Back to GetFilings.com
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, 1996
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 (I.R.S. Employer
incorporation of organization) Identification No.)
800 Philadelphia Street, Indiana, PA 15701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (412)-349-2900
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 18, 1997:
Common Stock, $2.50 par value - $364,472,218
The number of shares outstanding of the issuer's classes of common
stock as of February 18, 1997:
Common Stock, $2.50 par value - 11,092,850 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual shareholders report for the year ended
December 31, 1996 are incorporated by reference into Part II.
Portions of the proxy statement for the annual shareholders meeting
to be held April 21, 1997 are incorporated by reference into Part III.
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, 1996, S&T had $1.5 billion in total assets, $176 million
in total shareholders' equity and $1.0 billion in total deposits. Deposits are
insured by the Federal Deposit Insurance Corporation to the full extent provided
by law.
Total trust assets were approximately $465 million at December 31, 1996.
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 thirty-five offices located in Armstrong, Allegheny, Indiana,
Jefferson, 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, 1996, S&T Bank had a total of 586 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 of regulatory provisions or proposals.
On November 26, 1996, S&T announced the signing of a definitive agreement and
plan of merger to acquire Peoples Bank of Unity (Peoples). Peoples is a $291
million state chartered bank, headquartered in Plum Borough, a suburb of
Pittsburgh, Pennsylvania. The merger, which is based on a fixed exchange ratio
of 26.25 shares of S&T common stock for each outstanding share of Peoples (up
to 3,036,075 shares of S&T common stock), will be accounted for as a pooling-
of-interest.
ITEM 1. BUSINESS- continued
The transaction, which is subject to approval by the appropriate regulatory
authorities, is expected to be completed during the second quarter of 1997.
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 or 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
bank holding company operations, a bank holding company is required to serve as
a source of financial strength to its subsidiary depository institutions and
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 Federal Deposit Insurance Corporation
("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.
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 any one of its parent company or any
nonbank affiliate generally are limited to ten percent of the bank subsidiary's
capital and surplus, or twenty percent 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.
ITEM 1. BUSINESS- continued
S&T Bank also has $168.1 million of deposits subject to the Savings
Association Insurance Fund (SAIF). These deposits are related to a thrift
institution and branches acquired from the Resolution Trust Corporation
in 1991. S&T Bank currently pays an annual premium of $.013 per $100 on
BIF deposits and $.0648 per $100 on SAIF deposits.
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, 1996, S&T's Tier 1 and Total capital ratios
were 13.08 percent and 14.33 percent, respectively, and the ratios of Tier I
capital and Total capital to total risk-adjusted assets for S&T Bank were 9.29
percent and 10.54 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, 1996 was 10.28
percent, and S&T Bank's leverage ratio was 7.26 percent.
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, 1996, S&T Bank paid $10.0 million in
cash dividends to S&T.
ITEM 1. BUSINESS- continued
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, 1996, 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 of overall financial condition or prospects of any financial
institution.
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 nationwide- and state- imposed concentration
limits. Effective June 1, 1997, S&T Bank will have 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, 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, Pennsylvania; People's
Bank headquartered in Ford City, Pennsylvania; Indiana First Savings Bank
headquartered in Indiana, Pennsylvania; Clearfield Bank and Trust Company,
headquartered in Clearfield, Pennsylvania and Marion Center National Bank,
headquartered in Marion Center, Pennsylvania. 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.
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 income 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 1996, 1995 and 1994. The following table demonstrates the
amount that has been added to interest income per the summary of operations.
Year Ended December 31
1996 1995 1994
(In thousands of dollars)
Interest income per consolidated
statements of income $111,431 $107,017 $92,653
Adjustment to fully taxable
equivalent basis 2,856 2,871 2,740
Interest income adjusted to fully
taxable equivalent basis 114,287 109,888 95,393
Interest expense 51,544 49,998 39,346
Net interest income adjusted to fully
taxable equivalent basis $62,743 $59,890 $56,047
BUSINESS - Continued
Average Balance Sheet and Net Interest Income Analysis
December
1996 1995 1994
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) $991,105 $88,056 8.88% $949,896 $86,428 9.10% $844,222 $71,575 8.48%
Taxable investment securities (2) 306,818 23,588 7.69% 273,097 20,483 7.50% 284,222 20,189 7.10%
Tax-exempt investment securities (2)28,448 2,529 8.89% 31,132 2,784 8.94% 35,715 3,335 9.34%
Interest-earning deposits with banks 73 5 6.85% 1,744 143 8.20% 3,267 281 8.60%
Federal funds sold 2,045 109 5.33% 847 50 5.90% 295 13 4.41%
Total interest-earning assets (3) 1,328,489 114,287 8.60%1,256,716 109,888 8.74%1,167,721 95,393 8.17%
Noninterest-earning assets:
Cash and due from banks 32,030 31,651 32,940
Premises and equipment, net 15,052 14,719 15,033
Market value appreciation of
securities available for sale 30,930 21,478 18,441
Other assets 34,455 33,198 17,244
Less allowance for loan losses (16,373) (15,028) (13,914)
$1,424,583 $1,342,734 $1,237,465
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits $93,750 $1,338 1.43% $94,332 $1,503 1.59% $100,336 $1,650 1.64%
Money market accounts 137,822 5,520 4.01% 112,230 4,516 4.02% 110,491 3,346 3.03%
Savings deposits 123,122 2,977 2.42% 133,056 3,173 2.38% 146,284 3,452 2.36%
Time deposits 528,023 29,295 5.55% 484,314 27,494 5.68% 444,521 22,793 5.13%
Federal funds purchased 5,812 319 5.49% 7,851 474 6.04% 11,951 524 4.38%
Securities sold under agreements
to repurchase 135,199 7,006 5.18% 150,221 8,482 5.65% 148,588 6,542 4.40%
Long-term borrowings 88,613 5,071 5.72% 73,154 4,326 5.91% 19,254 990 5.14%
Other borrowed funds 264 18 6.82% 388 30 7.73% 753 49 6.51%
Total interest-bearing 1,112,605 51,544 4.63% 1,055,546 49,998 4.74% 982,178 39,346 4.01%
liabilities (3)
Noninterest-bearing liabilities:
Demand deposits 110,933 105,209 102,779
Other 31,946 27,023 11,001
Shareholders' equity 169,099 154,956 141,507
$1,424,583 $1,342,734 $1,237,465
Net interest income $62,743 $59,890 $56,047
Net yield on interest-earning assets 4.72% 4.77% 4.79%
(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 1996, 1995, and 1994.
(3) Yields are calculated using historical cost basis.
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:
1996 Compared to 1995 1995 Compared to 1994
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) $3,750 ($2,121) $1,628 $8,959 $5,894 $14,853
Taxable investment securities (2) 2,529 576 3,105 (790) 1,084 294
Tax-exempt investment securities (2) (240) (15) (255) (428) (123) (551)
Interest-earning deposits (137) (1) (138) (131) (7) (138)
Federal funds sold 71 (12) 59 24 13 37
Total interest-earning assets $5,973 ($1,573) $4,399 $7,634 $6,861 $14,495
Interest paid on:
Demand deposits ($9) ($156) ($165) ($99) ($48) ($147)
Money market accounts 1,030 (25) 1,004 53 1,117 1,170
Savings deposits (237) 41 (196) (312) 33 (279)
Time deposits 2,481 (680) 1,801 2,040 2,661 4,701
Securities sold under agreements
to repurchase (848) (628) (1,476) 72 1,868 1,940
Federal funds purchased (123) (32) (155) (180) 130 (50)
Long-term borrowings 914 (169) 745 2,771 565 3,336
Other borrowed funds (10) (2) (12) (24) 5 (19)
Total interest-bearing liabilities $3,198 ($1,651) $1,546 $4,321 $6,331 $10,652
Change in net interest income $2,853 $3,843
(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 1996, 1995 and 1994.
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 conditions 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, 1996 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 guidelines for cumulative gap in the six and
twelve month time frame, annually approved by the S&T Board of Directors,
is currently a .85 to 1.15 range. Management believes this range provides
an acceptable 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 0.50 %
Fixed Rate - Commercial Real Estate 1.25
Residential Real Estate 1.00
New Indirect Auto Loans 2.00
Other Installment Loans 2.25
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.
Interest Rate Sensitivity
December 1996
(thousands of dollars)
GAP 1-6 Months 7-12 Months 13-24 Months >2 Years
Repricing Assets:
Cash/Due From Bank $0 $0 $0 $33,319
Securities 69,546 17,922 60,857 233,731
Net Loans 448,162 108,542 132,407 339,971
Other Assets 0 0 0 51,488
Total $517,708 $126,464 $193,264 $658,509
Repricing Liabilities:
Demand $0 $0 $0 $115,766
NOW 12,028 12,028 24,054 48,109
Money Market 151,400 0 0 0
Savings/Clubs 14,820 14,820 29,640 59,282
Certificates 206,151 108,929 91,943 143,304
Repos & Short-term
Borrowings 85,649 331 0 0
Long-term Borrowin 98,730 0 0 38,118
Swaps 2,000 2,000 0 25,000
Other Liab./Equity 0 0 0 211,843
Total $570,778 $138,108 $145,637 $641,422
GAP ($53,070) ($11,644) $47,627 $17,087
Cumulative GAP ($53,070) ($64,714) ($17,087) $0
Immediate
Rate Sensitive Assets/Rate Sensitive Current Policy Core Deposit
Liabilities Month Guideline Repricing
Cumulative 6 months 0.91 .85-1.15 0.68
Cumulative 12 months 0.91 .85-1.15 0.74
S&T's six month and one year gap position at December 31, 1996 is liability
sensitive. This means that more liabilities than assets of S&T will reprice
during the measured time frames. The implications of this liability sensitive
position will differ depending upon the current trent of market interest rates.
For example, 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 repricing assets. This situation would cause an increase
to S&T interest rate spreads, net interest 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.
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 in this scenario, other
than increase costs, would not be material unless serious ongoing declines in
operating results caused depositors, lenders and investors to lose confidence.
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 fluctuations and
customer behaviors. ALCO uses simulation to measure changes in net interest
income during a 3%, 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.
Item 1. BUSINESS--Continued
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 portfolio 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,
1996, 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:
December 31
1996 1995 1994
(In thousands of dollars)
Available for Sale
Marketable equity securities $73,458 $64,223 $46,418
Obligations of U.S. government corporations
and agencies 231,776 177,582
Collateralized mortgage obligations of
U.S. government corporations and agencies 4,182 11,035 4,550
U.S. Treasury securities 30,928 53,198 67,936
Corporate securities 300 190
Other securities 13,136 9,115
TOTAL $353,780 $315,343 $118,904
Held to Maturity
U.S. Treasury bonds and obligations of
U.S. government corporations and agencies $130,456
Collateralized mortgage obligations of
U.S. government corporations and agencies 14,451
Obligations of states and political subdivisions $24,239 $31,412 32,816
Corporate securities 1,998 2,493 4,038
Other securities 1,928 1,092 5,459
TOTAL $28,165 $34,997 $187,220
Item 1. BUSINESS--Continued
During the fourth quarter of 1995, management reclassified the securities
portfolio allowed by the "one time" amnesty per Financial Accounting Standards
Board Statement No. 115. The reclassified securities were from the held to
maturity category to the available for sale category. The transferred
securities had an amortized cost of $154.2 million and a market value of
$159.5 million. The resulting net of tax effect of the reclassification
to S&T's equity was $3.4 million.
The following table sets forth the maturities of securities at
December 31, 1996, 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 1996 have been made in
calculating yields on obligations of state and political subdivisions.
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 $73,458
Obligations of U.S. government
corporations and agencies $65,678 7.55% $166,098 7.42%
Collateralized mortgage obligations
of U.S. government corporations
and agencies 2,517 9.09% 754 7.03% $911 8.54%
U.S. Treasury securities $15,080 6.61% 9,432 7.61% 6,416 7.81%
Corporate securities 100 8.10% 200 7.35%
Other securities 13,136
TOTAL $15,080 $77,727 $173,468 $911 $86,594
Weighted Average Rate 6.61% 7.61% 7.43% 8.54%
Held to Maturity
Obligations of states and political
subdivisions $1,400 10.10% $8,643 8.81% $9,874 8.69% $4,322 8.66%
Corporate securities 1,998 9.90%
Other securities $1,928
TOTAL $1,400 $10,641 $9,874 $4,322 $1,928
Weighted Average Rate 10.10% 9.01% 8.69% 8.66%
Item 1. BUSINESS-- Continued
Loan Portfolio
The following table shows S&T's loan distribution at the end of each of the
last five years:
December 31
1996 1995 1994 1993 1992
(In thousands of dollars)
Domestic Loans:
Commercial, financial
and agricultural $237,882 $234,779 $197,028 $178,723 $175,475
Real estate-construction 24,984 23,712 32,714 23,705 9,400
Real estate-mortgage 638,282 569,143 543,894 457,462 374,055
Installment 144,980 149,185 150,772 136,819 133,124
TOTAL LOANS $1,046,128 $976,819 $924,408 $796,709 $692,054
The following table shows the maturity of loans (excluding residential
mortgages of 1-4 family residences and installment loans) outstanding
as of December 31, 1996. Also provided are the amounts due after one
year classified according to the sensitivity to changes in interest rates.
Maturing
Within After One But After
One Year Within Five Years Five Year Total
(In thousands of dollars)
Commercial, financial
and agricultural $155,392 $64,990 $17,500 $237,882
Real estate-construction 8,826 4,580 11,578 24,984
Real estate-mortgage 41,673 76,188 110,821 228,682
TOTAL $205,891 $145,758 $139,899 $491,548
Fixed interest rates $46,608 $36,351
Variable interest rates 99,150 103,548
TOTAL $145,758 $139,899
Item 1. BUSINESS--Continued
Nonaccrual, Past Due and Restructured Loans
The following table summarizes S&T's nonaccrual, past due and restructured
loans:
December 31
1996 1995 1994 1993 1992
(In thousands of dollars)
Nonaccrual loans $8,280 $2,844 $1,922 $2,481 $2,983
Accruing loans past
due 90 days or more $0 $0 $0 $323 $605
At December 31, 1996, $8,280,000 of nonaccrual loans were secured. Interest
income that would have been recorded under original terms totaled $399,000.
No interest income was recorded on these loans. It is S&T's policy to place
loans on nonaccrual status when the interest and principal is 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, 1996, $6,000,000 of impaired loans 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.
Item 1. BUSINESS-Continued
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. Quarterly updates are presented to the S&T Board
of Directors as to the status of loan quality.
Charged-off and recovered loan amounts are applied to the allowance for loan
losses. 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. In
addition to the identification and monitoring of problem loans, management also
assesses other subjective factors such as economic conditions and business
trends, concentrations, growth and composition of the loan portfolio and
effectiveness of the Loan Administration Department. This 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.
The unallocated component is primarily subjective based upon management's
assessment of nonquantifiable factors that make historical trend analyses
difficult:
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.
Recent increases in charged-off, nonperforming and delinquent loans.
Peer analysis.
The provision for loan losses in each of the years presented below 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.
Year Ended December 31
1996 1995 1994 1993 1992
1.63% 1.63% 1.55% 1.69% 1.74%
The Company has considered impaired loans in its determination of the allowance
for loan losses. The allowance for loan losses for all impaired loans totaled
$2,600,000 and $1,800,000 at December 31, 1996 and 1995, respectively, and is
included in the allowance allocated specifically to commercial loans.
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:
Year Ended December 31
1996 1995 1994 1993 1992
(In thousands of dollars)
Balance at January 1: $15,938 $14,331 $13,480 $12,029 $9,321
Charge-offs:
Commercial, financial and 1,480 1,054 2,287 1,185 1,469
agricultural
Real estate-mortgage 1,788 325 239 644 553
Installment 1,920 1,510 1,201 835 1,349
5,188 2,889 3,727 2,664 3,371
Recoveries:
Commercial, financial and
agricultural 1,409 288 505 241 51
Real estate-mortgage 277 104 156 171 19
Installment 307 304 417 103 231
1,993 696 1,078 515 301
Net charge-offs 3,195 2,193 2,649 2,149 3,070
Provision for loan losses 4,300 3,800 3,500 3,600 5,778
Balance at December 31: $17,043 $15,938 $14,331 $13,480 $12,029
Ratio of net charge-offs to
average loans outstanding 0.32% 0.23% 0.31% 0.29% 0.48%
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:
December 31, 1996 December 31, 1995 December 31, 1994 December 31, 1993 December 31, 1992
Percent of Percent of Percent of Percent of Percent of
Loans in Loans in Loans in Loans in Loans in
Each Each Each Each Each
Category to Category to Category to Category to Category to
Amount Total Loans Amount Total Loans Amount Total Loans Amount Total Loans Amount Total Loans
(In thousands of dollars)
Commercial, financial
and agricultural $9,383 23% $8,335 24% $9,376 21% $9,304 23% $7,249 25%
Real estate-construction 0 2% 0 3% 0 4% 0 3% 0 1%
Real estate-mortgage 708 61% 701 58% 732 59% 678 57% 606 54%
Installment 1,761 14% 1,627 15% 1,381 16% 1,193 17% 1,125 19%
Unallocated 5,191 0% 5,275 0% 2,842 0% 2,305 0% 3,049 1%
TOTAL $17,043 100% $15,938 100% $14,331 100% $13,480 100% $12,029 100%
In 1995, S&T adopted Financial Accounting Standards Board Statement No. 114,
"Accounting by Creditors for Impairment of a Loan", (Statement No. 114 as
amended by Financial Accounting Standards Board Statement No. 118, "Accounting
by Creditors for Impairment of a Loan - Income Recognition and Disclosures
(Statement No. 118)). The adoption of these accounting pronouncements did not
have a material impact on the comparability for the table of loan loss
experience or the table for allocation of the allowance for loan losses
presented above.
Deposits
The daily average amount of deposits and rates paid on such deposits is
summarized for the periods indicated in the following table:
Year Ended December 31
1996 1995 1994
Amount Rate Amount Rate Amount Rate
(In thousands of dollars)
Noninterest-bearing demand deposits $110,933 $105,209 $102,779
Interest-bearing demand deposits 93,750 1.43% 94,332 1.59% 100,336 1.64%
Money market accounts 137,821 4.01% 112,230 4.02% 110,491 3.03%
Savings deposits 123,122 2.42% 133,056 2.38% 146,284 2.36%
Time deposits 528,023 5.55% 484,314 5.68% 444,521 5.13%
TOTAL $993,649 4.44% $929,141 4.45% $904,411 3.90%
Maturities of time certificates of deposit of $100,000 or more outstanding at
December 31, 1996, are summarized as follows:
(In thousands of dollars)
3 Months or less $47,696
Over 3 through 6 months 11,059
Over 6 through 12 months 10,345
Over 12 months 19,947
TOTAL $89,047
Return on Equity and Assets
The table below shows consolidated operating and capital ratios of S&T
for each of the last three years:
Year Ended December 31
1996 1995 1994
Return on average assets 1.63% 1.54% 1.49%
Return on average equity 13.75% 13.21% 13.03%
Dividend payout ratio 42.90% 38.43% 34.85%
Equity to asset ratio 11.78% 11.92% 10.94%
Short-Term Borrowings
The following table shows the distribution of the Company'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.
Federal Funds
Purchased and
Securities
Sold Under
Agreements
to Repurchase
(In thousands of dollars)
Balance at December 31:
1996 $114,980
1995 123,119
1994 189,461
Weighted average interest rate at year end:
1996 5.68%
1995 5.57%
1994 5.58%
Maximum amount outstanding at any month's end:
1996 $180,776
1995 195,811
1994 219,614
Average amount outstanding during the year:
1996 $141,012
1995 158,072
1994 160,539
Weighted average interest rate during the year:
1996 5.24%
1995 5.79%
1994 4.25%
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.
Item 2.PROPERTIES
The Company operates thirty-five banking offices in Indiana, Armstrong,
Allegheny, Jefferson, Clearfield, Westmoreland and surrounding counties in
Pennsylvania. The Company owns land and banking offices at the following
locations: 800 Philadelphia Street, 645 Philadelphia Street and 2175 Route
286, South in Indiana; Route 119 S. & Lucerne Road and 34 North Main Street in
Homer City; 539 West Mahoning Street, 100 West Mahoning Street and 232 North
Hampton Avenue in Punxsutawney; 133 Philadelphia Street in Armagh; Route 119
South in Black Lick; 256 Main Street and Route 36 & I-80 in Brookville; 456
Main Street in Brookway; Route 28 & Carrier Street in Summerville; 602 Salt
Street in Saltsburg; 12-14 West Long Avenue, 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
Chestnut Street in Derry; Second Avenue and Hicks Street in Leechburg; 109
Grant Avenue in Vandergrift; 100 South Fourth Street in Youngwood; and 701 East
Pittsburgh Street in Greensburg. Land is leased where the Company owns the
banking office at 1107 Wayne Avenue and remote ATM building at 435 South
Seventh Street and 1176 Grant Street, all in Indiana. In addition, the Company
leases land and banking offices at the following locations: Chestnut
Ridge Plaza in Blairsville; 324 North Fourth Street and 2850 Route 286 South in
Indiana; the Mall Office in DuBois, 229 Westmoreland Mall; 2320 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 the Company's business gnerates 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 the Company 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 the Company 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 of otherwise.
PART II
Item 5.MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER
MATTERS
Stock Prices and Dividend Information on page 44 and Dividend
and Loan Restrictions on page 35 of the Annual Report for the
year ended December 31, 1996, are incorporated herein by reference.
Item 6.SELECTED FINANCIAL DATA
Selected Financial Data on page 44 and 45 of the Annual Report for
the year ended December 31, 1996, is incorporated herein by reference.
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 pages 46 through 58 of the Annual
Report for the year ended December 31, 1996, is 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 22 through
43 and 45 of the Annual Report for the year ended December 31, 1996,
are 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 21, 1997 annual meeting of shareholders are incorporated herein by
reference.
Executive Officers
Number of
Shares
For the Officer Beneficially
Name Corporation Since Owned * Age
Robert D. Duggan Chairman, 1983 97,420 64
President, Chief
Executive Officer
and Director
James C. Miller Executive Vice 1983 64,170 51
President and
Director
James G. Barone Secretary 1992 30,871 49
and Treasurer
Robert E. Rout Chief Financial 1993 20,588 44
Officer
Bruce W. Salome Vice 1991 30,650 50
President
Edward C. Hauck Vice 1991 16,758 44
President
Executive Officers (continued)
Number of
Shares
For the Officer Beneficially
Name Corporation Since Owned * Age
David L. Krieger Vice 1984 33,089 53
President
Edward A. Onderick Vice 1989 21,742 52
President
J. Jeffrey Smead Vice 1992 23,410 45
President, Formerly
Executive Vice
President of First
National Bank of
Pennsylvania
William H. Klumpp Vice 1994 16,067 53
President, Formerly
Senior Vice President
of Huntington National
Bank
*Includes vested stock options
Item 11. EXECUTIVE COMPENSATION
Remuneration of Executive Officers on pages 7 through 9 of
the proxy statement for the April 21, 1997, annual meeting of
shareholders is 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 21, 1997, annual meeting of
shareholders is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management and Others on pages 11 and 12 of the
proxy statement for April 21, 1997, annual meeting with shareholders
is incorporated herein by reference.
PART IV
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, 1996, are incorporated by reference
in Part II, Item 8:
Page
Reference
Report of Ernst & Young LLP, Independent Auditors 43
Consolidated Balance Sheets
December 31, 1996 and 1995 22
Consolidated Statements of Income
Years ended December 31, 1996, 1995 and 1994 23
Consolidated Statements of Changes in Shareholders' Equity
Years ended December 31, 1996, 1995 and 1994 24
Consolidated Statements of Cash Flows
Years ended December 31, 1996, 1995 and 1994 25
Notes to Consolidated Financial Statements
December 31, 1996 26-42
Quarterly Selected Financial Data 45
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(Continued)
(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 not been omitted.
(3) Listings of Exhibits - See Item 14 (c) below
(b) Reports on Form 8-K
Form 8-K dated November 25, 1996 was filed as S&T Bancorp, Inc. (S&T) signed
a definitive agreement in which Peoples Bank of Unity will be merged into S&T's
subsidiary, S&T Bank. Subject to regulatory approvals and approval of the
shareholders of both companies, the transaction is expected to close in the
second quarter of 1997.
(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. and 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 dated January
15, 1986 and incorporated herein by reference.
(3.3) By-laws of S&T Bancorp, Inc., as amended, filed as Exhibit
3.3 to Form S-4 Registration Statement dated January 15, 1986 and
incorporated herein by reference.
(10.1) Deferred compensation arrangement with former director
filed as Exhibit 10.1 to Form 10-K dated December 31, 1983
and incorporated herein by reference.
(10.3) Employment Agreement dated December 9, 1985 between S&T Bancorp,
Inc. and Waid H. Nevins filed as Exhibit 10.1 to Form S-4 Registration
Statement dated January 15, 1986 and incorporated herein by reference.
(10.5) Sixth amendment to the Thrift Plan for Employees of S & T
Bank to be effective December 31, 1988, approved by the Board of
Directors at the November 21, 1988 meeting and incorporated
herein by reference.
(13) Annual Report for the year ended December 31, 1996 -
incorporated herein by reference.
(22) Subsidiaries of the Registrant - filed herewith
S&T Bank, a bank incorporated under the laws of Pennsylvania.
S&T Investment Company, Inc., an investment holding company
incorporated under the laws of Delaware.
(23.1) Consent of Ernst & Young LLP, Independent Auditors - filed herewith.
(d) Financial Statement Schedules
None
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/ Robert Duggan 03/17/97
Robert D. Duggan, Chairman, Date
President and Chief Executive Officer
(Principal Executive Officer)
/s/ James C. Miller 03/17/97
James C. Miller, Executive Vice President Date
(Executive Officer)
/s/ Robert E. Rout 03/17/97
Robert E. Rout, Chief Financial Officer Date
(Principal Financial and Accounting Officer)
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.
03/17/97 /s/ Paul B. Johnston 03/17/97
Thomas A. Brice, Director Date Paul B.Johnston, Director Date
/s/ Forrest L. Brubaker 03/17/97 /s/ Joseph A. Kirk 03/17/97
Forrest L. Brubaker, Director Date Joseph A. Kirk, Director Date
/s/ James L. Carino 03/17/97 03/17/97
James L. Carino, Director Date Samuel Levy, Director Date
/s/ John J. Delaney 03/17/97 /s/ James C. Miller 03/17/97
John J. Delaney, Director Date James C. Miller, Date
Executive Vice President
/s/ Robert D. Duggan 03/17/97 03/17/97
Robert D. Duggan, Chairman, Date W. Parker Ruddock, Date
President, Chief Executive Director
Officer and Director
/s/ Thomas W. Garges, Jr. 03/17/97 /s/ Charles A. Spadafora 03/17/97
Thomas W. Garges, Jr., Date Charles A. Spadafora, Date
Director Director
/s/ William J. Gatti 03/17/97 /s/ Christine J. Torretti 03/17/97
William J. Gatti, Director Date Christine J. Torretti, Date
Director
03/17/97 /s/ Harold W. Widdowson, 03/17/97
Herbert L. Hanna, Director Date Harold W. Widdowson, Director Date