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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, 1997
Commission file number 0-12508
S&T BANCORP, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania
(State or other jurisdiction of incorporation of organization)
25-1434426
(I.R.S. Employer Identification No.)
800 Philadelphia Street, Indiana, PA 15701
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including(724)-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 of 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 27, 1998:
Common Stock, $2.50 par value - $663,641,104
The number of shares outstanding of the issuer's classes of common stock as
of February 27, 1998:
Common Stock, $2.50 par value - 13,831,604 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual shareholders report for the year ended December 31,
1997 are incorporated by reference into Part II.
Portions of the proxy statement for the annual shareholders meeting to be
held April 20, 1998 are incorporated by reference into Part III.
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, 1997, S&T had $1.9 billion in total assets, $260 million
in total shareholders' equity and $1.3 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 $579 million at December 31, 1997.
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-seven 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 plan-
ning 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, 1997, S&T Bank had a total of 664 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.
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.
2
ITEM 1. BUSINESS- continued
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 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 Federal Deposit Insurance Corpor-
ation ("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 regul-
ations 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.
3
ITEM 1. BUSINESS- continued
Capital
The Federal Reserve Board and the FDIC have issued substantially similar
risk-based and leverage capital guidelines applicable to banking organizatons
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, 1997, S&T's Tier 1 and Total capital
ratios were 16.97 percent and 18.22 percent, respectively, and the ratios of
Tier 1 capital and Total capital to total risk-adjusted assets for S&T Bank
were 13.12 percent and 14.37 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, 1997 was
11.70 percent, and S&T Bank's leverage ratio was 9.24 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, 1997, S&T Bank paid $14.2 million in cash
dividends to S&T.
4
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, 1997, 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 nation-wide 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
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.
5
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 balance 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 obligaions 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 1997, 1996 and 1995. The following table demonstrates the
amount that has been added to interest income per the summary of operations.
[CAPTION]
Year Ended December 31
1997 1996 1995
(In thousands of dollars)
Interest income per consolidated
statements of income $141,101 $132,442 $127,020
Adjustment to fully taxable
equivalent basis 3,333 3,469 3,550
Interest income adjusted to fully
taxable equivalent basis 144,434 135,911 130,570
Interest expense 62,284 58,589 57,677
Net interest income adjusted to fully
taxable equivalent basis $82,150 $77,322 $72,893
6
BUSINESS - Continued
Average Balance Sheet and Net Interest Income Analysis
[CAPTION]
December 31
1997 1996 1995
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) $1,234,733 $109,779 8.89% $1,131,186 $100,373 8.87% $1.063.276 $96,501 9.08%
Taxable investment securities (2) 405,733 30,663 7.56% 411,560 30,871 7.50% 397,545 28,739 7.23%
Tax-exempt investment securities (2) 41,850 3,461 8.27% 52,026 4,332 8.33% 56,386 4,781 8.48%
Interest-earning deposits with banks 218 8 3.67% 73 5 6.85% 1,744 143 8.20%
Federal funds sold 9,528 523 5.49% 6,097 330 5.41% 6,976 406 5.82%
Total interest-earning assets (3) 1,692,062 144,434 8.54% 1,600,942 135,911 8.49% 1,525,927 130,570 8.56%
Noninterest-earning assets:
Cash and due from banks 36,185 38,741 38,584
Premises and equipment, net 19,752 19,419 19,444
Market value appreciation of
securities available for sale 46,626 33,524 23,164
Other assets 38,971 36,972 36,277
Less allowance for loan losses (19,802) (17,630) (15,977)
$1,813,794 $1,711,968 $1,627,419
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits $111,097 $1,383 1.24% $113,795 $1,723 1.51% $114,177 $1,899 1.66%
Money market accounts 183,259 7,389 4.03% 152,692 5,905 3.87% 128,661 4,926 3.83%
Savings deposits 187,394 4,340 2.32% 206,287 5,049 2.45% 227,712 6,037 2.65%
Time deposits 626,192 34,854 5.57% 605,693 33,448 5.52% 555,035 31,415 5.66%
Federal funds purchased 8,369 472 5.64% 5,812 319 5.49% 7,851 474 6.04%
Securities sold under agreements
to repurchase 126,481 6,602 5.22% 135,199 7,006 5.18% 150,221 8,482 5.65%
Long-term borrowings 123,722 7,227 5.84% 88,613 5,071 5.72% 73,154 4,326 5.91%
Other borrowed funds 230 17 7.39% 641 68 10.61% 1,042 118 11.32%
Total interest-bearing liabilities (3) 1,366,744 62,284 4.56% 1,308,732 58,589 4.48% 1,257,853 57,677 4.59%
Noninterest-bearing liabilities:
Demand deposits 161,339 151,863 141,966
Other 42,048 34,235 29,086
Shareholders' equity 243,663 217,138 198,514
$1,813,794 $1,711,968 $1,627,419
Net interest income $82,150 $77,322 $72,893
Net yield on interest-earning assets 4.85% 4.83% 4.78%
(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 1997, 1996 and 1995.
(3) Yields are calculated using historical cost basis.
7
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]
1997 Compared to 1996 1996 Compared to 1995
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) $9,188 $218 $9,406 $6,097 ($2,225) $3,872
Taxable investment securities (2) (437) 229 (208) 1,262 870 2,132
Tax-exempt investment securities (2) (847) (24) (871) (363) (86) (449)
Interest-earning deposits 10 (7) 3 (137) (1) (138)
Federal funds sold 186 7 193 (40) (36) (76)
Total interest-earning assets $8,100 $423 $8,523 $6,819 ($1,478) $5,341
Interest paid on:
Demand deposits ($41) ($299) ($340) ($5) ($171) ($176)
Money market accounts 1,182 302 1,484 990 (11) 979
Savings deposits (462) (247) (709) (728) (260) (988)
Time deposits 1,132 274 1,406 2,852 (819) 2,033
Securities sold under agreements
to repurchase (452) 48 (404) (848) (628) (1,476)
Federal funds purchased 140 13 153 (123) (32) (155)
Long-term borrowings 2,009 147 2,156 914 (169) 745
Other borrowed funds (44) (7) (51) (47) (3) (50)
Total interest-bearing liabilities $3,464 $231 $3,695 $3,005 ($2,093) 912
Change in net interest income $4,828 $4,429
(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 1997, 1996 and 1995.
8
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, 1997 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 frames, 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:
[CAPTION]
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.
9
Interest Rate Sensitivity
December 1997
(thousands of dollars)
[CAPTION]
GAP 1-6 Months 7-12 Months 13-24 Months >2 Years
Repricing Assets:
Cash/Due From Banks $0 $0 $0 $35,951
Securities 120,604 121,097 122,250 204,371
Net Loans 499,365 132,772 168,825 452,353
Other Assets 0 0 0 61,192
Total $619,969 $253,869 $291,075 $753,867
Repricing Liabilities:
Demand $0 $0 $0 $165,727
NOW 13,954 13,954 27,908 55,817
Money Market 196,823 0 0 0
Savings/Clubs 21,898 21,898 43,796 87,594
Certificates 185,473 120,806 187,257 141,755
Repos & Short-term Borrowings 153,660 532 0 258
Long-term Borrowings 94,730 0 0 49,618
Swaps 0 15,000 0 10,000
Other Liabilities/Equity 0 0 0 310,322
Total $666,538 $172,190 $258,961 $821,091
GAP ($46,569) $81,679 $32,114 ($67,224)
Cumulative GAP ($46,569) $35,110 $67,224 $0
Immediate
Current Policy Core Deposit
Rate Sensitive Assets/Rate Sensitive Liabilities Month Guideline Repricing
Cumulative 6 months 0.93 .85-1.15 0.68
Cumulative 12 months 1.04 .85-1.15 0.83
S&T's six month gap position at December 31, 1997 is liability sensitive;
the one year gap is asset sensitive. Liability sensitive means that more
liabilities than assets of S&T will reprice during the measured time frames;
asset sensitivety has the opposite meaning. The implications of a liability
sensitive position, or an asset 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 repricing assets. This
situation would cause an increase to S&T's 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 increased 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 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.
10
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,
1997, 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
1997 1996 1995
(In thousands of dollars)
Available for Sale
Marketable equity securities $101,639 $75,805 $65,873
Obligations of U.S. government corporations
and agencies 341,288 235,924 178,579
Collateralized mortgage obligations of
U.S. government corporations and agencies 0 4,182 11,035
Mortgage-backed securities 14,542 47,462 38,843
U.S. Treasury securities 39,473 58,742 107,763
Corporate securities 11,064 14,550 21,648
Other securities 13,111 13,136 9,115
TOTAL $521,117 $449,801 $432,856
Held to Maturity
Obligations of states and political subdivisions $37,497 $46,334 $55,795
Corporate securities 1,998 1,998 2,493
Other securities 7,608 1,928 1,092
TOTAL $47,103 $50,260 $59,380
11
Item 1. BUSINESS-- Continued
The following table sets forth the maturities of securities at December 31,
1997, 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 1997 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 $101,639
Obligations of U.S. government
corporations and agencies $9,078 7.31% $66,243 6.87% $265,967 7.23%
Mortgage-backed securities 3,474 7.62% 364 7.82% 2,552 7.76% $8,152 7.50%
U.S. Treasury securities 11,606 7.43% 21,364 7.25% 6,503 7.81%
Corporate securities 9,844 7.39% 1,220 7.16%
Other securities 13,111
TOTAL $24,158 $97,815 $276,242 $8,152 $114,750
Weighted Average Rate 7.41% 7.01% 7.25% 7.50%
Held to Maturity
Obligations of states and
political subdivisions $5,680 8.46% $16,290 7.93% $12,585 8.57% $2,942 8.56%
Corporate securities 1,998 7.53%
Other securities $7,608
TOTAL $5,680 $18,288 $12,585 $2,942 $7,608
Weighted Average Rate 8.46% 7.89% 8.57% 8.56%
12
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:
[CAPTION]
December 31
1997 1996 1995 1994 1993
(in thousands of dollars)
Domestic Loans:
Commercial, financial
and agricultural $255,017 $246,731 $242,854 $205,862 $185,656
Real estate-construction 47,967 35,508 30,191 35,660 26,338
Real estate-mortgage 839,801 763,556 669,900 623,707 529,231
Installment 130,968 154,341 160,437 161,105 149,978
TOTAL LOANS $1,273,753 $1,200,136 $1,103,382 $1,026,334 $891,203
The following table shows the maturity of loans (excluding residential
mortgages of 1-4 family residences and installment loans) outstanding as of
December 31, 1997. 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, financial
and agricultural $172,999 $65,051 $16,967 $255,017
Real estate-construction 14,668 12,495 20,804 47,967
Real estate-mortgage 52,156 117,556 157,672 327,384
TOTAL $239,823 $195,102 $195,443 $630,368
Fixed interest rates $75,942 $42,037
Variable interest rates 119,160 153,406
TOTAL $195,102 $195,443
13
Item 1. BUSINESS--Continued
Nonaccrual, Past Due and Restructured Loans
The following table summarizes S&T's nonaccrual, past due and restructured
loans:
[CAPTION]
December 31
1997 1996 1995 1994 1993
(In thousands of dollars)
Nonaccrual loans $3,602 $10,268 $4,748 $3,894 $2,577
Accruing loans past
due 90 days or more $0 $0 $0 $0 $1,254
At December 31, 1997, $3,602,000 of nonaccrual loans were secured. Interest
income that would have been recorded under original terms totaled $368,000.
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, 1997, 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. 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 effect-
iveness 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.
14
Item 1.BUSINESS--Continued
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
1997 1996 1995 1994 1993
1.60% 1.56% 1.55% 1.48% 1.60%
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 $914,000 and $2,605,000 at December 31, 1997 and 1996,
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:
[CAPTION]
Year Ended December 31
1997 1996 1995 1994 1993
(In thousands of dollars)
Balance at January 1: $18,729 $17,065 $15,169 $14,242 $12,786
Charge-offs:
Commercial, financial and agricultural 1,363 1,572 1,054 2,290 1,186
Real estate-mortgage 1,347 1,819 407 239 690
Installment 1,771 2,145 1,578 1,258 890
4,481 5,536 3,039 3,787 2,766
Recoveries:
Commercial, financial and agricultural 512 1,409 288 505 245
Real estate-mortgage 226 287 113 188 201
Installment 441 329 314 421 111
1,179 2,025 715 1,114 557
Net charge-offs 3,302 3,511 2,324 2,673 2,209
Provision for loan losses 5,000 5,175 4,220 3,600 3,665
Balance at December 31: $20,427 $18,729 $17,065 $15,169 $14,242
Ratio of net charge-offs
to average loans outstanding 0.27% 0.31% 0.22% 0.28% 0.27%
15
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, 1997 December 31, 1996 December 31, 1995 December 31, 1994 December 31, 1993
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 $13,556 20% $9,605 21% $8,579 22% $9,578 20% $9,419 21%
Real estate-construction 0 4% 0 3% 0 3% 0 3% 0 3%
Real estate-mortgage 763 66% 1,680 63% 1,321 61% 1,215 61% 1,087 59%
Installment 1,865 10% 1,859 13% 1,803 14% 1,510 16% 1,291 17%
Unallocated 4,243 0% 5,585 0% 5,362 0% 2,866 0% 2,445 0%
TOTAL $20,427 100% $18,729 100% $17,065 100% $15,169 100% $14,242 100%
In 1995, S&T adopted Financial Accounting Standards Board Statement No. 114,
"Accounting by Creditors for Impairment of a Loan," (as amended by Financial
Accounting Standards Board Statement No. 118 "Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures"). 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:
[CAPTION]
Year Ended December 31
1997 1996 1995
Amount Rate Amount Rate Amount Rate
(In thousands of dollars)
Noninterest-bearing demand deposits $161,339 $151,863 $141,966
Interest-bearing demand deposits 111,097 1.24% 113,795 1.51% 114,177 1.66%
Money market accounts 183,259 4.03% 152,692 3.87% 128,661 3.83%
Savings deposits 187,394 2.32% 206,287 2.45% 227,712 2.65%
Time deposits 626,192 5.57% 605,693 5.52% 555,035 5.66%
TOTAL $1,269,281 $1,230,330 $1,167,551
Maturities of time certificates of deposit of $100,000 or more outstanding
at December 31, 1997, are summarized as follows:
[CAPTION]
(In thousands of dollars)
3 Months or less $28,507
Over 3 through 6 months 18,195
Over 6 through 12 months 12,682
Over 12 months 36,294
TOTAL $95,678
Return on Equity and Assets
The table below shows consolidated operating and capital ratios of S&T for
each of the last three years:
[CAPTION]
Year Ended December 31
1997 1996 1995
Return on average assets 1.84% 1.65% 1.53%
Return on average equity 13.71% 13.01% 12.51%
Dividend payout ratio 42.54% 37.77% 35.25%
Equity to asset ratio 13.55% 12.65% 12.67%
16
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.
[CAPTION]
Federal Funds
Purchased and
Securities
Sold Under
Agreements
to Repurchase
(In thousands of dollars)
Balance at December 31
1997 $179,449
1996 114,980
1995 123,119
Weighted average interest rate at year end:
1997 5.82%
1996 5.68%
1995 5.57%
Maximum amount outstanding at any month's end:
1997 $195,024
1996 180,776
1995 195,811
Average amount outstanding during the year:
1997 $134,851
1996 141,012
1995 158,072
Weighted average interest rate during the year:
1997 5.31%
1996 5.24%
1995 5.79%
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.
17
Item 2. PROPERTIES
The Company operates thirty-seven 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 South & Lucerne Road and 34 North Main Street
in Homer City; 539 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
Brockway; Route 28 & Carrier Street in Summerville; 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 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; and 301 Unity Center Road in Unity. Land is leased where the Company
owns the banking offices at 1107 Wayne Avenue and remote ATM buildings 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
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 the Company's business generates a certain amount of litigation
involving matters arising in the ordinary cource 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 TO 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,
1997, 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, 1997, incorporated herein by reference.
18
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 21 through 29 of the Annual
Report for the year ended December 31, 1997, incorporated
herein by reference.
Item 7(A) QUANITATIVE and QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quanitative and Qualitative Disclosures about Market Risk
on page 28 of the Annual Report for the year ended December
31, 1997, 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 30
through 53 and 55 of the Annual Report for the year ended
December 31, 1997, 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 20, 1998, annual meeting of share-
holders are incorporated herein by reference.
[CAPTION]
Executive Officers
Number of
Shares
For the Officer Beneficially
Name Corporation Since Owned (2) Age
Robert D. Duggan (1) Chairman 1983 118,783 65
and Director
James C. Miller (1) President, Chief 1983 79,543 52
Executive Officer and
Director
James G. Barone Executive Vice 1992 41,086 50
President, Secretary and
Treasurer
Robert E. Rout Senior Vice 1993 27,940 45
President and Chief
Financial Officer
Bruce W. Salome Executive Vice 1991 40,908 51
President
Edward C. Hauck Executive Vice 1991 25,111 45
President
19
Executive Officers (continued)
Number of
Shares
For the Officer Beneficially
Name Corporation Since Owned (2) Age
David L. Krieger Executive Vice 1984 43,299 54
President
J. Jeffrey Smead Executive Vice 1992 30,542 46
President
William H. Klumpp Senior Vice 1994 22,409 54
President
Edward A. Onderick Senior Vice 1989 29,022 53
President
(1) On January 2, 1998 Mr. Duggan retired as President and Chief Executive
Officer. He will continue as chairman and director of S&T. Mr. Miller,
previously Executive Vice President and Chief Operating Officer, was
appointed President and Chief Executive Officer.
(2) May include shares held by family members, as trustee and nonstatutory
stock options vesting within 60 days of the date of this 10-K Report.
20
Item 11. EXECUTIVE COMPENSATION
Remuneration of Executive Officers on pages 7 through 9 of the
proxy statement for the April 20, 1998, annual meeting of share-
holders, 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 20, 1998, annual meeting of share-
holders, incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management and Others on page 11 and 12 of
the proxy statement for April 20, 1998, annual meeting with
shareholders, incorporated herein by reference.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
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, 1997, are incorporated by reference in Part
II, Item 8:
Page
Reference
Report of Ernst & Young LLP, Independent Auditors 53
Consolidated Balance Sheets
December 31, 1997 and 1996 30
Consolidated Statements of Income
Years ended December 31, 1997, 1996, and 1995 31
Consolidated Statements of Changes in Shareholders' Equity
Years ended December 31, 1997, 1996, and 1995 32
Consolidated Statements of Cash Flows
Years ended December 31, 1997, 1996, and 1995 33
Notes to Consolidated Financial Statements
December 31, 1997 34-52
Quarterly Selected Financial Data 55
21
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 been omitted.
(3) Listings of Exhibits - See Item 14 (c) below
Reports on Form 8-K
Form 8-K dated May 2, 1997 was filed as S&T Bancorp, Inc. (S&T)
completed the merger of Peoples Bank of Unity into its principal
subsidiary, S&T Bank. Peoples Bank of Unity, had assets of $288
million and operated six offices in the eastern suburbs of Pittsburgh.
Form 8-K dated September 12, 1997 was filed as S&T Bancorp, Inc. (S&T)
announcing Robert D. Duggan's retirement and James C. Miller's
appointment as President and Chief Executive Officer. The Form 8-K
also included the announcement of two new directors, Jeffrey D. Grube
and Alan Papernick.
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., 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, 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,
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,
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, 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, incorporated herein by reference.
(13) Annual Report for the year ended December 31, 1997, 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.
(23.2) Consent of S.R. Snodgrass, A.C., Independent Auditors - filed herewith.
Financial Statement Schedules
None
(99) Report of S.R. Snodgrass, A.C., Independent Auditors - filed herewith.
22
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 03/16/98
James C. Miller, Date
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Robert E. Rout 03/16/98
Robert E. Rout, Date
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
23
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 03/16/98 /s/Herbert L. Hanna 03/16/98
Thomas A. Brice, Herbert L. Hanna,
Director Date Director Date
/s/ Forrest L. Brubaker 03/16/98 /s/Frank W. Jones 03/16/98
Forrest L. Brubaker, Frank W. Jones,
Director Date Director Date
/s/ James L. Carino 03/16/98 /s/Joseph A. Kirk 03/16/98
James L. Carino, Joseph A. Kirk,
Director Date Director Date
/s/ John J. Delaney 03/16/98 03/16/98
John J. Delaney, Samuel Levy,
Director Date Director Date
/s/Robert D. Duggan 03/16/98 /s/James C. Miller 03/16/98
Robert D. Duggan, James C. Miller,
Chairman Date President, Chief
Executive Officer
and Director Date
/s/ Thomas W. Garges,Jr.03/16/98 /s/ Alan Papernick 03/16/98
Thomas W. Garges, Jr., Alan Papernick,
Director Date Director Date
/s/William J. Gatti 03/16/98 03/16/98
William J. Gatti, W. Parker Ruddock,
Director Date Director Date
/s/ Ruth M. Grant 03/16/98 /s/ Myles D. Sampson 03/16/98
Ruth M. Grant, Myles D. Sampson,
Director Date Director Date
/s/Jeffrey D. Grube 03/16/98 /s/Charles A. Spadafora 03/16/98
Jeffrey D. Grube, Charles A. Spadafora,
Director Date Director Date
/s/Christine J. Torretti 03/16/98
Christine J. Toretti,
Director Date
24