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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the fiscal year ended December 31, 1999
Commission file number 0-12508
S&T BANCORP, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1434426
(State or other jurisdiction
of incorporation of organization) (I.R.S. Employer Identification No.)
800 Philadelphia Street, Indiana, PA 15701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (724) 349-1800
Securities registered pursuant to Section 12(b) of the Act None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $2.50 per share
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by reference
in Part III of this form 10-K or any amendment to this form 10-K. { }
The aggregate market value of the voting stock held by nonaffiliates of
the registrant as of February 07, 2000:
Common Stock, $2.50 par value - $493,358,520
The number of shares outstanding of the issuer's classes of common
stock as of February 07, 2000:
Common Stock, $2.50 par value - 27,000,042 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual shareholders report for the year ended December
31, 1999 are incorporated by reference into Part II. Portions of the
proxy statement for the annual shareholders meeting to be held April
17, 2000 are incorporated by reference into Part III.
PAGE 1
PART I
Item 1. BUSINESS
General
S&T Bancorp, Inc. ("S&T") was incorporated on March 17, 1983
under the laws of the Commonwealth of Pennsylvania as a bank
holding company and has two wholly owned subsidiaries, S&T Bank
and S&T Investment Company, Inc. S&T is registered as a bank
holding company with the Board of Governors of the Federal Reserve
System under the Bank Holding Company Act, as amended.
As of December 31, 1999, S&T had $2.2 billion in total assets, $240
million in total shareholders' equity and $1.4 billion in total deposits.
Deposits are insured by the Federal Deposit Insurance Corporation
("FDIC") to the full extent provided by law.
Total trust assets were approximately $645 million at December 31,
1999. Trust services include services as executor and trustee under
wills and deeds, and as guardian and custodian of employee benefit
trusts. S&T Bank is a full service bank with its Main Office at 800
Philadelphia Street, Indiana, Pennsylvania, providing service to its
customers through a branch network of 38 offices located in
Armstrong, Allegheny, Indiana, Jefferson, Clarion, Clearfield and
Westmoreland counties.
S&T Bank's services include accepting time and demand deposit
accounts, making secured and unsecured commercial and consumer
loans, providing letters of credit, and offering discount brokerage
services, personal financial planning and credit card services. S&T
Bank has a relatively stable deposit base and no material amount of
deposits is obtained from a single depositor or group of depositors
(including federal, state and local governments). S&T Bank does not
experience significant fluctuations in deposits.
Employees
As of December 31, 1999, S&T Bank had a total of 662 full-time
equivalent employees. S&T provides a variety of employment benefits
and considers its relationship with its employees to be good.
Supervision and Regulation
General
S&T and S&T Bank are each extensively regulated under both
federal and state law. The following information describes certain
aspects of that regulation applicable to S&T and S&T Bank and does
not purport to be complete. To the extent statutory or regulatory
provisions or proposals are described, the description is qualified in its
entirety by reference to the particular statutory or regulatory provisions
or proposals.
PAGE 2
Item 1. BUSINESS -- Continued
S&T
As a bank holding company, S&T is subject to regulation under the
Bank Holding Company Act of 1956 ("BHCA") and the examination
and reporting requirements of the Federal Reserve Board. Under the
BHCA a bank holding company may not directly or indirectly acquire
ownership or control of more than five percent of the voting shares or
substantially all of the assets of any additional bank, or merge or
consolidate with another bank holding company, without the prior
approval of the Federal Reserve Board.
The BHCA also generally limits the activities of a bank holding
company to that of banking, managing on controlling banks, or any
other activity which is determined to be so closely related to banking or
to managing or controlling banks as to be a proper incident thereto.
S&T is presently engaged in two nonbanking activities: S&T
Investment Company, Inc., which is an investment holding company,
and Commonwealth Trust Credit Life Insurance Company
("CTCLIC"). S&T Investment Company, Inc. was formed in June
1988 to hold and manage a group of investments previously owned by
S&T Bank and to give S&T additional latitude to purchase other
investments. CTCLIC, which is a joint venture with another financial
institution, acts as a reinsurer of credit life, accident and health
insurance policies sold by S&T Bank and the other institution.
There are a number of obligations and restrictions imposed on bank
holding companies and their depository institution subsidiaries by
federal law and regulatory policy that are designed to reduce potential
loss exposure to the depositors of such depository institutions and to
the FDIC insurance funds in the event the depository institution
becomes in danger of default or in default. For example, under a policy
of the Federal Reserve Board with respect to bank holding company
operations, a bank holding company is required to serve as a source of
financial strength to its subsidiary depository institutions and to commit
resources to support such institutions in circumstances where it might
not do so otherwise.
S&T Bank
As a state-chartered commercial bank, the deposits of which are
insured by the Bank Insurance Fund ("BIF") of the FDIC, S&T Bank is
subject to the supervision and regulation of the Pennsylvania
Department of Banking ("PADB") and the FDIC. S&T Bank also is
subject to various requirements and restrictions under federal and state
law, including requirements to maintain reserves against deposits,
restrictions on the types, amount and terms and conditions of loans that
may be granted, and limits on the type of other activities in which S&T
Bank may engage and the investments it may make. Various consumer
and compliance laws and regulations also affect S&T Bank's
operations.
PAGE 3
Item 1. BUSINESS -- Continued
S&T Bank also is subject to federal laws that limit the amount of
transactions between itself and S&T or S&T's nonbank subsidiaries.
Under these provisions, transactions by a bank subsidiary to its parent
company or any nonbank affiliate generally are limited to 10% of the
bank subsidiary's capital and surplus, or 20% in the aggregate. Further,
loans and extensions of credit generally are required to be secured by
eligible collateral in specified amounts. A bank, such as S&T Bank, is
prohibited from purchasing any "low quality" asset from an affiliate.
S&T Bank is in compliance with these provisions.
As an FDIC-insured bank, S&T Bank also is subject to FDIC insurance
assessments. Currently, the amount of FDIC assessments paid by individual
insured depository institutions ranges from zero to $.27 per $100 of insured
deposits, based on their relative risk to the deposit insurance funds, as
measured by the institutions' regulatory capital position and other
supervisory factors. S&T Bank currently pays the lowest premium rate
based upon this risk assessment. However, because legislation enacted
in 1996 requires that all insured deposits pay a pro rata portion of the
interest due on the obligations issued by the Financing Corporation, the
FDIC is assessing BIF-insured deposits an additional $.013 per $100 of
deposits to cover those obligations.
Capital
The Federal Reserve Board and the FDIC have issued substantially
similar risk-based and leverage capital guidelines applicable to banking
organizations they supervise. Under the risk-based capital
requirements, S&T and S&T Bank each generally is required to
maintain a minimum ratio of total capital to risk-weighted assets
(including certain off-balance sheet activities, such as standby letters of
credit), of eight percent. At least half of the total capital is to be
composed of common equity, retained earnings and qualifying
perpetual preferred stock, less certain intangibles ("Tier 1 capital").
The remainder may consist of certain subordinated debt, certain hybrid
capital instruments and other qualifying preferred stock, and a limited
amount of the loan loss allowance ("Tier 2 capital") and, together with
Tier 1 capital, ("Total capital"). At December 31, 1999, S&T's Tier 1
and Total capital ratios were 12.41 percent and 14.59 percent,
respectively, and the ratios of Tier 1 capital and Total capital to total
risk-adjusted assets for S&T Bank were 9.03 percent and 10.29 percent,
respectively.
In addition, each of the federal bank regulatory agencies has
established minimum leverage capital ratio requirements for banking
organizations. These requirements provide for a minimum leverage
ratio of Tier 1 capital to adjusted average quarterly assets equal to three
percent for bank and bank holding companies that meet certain
specified criteria, including that they have the highest regulatory rating
and are not experiencing significant growth or expansion. All other
banks and bank holding companies will generally be required to
maintain a leverage ratio of at least 100 to 200 basis points above the
stated minimum. S&T's leverage ratio at December 31, 1999 was 9.90
percent, and S&T Bank's leverage ratio was 7.08 percent.
PAGE 4
Item 1. BUSINESS -- Continued
Both the Federal Reserve Board's and the FDIC's risk-based capital
standards explicitly identify concentrations of credit risk and the risk
arising from non-traditional activities, as well as an institution's ability
to manage these risks, as important factors to be taken into account by
the agency in assessing an institution's overall capital adequacy. The
capital guidelines also provide that an institution's exposure to a decline
in the economic value of its capital due to changes in interest rates be
considered by the agency as a factor in evaluating a bank's capital
adequacy. The Federal Reserve Board also has recently
issued additional capital guidelines for certain bank holding companies
that engage in trading activities. S&T does not believe that
consideration of these additional factors will affect the regulators'
assessment of S&T's or S&T Bank's capital position.
Payment of Dividends
S&T is a legal entity separate and distinct from its banking and other
subsidiaries. A major portion of the revenues of S&T result from
amounts paid as dividends to S&T by S&T Bank. S&T Bank, in turn,
is subject to state laws and regulations that limit the amount of
dividends it can pay to S&T. In addition, both S&T and S&T Bank are
subject to various general regulatory policies relating to the payment of
dividends, including requirements to maintain adequate capital above
regulatory minimums. The Federal Reserve Board has indicated that
banking organizations should generally pay dividends only if (1) the
organization's net income available to common shareholders over the
past year has been sufficient to fund fully the dividends and (2) the
prospective rate of earnings retention appears consistent with the
organization's capital needs, asset quality and overall financial
condition. S&T does not expect that any of these laws, regulations or
policies will materially impact its ability or the ability of S&T Bank to
pay dividends. During the year ended December 31, 1999, S&T Bank
paid $20.1 million in cash dividends to S&T.
Other Safety and Soundness Regulations
The federal banking agencies possess broad powers under current
federal law to take prompt corrective action to resolve problems of
insured depository institutions. The extent of these powers depends
upon whether the institution in question is "well capitalized,"
"adequately capitalized," "undercapitalized," "significantly
undercapitalized," or "critically undercapitalized," as defined by the
law. As of December 31, 1999, S&T Bank was classified as "well
capitalized." The classification of depository institutions is primarily
for the purpose of applying the federal banking agencies' prompt
corrective action provisions and is not intended to be, and should not be
interpreted as, a representation overall financial condition or prospects
of any financial institution.
PAGE 5
Item 1. BUSINESS -- Continued
The agencies' prompt corrective action powers can include, among
other things, requiring an insured depository institution to adopt a
capital restoration plan which cannot be approved unless guaranteed by
the institution's parent company; placing limits on asset growth and
restrictions on activities, including restrictions on transactions with
affiliates; restricting the interest rates the institution may pay on
deposits; prohibiting the payment of principal or interest on
subordinated debt; prohibiting the holding company from making
capital distributions without prior regulatory approval and, ultimately,
appointing a receiver for the institution. Among other things, only a
"well capitalized" depository institution may accept brokered deposits
without prior regulatory approval.
The PADB also has broad enforcement powers over S&T Bank,
including the power to impose fines and other civil and criminal
penalties, and to appoint a conservator or receiver.
Interstate Banking and Branching
The BHCA currently permits bank holding companies from any
state to acquire banks and bank holding companies located in any other
state, subject to certain conditions, including certain nation-wide and
state-imposed concentration limits. Effective June 1, 1997, S&T Bank
has the ability, subject to certain restrictions, including state opt-out
provisions, to acquire by acquisition or merger, branches of banks
located outside of Pennsylvania, its home state. States may
affirmatively opt-in to permit these transactions earlier, which
Pennsylvania, among other states, has done. The establishment of de
novo interstate branches also will be possible in those states that
expressly permit it. Once a bank has established branches in a state
through an interstate merger transaction, the bank may establish and
acquire additional branches at any location in the state where a bank
headquartered in that state could have established or acquired branches
under applicable federal or state law.
Competition
All phases of S&T Bank's business are highly competitive. S&T
Bank's market area is western Pennsylvania, with a representation in
Indiana, Armstrong, Allegheny, Jefferson, Clarion, Clearfield and
Westmoreland counties. S&T Bank competes with those local
commercial banks which have branches and customer calling programs
in its market area. S&T Bank considers its major competitors to be
First Commonwealth Bank headquartered in Indiana, PA; People's
Bank headquartered in Ford City, PA; Indiana First Savings Bank
headquartered in Indiana, PA; Clearfield Bank and Trust Company,
headquartered in Clearfield, PA and Marion Center National Bank,
headquartered in Marion Center, PA. The proximity of Indiana to
metropolitan Pittsburgh results in a significant impact on the S&T
market because of media influence and penetration by larger financial
institutions, such as Mellon Bank,National City Bank and PNC Bank.
PAGE 6
Item 1. BUSINESS -- Continued
Distribution of Assets, Liabilities and Shareholders' Equity; Interest
Rates and Interest Differential.
The following discussion and analysis is presented so that
shareholders may review in further detail the financial condition and
results of operations of S&T. This discussion and analysis should be
read in conjunction with the consolidated financial statements, selected
financial data and management's discussion and analysis incorporated
by reference. References to assets and liabilities and changes thereto
represent daily average balances for the periods discussed, unless
otherwise noted.
Net interest incme represents the difference between the interest and
fees earned on interest-earning assets and the interest paid on interest-
bearing liabilities. Net interest income is affected by changes in the
volume of interest-earning assets and interest-bearing liabilities and
changes in interest yields and rates. Interest on loans to and obligations
of state, municipalities and other public entities is not subject to federal
income tax. As such, the stated (pre-tax) yield on these assets is lower
than the yields on taxable assets of similar risk and maturity. In order
to make the pre-tax income and resultant yields comparable to taxable
loans and investments, a taxable equivalent adjustment was added to
interest income in the tables below. This adjustment has been
calculated using the U.S. federal statutory income tax rate of 35% for
1999, 1998 and 1997. The following table demonstrates the amount
that has been added to interest income per the summary of operations.
[CAPTION]
Year Ended December 31
1999 1998 1997
(In thousands of dollars)
Interest income per consolidated
statements of income $156,727 $151,438 $141,101
Adjustment to fully taxable
equivalent basis 3,098 3,048 3,335
Interest income adjusted to fully
taxable equivalent basis 159,825 154,486 144,436
Interest expense 69,942 69,156 62,284
Net interest income adjusted to
fully taxable equivalent basis $89,883 $85,330 $82,152
PAGE 7
Item 1. BUSINESS -- Continued
Average Balance Sheet and Net Interest Income Analysis
[CAPTION]
December 31
1999 1998 1997
Average Yield/ Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate Balance Interest Rate
(in thousands of dollars)
ASSETS
Interest-earning assets:
Loans (1)(2) $1,421,906 $121,424 8.54% $1,314,984 $115,993 8.82% $1,234,733 $109,781 8.89%
Taxable investment
securities 525,848 36,404 6.92% 502,889 35,784 7.12% 405,840 30,663 7.56%
Tax-exempt investment
securities (2) 17,045 1,449 8.50% 28,459 2,395 8.42% 41,850 3,461 8.27%
Interest-earning
deposits with banks 71 4 5.63% 83 6 7.23% 111 8 7.21%
Federal funds sold 10,880 544 5.00% 5,812 308 5.30% 9,528 523 5.49%
Total interest-earning
assets (3) 1,975,750 159,825 8.09% 1,852,227 154,486 8.34% 1,692,062 144,436 8.54%
Noninterest-earning assets:
Cash and due from banks 40,121 39,395 36,185
Premises and equipment, net 20,976 20,905 19,752
Market value appreciation
of securities available
for sale 45,573 60,811 46,626
Other assets 65,559 44,755 38,971
Less allowance for loan
losses (27,743) (23,562) (19,802)
$2,120,236 $1,994,531 $1,813,794
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
NOW/Money market accounts $393,929 $11,808 3.00% $327,851 $10,146 3.09% $294,356 $8,772 2.98%
Savings deposits 167,414 3,546 2.12% 172,525 3,914 2.27% 187,394 4,340 2.32%
Time deposits 626,166 31,924 5.10% 642,681 35,510 5.53% 626,192 34,854 5.57%
Federal funds purchased 4,465 229 5.13% 7,007 383 5.47% 8,369 472 5.64%
Securities sold under
agreements to repurchase 138,387 6,519 4.71% 170,961 8,968 5.25% 126,481 6,602 5.22%
Long-term borrowing 286,975 15,916 5.55% 185,959 10,226 5.50% 123,722 7,227 5.84%
Other borrowed funds - - - 130 9 6.92% 230 17 7.39%
Total interest-bearing
liabilities (3) 1,617,336 69,942 4.32% 1,507,114 69,156 4.59% 1,366,744 62,284 4.56%
Noninterest-bearing liabilities:
Demand deposits 210,095 183,435 161,339
Other 41,815 47,423 42,048
Shareholders' equity 250,990 256,559 243,663
$2,120,236 $1,994,531 $1,813,794
Net interest income $89,883 $85,330 $82,152
Net yield on interest-
earning assets 4.55% 4.61% 4.85%
(1) For the purpose of these computations, nonaccruing loans are
included in the daily average loan amounts outstanding.
(2) Tax-exempt income is on an FTE basis, including the dividend
received deduction for equity securities, using the statutory federal
income tax rate of 35% for 1999, 1998 and 1997.
(3) Yields are calculated using historical cost basis.
PAGE 8
Item 1. BUSINESS -- Continued
The following tables set forth for the periods indicated a summary
of the changes in interest earned and Interest paid resulting from
changes in volume and changes in rates:
[CAPTION]
1999 Compared to 1998 1998 Compared to 1997
Increase (Decrease) Due to (1) Increase (Decrease) Due to (1)
Volume Rate Net Volume Rate Net
(In thousands of dollars)
Interest earned on:
Loans (2) $9,431 ($4,000) $5,431 $7,135 ($923) $6,212
Taxable investment securities 1,634 (1,014) 620 7,332 (2,211) 5,121
Tax-exempt investment securities(2) (961) 15 (946) (1,107) 41 (1,066)
Interest-earning deposits (1) (1) (2) (2) 0 (2)
Federal funds sold 269 (33) 236 (204) (11) (215)
Total interest-earning assets $10,372 ($5,033) $5,339 $13,154 ($3,104) $10,050
Interest paid on:
NOW/Money market accounts $2,045 $(383) $1,662 $3,597 ($2,223) $1,374
Savings deposits (116) (252) (368) (344) (82) (426)
Time deposits (913) (2,673) (3,586) 918 (262) 656
Securities sold under agreements
to repurchase (1,709) (740) (2,449) 2,322 44 2,366
Federal funds purchased (139) (15) (154) (77) (12) (89)
Long-term borrowings 5,555 135 5,690 3,635 (636) 2,999
Other borrowed funds (9) 0 (9) (7) (1) (8)
Total interest-bearing liabilities $4,715 ($3,928) $786 $10,044 ($3,172) $6,872
Change in net interest income $4,553 $3,178
(1) The change in interest due to both volume and rate has been
allocated to volume and rate changes in proportion to the
relationship of the absolute dollar amounts of the change in each.
(2) Tax-exempt income is on an FTE basis using the statutory federal
income tax rate of 35% for 1999, 1998 and 1997.
PAGE 9
Item 1. BUSINESS -- Continued
INFLATION AND CHANGING INTEREST RATES
The majority of assets and liabilities of a financial institution are
monetary in nature and therefore differ greatly from most commercial
and industrial companies that have significant investments in fixed
assets or inventory. Fluctuations in interest rates and the efforts of the
Federal Reserve Board to regulate money and credit have a greater
effect on a financial institution's profitability than do the effects of
higher costs for goods and services. Through its asset/liability
management committee ("ALCO"), S&T is positioned to cope with
changing interest rates and inflationary trends. ALCO monitors and
manages interest rate sensitivity through gap, simulation and duration
analysis.
The schedule below presents S&T's interest rate sensitivity at
December 31, 1999 using gap analysis. The gap and cumulative gap
represents the net position of assets and liabilities subject to
repricing in specified time periods, as measured by a ratio of rate
sensitive assets to rate sensitive liabilities. ALCO policy guide-
lines for cumulative gap in the six and twelve month time frames,
annually approved by the S&T Board of Directors, is currently a .85
to 1.15 range. Management believes this range provides an accept-
able and manageable level of interest rate risk for S&T. Significant
to gap analysis is the expected rate of asset prepayment, calls on
securities and the behavior of depositors during periods of changing
interest rates. For example, in periods of declining interest rates,
borrowers can be expected to accelerate loan prepayments and
refinancings; depositors will tend to hold those certificates of
deposits with rates currently higher than the market. Conversely,
in a rising interest rate scenario, borrower refinancings and
prepayments typically decrease, while deposit shifting and early
withdrawals tend to accelerate as depositors position funds to
earn higher yields.
ALCO continually monitors these historical behavior patterns
through periods of changing interest rates, and uses this information to
develop loan prepayments and decay rates for Core Deposits (demand,
NOW, savings). The gap analysis below incorporates a flat rate
scenario, and the following significant assumptions:
Monthly loan prepayments above contractual requirements
5 year ARM - Commercial Real Estate 1.50%
Fixed Rate - Commercial Real Estate 1.25
Residential Real Estate 1.75
New Indirect Auto Loans 2.00
Other Installment Loans 2.65
Deposit behavioral patterns/decay rate assumptions
NOW and Savings - Year #1 25.00%
NOW and Savings - Year #2 25.00
NOW and Savings - beyond Year #2 50.00
Money market pricing is indexed and
tiered to market interest rates. NA
S&T has not historically experienced
fluctuations in demand deposit
balances during periods of interest
rate fluctuations. NA
Swaps
Reflects that portion of borrowings whose interest rate risk is reduced
due to the effects of interest rate swaps.
PAGE 10
Item 1. BUSINESS -- Continued
[CAPTION]
Interest Rate Sensitivity
December 31, 1999
(thousands of dollars)
GAP 1-6 Months 7-12 Months 13-24 Months >2 Years
Repricing Assets:
Cash/Due From Banks $0 $0 $0 $38,717
Federal Funds 15,400 0 0 0
Securities 42,010 13,354 22,363 497,501
Net Loans 602,012 159,207 223,218 484,705
Other Assets 0 0 0 95,588
Total $659,422 $172,561 $245,581 $1,116,511
Repricing Liabilities:
Demand $0 $0 $0 $219,202
NOW 15,026 15,026 30,052 60,106
Money Market 295,258 0 0 0
Savings/Clubs 19,974 19,974 39,950 79,899
Certificates 200,282 130,166 122,193 187,954
Repos & Short-term Borrowings 106,009 0 0 0
Long-term Borrowings 69,600 30,000 73,844 190,618
Swaps 10,000 0 0 0
Other Liabilities/Equity 0 0 0 278,942
Total $716,149 $195,166 $266,039 $1,016,721
GAP ($56,727) ($22,605) ($20,458) $99,790
Cumulative GAP ($56,727) ($79,332) ($99,790) $0
[CAPTION]
Immediate
Current Policy Core Deposit
Rate Sensitive Assets/Rate Sensitive Liabilities Month Guideline Repricing
Cumulative 6 months 0.92 .85-1.15 0.69
Cumulative 12 months 0.91 .85-1.15 0.74
S&T's six month and one year gap position at December 31, 1999 is
liability sensitive. Liability sensitive means that more liabilities than
assets of S&T will reprice during the measured time frames. The
implications of liability sensitive position will differ depending upon
the current trend of market interest rates.
For example, a liability sensitive position in a declining interest rate
environment, the cost of S&T repricing liabilities can theoretically be
expected to decline more quickly than the yields on S&T repricing
assets. This situation would cause an increase to S&T's interest rate
spreads, net interest income and to operating income. Liquidity
impacts in this scenario, other than increased costs, would not be
material unless serious ongoing declines in operating results caused
depositors, lenders and investors to lose confidence.
PAGE 11
Item 1. BUSINESS -- Continued
Conversely, a liability sensitive gap position in a rising interest rate
scenario would theoretically have a negative impact to interest rate
spreads, net income and to operating income. Liquidity impacts would
not be material in the short-term; in the long-term, improved operating
income is always beneficial to liquidity issues.
Gap analysis usefulness as a measurement of interest rate risk is
limited because the time period measured is static. Simulation provides
a more dynamic modeling tool for interest rate risk since this technique
can incorporate future assumptions about interest rates, volume
flucuations and customer behaviors. ALCO uses simulation to measure
changes in net interest income during a 2%, plus or minus, change in
current market interest rates (Rate Shock Analysis). Current ALCO
policy guidelines require that declines in forecasted net interest income
do not exceed 3% as a result of Rate Shock Analysis.
Duration techniques are a relatively new addition to S&T's interest
rate risk monitoring tools. Duration modeling is primarily used to assist
in match fundings for large commercial loans, security purchases and
segments of the installment loan portfolios.
Securities
S&T invests in various securities in order to provide a source of
liquidity, increase net interest income and as an ALCO tool to quickly
reposition the balance sheet for interest rate risk purposes. Securities
are subject to similar interest rate and credit risks as loans. In addition,
by their nature, securities classified as available for sale are also subject
to market value risks that could negatively affect the level of liquidity
available to S&T, as well as equity.
Risks associated with various securities portfolios are managed and
monitored by investment policies annually approved by the S&T Board
of Directors, and administered through ALCO and the Chief
Investment Officer. As of December 31, 1999, management is not
aware of any risk associated with securities that would be expected to
have a significant, negative effect to S&T's statement of condition or
statement of operations.
The following table sets forth the carrying amount of securities
at the dates indicated:
[CAPTION]
December 31
1999 1998 1997
(In thousands of dollars)
Available for Sale
Marketable equity securities $97,729 $115,532 $101,639
Obligations of U.S. government
corporations and agencies 335,941 357,417 341,288
Mortgage-backed securities 6,170 8,715 14,542
U.S. Treasury securities 14,126 27,952 39,473
Corporate securities 64,526 36,353 11,064
Other securities 39,502 22,509 20,719
TOTAL $557,994 $568,478 $528,725
Held to Maturity
Obligations of states and
political subdivisions $15,231 $21,009 $37,497
Corporate securities 1,999 1,999 1,998
TOTAL $17,230 $23,008 $39,495
PAGE 12
Item 1. BUSINESS -- Continued
The following table sets forth the maturities of securities at
December 31, 1999, and the weighted average yields of such Securities
(calculated on the basis of the cost and effective yields weighted for the
scheduled maturity of each security). Tax-Equivalent adjustments
(using a 35% federal income tax rate) for 1999 have been made in
calculating yields on obligations of state and political subdivisions.
[CAPTION]
Maturing
Within After One But After Five But After No Fixed
One Year Within Five Years Within Ten Years Ten Years Maturity
Amount Yield Amount Yield Amount Yield Amount Yield Amount
(in thousands of dollars)
Available for Sale
Marketable equity securities $97,729
Obligations of U.S. government
corporations and agencies $10,141 7.86% $176,683 6.25% $149,117 7.06%
Mortgage-backed securities 25 7.96% 199 7.35% 3,551 7.69% $2,395 7.47%
U.S. Treasury securities 3,059 7.18% 5,103 7.22% 5,964 7.81%
Corporate securities 1,102 7.06% 48,619 6.61% 14,805 6.64%
Other securities 39,502
TOTAL $14,327 $230,604 $173,437 $2,395 $137,231
Weighted Average Rate 7.65% 6.35% 7.06% 7.47%
Held to Maturity
Obligations of states and
political subdivisions $2,907 8.05% $10,847 8.70% $1,477 8.71%
Corporate securities 1,999 7.15%
TOTAL $2,907 $12,846 $1,477 $0 $0
Weighted Average Rate 8.05% 8.46% 8.71% 0.00%
Loan Portfolio
The following table shows S&T's loan distribution at the end of
each of the last five years:
[CAPTION]
December 31
1999 1998 1997 1996 1995
(In thousands of dollars)
Domestic Loans:
Commercial, mortgage
and industrial $830,847 $672,742 $582,401 $496,863 $450,932
Real estate-construction 94,786 87,246 47,967 35,508 30,191
Real estate-mortgage 466,881 492,570 512,417 513,424 461,822
Installment 103,763 113,351 130,968 154,341 160,437
TOTAL LOANS $1,496,277 $1,365,909 $1,273,753 $1,200,136 $1,103,382
PAGE 13
Item 1. BUSINESS -- Continued
The following table shows the maturity of loans (excluding residential
mortgages of 1-4 family residences and installment loans) outstanding
as of December 31, 1999. Also provided are the amounts due after one
year classified according to the sensitivity to changes in interest rates.
[CAPTION]
Maturing
Within After One But After
One Year Within Five Years Five Years Total
(In thousands of dollars)
Commercial, mortgage
and industrial $282,436 $261,345 $287,066 $830,847
Real estate-construction 23,754 32,544 38,488 94,786
$306,190 $293,889 $325,554 $925,633
Fixed interest rates $92,706 $73,949
Variable interest rates 201,183 251,605
$293,889 $325,554
Nonaccrual, Past Due and Restructured Loans
The following table summarizes S&T's nonaccrual, past due and
restructured loans:
[CAPTION]
December 31
1999 1998 1997 1996 1995
(in thousands of dollars)
Nonaccrual loans $2,987 $2,933 $3,602 $10,268 $4,748
Accruing loans past
due 90 days or more $0 $0 $0 $0 $0
PAGE 14
Item 1. BUSINESS -- Continued
At December 31, 1999, $2,987,000 of nonaccrual loans were
secured. Interest income that would have been recorded under original
terms totaled $578,000. No interest income was recorded on these
loans. It is S&T's policy to place loans on non-accrual status when
collection of interest or principal is doubtful, or generally when interest
or principal are 90 days or more past due. The accrual of interest on
impaired loans is discontinued when, in management's opinion, the
borrower may be unable to meet payments as they become due. At
December 31, 1999, there were no impaired loans that were on
nonaccrual. There are no foreign loan amounts required to be included
in this table. There were no restructured loans in the periods presented.
Summary of Loan Loss Experience
Management evaluates the degree of loss exposure for loans on a
continuous basis through a formal loan policy as administered by the
Loan Administration Department and various management and director
committees. Problem loans are identified and continually monitored
through detailed reviews of specific large dollar loans, and the analysis
of delinquency and charge-off levels of consumer loan portfolios.
Charged-off and recovered loan amounts are applied to the allowance
for loan losses. Quarterly updates are presented to the S&T Board of
Directors as to the status of loan quality.
Additional amounts are added through a charge to current earnings
through the provision for loan losses, based upon management's
assessment about the adequacy of the allowance for loan losses for
probable loan losses. A quantitative analysis is utilized to support the
adequacy of the allowance for loan losses. This analysis includes
review of the high and low historical charge-off rates for loan
categories, fluctuations and trends in the amount of classified loans and
economic factors. Economic factors consider the level of S&T's
historical charge-offs that have occurrence within the credits economic
life cycle. Management also assesses other subjective factors such as
economic conditions and business trends, concentrations, growth and
composition of the loan portfoio and effectiveness of the Loan
Administration Department.
Significant to this analysis and assessment is the shift in loan
portfolio composition to an increased mix of commercial loans. These
loans are generally larger in size and due to our continuing growth,
many are not well seasoned and could be more vulnerable to an
economic slowdown. Management relies on its risk rating process to
monitor trends which may be occurring relative to commercial loans to
assess potential weaknesses within specific credits. Current economic
factors and trends in risk ratings are considered in the determination
of the allowance for loan losses.
This analysis and assessment results in an allowance for loan losses
consisting of two components, allocated and unallocated. The allocated
component of the allowance for loan losses reflects expected losses
resulting from the analysis of individual loans developed through
specific ratings and allocations, and historical loss experience for
categories of loans. The specific allocations are based upon regular
analysis of loans and commitments over a fixed dollar amount and the
internal credit rating for the loan or commitment. Categories of smaller
individual loans are allocated based upon historical losses and current
delinquency levels.
PAGE 15
Item 1. BUSINESS -- Continued
The unallocated component is primarily subjective based upon
management's assessment of nonquantifiable factors that make
historical trend analyses difficult such as:
Economic factors
Loan concentration in western Pennsylvania.
Significant commercial loan volume increases in the last
three years in new markets with new customers.
The introduction of several new consumer products.
Increased commercial real estate lending.
The allowance for loan losses considered management's assessment
of the factors noted above along with the growth in the loan portfolio.
The additions to the allowance charged to operating expense has
maintained the allowance as a percent of loans at the following levels at
the end of each year presented below.
[CAPTION]
Year Ended December 31
1999 1998 1997 1996 1995
1.81% 1.95% 1.60% 1.56% 1.55%
S&T has considered impaired loans in its determination of the
allowance for loan losses. The allowance for loan losses for all
impaired loans totaled $73,000 and $133,000 at December 31, 1999
and 1998, respectively, and is included in the allowance allocated
specifically to commercial loans.
Asset quality is a major corporate objective at S&T. Based on the
evaluation of loan quality and assessment of risk characteristics,
management believes that the allowance for loan losses is adequate to
absorb probable loan losses.
This table summarizes S&T's loan loss experience for each of the five
years ended December 31:
[CAPTION]
Year Ended December 31
1999 1998 1997 1996 1995
(In thousands of dollars)
Balance at January 1: $26,677 $20,427 $18,729 $17,065 $15,169
Charge-offs:
Commercial, mortgage and
industrial 4,270 2,905 1,654 2,986 1,313
Real estate-mortgage 913 1,497 1,056 405 148
Installment 1,819 1,597 1,771 2,145 1,578
7,002 5,999 4,481 5,536 3,039
Recoveries:
Commercial, mortgage and
industrial 2,483 713 517 1,591 294
Real estate-mortgage 495 389 221 105 107
Installment 481 597 441 329 314
3,459 1,699 1,179 2,025 715
Net charge-offs 3,543 4,300 3,302 3,511 2,324
Provision for loan losses 4,000 10,550 5,000 5,175 4,220
Balance at December 31: $27,134 $26,677 $20,427 $18,729 $17,065
Ratio of net charge-offs
to average loans outstanding 0.25% 0.33% 0.27% 0.31% 0.22%
PAGE 16
Item 1. BUSINESS -- Continued
This table shows allocation of the allowance for loan losses as of
the end of each of the last five years:
[CAPTION]
December 31,1999 December 31,1998 December 31,1997 December 31,1996 December 31,1995
Percent Percent Percent Percent Percent
of Loans of Loans of Loans of Loans of Loans
in Each in Each in Each in Each in Each
Category Category Category Category Category
to Total to Total to Total to Total to Total
Amount Loans Amount Loans Amount Loans Amount Loans Amount Loans
Commercial, mortgage
and industrial $20,147 56% $16,850 49% $13,556 46% $9,605 41% $8,579 41%
Real estate-construction 0 6% 0 7% 0 4% 0 3% 0 3%
Real estate-mortgage 868 31% 1,096 36% 763 40% 1,680 43% 1,321 42%
Installment 2,541 7% 2,635 8% 1,865 10% 1,859 13% 1,803 14%
Unallocated 3,578 0% 6,096 0% 4,243 0% 5,585 0% 5,362 0%
TOTAL $27,134 100% $26,677 100% $20,427 100% $18,729 100% $17,065 100%
Deposits
The daily average amount of deposits and rates paid on such deposits
is summarized for the periods indicated in the following table:
[CAPTION]
Year Ended December 31
1999 1998 1997
Amount Rate Amount Rate Amount Rate
(in thousands of dollars)
Noninterest-bearing demand deposits $210,095 $183,435 $161,339
NOW/Money market account 393,929 3.00% 327,851 3.09% 294,356 2.98%
Savings deposits 167,414 2.12% 172,525 2.27% 187,394 2.32%
Time deposits 626,166 5.10% 642,681 5.53% 626,192 5.57%
TOTAL $1,397,604 $1,326,492 $1,269,281
Maturities of time certificates of deposit of $100,000 or more outstanding
at December 31, 1999, are summarized as follows:
[CAPTION]
(in thousands of dollars)
3 Months or less $32,389
Over 3 through 6 months 8,655
Over 6 through 12 months 13,045
Over 12 months 31,560
TOTAL $85,649
Return on Equity an Assets
[CAPTION]
Year Ended December 31
1999 1998 1997
Return on average assets 1.95% 1.90% 1.84%
Return on average equity 16.50% 14.80% 13.71%
Dividend payout ratio 48.65% 46.14% 42.54%
Equity to asset ratio 10.92% 12.55% 13.55%
PAGE 17
Item 1. BUSINESS -- Continued
Short-Term Borrowings
The following table shows the distribution of S&T's short-term
borrowings and the weighted average interest rates thereon at the end of
each of the last three years. Also provided are the maximum amount of
borrowings and the average amounts of borrowings as well as weighted
average interest rates for the last three years.
[CAPTION]
Federal Funds
Purchased and
Securities
Sold under
Agreements
to Repurchase
(in thousand of dollars)
Balance at December 31:
1999 $116,009
1998 138,825
1997 179,449
Weighted average interest rate at
year end:
1999 5.06%
1998 4.63%
1997 5.82%
Maximum amount outstanding at any
month's end:
1999 $212,361
1998 251,030
1997 195,024
Average amount outstanding during the year:
1999 $142,852
1998 177,968
1997 134,851
Weighted average interest rate during the year:
1999 4.72%
1998 5.29%
1997 5.31%
S&T defines repurchase agreements with its retail customers as
retail REPOs; wholesale REPOs are those transacted with other banks
and brokerage firms with terms normally ranging from 1 to 14 days.
PAGE 18
Item 2. PROPERTIES
S&T operates 38 banking offices in Indiana, Armstrong,
Allegheny, Jefferson, Clearfield, Clarion, Westmoreland
and surrounding counties in Pennsylvania. S&T owns land
and banking offices at the following locations: 800
Philadelphia Street, 2175 Route 286 South in Indiana;
Route 119 South & Lucerne Road and 34 North Main Street
in Homer City; 232 North Hampton Avenue in Punxsutawney;
133 Philadelphia Street in Armagh; Route 119 in Black
Lick; 256 Main Street and Route 36 & I-80 in Brookville;
456 Main Street in Brockway; 602 Salt Street in Saltsburg;
35 West Scribner Avenue, Treasure Lake and 614 Liberty
Boulevard in DuBois; 418 Main Street in Reynoldsville;
205 East Market Street in Blairsville; 85 Greensburg
Street in Delmont; 100 South Chestnut Street in Derry; 109
Grant Avenue in Vandergrift; 100 South Fourth Street in
Youngwood; 701 East Pittsburgh Street in Greensburg; 2190
Hulton Road in East Oakmont; 4385 Old William Penn Highway
in Monroeville; 7660 Saltsburg Road in Plum; 12262 Frankstown
Road in Penn Hills; 410 Main Street in Clarion; and 301 Unity
Center Road in Unity. Land is leased where S&T owns the
banking offices at 1107 Wayne Avenue and remote ATM buildings
at 435 South Seventh Street and 1176 Grant Street, all in
Indiana; 8th and Merle Street and Gemmel Student Center in
Clarion; 730 East Pittsburgh Street in Greensburg; and 523
Franklin Avenue in Vandergrift. In addition, S&T leases land
and banking offices at the following locations: Chestnut Ridge
Plaza in Blairsville; 324 North Fourth Street and 2850 Route
286 South and Hospital Road in Indiana; the Mall Office in
DuBois; 229 Westmoreland Mall; 2388 Route 286 in Holiday Park;
Route 268 Hilltop Plaza in Kittanning and a remote ATM location
at the Main Street Mall in DuBois.
Item 3. LEGAL PROCEEDINGS
The nature of S&T's business generates a certain amount of
litigation involving matters arising in the ordinary course of business.
However, in the opinion of management, there are no proceedings
pending to which S&T is a party or to which its property is subject,
which, if determined adverse, would be material in relation to its
shareholders' equity or financial condition. In addition, no material
proceedings are pending nor are known to be threatened or
contemplated against S&T by governmental authorities or other parties.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
There were no matters during the fourth quarter of the fiscal
year covered by this report that were submitted to a vote of the security
holders through solicitation of proxies or otherwise.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND
RELATED SHAREHOLDER MATTERS
Stock Prices and Dividend Information on page 54 and
Dividend and Loan Restrictions on page 44 of the Annual Report for
the year ended December 31, 1999, incorporated herein by reference.
Item 6. SELECTED FINANCIAL DATA
Selected Financial Data on pages 54 and 55 of the Annual
Report for the year ended December 31, 1999, incorporated herein by
reference.
PAGE 19
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Management's Discussion and Analysis of Financial
Condition and Results of Operations on page 21 through 30 of the
Annual Report for the year ended December 31, 1999, incorporated
herein by reference.
Item 7(A).QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
Quantitative and Qualitative Disclosures about Market Risk
on pages 28 and 29 of the Annual Report for the year ended December
31, 1999, incorporated herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
The Consolidated Financial Statements, Report of
Independent Auditors and Quarterly Selected Financial Data on pages
31 through 53 and page 55 of the Annual Report for the year ended
December 31, 1999, incorporated herein by reference.
Item 9. CHANGES AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
There have been no changes in accountants or disagreements
with accountants on accounting and financial disclosures.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT
Election of Directors on pages 4 through 5 of the proxy
statement for the April 17, 2000, annual meeting of shareholders,
incorporated herein by reference.
[CAPTION]
Executive Officers
Number of
Shares
For the Officer Beneficially
Name Corporation Since Owned(1) Age
Robert D. Duggan Chairman 1983 180,235 67
and Director
James C. Miller President, Chief 1983 172,763 54
Executive Officer and
Director
James G. Barone Executive Vice 1992 46,140 52
President, Secretary and
Treasurer
Robert E. Rout Executive Vice 1993 55,468 47
President and Chief
Financial Officer
PAGE 20
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - Continued
Executive Officers (continued)
Edward C. Hauck Executive Vice 1991 43,244 47
President
David L. Kreiger Executive Vice 1984 38,070 56
President
J. Jeffrey Smead Executive Vice 1992 72,199 48
President
William H. Klummp Senior Vice 1994 29,692 56
President
Edward A. Onderick Senior Vice 1989 67,466 55
President
David P. Rudduck Senior Vice 1998 17,882 38
President
Todd D. Brice Senior Vice 1999 62,531 38
President
Richard A. Fiscus Senior Vice 1999 24,149 44
President
(1) May include shares held by spouse, other family members, as
trustee or through a corporation and nonstatutory stock options
vesting within 60 days of the date of this 10-K Report. The
reporting person may disclaim beneficial ownership of such
shares.
Item 11. EXECUTIVE COMPENSATION
Remuneration of Executive Officers on pages 7 and 8 of the
proxy statement for the April 17, 2000, annual meeting of shareholders,
incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Principal Beneficial Owners of Common Stock on page 3 of
the proxy statement for the April 17, 2000, annual meeting of
shareholders, incorporated herein by reference.
PAGE 21
PART IV
PART IV
Item 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Transactions with Management and Others on pages 10 and
11 of the proxy statement for April 17, 2000, annual meeting with
shareholders, incorporated herein by reference.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K
(a) List of financial statements and financial statement schedules
(1) The following Consolidated Financial Statements and
Report of Independent Auditors of S&T Bancorp, Inc. and
subsidiaries included in the annual report of the registrant to
its shareholders for the year ended December 31, 1999, are
incorporated by reference in Part II, Item 8:
Page
Reference
Report of Ernst & Young LLP, Independent Auditors 53
Consolidated Balance Sheets
December 31, 1999 and 1998 31
Consolidated Statements of Income
Year ended December 31, 1999, 1998, and 1997 32
Consolidated Statements of Changes in Shareholders'
Equity Year ended December 31, 1999, 1998, and 1997 33
Consolidated Statements of Cash Flows
Year ended December 31, 1999, 1998, and 1997 34
Notes to Consolidated Financial Statements
December 31, 1999 35-52
Quarterly Selected Financial Data 55
(2) Schedules to the consolidated financial statements required
by Article 9 of Regulation S-X are not required under the
related instructions or are inapplicable, and therefore have
been omitted.
(3) Listing of Exhibits - See Item 14 (c) below
(b) Reports on Form 8-K
None
PAGE 22
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K (Continued)
(c) Exhibits
(3.1) Articles of Incorporation of S&T Bancorp, Inc. filed
as Exhibit B to Registration Statement (No. 2-83565)
on Form S-4 of S&T Bancorp, Inc., dated May 5,
1983, incorporated herein by reference.
(3.2) Amendment to Articles of Incorporation of S&T
Bancorp, Inc. filed as Exhibit 3.2 to Form S-4
Registration Statement (No. 33-02600) dated
January 15, 1986, incorporated herein by reference.
(3.3) Amendment to Articles of Incorporation of S&T
Bancorp, Inc. effective May 8, 1989 - incorporated
herein by reference.
(3.4) Amendment to Articles of Incorporation of S&T
Bancorp, Inc. effective July 21, 1995 - incorporated
herein by reference.
(3.5) Amendment to Articles of Incorporation of S&T
Bancorp, Inc. effective June 18, 1998 -
incorporated herein by reference.
(3.6) By-Laws of S&T Bancorp, Inc., as amended,
December 20, 1999 - filed herewith.
(13) Annual Report for the year ended December 31, 1999, pages
21-55, - filed herewith.
(21) Subsidiaries of the Registrant - filed herewith.
(23.1) Consent of Ernst & Young LLP, Independent Auditors
filed herewith.
PAGE 23
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
S&T BANCORP, INC.
(Registrant)
/s/ James C. Miller 3/20/00
James C. Miller, Date
President and Chief
Executive Officer
(Principal Executive Officer)
/s/ Robert E. Rout 3/20/00
Robert E. Rout, Date
Executive Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
PAGE 24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
/s/ Thomas A. Brice 3/20/00 /s/ Joeseph A Kirk 3/20/00
Thomas A. Brice, Director Date Joseph A. Kirk, Director Date
/s/ James L. Carino 3/20/00 /s/ Frank W. Jones 3/20/00
James L. Carino, Director Date Frank W. Jones, Director Date
/s/ John J. Delaney 3/20/00 /s/ James C. Miller 3/20/00
John J. Delaney, Director Date James C. Miller, President, Date
Chief Executive Officer
and Director
/s/ Robert D. Duggan 3/20/00 /s/ Alan Papernick 3/20/00
Robert D. Duggan, Chairman Date Alan Papernick, Director Date
/s/ William J. Gatti 3/20/00 /s/ Myles D. Sampson 3/20/00
William J. Gatti, Director Date Myles D. Sampson, Director Date
/s/ Ruth M. Grant 3/20/00
Ruth M. Grant, Director Date Charles A. Spadafora, Date
Director
/s/ Jeffrey D. Grube 3/20/00 /s/ Christine J. Toretti 3/20/00
Jeffrey D. Grube, Director Date Christine J. Toretti, Date
Director
/s/ Herbert L. Hanna 3/20/00
Herbert L. Hanna, Director Date Samuel Levy, Director Date
PAGE 25