assets                     $3,463,806  $4,353,568  $4,461,085  $4,438,368
    Earning Assets              3,212,919   3,934,187   4,075,431   4,044,970
    Securities                    362,053     466,524     496,844     476,255
    Loans, Gross                2,850,866   3,467,663   3,578,587   3,568,716
    Total Deposits              2,605,187   3,114,560   3,131,882   3,228,416
        Non-Interest Bearing
         Deposits                 471,040     593,339     600,246     600,282
        NOW, Money Market &
         Savings                1,203,833   1,325,755   1,280,816   1,334,324
        CD's $100,000 and over    250,489     329,087     353,167     377,748
        Other Time Deposits       679,825     866,379     897,653     916,062
    Short-term Borrowings         211,391     472,045     552,505     421,894
    Long-term Debt                246,403     281,163     280,921     270,950
    Shareholders' Equity          349,073     438,499     450,717     448,694

    Balance Sheet (Daily
     Averages)
    --------------------

    Assets                     $3,407,665  $3,701,389  $4,346,481  $4,419,465
    Earning Assets              3,198,279   3,434,268   3,961,327   4,042,118
    Securities                    369,400     386,243     472,293     490,754
    Loans, Gross                2,828,762   3,048,024   3,488,843   3,551,179
    Deposits                    2,579,321   2,712,198   3,086,428   3,205,711
    Shareholders' Equity          345,939     377,160     447,941     458,600


                                                 2009
                                                 ----
                                March        June     September    December
    Asset Quality Data            1Q          2Q          3Q          4Q
    ------------------           ---         ---         ---         ---

    Nonaccrual Loans and
     Nonperforming Loans          $92,047     $71,433     $86,454     $90,807
    Assets Acquired through
     Foreclosure or
     Repossession                   1,452       2,262       4,745       4,607
    Nonperforming Assets           93,499      73,695      91,199      95,414
    Allowance for Loan
     Losses                        59,847      57,875      60,880      59,580
    Nonperforming Loans /
     Loans                           2.62%       2.06%       2.51%       2.67%
    Allowance for Loan
     Losses /Loans                   1.70%       1.67%       1.77%       1.75%
    Allowance for Loan
     Losses /Nonperforming
     Loans                             65%         81%         70%         66%
    Net Loan Charge-offs
     (Recoveries)                   4,231      34,156       5,376      11,699
    Net Loan Charge-offs
     (Recoveries)
     (annualized)/Average
     Loans                           0.49%       3.91%       0.62%       1.36%

    Balance Sheet (Period-
     End)
    ----------------------

    Assets                     $4,314,540  $4,243,876  $4,208,224  $4,170,475
    Earning Assets              3,948,774   3,868,782   3,836,327   3,782,809
    Securities                    429,919     409,011     389,980     378,402
    Loans, Gross                3,518,855   3,459,771   3,446,347   3,404,407
    Total Deposits              3,244,197   3,155,852   3,279,784   3,304,542
        Non-Interest Bearing
         Deposits                 625,325     629,967     673,863     712,121
        NOW, Money Market &
         Savings                1,264,407   1,170,573   1,212,073   1,302,051
        CD's $100,000 and over    422,841     403,694     472,736     411,901
        Other Time Deposits       931,624     951,618     921,112     878,469
    Short-term Borrowings         225,898     291,763     143,980      96,235
    Long-term Debt                232,282     207,028     186,772     176,513
    Shareholders' Equity          547,276     533,094     541,682     553,318

    Balance Sheet (Daily
     Averages)
    --------------------

    Assets                     $4,360,166  $4,304,406  $4,207,966  $4,167,295
    Earning Assets              3,980,258   3,935,389   3,836,806   3,798,477
    Securities                    445,150     427,285     397,106     385,966
    Loans, Gross                3,534,064   3,508,104   3,439,700   3,412,510
    Deposits                    3,251,587   3,220,761   3,251,265   3,271,199
    Shareholders' Equity          542,240     549,968     540,153     545,787






    S&T Bancorp, Inc.
    Consolidated Selected Financial Data
    December 31, 2009
    (Dollars in thousands, except per share data)

                                                      2008
                                                      ----
                                        March      June    September  December
                                           1Q        2Q         3Q        4Q
                                           --        --         --        --
    Profitability Ratios (annualized)
    ---------------------------------
    Common Return on Average Assets       1.75%     1.51%      1.44%     1.42%
    Common Return on Average Tangible
     Common Assets (6)                    1.78%     1.54%      1.50%     1.48%
    Common Return on Average
     Shareholders' Equity                17.27%    14.78%     13.93%    13.71%
    Common Return on Average Tangible
     Common Equity (7)                   20.37%    19.17%     22.95%    22.32%
    Yield on Earning Assets (FTE)         6.49%     6.05%      5.92%     5.83%
    Cost of Interest Bearing Funds        3.10%     2.43%      2.23%     2.06%
    Net Interest Margin (FTE)(4)          3.99%     4.08%      4.07%     4.13%
    Efficiency Ratio (FTE)(1)            44.23%    50.11%     43.67%    40.80%

    Capitalization Ratios
    ---------------------
    Dividends Paid to Net Income         51.23%    55.05%     54.17%    54.13%
    Common Equity to Assets (8)          10.08%    10.07%     10.10%    10.11%
    Leverage Ratio (2)                    9.28%     8.05%      7.15%     7.30%
    Risk Based Capital - Tier I (3)      10.29%     7.99%      8.23%     8.65%
    Risk Based Capital - Tier II (3)     12.46%    11.12%     11.40%    11.82%
    Tangible Common Equity/Tangible
     Assets (8)                           8.69%     6.25%      6.42%     6.41%

    Definitions and reconciliation of GAAP to non-GAAP financial measures:
    (1)  Recurring non-interest expense divided by recurring non-interest
         income plus net interest income, on a fully taxable equivalent basis.
    (2)  Equity less goodwill to total assets and allowance for loan losses.
    (3)  Effective October 1, 1998, banking regulators require financial
         institutions to include 45% of the pretax net unrealized holding
         gains on available for sale equity securities in Tier 2 capital.
    (4)  Net interest income, on a fully taxable equivalent basis, annualized
         divided by quarter-to-date average earning assets.
    (5)  Tangible Common Book Value

         Common book value (GAAP basis) $14.18    $16.00     $16.34    $16.24
         Effect of excluding intangible
          assets                         (2.14)    (6.48)     (6.37)    (6.37)
                                          -----     -----      -----     ----
         Tangible common book value     $12.04     $9.52      $9.97     $9.87

    (6)  Common Return on Average
          Tangible Common Assets
         Common return on average assets
          (GAAP basis)                   1.75%     1.51%      1.44%     1.42%
         Effect of excluding intangible
          assets                         0.03%     0.03%      0.06%     0.06%
                                         ----      ----       ----      ----
         Common return on average tangible
          common assets                  1.78%     1.54%      1.50%     1.48%

    (7)  Common Return on Average Tangible
          Common Equity
         Common return on average equity
          (GAAP basis)                  17.27%    14.78%     13.93%    13.71%
         Effect of excluding intangible
          assets                         3.10%     4.39%      9.02%     8.61%
         Effect of excluding preferred
          stock                          0.00%     0.00%      0.00%     0.00%
                                         ----      ----       ----      ----
         Common return on average tangible
          common equity                 20.37%    19.17%     22.95%    22.32%

    (8)  Tangible Common Equity / Tangible
          Assets
         Common equity / Assets (GAAP
          basis)                        10.08%    10.07%     10.10%    10.11%
         Effect of excluding intangible
          assets                        -1.39%    -3.82%     -3.68%    -3.70%
                                        -----     -----      -----     -----
         Tangible common equity / Tangible
          assets                         8.69%     6.25%      6.42%     6.41%


                                                       2009
                                                       ----
                                        March      June    September  December
                                           1Q        2Q         3Q        4Q
                                           --        --         --        --
    Profitability Ratios (annualized)
    ---------------------------------
    Common Return on Average Assets     -0.29%    -0.95%      0.73%     0.73%
    Common Return on Average Tangible
     Common Assets (6)                  -0.30%    -0.99%      0.76%     0.76%
    Common Return on Average
     Shareholders' Equity               -2.34%    -7.44%      5.67%     5.56%
    Common Return on Average Tangible
     Common Equity (7)                  -4.53%   -15.13%     11.75%    11.42%
    Yield on Earning Assets (FTE)        5.27%     5.16%      5.14%     5.06%
    Cost of Interest Bearing Funds       1.82%     1.65%      1.53%     1.46%
    Net Interest Margin (FTE)(4)         3.82%     3.86%      3.94%     3.94%
    Efficiency Ratio (FTE)(1)           53.28%    66.04%     51.32%    51.10%

    Capitalization Ratios
    ---------------------
    Dividends Paid to Net Income      -273.87%   -84.02%     53.77%    54.31%
    Common Equity to Assets (8)         10.26%    10.09%     10.37%    10.74%
    Leverage Ratio (2)                   9.73%     9.56%      9.92%    10.26%
    Risk Based Capital - Tier I (3)     11.58%    11.33%     11.57%    12.10%
    Risk Based Capital - Tier II (3)    14.82%    14.60%     14.86%    15.43%
    Tangible Common Equity/Tangible
     Assets (8)                          6.46%     6.23%      6.48%     6.84%

    Definitions and reconciliation of GAAP to non-GAAP financial measures:
    (1)  Recurring non-interest expense divided by recurring non-interest
         income plus net interest income, on a fully taxable equivalent basis.
    (2)  Equity less goodwill to total assets and allowance for loan losses.
    (3)  Effective October 1, 1998, banking regulators require financial
         institutions to include 45% of the pretax net unrealized holding
         gains on available for sale equity securities in Tier 2 capital.
    (4)  Net interest income, on a fully taxable equivalent basis, annualized
         divided by quarter-to-date average earning assets.
    (5)  Tangible Common Book Value

         Common book value
          (GAAP basis)                 $16.01    $15.48     $15.77    $16.14
         Effect of excluding intangible
          assets                        (6.33)    (6.31)     (6.33)    (6.29)
                                        -----     -----      -----     -----
         Tangible common book value     $9.68     $9.17      $9.44     $9.85

    (6)  Common Return on Average
          Tangible Common Assets
         Common return on average assets
          (GAAP basis)                 -0.29%    -0.95%      0.73%     0.73%
         Effect of excluding intangible
          assets                       -0.01%    -0.04%      0.03%     0.03%
                                        -----     -----       ----      ----
         Common return on average tangible
          common assets                -0.30%    -0.99%      0.76%     0.76%

    (7)  Common Return on Average Tangible
          Common Equity
         Common return on average equity
          (GAAP basis)                 -2.34%    -7.44%      5.67%     5.56%
         Effect of excluding intangible
          assets                       -1.08%    -4.23%      3.38%     3.24%
         Effect of excluding preferred
          stock                        -1.11%    -3.46%      2.70%     2.62%
                                        -----     -----       ----      ----
         Common return on average tangible
          common equity                -4.53%   -15.13%     11.75%    11.42%

    (8)  Tangible Common Equity / Tangible Assets
         Common equity / Assets (GAAP
          basis)                       10.26%    10.09%     10.37%    10.74%
         Effect of excluding intangible
          assets                       -3.80%    -3.86%     -3.89%    -3.90%
                                        -----     -----      -----     -----
         Tangible common equity / Tangible
          assets                        6.46%     6.23%      6.48%     6.84%



                                           Year-to-date
                                           ------------
                                        December  December
                                            2009      2008
                                            ----      ----
    Profitability Ratios (annualized)
    ---------------------------------
    Common Return on Average Assets        0.05%     1.52%
    Common Return on Average Tangible
     Common Assets (6)                     0.05%     1.57%
    Common Return on Average
     Shareholders' Equity                  0.37%    14.77%
    Common Return on Average Tangible
     Common Equity (7)                     0.76%    21.27%
    Yield on Earning Assets (FTE)          5.16%     6.05%
    Cost of Interest Bearing Funds         1.62%     2.41%
    Net Interest Margin (FTE)(4)           3.89%     4.07%
    Efficiency Ratio (FTE)(1)             55.49%    44.53%
                                          -----


    Definitions and reconciliation of GAAP to non-GAAP financial measures:
    (1)  Recurring non-interest expense divided by recurring non-interest
         income plus net interest income, on a fully taxable equivalent basis.
    (2)  Equity less goodwill to total assets and allowance for loan losses.
    (3)  Effective October 1, 1998, banking regulators require financial
         institutions to include 45% of the pretax net unrealized holding
         gains on available for sale equity securities in Tier 2 capital.
    (4)  Net interest income, on a fully taxable equivalent basis, annualized
         divided by quarter-to-date average earning assets.
    (5)  Tangible Common Book Value


    Common book value
          (GAAP basis)                        $16.14    $16.24
         Effect of excluding intangible
          assets                               (6.29)    (6.37)
                                               -----     -----
         Tangible common book value            $9.85     $9.87

    (6)  Common Return on Average
          Tangible Common Assets
         Common return on average assets
          (GAAP basis)                         0.05%     1.52%
         Effect of excluding intangible
          assets                                  -      0.05%
                                               ----      ----
         Common return on average
          tangible
          common assets                        0.05%     1.57%

    (7)  Common Return on Average
          Tangible Common Equity
         Common return on average equity
          (GAAP basis)                         0.37%    14.77%
         Effect of excluding intangible
          assets                               0.21%     6.50%
         Effect of excluding preferred
          stock                                0.18%     0.00%
                                               ----      ----
         Common return on average tangible
          common equity                        0.76%    21.27%

    (8)  Tangible Common Equity / Tangible Assets
         Common equity / Assets (GAAP basis)
         Effect of excluding intangible assets
         Tangible common equity / Tangible assets

SOURCE S&T Bancorp, Inc.



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