April 21, 2008

S&T Bancorp, Inc. Announces Earnings

INDIANA, Pa., April 21 /PRNewswire-FirstCall/ -- S&T Bancorp, Inc. (Nasdaq: STBA) today announced net income of $14.9 million or $0.60 diluted earnings per share for the quarter ended March 31, 2008 compared to net income of $13.3 million or $0.52 diluted earnings per share for the first quarter of 2007. The increase in net income and earnings per share is primarily due to improved net interest income and lower provision for loan losses.

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Annualized return on average equity for the quarter ended March 31, 2008 was 17.27 percent, as compared to 15.90 percent for the quarter ended March 31, 2007 and 16.97 percent for the full year 2007. Annualized return on average assets was 1.75 percent for the quarter ended March 31, 2008, compared with 1.63 percent for the first quarter of 2007 and 1.68 percent for the full year 2007.

James C. Miller, S&T chairman and chief executive officer, commented, "We are very pleased with this quarter's strong earnings performance. Despite the general economic concerns, market disruptions such as we have seen over the past year sometimes create opportunities for companies like S&T that have not strayed from banking fundamentals. Our upcoming merger with IBT Bancorp, Inc. scheduled for the second quarter of this year should allow us to further leverage those opportunities."

Net interest income on a fully taxable equivalent basis increased by $2.3 million, or 8 percent, to $31.7 million for the first quarter of 2008, as compared to the same period of 2007. The net interest margin on a fully taxable equivalent basis was 3.99 percent, 3.94 percent and 3.84 percent for the quarters ending March 31, 2008, December 31, 2007, and March 31, 2007, respectively.

Earning assets have increased $66.0 million over the past 12 months, primarily driven by a $63.8 million, or 3 percent, increase in commercial lending and a $52.5 million, or 8 percent, increase in consumer lending. Investment securities were reduced by $50.3 million over the same 12-month period, as the risk/reward opportunities for leveraging activities have been significantly reduced by a relatively flat and sometimes inverted yield curve.

Deposits increased $28.3 million, or 1 percent, during the 12-month period, providing core funding for loan growth. Todd D. Brice, president and chief operating officer, added, "While core deposits are our most stable and lowest cost of funds overall, from time to time, we may experience periods like we are in today where borrowings have a slight pricing advantage. We are willing to accept slightly less robust deposit growth in the short run to take advantage of these unique circumstances. We know that we have excellent and very competitive deposit products, especially our CMA high-yield savings account, cash management services and electronic banking systems that we believe will continue to keep us competitive and serve our customers' needs well into the future."

Noninterest income, excluding investment security gains, increased $0.4 million for the first quarter of 2008 as compared to the first quarter of 2007. The increase is primarily due to strong performances in debit and credit card activities, insurance, commercial loan swap fees and a $0.4 million gain on the Visa initial public offering. Partially offsetting these increases are mortgage servicing impairment charges of $0.2 million and fair value adjustments of investments held in trust for deferred compensation plans of $0.4 million.

Net equity investment security gains for the first quarter of 2008 were $0.6 million, a decrease from the $1.7 million for the same period of 2007. Included in the equity investment security gains for the first quarter 2008 is a $0.2 million loss recognized from the fair market value adjustment on a bank equity holding as an other-than-temporary impairment. The equity securities portfolio has a market value of $40.3 million and net unrealized gains of $8.2 million as of March 31, 2008, as compared to $51.0 million and $12.0 million at March 31, 2007.

Noninterest expense increased $0.4 million, or 2 percent, for the first three months of 2008, as compared to the 2007 period. Increases include the effects of normal year-end merit increases, higher occupancy expense due to the addition of new branches and increased reserves for unfunded commitments. The efficiency ratio, which measures recurring noninterest expense to noninterest income, excluding security gains, plus recurring net interest income on a fully taxable equivalent basis, was 44 percent and 46 percent for the quarters ended March 31, 2008 and March 31, 2007, respectively. The provision for loan losses was $1.3 million, $1.2 million and $2.2 million for the quarters ending March 31, 2008, December 31, 2007, and March 31, 2007, respectively. Net loan recoveries for the first quarter 2008 were $0.1 million, or 0.01 percent of average loans on an annualized basis, compared to 0.01 percent of net loan charge-offs in the first quarter of 2007, and 0.17 percent for the full year 2007. Net loan recoveries were impacted by a $0.5 million recovery on a mixed-use real estate development participation loan that was partially charged-off in 2006. Provision for loan losses in the first quarter 2008 includes specific reserves for two commercial loan relationships totaling $1.2 million. Both of these relationships were placed on nonperforming loan status during the quarter.

The allowance for loan losses was 1.25 percent of total loans at the end of the first quarter of 2008, as compared to 1.23 percent at December 31, 2007 and 1.29 percent at March 31, 2007. Nonperforming assets were $23.8 million or 0.69 percent of total assets at March 31, 2008, as compared to $17.3 million or 0.51 percent of total assets at December 31, 2007 and $20.5 million or 0.61 percent of total assets at March 31, 2007. The two aforementioned commercial loan relationships placed on nonperforming status in the first quarter of 2008 were $4.7 million and $4.2 million, respectively. These increases to nonperforming loans were partially offset by the repayment of a $1.7 million residual balance on the mixed-use real estate development participation loan that was previously classified as nonperforming.

Brice commented, "Asset quality is an important strategic commitment at S&T, especially considering our growing commercial relationships, where loans tend to be larger, more complex, and, by their nature, may take longer to resolve when a problem does occur. We continue to be very aggressive in dealing with problem loans."

S&T Bancorp, Inc. declared a common stock quarterly dividend of $0.31 per share on March 17, 2008, which is payable on April 25, 2008 to shareholders of record as of April 1, 2008. This dividend represents a 3 percent increase over the $0.30 per share quarterly dividend declared a year ago and a 4 percent projected annual yield utilizing the March 31, 2008 closing market price of $32.17.

The S&T Bancorp, Inc. Board of Directors authorized stock buyback programs in 2005 and 2006 of one million shares each, or approximately 4 percent of shares outstanding in each year. On June 18, 2007, the S&T Bancorp, Inc. Board of Directors authorized an additional buyback program of one million shares until June 30, 2008. During 2007, S&T repurchased 971,400 shares through these programs at an average cost of $32.74 per share. During 2008, there were no purchases of S&T Bancorp, Inc. stock under the 2007 program.

Headquartered in Indiana, PA, S&T Bancorp, Inc. operates 46 offices within Allegheny, Armstrong, Blair, Butler, Cambria, Clarion, Clearfield, Indiana, Jefferson and Westmoreland counties. With assets of $3.5 billion, S&T Bancorp, Inc. stock trades on the NASDAQ Global Select Market System under the symbol STBA.

This information may contain forward-looking statements regarding future financial performance which are not historical facts and which involve risks and uncertainties. Actual results and performance could differ materially from those anticipated by these forward-looking statements. Factors that could cause such a difference include, but are not limited to, general economic conditions, change in interest rates, deposit flows, loan demand, asset quality, including real estate and other collateral values, and competition. This information should be read in conjunction with the audited financial statements and analysis as presented in the Annual Report on Form 10-K for S&T Bancorp, Inc. and subsidiaries.


    S&T Bancorp, Inc.                                            Page 1 of 3
    Consolidated Selected Financial Data
    March 31, 2008
    (Dollars in thousands, except per share data)

                                           2007                         2008
                          March      June     September  December      March
    For the period:        1Q         2Q         3Q         4Q          1Q

    Interest Income      $52,934    $54,274    $54,761    $53,637     $50,458
    Interest Expense      24,725     25,321     25,485     23,636      19,909
      Net Interest
       Income             28,209     28,953     29,276     30,001      30,549
      Taxable Equivalent
       Adjustment          1,186      1,216      1,170      1,156       1,148
      Net Interest
       Income (FTE)       29,395     30,169     30,446     31,157      31,697

    Provision For
     Loan Losses           2,178      1,305      1,142      1,187       1,279
      Net Interest
       Income After
       Provisions (FTE)   27,217     28,864     29,304     29,970      30,418

    Security Gains, Net    1,656        481      1,129        579         611

    Service Charges
     and Fees              2,343      2,529      2,605      2,647       2,402
    Wealth Management      1,855      1,978      1,751      1,886       1,862
    Insurance              1,894      1,792      1,874      1,726       1,997
    Other                  2,424      2,744      4,270      2,443       2,638

      Total Noninterest
       Income              8,516      9,043     10,500      8,702       8,899

    Salaries and Employee
     Benefits              9,934     10,073      9,910     10,470      10,060
    Occupancy and Equip.
     Expense, Net          2,261      2,447      2,423      2,452       2,660
    Data Processing
     Expense               1,234      1,301      1,179      1,166       1,071
    FDIC Expense              76         77         74         75          75
    Other                  4,084      4,163      4,543      5,518       4,089

      Total Noninterest
       Expense            17,589     18,061     18,129     19,681      17,955

    Income Before Taxes   19,800     20,327     22,804     19,570      21,973
    Taxable Equivalent
     Adjustment            1,186      1,216      1,170      1,156       1,148
    Applicable Income
     Taxes                 5,316      5,235      5,973      5,103       5,969

      Net Income         $13,298    $13,876    $15,661    $13,311     $14,856

    Per Common Share Data:

    Shares Outstanding
     at End of Period 24,897,787 24,468,671 24,543,177 24,551,087  24,615,136
    Average Shares
     Outstanding -
     Diluted          25,389,584 24,847,410 24,690,735 24,677,720  24,680,484
    Net Income -
     Diluted               $0.52      $0.56      $0.63      $0.54       $0.60
    Dividends
     Declared              $0.30      $0.30      $0.30      $0.31       $0.31
    Book Value            $13.16     $12.98     $13.36     $13.75      $14.18
    Market Value          $33.04     $32.90     $32.09     $27.64      $32.17



    S&T Bancorp, Inc.                                             Page 2 of 3
    Consolidated Selected Financial Data
    March 31, 2008
    (Dollars in thousands)

                                          2007                          2008
                         March       June     September    December     March
    Asset Quality Data    1Q          2Q         3Q          4Q          1Q

    Nonaccrual Loans
     and Nonperforming
     Loans             $19,854     $14,944     $14,445     $16,798     $23,212
    Assets acquired
     through
     foreclosure or
     repossession          606         610         869         488         630
    Nonperforming
     Assets             20,460      15,554      15,314      17,286      23,842
    Allowance for
     Loan Losses        35,319      35,808      34,144      34,345      35,717
    Nonperforming
     Loans / Loans       0.73%       0.54%       0.52%       0.60%       0.81%
    Allowance for
     Loan Losses /
     Loans               1.29%       1.31%       1.24%       1.23%       1.25%
    Allowance for
     Loan Losses /
     Nonperforming
     Loans                178%        240%        236%        204%        154%
    Net Loan
     Charge-offs
     (Recoveries)           78         817       2,806         986        (94)
    Net Loan
     Charge-offs
     (Recoveries)
     (annualized)/
     Average Loans       0.01%       0.12%       0.41%       0.14%      -0.01%

    Balance Sheet
     (Period-End)
    Assets          $3,361,963  $3,368,761  $3,348,096  $3,407,621  $3,463,806
    Earning Assets   3,146,934   3,141,844   3,126,714   3,169,594   3,212,919
    Securities         412,384     398,612     375,151     372,655     362,053
    Loans, Gross     2,734,550   2,743,232   2,751,564   2,796,939   2,850,866
    Total Deposits   2,576,887   2,624,495   2,620,176   2,621,825   2,605,187
      Non-Interest
       Bearing
       Deposits        444,525     446,455     451,196     459,708     471,040
      NOW, Money
       Market &
       Savings       1,204,833   1,230,290   1,233,969   1,243,061   1,203,833
      CD's $100,000
       and over        259,390     258,311     250,011     249,643     250,489
      Other Time
       Deposits        668,139     689,439     685,000     669,413     679,825
    Short-term
     borrowings        169,552     144,342     125,809     180,258     211,391
    Long-term Debt     246,715     246,487     236,255     226,021     246,403
    Shareholders'
     Equity            327,559     317,707     327,863     337,560     349,073

    Balance Sheet
     (Daily Averages)
    Assets          $3,312,784  $3,344,544  $3,339,979  $3,346,685  $3,407,665
    Earning Assets   3,108,328   3,134,253   3,127,103   3,137,967   3,198,279
    Securities         420,645     403,351     384,405     370,100     369,400
    Loans, Gross     2,687,564   2,730,618   2,740,458   2,767,615   2,828,762
    Deposits         2,550,819   2,578,878   2,623,770   2,620,448   2,579,321
    Shareholders'
     Equity            339,168     325,966     324,124     333,880     345,939



    S&T Bancorp, Inc.                                              Page 3 of 3
    Consolidated Selected Financial Data
    March 31, 2008
    (Dollars in thousands, except per share data)

                                         2007                           2008
    Profitability       March       June     September    December      March
     Ratios (annualized) 1Q          2Q          3Q          4Q          1Q

    Return on Average
     Assets             1.63%       1.66%       1.86%       1.58%       1.75%
    Return on Average
     Shareholders'
     Equity            15.90%      17.07%      19.17%      15.82%       17.27%
    Yield on Earning
     Assets (FTE)       7.06%       7.10%       7.10%       6.93%        6.49%
    Cost of Interest
     Bearing Funds      4.00%       4.01%       3.99%       3.70%        3.10%
    Net Interest
     Margin (FTE)(4)    3.84%       3.86%       3.86%       3.94%        3.99%
    Efficiency
     Ratio (FTE)(1)    46.40%      46.06%      44.28%      49.38%       44.23%

    Capitalization
     Ratios

    Dividends Paid to
     Net Income        57.21%      53.92%      46.86%      55.31%       51.23%
    Shareholders'
     Equity to Assets
     (Period End)       9.74%       9.43%       9.79%       9.91%       10.08%
    Leverage Ratio (2)  8.38%       8.06%       8.38%       8.57%        9.28%
    Risk Based Capital
     - Tier I (3)       9.23%       8.94%       9.35%       9.50%       10.29%
    Risk Based
     Capital - Tier
     II (3)            11.45%      11.15%      11.50%      11.64%       12.46%


    Definitions:
    (1)  Recurring non-interest expense divided by recurring non-interest
         income plus net interest income, on a fully taxable equivalent basis.

    (2)  Equity less goodwill to total assets and allowance for loan losses.

    (3)  Effective October 1, 1998, banking regulators require financial
         institutions to include 45% of the pretax net unrealized holding
         gains on available for sale equity securities in Tier 2 capital.

    (4)  Net interest income, on a fully taxable equivalent basis, annualized
         divided by quarter-to-date average earning assets.

SOURCE S&T Bancorp, Inc.


Contact: Robert E. Rout, Senior Executive Vice President, Chief Financial Officer and Secretary of S&T Bancorp, Inc., +1-724-465-4825


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