SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D. C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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 (I.R.S.EMPLOYER
incorporation or organization) Identification No.)
800 Philadelphia Street, Indiana, PA 15701
(Address of principal executive offices) (Zip Code)
(724) 349-2900
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report.)
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 periods 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
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, $2.50 Par Value -- 27,642,620 shares as of November 2, 1998
<PAGE> 1
INDEX
S&T BANCORP, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Condensed consolidated balance sheets -
September 30, 1998 and December 31, 1997 3
Condensed consolidated statements of income -
three months ended September 30, 1998 and 1997,
and nine months ended September 30, 1998 and 1997 4
Condensed consolidated statements of cash flows -
nine months ended September 30, 1998 and 1997 5
Notes to condensed consolidated financial
statements 6-9
Item 2. Management's discussion and analysis of financial
condition and results of operations 10-19
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 20
SIGNATURES 21
<PAGE> 2
S&T BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
(000's omitted except share data)
<S> <C> <C>
ASSETS
Cash and due from banks $42,550 $35,951
Interest-earning deposits with banks 50 102
Securities:
Available for sale 571,498 521,117
Held to maturity (market value
$33,956 in 1998 and $48,101 in 1997) 33,025 47,103
Total Securities 604,523 568,220
Loans, net of allowance for loan losses
of $24,791 in 1998 and $20,427 in
1997 1,318,509 1,253,326
Premises and equipment 21,218 20,613
Other assets 50,227 42,079
TOTAL ASSETS $2,037,077 $1,920,291
LIABILITIES
Deposits:
Noninterest-bearing $200,367 $165,727
Interest-bearing 1,171,079 1,118,931
Total Deposits 1,371,446 1,284,658
Securities sold under repurchase
agreements 137,366 170,124
Federal funds purchased 0 9,325
Long term borrowing 229,068 144,218
Other borrowed funds 130 130
Other liabilities 47,861 51,718
TOTAL LIABILITIES 1,785,871 1,660,173
SHAREHOLDERS' EQUITY
Preferred stock, without par value,
10,000,000 shares authorized and
none outstanding - -
Common stock ($2.50 par value)
Authorized - 50,000,000 shares
in 1998 and 25,000,000 in 1997
*Issued - 29,714,038 shares in 1998
and 14,857,019 in 1997 74,285 37,142
Additional paid in capital 21,017 19,369
Retained earnings 153,479 175,707
Accumulated other comprehensive income 38,319 40,524
*Treasury stock (2,136,824 shares at
September 30, 1998 and 1,431,728 at
December 31, 1997, at cost) (35,764) (12,494)
Deferred compensation (130) (130)
TOTAL SHAREHOLDERS' EQUITY 251,206 260,118
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $2,037,077 $1,920,291
*Reflects the effect of a two-for-one common stock split in the form of a 100%
stock dividend distributed on October 30, 1998.
See Notes to Condensed Consolidated Financial Statements
</TABLE>
<PAGE> 3
S&T BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For Three Months Ended For Nine Months Ended
September 30, September 30,
<S> <C> <C> <C> <C>
1998 1997 1998 1997
(000's omitted except per share data)
INTEREST INCOME
Loans, including fees $29,263 $27,670 $85,791 $81,003
Deposits with banks 1 2 5 6
Federal funds sold 39 92 218 501
Investment securities:
Taxable 7,816 6,364 23,262 19,004
Tax-exempt 371 550 1,253 1,741
Dividends 855 811 2,537 2,432
Total Interest Income 38,345 35,489 113,066 104,687
INTEREST EXPENSE
Deposits 12,502 12,437 37,000 35,518
Securities sold under
repurchase agreements 2,183 1,538 7,316 4,842
Federal funds purchased 68 64 305 304
Long term borrowing 2,822 1,704 7,028 5,142
Other borrowed funds 2 5 7 13
Total Interest Expense 17,577 15,748 51,656 45,819
NET INTEREST INCOME 20,768 19,741 61,410 58,868
Provision for loan losses 2,000 750 8,050 3,100
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 18,768 18,991 53,360 55,768
NONINTEREST INCOME
Trust fees 870 896 2,614 2,305
Service charges on deposit
accounts 1,387 1,174 3,993 3,317
Net securities/other gains 1,095 378 8,539 3,918
Other 976 777 2,954 2,178
Total Noninterest Income 4,328 3,224 18,100 11,718
NONINTEREST EXPENSE
Salaries and employee benefits 5,291 5,540 16,537 17,503
Occupancy, net 695 638 2,074 1,989
Furniture and equipment 624 559 2,168 2,580
Other taxes 369 333 1,091 987
Data processing 542 510 1,934 1,645
FDIC assessment 59 58 172 176
Other 2,042 2,354 7,282 7,712
Total Noninterest Expense 9,623 9,991 31,258 32,593
INCOME BEFORE INCOME TAXES 13,472 12,224 40,201 34,893
Applicable income taxes 3,971 3,575 12,012 10,190
NET INCOME $9,501 $8,649 $28,189 $24,703
PER COMMON SHARE (1)
Net Income - Basic $0.35 $0.31 $1.02 $0.88
Net Income - Diluted $0.34 $0.30 $1.00 $0.87
Dividends 0.17 0.14 0.48 0.41
Average Common Shares
Outstanding - Basic 27,622 28,264 27,806 28,258
Average Common Shares
Outstanding - Diluted 28,028 28,614 28,130 28,582
(1) Per share amounts and average shares outstanding have been restated to
record the effect of a two-for-one common stock split in the form of a 100%
stock dividend distributed on October 30, 1998.
See Notes to Condensed Consolidated Financial Statements
</TABLE>
<PAGE> 4
S&T BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended September 30
1998 1997
(000's omitted)
<S> <C> <C>
Operating Activities
Net Income $28,189 $24,703
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 8,050 3,100
Provision for depreciation and
amortization 1,598 1,643
Net amortizaton of investment security
premiums 466 470
Net gains on sales of securities
available for sale (8,168) (3,813)
Deferred income taxes (814) 38
Increase in interest receivable (1,095) (1,226)
Increase in interest payable 611 189
(Increase) decrease in other assets (5,697) 1,139
Decrease in other liabilities (4,128) (891)
Net Cash Provided by Operating Activities 19,012 25,352
Investing Activities
Net redemption of interest-earning
deposits with banks 52 5
Net decrease in federal funds sold 0 6,465
Proceeds from maturities of investment
securities 14,094 952
Proceeds from maturities of securities
available for sale 136,711 86,985
Proceeds from sales of securities
available for sale 76,626 38,480
Purchases of securities available for sale (259,425) (98,124)
Net increase in loans (94,379) (70,541)
Proceeds from the sale of loans 21,146 10,185
Purchases of premises and equipment (2,226) (167)
Other, net 23 (673)
Net Cash Used by Investing Activities (107,378) (26,433)
Financing Activities
Net increase in demand, NOW, MMI, and
savings deposits 58,279 6,275
Net increase in certificates of deposit 28,509 13,249
Net (decrease) increase in repurchase
agreements (32,758) 7,220
Net (decrease) increase in federal
funds purchased (9,325) 160
Proceeds from FHLB long-term borrowings 84,850 0
Repayments of FHLB long-term borrowings 0 (13,500)
Acquisition of treasury stock (27,975) (4)
Excercise of stock options and related
tax benefit 6,354 748
Decrease in obligation under capital lease 0 (119)
Cash dividends paid to shareholders (12,969) (10,258)
Net Cash Used by Financing Activities 94,965 3,771
Increase in Cash and Cash Equivalents 6,599 2,690
Cash and Cash Equivalents at Beginning
of Period 35,951 40,710
Cash and Cash Equivalents at End of Period $42,550 $43,400
See Notes to Condensed Consolidated Financial Statements
</TABLE>
<PAGE> 5
S&T BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments consisting
of normal recurring accruals considered necessary for a fair presentation have
been included. Operating results for the nine month period ended September
30, 1998 are not necessarily indicative of the results that may be expected for
the year ending December 31, 1998. For further information, refer to the
consolidated financial statements and footnotes thereto included in the annual
report on Form 10-K for the year ended December 31, 1997.
On September 21, 1998, the Board of Directors approved a two-for-one common
stock split in the form of a 100% stock dividend. The new shares were
distributed on October 30, 1998 to shareholders of record on October 15, 1998.
This increased the outstanding shares by 13,789,110. All per share amounts in
the report have been restated to reflect the stock split.
Basic earnings per share is calculated by dividing income available to common
shareholders by the weighted average number of common shares outstanding during
the period. Options, warrants and other potentially dilutive securities are
excluded from the basic calculation, but are included in diluted earnings per
share. Average shares outstanding for computing basic earnings per share
were 27,805,228 and 28,257,954 for the period ending September 30, 1998 and
1997. Average shares outstanding for computing dilutive earnings per share
were 28,130,976 and 28,581,988 for the period ending September 30, 1998 and
1997. In computing dilutive earnings per share, average shares outstanding
have been increased by the common stock equivalents relating to S&T's available
stock options.
As of January 1, 1998, S&T adopted Statement 130, Reporting Comprehensive
Income. Statement 130 establishes new rules for the reporting and display of
of comprehensive income and its components. The adoption of this Statement
had no impact on S&T's net income or shareholders' equity. Statement 130
requires unrealized gains or losses on S&T's available-for-sale securities,
which prior to adoption were reported separately in shareholders' equity, to
be included in comprehensive income. Prior period financial statements
have been reclassified to conform to the requirements of Statement 130.
During the nine months ended September 30, 1998 and 1997, total comprehensive
income amounted to $25,984,000 and $34,718,000.
NOTE B--SECURITIES
The amortized cost and estimated market value of securities as of September 30
are as follows:
<TABLE>
<CAPTION>
1998 Available for Sale
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
(000's omitted)
<S> <C> <C> <C> <C>
Obligations of U.S.
government corporations
and agencies $391,471 $6,699 $398,170
Mortgage-backed securities 9,340 400 (1) 9,739
U.S. Treasury securities 31,414 1,922 33,336
Corporate securities 15,914 534 16,448
Debt securities available
for sale 448,139 9,555 (1) 457,693
Marketable equity
securities 47,140 51,179 (1,781) 96,538
Other securities 17,267 17,267
Total $512,546 $60,734 ($1,782) $571,498
1998 Held to Maturity
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
(000's omitted)
Obligations of states and
political subdivision $25,286 $728 $26,014
Corporate securities 1,999 203 2,202
Debt securities held to
maturity 27,285 931 0 28,216
Other securities 5,740 5,740
Total $33,025 $931 $0 $33,956
</TABLE>
<PAGE> 6
S&T BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Continued
<TABLE>
<CAPTION>
NOTE B-SECURITIES
The amortized cost and estimated market value of securities as of December 31
are as follows:
1997 Available for Sale
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
(000's omitted)
<S> <C> <C> <C> <C>
Obligations of U.S. government
corporations and agencies $338,855 $2,616 ($183) $341,288
Mortgage-backed securities 14,169 373 14,542
U.S. treasury securities 38,044 1,429 39,473
Corporate securities 10,848 228 (12) 11,064
Debt securities available
for sale 401,916 4,646 (195) 406,367
Marketable equity securities 43,745 58,060 (166) 101,639
Other securities 13,111 13,111
Total $458,772 $62,706 ($361) $521,117
1997 Held to Maturity
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
(000's omitted)
Obligations of states and
political subdivisions $37,497 $794 ($5) $38,286
Corporate securities 1,998 209 2,207
Debt securities held to
maturity 39,495 1,003 (5) 40,493
Other securities 7,608 7,608
Total $47,103 $1,003 ($5) $48,101
</TABLE>
During the period ended September 30, 1998 and 1997, there were $8,168,308 and
$3,813,153 in realized gains relative to securites available for sale.
The amortized cost and estimated market value of debt securities at September
30, 1998, by contractual maturity, are shown below.
<TABLE>
Estimated
Amortized Market
Available for Sale Cost Value
(000's omitted)
<S> <C> <C>
Due in one year or less $20,944 $21,196
Due after one year through five years 256,147 261,903
Due after five years through ten years 166,007 169,346
Due after ten years 5,041 5,248
Total $448,139 $457,693
</TABLE>
<PAGE> 7
S&T BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Continued
NOTE B-SECURITIES
<TABLE>
<CAPTION>
Estimated
Amortized Market
Held to Maturity Cost Value
(000's omitted)
<S> <C> <C>
Due in one year or less $6,149 $6,190
Due after one year through five years 15,263 15,944
Due after five years through ten years 5,873 6,082
Due after ten years 0 0
Total $27,285 $28,216
</TABLE>
At September 30, 1998 and December 31, 1997 investment securities with a
principal amount of $269,440,000 and $274,350,000 respectively, were pledged
to secure repurchase agreements and public and trust fund deposits.
NOTE C--LOANS AND ALLOWANCE FOR LOAN LOSSES
The composition of the loan portfolio was as follows:
<TABLE>
September 30, 1998 December 31, 1997
(000's omitted)
<S> <C> <C>
Real estate - construction $70,763 $47,967
Real estate - mortgages:
Residential 501,392 512,417
Commercial 383,146 327,384
Commercial - industrial and
agricultural 269,498 255,017
Consumer installment 118,501 130,968
Gross Loans 1,343,300 1,273,753
Allowance for loan losses (24,791) (20,427)
Total Loans
$1,318,509 $1,253,326
</TABLE>
Changes in the allowance for loan losses for the nine months ended September 30
were as follows:
<TABLE>
1998 1997
(000's omitted)
<S> <C> <C>
Balance at beginning of period $20,427 $18,729
Charge-offs (4,787) (2,137)
Recoveries 1,101 699
Net charge-offs (3,686) (1,438)
Provision for loan losses 8,050 3,100
Balance at end of period $24,791 $20,392
</TABLE>
<PAGE> 8
S&T BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Continued
<TABLE>
<CAPTION>
The following table represents S&T's investment in loans considered to be
impaired and related information on those impaired loans at September 30,
1998 and December 31, 1997.
1998 1997
<S> <C> <C>
Recorded investment in loans considered
to be impaired $4,131,000 $1,869,000
Loans considered to be impaired that
were on a nonaccrual basis 534,000 -
Allowance for loan losses related to
loans considered to be impaired 238,000 914,000
Average recorded investment in impaired
loans 3,723,000 6,329,000
Total interest income recognized on
impaired loans 670,000 656,000
Interest income on impaired loans
recognized on a cash basis -
</TABLE>
NOTE D--FINANCIAL INSTRUMENTS
S&T, in the normal course of business, commits to extend credit and issue
standby letters of credit. The obligations are not recorded in S&T's
financial statements. Loan commitments and standby letters of credit are
subject to S&T's normal credit underwriting policies and procedures and
generally require collateral based upon management's evaluation of each
customer's financial condition and ability to satisfy completely the terms
of the agreement. S&T's exposure to credit loss in the event the customer
does not satisfy the terms of agreement equals the notional amount of the
obligation less the value of any collateral. Unfunded loan commitments
totaled $361,198,000 and obligations under standby letters of credit
totaled $65,040,000 at September 30, 1998.
At September 30, 1998, S&T had marketable equity securities, totaling
$2,581,267 at amortized cost and $4,780,688 at estimated market value,
that were subject to covered call option contracts. The purpose of
these contracts was to generate fee income for S&T.
NOTE E - LITIGATION
S&T, in the normal course of business, is subject to various legal
proceedings in which claims for monetary damages are asserted. No
material losses are anticipated by management as a result of these
legal proceedings.
<PAGE> 9
S&T BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
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
Bancorp, Inc. and subsidiaries (S&T). This
discussion and analysis should be read in conjunction
with the condensed consolidated financial statements
and the selected financial data presented elsewhere
in this report.
Financial Condition
Total assets averaged $2.0 billion in the first nine
months of 1998, a $162.4 million increase from the
1997 full year average. Average loans increased
$67.3 million and average securities and federal
funds increased $76.4 million in the first nine
months of 1998 compared to the 1997 full year
averages. Funding for this loan and security growth
was primarily provided by a $43.2 million increase in
average deposits, a $12.1 million increase in average
retained earnings and a $101.1 million increase in
average borrowings.
Lending Activity
Total loans at September 30, 1998 were $1.3 billion,
a $69.4 million or 5.5% increase from December 31,
1997. Average loans increased $67.3 million, or 5%
to $1.3 billion for the nine months ended September
30, 1998 from the 1997 full year average. Changes in
the composition of the loan portfolio during 1998
included increases of $14.5 million of commercial
loans, $77.2 million of commercial real estate loans,
offset by a decrease of $9.6 million of residential
mortgages and $12.6 million of installment loans.
Commercial real estate loans comprise 29% of the loan
portfolio. Although commercial real estate loans can
be an area of higher risk, management believes these
risks are mitigated by limiting the percentage amount
of portfolio composition, a rigorous underwriting
review by loan administration and the fact that many
of the commercial real estate loans are
owner-occupied and/or seasoned properties. During
1998, S&T sold $13.8 million of participations in
originated commercial real estate loans. The purpose
of these sales was to diversify credit risk on larger
loans and to generate fee income from servicing.
Residential mortgage lending continued to be a
strategic area of focus during the first nine months
of 1998 through a centralized mortgage origination
department, ongoing product redesign, the utilization
of commission compensated originators and the
implementation of a mortgage banking function.
Management believes that if a downturn in the local
residential real estate market occurs, the impact of
declining values on the real estate loan portfolio
will be negligible because of S&T's conservative
mortgage lending policies. These policies generally
require, for portfolio loans, a maximum term of
twenty years for fixed rate mortgages and private
mortgage insurance for loans with less than a 20%
down payment. At September 30, 1998 the residential
mortgage portfolio had a 24% composition of
adjustable rate mortgages.
Beginning in the fourth quarter of 1997, S&T sold
$12.7 million of long-term, lower-yielding 1-4 family
mortgages, acquired from the Peoples merger, to the
Federal National Mortgage Association (FNMA). S&T
retained ongoing servicing rights on the mortgages
sold to FNMA. The rationale for these sales is to
mitigate interest rate risk associated with holding
long-term residential mortgages in the loan
portfolio, to generate fee revenue from servicing,
and still maintain the primary customer relationship.
During the first nine months of 1998, S&T sold $7.3
million of 1-4 family mortgages to FNMA. S&T will
continue to sell longer-term loans to FNMA in the
future on a selective basis, especially during
periods of lower interest rates.
<PAGE> 10
S&T BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF
OPERATIONS
Installment loan decreases are primarily associated
with significantly lower volumes in the indirect
auto loan category. Pricing pressures have been
unusually intense in the indirect auto loan market
during the last two years and the decision was made
to exit this line of business and allow the portfolio
to roll off. Installment loans have also decreased
due to recent changes in government regulations
which have significantly decreased the profit
potential of guaranteed student loans. The remaining
student loan portfolio of $7.0 million was sold in
1997. S&T will continue to distribute student loan
applications for customer convenience, but will not
fund or hold the loans.
Loan underwriting standards for S&T are established
by a formal policy administered by the S&T Bank
Credit Administration Department, and subject to the
periodic review and approval of the S&T Bank Board of
Directors.
Rates and terms for commercial real estate and
equipment loans normally are negotiated, subject to
such variables as economic conditions, marketability
of collateral, credit history of the borrower and
future cash flows. The loan to value policy
guideline for commercial loans is generally 75%.
The residential, first lien, mortgage loan to value
policy guideline is 80%. Higher loan to value loans
can be approved with the appropriate private mortgage
insurance coverage. Second lien positions are
sometimes incurred with home equity loans, but
normally only to the extent that the combined credit
exposure for both first and second liens do not
exceed 100% of loan to value.
A variety of unsecured and secured installment loan
and credit card products are offered by S&T.
However, the bulk of the consumer loan portfolio is
automobile loans. Loan to value guidelines for
direct loans are 90%-100% of invoice for new
automobiles and 80%-90% of "NADA" value for used
automobiles. Loan to value policy guidelines for
automobile loans purchased from dealers on a third
party basis are 90%-125% of invoice for new
automobiles and 100%-125% of "Black Book" value for
used automobiles.
Management intends to continue to pursue quality
loans in a variety of lending categories within our
market area in order to honor our commitment to
provide the best service possible to our customers.
S&T's loan portfolio primarily represents loans to
businesses and consumers in our market area of
Western Pennsylvania rather than to borrowers in
other areas of the country or to borrowers in other
nations. S&T has not concentrated its lending
activities in any industry or group. During the past
several years, management has concentrated on
building an effective credit and loan administration
staff which assists management in evaluating loans
before they are made and identifies problem loans
early.
Security Activity
Average securities increased $80.6 million in the
first nine months of 1998 compared to the 1997 full
year average. The increase in the average investment
portfolio was related to an increase in average
taxable securities of $92.0 million, offset by a
decrease in tax-exempt state and municipal securities
average balances of $11.4 million. This increase
was comprised of $98.2 million in U.S. government
agency securities, $0.5 million of mortgage-backed
securities, $2.2 million of corporate equity
securities and $4.5 million of Federal Home Loan Bank
(FHLB) stock. Offsetting these increases were
average decreases of $11.8 million of U.S. treasury
securities and $1.6 million of corporate securities.
<PAGE> 11
S&T BANCORP , INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF
OPERATIONS
The significant increase in U.S. government agency
securities, classified as available for sale, during
1998 was due to a balance sheet leveraging strategy
to maximize net interest income by taking advantage
of low, short-term funding rates. Interest rate risk
associated with this strategy is managed and
monitored through S&T's Asset Liability Committee
(ALCO).
The equity securities portfolio is primarily
comprised of bank holding companies, as well as
preferred and utility stocks to take advantage of the
dividends received deduction for corporations.
During 1998, the equity portfolio yielded 10.4% on a
fully taxable equivalent basis and had unrealized
gains, net of nominal unrealized losses, of $49.4
million. The equity securities portfolio consists of
securities traded on the various stock markets and
are subject to change in market value. The FHLB
capital stock is a membership and borrowing
requirement and is acquired and sold at stated value.
S&T's policy for security classification includes
U.S. treasuries, U.S. government agencies,
mortgage-backed securities, CMOs and corporate
equities as available for sale. Municipal securities
and other debt securities are classified as held to
maturity. At September 30, 1998, unrealized gains,
net of unrealized losses, for securities classified
as available for sale were $58.9 million.
Allowance for Loan Losses
The adequacy of the allowance for loan losses is
determined by management through evaluation of the
loss potential on individual nonperforming,
delinquent and high-dollar loans, review of economic
conditions and business trends, historical loss
experience, growth and composition of the loan
portfolio as well as other relevant factors. Asset
quality is a major corporate objective at S&T and
management believes that the total allowance for loan
losses is adequate to absorb probable loan losses.
The balance of nonperforming loans at September 30,
1998, which includes nonaccrual loans past due 90
days or more, was $3.6 million, or 0.27% of total
loans. This compares to nonperforming loans of $3.6
million or 0.28% of total loans at December 31, 1997.
S&T had a $67.3 million, or 5%, increase in average
loans during the first nine months of 1998 as compared
to the 1997 average. All of this portfolio growth
occurred in the industrial and commercial real estate
classifications. Despite currently favorable credit
quality statistics, S&T recognizes the increased
risks of these types of loans, especially when the
current economic expansion slows or declines. Also
unknown is the effect that the Year 2000 computer
issue will have on the businesses of commercial
customers, pending completion of a Year 2000 risk
assessment program currently in process for major S&T
commercial customers. Therefore, S&T believed it
prudent to increase the allowance for loan losses to
$24.8 million, or 1.85% of total loans at September
30, 1998, as compared to $20.4 million, or 1.60% at
December 31, 1997. During the third quarter of 1998,
$2.0 million was charged-off related to an out of
trust problem on a floor plan inventory loan with a
local automobile dealer.
Deposits
Average total deposits increased by $43.2 million, or
3% for the nine months ended September 30, 1998 as
compared to the 1997 average. Changes in the average
deposit mix included a $12.5 million increase in time
deposits, $25.0 million increase in money market
accounts, $1.5 million increase in NOW accounts and a
$17.4 million increase in demand accounts, offset by
a $13.2 million decrease in savings accounts. On
September 25, 1998, S&T consummated the purchase of
Mellon Bank's Clarion office which added
approximately $40.0 million in deposits.
Special rate deposits of $100 thousand and over were
7% of total deposits at September 30, 1998 and
December 31, 1997 and primarily represent deposit
relationships with local customers in our market
area. Retail time deposit increases of $12.5 million
were the result of expanded promotional programs.
<PAGE> 12
S&T BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF
OPERATIONS
During the second half of 1995, S&T issued $25.0
million of retail certificates of deposits through
two brokerage firms, further broadening the
availability of reasonably priced deposit funds. At
September 30, 1998, there were $26.6 million of these
brokered retail certificates of deposits outstanding.
Money market accounts were recently repriced in order
to be more competitive with money funds offered by
brokerage firms. As a result of this repricing and
proactive sales activities to high-balance deposit
customers, S&T has experienced a significant shift
in funds from savings to money market accounts.
Although this strategy tends to increase cost of
funds, management believes it is necessary for
customer retention and the development of long-term
relationships.
Management believes that the S&T deposit base is
stable and that S&T has the ability to attract new
deposits, mitigating a funding dependency on volatile
liabilities. In addition, S&T has the ability to
access both public and private markets to raise
long-term funding if necessary.
Borrowings
Average borrowings increased $101.1 million for the
nine months ended September 30, 1998 compared to the
1997 annual average and were comprised of retail
repurchase agreements (REPO's), wholesale REPO's,
federal funds purchased and long-term borrowings.
S&T defines repurchase agreements with its local,
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.
The average balance in retail REPOS increased
approximately $10.4 million for the first nine months
of 1998 compared to the full year 1997 average. This
increase is primarily attributable to new REPO sweep
relationships in our cash management department. S&T
views retail REPOS as a relatively stable source of
funds since most of these accounts are with local,
long-term customers.
Wholesale REPOS and federal funds increased $43.1
million for the first nine months of 1998 compared to
the full year 1997 average. The aforementioned
balance sheet leveraging strategy has increased the
usage of wholesale REPO fundings in 1998.
Average long-term borrowings have increased $47.7
million in the first nine months of 1998 as compared
to the full year 1997 average. At September 30,
1998, S&T had long-term borrowings outstanding of
$49.6 million at a fixed rate and $119.6 million at
an adjustable rate with the FHLB. The purpose of
these borrowings was to provide matched, fixed rate
fundings for newly originated loans, to mitigate the
risk associated with volatile liability fundings, to
take advantage of lower cost funds through the FHLB's
Community Investment Program and to fund stock
buy-backs.
Capital Resources
Shareholders' equity decreased $8.9 million at
September 30, 1998, compared to December 31, 1997.
Net income was $28.2 million and dividends paid to
shareholders were $13.0 million for the nine months
ended September 30, 1998. The decrease is
attributable to the conclusion of the Modified Dutch
Auction in which S&T repurchased approximately
880,000 shares of its common stock. An authorization
to buy-back up to 2,120,000 shares not acquired in
the Modified Dutch Auction remains in effect until
December 31, 1998. During the second and third
quarters of 1998, S&T repurchased an additional
238,000 shares of its common stock.
<PAGE> 13
S&T BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF
OPERATIONS
S&T paid 46% of net income in dividends, equating to
an annual dividend rate of $0.64 per share during the
first nine months of 1998. On September 21, 1998. the
Board of Directors of S&T approved a two-for-one
stock split which will be effected in the form of a
100 percent stock dividend. The new shares will be
distributed on October 30, 1998 to shareholders of
record on October 15, 1998. The split will increase
the number of shares outstanding to 27,577,214.
The book value of S&T's common stock decreased
slightly from $9.20 at December 31, 1997 to $9.11
at September 30,1998, primarily due to the stock
buy-backs during the first nine months of 1998.
Equity associated with the available for sale
securities portfolio decreased $2.2 million during
the first nine months of 1998. The market price of
S&T's common stock was $26.75 per share at September
30, 1998, an increase from $21.63 per share at
December 31, 1997.
S&T continues to maintain a strong capital position
with a leverage ratio of 10.8% as compared to the
minimum regulatory guideline of 3.0%. S&T's
risk-based capital Tier I and Total ratios were 15.3%
and 16.6% respectively, at September 30, 1998. These
ratios place S&T well above the Federal Reserve
Board's risk-based capital guidelines of 4.0% and
8.0% for Tier I and Total, respectively.
RESULTS OF OPERATIONS
Nine months ended September 30, 1998 compared to
Nine months ended September 30, 1997
Net Income
Net income increased to $28.2 million or $1.00 per
diluted earnings per share in the first nine months
of 1998 from $24.7 million or $0.87 per diluted
earnings per share for the same period of 1997.
The significant improvement during the first nine
months of 1998 was the result of higher net interest
income, noninterest income and security gains.
Operating expenses were lower due to the People's
merger related costs and post merger restructurings
incurred in the first nine months of 1997.
Net Interest Income
On a fully taxable equivalent basis, net interest
income increased $2.3 million or 4% in the first nine
months of 1998 compared to the same period of 1997.
The net yield on interest-earning assets was 4.63%
in the first nine months of 1998 as compared to 4.90%
in the same period of 1997. The decline in the net
yield on interest earning assets during 1998 was
primarily attributed the aforementioned balance sheet
leveraging strategy with arbitraged securities, and
stock buy-backs during the first nine months of 1998.
In the first nine months of 1998, average securities
increased $80.6 million and average loans increased
$67.3 million. The yields on average securities
decreased by 17 basis points during the period and
the yield on average loans remained constant.
In the fourth quarter of 1997, S&T implemented a
balance sheet leveraging strategy through the
purchase of approximately $100 million of
intermediate-term U.S. government securities, funded
with short-term borrowings. The strategy provided
pre-tax spreads of 100-125 basis points during the
period with manageable risks, contributing positively
to net interest income, but also causing a 13 basis
points decline in the net yield on interest earning
assets.
Average interest-bearing deposits provided $49.1
million of the funds for the growth in securities and
loans; cost of deposits totaled 3.77%, an increase of
1 basis point from 1997. The cost of REPOS and
<PAGE> 14
S&T BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
other borrowed funds decreased 6 basis points to
5.45%. More longer-term borrowings were utilized in
1998 in order to take advantage of low, long-term
funds rates and to mitigate interest rate risk.
Also positively affecting net interest income was a
$22.0 million increase to average net free funds.
Average net free funds are the excess of demand
deposits, other non-interest bearing liabilities and
shareholders' equity over non-earning assets. This
increase is net of the reduction to shareholders'
equity resulting from stock buy-backs.
Maintaining consistent spreads between earning assets
and costing liabilities is very significant to S&T's
financial performance since net interest income
comprises 87% of operating revenue. A variety of
asset/liablity management strategies were
successfully implemented within prescribed ALCO risk
parameters that enabled S&T to maintain a net
interest margin reasonably consistent with historical
levels. The level and mix of funds is continually
monitored by ALCO in order to mitigate the interest
rate sensitivity and liquidity risks of the balance
sheet.
Provision for Loan Losses
The provision for loan losses increased to $8.1
million for the first nine months of 1998 as compared
to $3.1 million in the same period of 1997. The
increase was the result of management's assessment of
economic conditions, credit quality statistics, loan
administration effectiveness and other factors that
would have an impact on future probable losses in the
loan portfolio.
Credit quality statistics are an important factor in
determining the amount of provision expense. Net
loan charge-offs totaled $3.7 million for the first
nine months of 1998 compared to $1.4 million for the
same period 1997. Net loan charge-offs in 1998
included a $2.0 million charge-off to one related
credit. Nonperforming loans to total loans was 0.27%
at September 30, 1998 and 0.32% in the same period of
1997.
Also affecting the amount of provision expense is the
amount and types of loan growth. Recent loan growth
has been primarily in the commercial sectors, which
can be areas of higher risks in the event of an
economic downturn. Therefore, despite currently
favorable credit quality statistics, S&T believed
that a significant increase to the allowance for loan
losses was warranted in 1998.
Noninterest Income
Noninterest income increased $6.4 million or 54% in
the first nine months of 1998 compared to the same
period of 1997. Increases included $0.7 million in
service charges and fees, $0.3 million in trust
income, $4.6 million in security gains and $0.8
million in other income.
The 20% increase in service charges on deposit
accounts was primarily the result of expanding new
cash management relationships, management's continual
effort to implement reasonable fees for services
performed, to manage closely the collection of these
fees, as well as the implementation of foreign ATM
service charges in the fourth quarter of 1997. The
increase in trust fees is attributable to expanded
marketing efforts to develop new trust business and
to expand current relationships. The People's merger
presents new trust opportunities within the Allegheny
County market for trust products. The increase in
other income was a result of increased performance
for brokerage activities, credit insurance, letters
of credit fees and fees on covered call options.
These areas were the focus of several strategic
initiatives and product enhancements implemented in
order to expand this source of revenue.
<PAGE> 15
S&T BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF
OPERATIONS
S&T recognized $8.2 million of gains on equity
securities in the first nine months of 1998. $3.0
million were the result of Emerging Issues Task Force
#91-5, Nonmonetary Exchange of Cost-Method
Investments (EITF 91 5). This accounting
pronouncement requires the mark to market of equity
securities when an acquisition of the company in
which securities are owned occurs. EITF 91-5 gains
recognized included $2.6 million from the First
Union/Corestates merger and $0.4 million from the
CFX/Peoples Heritage merger. The remaining security
gains were taken on available for sale equities
securities in the first nine months of 1998 in order
to maximize returns by taking advantage of market
opportunities when presented. Unrealized gains, net
of unrealized losses, in the available for sale
equities portfolio totaled $49.4 million at
September 30, 1998.
Noninterest Expense
Noninterest expense decreased $1.3 million or 4% at
September 30, 1998 compared to September 30, 1997.
The decrease is primarily attributable to $2.2
million of merger related and other nonrecurring
expenses associated with the acquisition of Peoples
Bank of Unity (Peoples) during the first nine months
of 1997. Merger related and other nonrecurring
expenses included costs for severance and early
retirement programs, the write-off and conversion of
data processing systems, as well as legal, accounting
and investment banker expenses. Other expenses of
$0.9 million were provided for during the first nine
months of 1998 and included $0.2 million of
consulting fees for reengineering of retail loan
delivery services, $0.3 million for Year 2000
projected costs and $0.4 million of costs associated
with the conversion of data processing systems for a
branch purchase.
Recurring expenses were relatively flat during the
first nine months of 1998 as compared to the first
nine months of 1997. Severance and early retirement
programs were implemented in May 1997 in order to
eliminate duplicate positions following post merger
restructuring and consolidation of operations.
Average full-time equivalent staff decreased from 667
to 658. S&T's efficiency ratio, which measures
noninterest expense as a percent of recurring
noninterest income plus net interest income on a
fully taxable equivalent basis, improved to 41.85% at
September 30, 1998 as compared to 44.10% at September
30, 1997.
Federal Income Taxes
Federal income tax expense increased $1.8 million at
September 30, 1998 as compared to September 30, 1997
primarily as a result of higher pre-tax income in
1998. The effective tax rate for the first nine
months of 1998 was 30%, and 29% during the same
period of 1997, which is below the 35% statutory
rate due to benefits resulting from tax-exempt
interest, excludable dividend income and low income
housing tax credits (LIHTC).
RESULTS OF OPERATIONS
Three months ended September 30, 1998 compared to
Three months ended September 30, 1997
Net Income
Net income increased to $9.5 million or $0.34 per
diluted earnings per share in the third quarter of
1998 from $8.6 million or $0.30 per diluted earnings
per share for the same period of 1997, a 13%
earnings per share improvement. This significant
improvement is due to higher net interest income,
higher noninterest income, higher security gains,
reduced operating expenses and increased revenues
resulting from the synergies achieved with the
Peoples merger and stock buy-backs.
<PAGE> 16
S&T BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF
OPERATIONS
Net Interest Income
On a fully taxable equivalent basis, net interest
income increased $1.0 million or 5% in the third
quarter of 1998 compared to the same period of 1997.
This improvement in net interest income primarily
resulted from a higher level of earning assets while
spreads decreased. Average earning assets increased
increased by $162.1 million as compared to the third
quarter of 1997, primarily as a result $76.2 million
of loan growth and $86.0 million of security growth.
Funding for this asset growth was provided by available
for sale securities sales, deposits, borrowings and
retained earnings. Net interest margin on a fully
taxable equivalent basis was 4.60% for the third
quarter of 1998, as compared to 4.85% for the same
period of 1997. The decline in the net interest
margin is primarily due to the aforementioned balance
sheet leveraging strategy utilizing securities arbitrage
and the reduction of common equity through stock buy-back
programs.
Provision for Loan Losses
The provision for loan losses increased to $2.0 million
for the third quarter of 1998 compared to $0.8 million in
the same period of 1997. Net loan charge-offs totaled
$2.3 million for the third quarter of 1998, of which $2.0
million was related to a single credit, compared to $0.3
million for the same period 1997. The provision expense
in 1998 was a result of an effort to maintain S&T's
allowance for loan losses to total loans at a relatively
consistent level with loan growth, to provide for the
charge-off of a single credit this quarter and the continuing
change in the loan portfolio mix to a greater percentage of
commercial loans. The provision expense also considers
management's assessment of economic conditions, credit
quality statistics, loan administration effectiveness and
other factors that would have an impact on future probable
losses in the loan portfolio.
Noninterest Income
Noninterest income increased $1.1 million or 34% in the
third quarter of 1998 compared to the same period of 1997.
Increases included $0.7 million in security/nonrecurring
gains, $0.2 million in service charges and fees and $0.2
million in other income during the third quarter of 1998.
S&T recognized $0.7 million of gains on equity securities
in the third quarter of 1998. The security gains were taken
on available for sale equities securities in the third quarter
of 1998 in order to maximize returns by taking advantage of
market opportunities when presented. $0.4 million of
nonrecurring gains were recognized from oil and gas producing
properties that were sold during the third quarter of 1998.
The increase in service charges on deposit accounts was
primarily the result of expanding new cash management
relationships, management's continual effort to implement
reasonable fees for services performed, to manage closely the
collection of these fees, as well as the implementation of
foreign ATM service charges in the fourth quarter of 1997.
The increase in other income was a result of increased
performance for brokerage activities, letters of credit fees,
insurance and fees on covered call options. These areas were
the focus of several strategic initiatives and product
enhancements implemented in order to expand this source of
revenue.
Noninterest Expense
Noninterest expense decreased $0.4 million or 4% in the third
quarter of 1998 as compared to 1997. The decrease is primarily
attributable to the partial recovery of a previously charged-
off fraud loss and adjustments to employee benefit plans.
<PAGE> 17
S&T BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Recurring expenses were relatively flat during the third
quarter of 1998 as compared to the third quarter of 1997.
Severance and early retirement programs were implemented
in May 1997 in order to eliminate duplicate positions
following the merger restructuring and consolidation of
operations. S&T's efficiency ratio, which measures
noninterest expense as a percent of recurring noninterest
income plus net interest income on a fully taxable equivalent
basis, improved to 39.88% at September 30, 1998 as compared
to 42.67%at September 30, 1997.
Federal Income Taxes
Federal income tax expense increased $0.4 million at
September 30, 1998 as compared to September 30, 1997
primarily as a result of higher pre-tax income in 1998.
The effective tax rate for the third quarter of 1998 was
29%, which is below the 35% statutory rate due to benefits
resulting from tax-exempt interest, excludable dividend
income and low income housing tax credits (LIHTC).
Year 2000 Issue
The Year 2000 Issue is the result of computer programs being
written using two digits rather than four to define the
applicable year. Any of S&T's computer programs or hardware
that have date-sensitive software or embedded chips may
recognize a date using "00" as the year 1900 rather than the
year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including,
among other things, a temporary inability to process
transactions, send invoices or engage in similar normal
business activities.
Based on recent assessments, S&T determined that it will be
required to modify or replace some portions of hardware and
software so that those systems will properly utilize dates
beyond December 31, 1999. S&T presently believes that with
modifications and replacement of existing hardware and
software, the Year 2000 Issue can be mitigated. However,
if such modifications and replacements are not made, or are
not completed timely, the Year 2000 Issue could have a
material impact on the operations of S&T.
S&T's plan to resolve the Year 2000 Issue involves four
phases; assessment, remediation, testing and implementation.
In June 1997, S&T management formed a task force (Y2K Task
Force) to evaluate the process of preparing its computer
systems and applications for the Year 2000. This process
involves modifying or replacing certain hardware and
software maintained by S&T, as well as communicating with
external service providers and customers to ensure that
they are taking the appropriate action to remedy the their
Year 2000 issues. To date, the Y2K Task Force has completed
its assessment of the Year 2000 issue with internal systems
and third party vendors. Assessment of the effect of the
Year 2000 issue on commercial business customers is still
being evaluated.
Significant to S&T's data processing abilities is the.
services provided by M&I Data Services (M&I) which provides
the majority of computer services for S&T customer accounts
and transactions. M&I is also currently involved in a
similar Year 2000 assessment and remediation. S&T has been
notified by M&I that the project is on target. M&I expects
to be fully Year 2000 compliant in the fourth quarter of
1998. If compliance assurance is not received from M&I at
that time, S&T will develop contingency plans.
<PAGE> 18
S&T BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
All internal data processing systems are in the process of
being tested for Year 2000 compliance. The testing also
includes validations of third party software/hardware
vendors that have provided assurance or certifications of
compliance. To date, 90% of the testing for critical
systems has been completed and software/hardware replace-
ments have been scheduled where problems have been
identified. The testing and remediation of critical
internal systems is expected to be completed by December
31, 1998.
The effect of Year 2000 on the businesses of commercial
customers is unknown and is currently being evaluated as
part of this risk assessment process. The assessment
identified 31 high-risk commercial customers as being
significant to S&T's future financial performance. Each
of these significant business customers are being called
upon and interviewed to determine their respective
company's awareness and preparedness for the Year 2000
Issue. Results of these interviews are reported to the
S&T Senior Loan Committee and credit administration so
that remedial action can be taken when appropriate.
Communications to all commercial customers via mail and
calling officers has been ongoing to ensure effective
planning to meet the Year 2000 compliance requirements.
Management and the Y2K Task Force expect to have
substantially all of the critical systems and application
changes completed and tested by the end of 1998 and believe
that its level of preparedness is appropriate. S&T has
estimated the total cost of the project to be $0.3 million
and is not expected to materially impact future operations.
Purchased hardware and software will be capitalized in
accordance with normal policy. Personnel and all other
costs related to the project will be expensed as incurred.
The Y2K Task Force reports to the S&T Board of Directors
each quarter.
"Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995
The statements in this Form 10-Q which are not historical
fact are forward looking statements that involve risks and
uncertainties, including, but not limited to, the interest
rate environment, the effect of federal and state banking
and tax regulations, the effect of economic conditions,
the impact of competitive products and pricing, and other
risks detailed in S&T's Securities and Exchange Commission
filings.
<PAGE> 19
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
Form 8-K dated September 21, 1998
On September 21, 1998, the Board of Directors
of S&T Bancorp, Inc. (S&T) approved a two-for-one stock
split which will be effected in the form of a 100 percent
stock dividend. The new shares will be distributed on
October 30, 1998 to shareholders of record on October 15,
1998. The split will increase the number of shares
outstanding to approximately 27,577,214.
<PAGE> 20
SIGNATURES
Pursuant to the requirements 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)
Date: November 11, 1998 /s/ Robert E. Rout
Robert E. Rout
Principal Accounting Officer
<PAGE> 21
[ARTICLE] 9
[LEGEND]
"This schedule contains summary financial information extracted from SEC Form
10-Q and is qualified in its entirety by reference to such financial
statements."
[S] [C]
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-END] SEP-30-1998
[CASH] 42,550
[INT-BEARING-DEPOSITS] 50
[FED-FUNDS-SOLD] 0
[TRADING-ASSETS] 0
[INVESTMENTS-HELD-FOR-SALE] 571,498
[INVESTMENTS-CARRYING] 33,025
[INVESTMENTS-MARKET] 33,956
[LOANS] 1,318,509
[ALLOWANCE] 24,791
[TOTAL-ASSETS] 2,037,077
[DEPOSITS] 1,371,446
[SHORT-TERM] 137,366
[LIABILITIES-OTHER] 47,861
[LONG-TERM] 229,198
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 74,285
[OTHER-SE] 176,921
[TOTAL-LIABILITIES-AND-EQUITY] 251,206
[INTEREST-LOAN] 85,791
[INTEREST-INVEST] 27,052
[INTEREST-OTHER] 223
[INTEREST-TOTAL] 113,066
[INTEREST-DEPOSIT] 37,000
[INTEREST-EXPENSE] 51,656
[INTEREST-INCOME-NET] 61,410
[LOAN-LOSSES] 8,050
[SECURITIES-GAINS] 8,539
[EXPENSE-OTHER] 31,258
[INCOME-PRETAX] 40,201
[INCOME-PRE-EXTRAORDINARY] 40,201
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 28,189
[EPS-PRIMARY] 1.02
[EPS-DILUTED] 1.00
[YIELD-ACTUAL] 4.63
[LOANS-NON] 3,609
[LOANS-PAST] 0
[LOANS-TROUBLED] 0
[LOANS-PROBLEM] 0
[ALLOWANCE-OPEN] 20,427
[CHARGE-OFFS] 4,787
[RECOVERIES] 1,101
[ALLOWANCE-CLOSE] 24,791
[ALLOWANCE-DOMESTIC] 24,791
[ALLOWANCE-FOREIGN] 0
[ALLOWANCE-UNALLOCATED] 0
