Proxy Statement - Merger or Acquistion (definitive) (defm14a)

Date : 08/22/2019 @ 2:29PM
Source : Edgar (US Regulatory)
Stock : DNB Financial Corporation (DNBF)
Quote : 46.19  0.0 (0.00%) @ 12:00AM

Proxy Statement - Merger or Acquistion (definitive) (defm14a)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.  )

Filed by the Registrant ☒
   
 
Filed by a Party other than the Registrant o
   
 
Check the appropriate box:
   
 
o
Preliminary Proxy Statement
   
 
o
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
   
 
Definitive Proxy Statement
   
 
o
Definitive Additional Materials
   
 
o
Soliciting Material Pursuant to §240.14a-12
DNB Financial Corporation
(Name of Registrant as Specified In Its Charter)
 
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

No fee required.
o
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
   
 
 
(1)
Title of each class of securities to which transaction applies:
 
 
 
 
(2)
Aggregate number of securities to which transaction applies:
 
 
 
 
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
 
 
 
(4)
Proposed maximum aggregate value of transaction:
 
 
 
 
(5)
Total fee paid:
 
 
 
 
 
 
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Fee paid previously with preliminary materials.
o
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
 
 
 
(1)
Amount Previously Paid:
 
 
 
 
(2)
Form, Schedule or Registration Statement No.:
 
 
 
 
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Filing Party:
 
 
 
 
(4)
Date Filed:
 
 
 

   

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Proxy Statement of DNB Financial Corporation

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

Dear Shareholder of DNB Financial Corporation:

On June 5, 2019, DNB Financial Corporation (which we refer to as “DNB”) and S&T Bancorp, Inc. (which we refer to as “S&T”) entered into an Agreement and Plan of Merger (which, as it may be amended, supplemented or modified from time to time, we refer to as the “merger agreement”), pursuant to which DNB will merge with and into S&T. Immediately following the completion of the merger, DNB First, National Association, a wholly owned bank subsidiary of DNB (which we refer to as “DNB Bank”), will merge with and into S&T Bank, S&T’s wholly owned bank subsidiary, with S&T Bank continuing as the surviving bank (which we refer to as the “bank merger”).

In the merger, each share of DNB common stock will be converted into the right to receive 1.22 shares of S&T common stock (which we refer to as the “merger consideration”). Based on S&T’s closing price of $38.15 per share on June 5, 2019, the last trading day before the announcement of the merger agreement, the merger consideration represented approximately $46.54 for each share of DNB common stock. Based on S&T’s closing price of $35.73 per share on August 19, 2019, the last practicable trading day before the date of the enclosed proxy statement/prospectus, the merger consideration represented approximately $43.59 for each share of DNB common stock. We encourage you to obtain current market quotations for the common stock of S&T and DNB before you vote. S&T common stock is currently quoted on the NASDAQ Stock Market (which we refer to as the “NASDAQ”) under the symbol “STBA.” DNB common stock is currently quoted on the NASDAQ under the symbol “DNBF.”

The maximum number of shares of S&T common stock to be delivered to holders of shares of DNB common stock upon completion of the merger is approximately 5,316,250 shares, based on 4,334,782 shares of DNB common stock and 22,800 restricted stock awards in respect of DNB common stock, in each case outstanding as of August 19, 2019.

DNB will hold a special meeting of its shareholders in connection with the merger. DNB shareholders will be asked to vote to approve the merger agreement and approve related matters, as described in the attached proxy statement/prospectus.

The special meeting of DNB shareholders will be held will be held on September 25, 2019, at 10:00 a.m. local time, at the Downingtown Country Club, located at 85 Country Club Drive, Downingtown, PA 19335.

Your vote is important. We cannot complete the merger unless DNB’s shareholders approve the merger agreement. Approval of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of DNB common stock entitled to vote on the proposal. Regardless of whether or not you plan to attend the special meeting, please take the time to vote your shares in accordance with the instructions contained in the enclosed proxy statement/prospectus.

The DNB board of directors unanimously recommends that DNB shareholders vote “FOR” the approval of the merger agreement and the transactions contemplated by the merger agreement and “FOR” the other matters to be considered at the DNB special meeting.

The enclosed proxy statement/prospectus describes the special meeting, the merger, the documents related to the merger and other related matters. Please carefully read the entire proxy statement/prospectus, including the Risk Factors section, beginning on page 22, for a discussion of the risks relating to the proposed merger. You also can obtain information about S&T and DNB from documents that each has filed with the Securities and Exchange Commission.

If you have any questions concerning the merger, you should please contact Gerald F. Sopp, Executive Vice President and Chief Financial Officer, 4 Brandywine Avenue, Downingtown, PA 19335, or by telephone at (484) 359-3138. We look forward to seeing you at the meeting.

 

 
William J. Hieb
President and Chief Executive Officer
DNB Financial Corporation

Neither the Securities and Exchange Commission nor any state securities commission or any other bank regulatory agency has approved or disapproved the securities to be issued in the merger or determined if the enclosed proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.

The securities to be issued in the merger are not savings or deposit accounts or other obligations of any bank or nonbanking subsidiary of either S&T or DNB, and they are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

The date of the enclosed proxy statement/prospectus is August 22, 2019, and it is first being mailed or otherwise delivered to the shareholders of DNB on or about August 22, 2019.

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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To the Shareholders of DNB Financial Corporation:

NOTICE IS HEREBY GIVEN that a special meeting of shareholders of DNB Financial Corporation (which we refer to as “DNB”) will be held on September 25, 2019, at 10:00 a.m. local time, at the Downingtown Country Club, located at 85 Country Club Drive, Downingtown, PA 19335, to consider and vote upon the following matters:

A proposal to approve the Agreement and Plan of Merger, dated as of June 5, 2019, by and between DNB and S&T Bancorp, Inc. (which we refer to as “S&T”), pursuant to which DNB will merge with and into S&T, as more fully described in the enclosed proxy statement/prospectus (which we refer to as the “DNB merger proposal”);
A proposal to authorize the adjournment of the DNB special meeting, if necessary or appropriate, to solicit additional proxies in favor of the DNB merger proposal (which we refer to as the “DNB adjournment proposal”); and
A proposal to adopt an advisory (non-binding) resolution approving the compensation that certain executive officers of DNB may receive in connection with the merger pursuant to agreements or arrangements with DNB (which we refer to as the “DNB compensation proposal”).

We have fixed the close of business on August 19, 2019 as the record date for the determination of shareholders entitled to notice of and to vote at the DNB special meeting. Only holders of record of DNB’s common stock at the close of business on that date are entitled to notice of, and to vote at, the DNB special meeting or any adjournment or postponement thereof. Approval of the DNB merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of DNB’s common stock entitled to vote on the proposal. Approval of each of the DNB adjournment proposal and the DNB compensation proposal requires the votes cast by DNB shareholders in favor of such proposal to exceed the votes cast by DNB shareholders against such proposal at the DNB special meeting.

The DNB board of directors has unanimously approved the merger agreement and the merger and unanimously recommends that DNB shareholders vote “FOR” the DNB merger proposal, “FOR” the DNB adjournment proposal and “FOR” the DNB compensation proposal.

Your vote is very important. We cannot complete the merger unless DNB’s shareholders approve the DNB merger proposal.

Whether or not you plan to attend the special meeting, we encourage you to execute and return the enclosed proxy card promptly in the enclosed self-addressed envelope or to vote your shares in advance of the DNB special meeting by Internet or phone, as described in the accompanying proxy statement/prospectus. If you decide to attend the meeting, then you may, if you desire, revoke the proxy and vote the shares in person. If you hold your stock in “street name” through a bank, broker or other nominee, please follow the instructions on the voting instruction card furnished by the record holder.

The enclosed proxy statement/prospectus provides a detailed description of the special meeting, the merger, the documents related to the merger and other related matters. We urge you to read the proxy statement/prospectus, including any documents incorporated in the proxy statement/prospectus by reference, and its annexes carefully and in their entirety.

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If you have any questions concerning the merger or the proxy statement/prospectus, would like additional copies of the proxy statement/prospectus or need help voting your shares of DNB common stock, please contact Gerald F. Sopp, Executive Vice President and Chief Financial Officer, 4 Brandywine Avenue, Downingtown, PA 19335, or by telephone at (484) 359-3138.

 
BY ORDER OF THE BOARD OF DIRECTORS
   
 
 

 
Gerald F. Sopp
Corporate Secretary

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REFERENCES TO ADDITIONAL INFORMATION

This proxy statement/prospectus incorporates important business and financial information about S&T Bancorp, Inc (which we refer to as “S&T”) and DNB Financial Corporation (which we refer to as “DNB”) from documents filed with the Securities and Exchange Commission (which we refer to as the “SEC”) that are not included in or delivered with this proxy statement/prospectus. You can obtain any of the documents filed with or furnished to the SEC by S&T and/or DNB at no cost from the SEC’s website at http://www.sec.gov. You may also request copies of these documents, including documents incorporated by reference in this proxy statement/prospectus, at no cost by contacting the appropriate company at the following address:

S&T Bancorp, Inc.
800 Philadelphia Street
Indiana, Pennsylvania 15701
Attention: Investor Relations
Telephone: (800) 325-2265
DNB Financial Corporation
4 Brandywine Avenue
Downingtown, Pennsylvania 19335
Attention: Gerald F. Sopp, Executive Vice President
and Chief Financial Officer
Telephone: (484) 359-3138

You will not be charged for any of these documents that you request. To obtain timely delivery of these documents, you must request them no later than five business days before the date of the DNB special meeting. This means that DNB shareholders requesting documents must do so by September 18 to receive them before the DNB special meeting.

You should rely only on the information contained in or incorporated by reference into this document. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this document. This document is dated August 22, 2019, and you should assume that the information in this document is accurate only as of such date. You should assume that the information incorporated by reference into this document is accurate as of the date of such document. Neither the mailing of this document to DNB shareholders nor the issuance by S&T of shares of S&T common stock in connection with the merger will create any implication to the contrary.

This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Except where the context otherwise indicates, information contained in this document regarding DNB has been provided by DNB, and information contained in this document regarding S&T has been provided by S&T.

See “Where You Can Find More Information” for more details.

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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE DNB SPECIAL MEETING

The following are some questions that you may have about the merger and the DNB special meeting and brief answers to those questions. We urge you to read carefully the remainder of this proxy statement/prospectus because the information in this section does not provide all of the information that might be important to you with respect to the merger and the DNB special meeting. Additional important information is also contained in the documents incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information.”

Q: Why am I receiving this proxy statement/prospectus?
A: S&T has entered into an Agreement and Plan of Merger, dated as of June 5, 2019, with DNB (which, as it may be amended, supplemented or modified from time to time, we refer to as the “merger agreement”). Under the merger agreement, DNB will be merged with and into S&T (which we refer to as the “merger”), with S&T continuing as the surviving corporation (which we refer to as the “surviving corporation”). Immediately following the merger, DNB First, National Association, a wholly owned bank subsidiary of DNB (which we refer to as “DNB Bank”), will merge with and into S&T Bank, S&T’s wholly owned bank subsidiary, with S&T Bank continuing as the surviving bank (which we refer to as the “bank merger”). A copy of the merger agreement is included in this proxy statement/prospectus as Annex A.

The merger cannot be completed unless, among other things, DNB shareholders approve the proposal to approve the merger agreement and the transactions contemplated by the merger agreement (which we refer to as the “DNB merger proposal”).

In addition, DNB is soliciting proxies from its shareholders with respect to two additional proposals, approvals of which are not conditions to the completion of the merger:

a proposal to adjourn the DNB special meeting, if necessary or appropriate, to solicit additional proxies in favor of the DNB merger proposal (which we refer to as the “DNB adjournment proposal”); and
a proposal to adopt an advisory (non-binding) resolution approving the compensation that certain executive officers of DNB may receive in connection with the merger pursuant to agreements or arrangements with DNB (which we refer to as the “DNB compensation proposal”).

DNB will hold a special meeting of shareholders to obtain these approvals (which we refer to as the “DNB special meeting”). This proxy statement/prospectus contains important information about the merger and the other proposals being voted on at the special meeting. You should read it carefully and in its entirety. The enclosed materials allow you to have your shares voted by proxy without attending the DNB special meeting. Your vote is important. We encourage you to submit your proxy as soon as possible.

This proxy statement/prospectus constitutes both a proxy statement of DNB and a prospectus of S&T. It is a proxy statement because the board of directors of DNB is soliciting proxies using this proxy statement/prospectus from DNB shareholders. It is a prospectus because S&T, in connection with the merger, is offering shares of its common stock in exchange for outstanding shares of DNB common stock in the merger.

Q: What will I receive in the merger?
A: DNB Shareholders: If the merger is completed, you will receive 1.22 shares of S&T common stock for each share of DNB common stock that you hold immediately prior to the merger (which we refer to as the “merger consideration”). S&T will not issue any fractional shares of S&T common stock in the merger. DNB shareholders who otherwise would be entitled to a fraction of a share of S&T common stock will receive an amount in cash (rounded to the nearest whole cent) equal to the product of (i) the fraction of a share of S&T common stock to which the holder would otherwise be entitled and (ii) the average closing price per share, rounded to the nearest cent, of S&T common stock on the NASDAQ Stock Market (which we refer to as the “NASDAQ”) for the consecutive 10 trading days immediately preceding (but not including) the closing date of the merger (which we refer to as the “S&T share value”).

As a result of the merger, based on the number of shares of S&T and DNB common stock outstanding as of August 19, 2019, the last practicable trading day before the date of this proxy statement/prospectus,

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approximately 87% of the outstanding S&T common stock following the merger will be held by shareholders that were holders of S&T common stock immediately prior to the effectiveness of the merger, and approximately 13% of outstanding S&T common stock will be held by shareholders that were holders of DNB common stock immediately prior to the effectiveness of the merger (without giving effect to any shares of S&T common stock held by DNB shareholders prior to the merger).

Based on S&T’s closing price of $38.15 per share on June 5, 2019, the last trading day before the announcement of the merger agreement, the merger consideration represented approximately $46.54 for each share of DNB common stock. Based on S&T’s closing price of $35.73 per share on August 19, 2019, the last practicable trading day before the date of this proxy statement/prospectus, the merger consideration represented approximately $43.59 for each share of DNB common stock.

Q: Will the value of the merger consideration change between the date of this proxy statement/prospectus and the time the merger is completed?
A: The value of the merger consideration may fluctuate between the date of this proxy statement/prospectus and the completion of the merger based upon the market value for S&T common stock. In the merger, DNB shareholders will receive 1.22 shares (which we refer to as the “exchange ratio”) of S&T common stock for each share of DNB common stock they hold. Any fluctuation in the market price of S&T common stock after the date of this proxy statement/prospectus and before the effective time of the merger (which we refer to as the “effective time”) will change the value of the shares of S&T common stock that DNB shareholders will receive.
Q: How will the merger affect DNB equity awards?
A: Each restricted stock award in respect of DNB common stock will vest in full and the restrictions thereon will lapse and will be converted into a right to receive the merger consideration (less applicable tax withholdings) with respect to each share of DNB common stock subject to the award.
Q: How does DNB’s board of directors recommend that I vote at the DNB special meeting?
A: DNB’s board of directors (which we refer to as the “DNB board of directors”) unanimously recommends that DNB’s shareholders vote “FOR” the DNB merger proposal, “FOR” the DNB adjournment proposal and “FOR” the DNB compensation proposal.
Q: When and where is the special meeting?
A: The DNB special meeting will be held on September 25, 2019, at 10:00 a.m. local time, at the Downingtown Country Club, located at 85 Country Club Drive, Downingtown, PA 19335.
Q: What do I need to do now?
A: After you have carefully read this proxy statement/prospectus and have decided how you wish to vote your shares, please vote your shares promptly so that your shares are represented and voted at your special meeting. If you hold your shares in your name as a shareholder of record, you must complete, sign, date and mail your proxy card in the enclosed postage-paid return envelope as soon as possible or vote by Internet or phone, as described in this proxy statement/prospectus. If you hold your shares in “street name” through a bank, broker or nominee, you must direct your bank, broker or nominee how to vote in accordance with the instructions you have received from your bank, broker or nominee. “Street name” shareholders who wish to vote in person at the DNB special meeting will need to obtain a legal proxy from the institution that holds their shares.
Q: What constitutes a quorum for the DNB special meeting?
A: The presence at the DNB special meeting, in person or by proxy, of shareholders entitled to cast at least a majority of the votes which all shareholders are entitled to cast on each proposal will constitute a quorum for each respective proposal. Abstentions are counted as present for the purpose of determining whether a quorum is present, while broker non-votes are not counted as present unless instructions have been provided by the beneficial owner to the applicable bank, brokerage firm or nominee with respect to at least one proposal.

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Q: What is the vote required to approve each proposal?
A: Approval of the DNB merger proposal requires the affirmative vote of a majority of the outstanding shares of DNB common stock entitled to vote on the proposal. If you mark “ABSTAIN” on your proxy card or when voting by Internet or phone, fail to either submit a proxy or vote in person at the DNB special meeting or fail to instruct your bank, broker or other nominee how to vote with respect to the DNB merger proposal, it will have the same effect as a vote “AGAINST” the DNB merger proposal.

Approval of each of the DNB adjournment proposal and the DNB compensation proposal requires the affirmative vote of the holders of a majority of the votes cast by holders of DNB common stock entitled to vote at the DNB special meeting.

Q: Will my vote affect the amounts that certain executive officers of DNB may receive in connection with the merger?
A: Certain of DNB’s executive officers are entitled, pursuant to the terms of their existing compensation arrangements with DNB, to receive certain payments in connection with the merger. If the merger is completed, S&T, as successor to DNB, is contractually obligated to make these payments to these executives (under certain circumstances). Accordingly, even if the DNB shareholders vote not to approve these payments, the compensation will be payable, subject to the terms and conditions of the arrangements and the merger agreement. DNB is seeking your approval of these payments on an advisory (non-binding) basis in order to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and related SEC rules.
Q: Why is my vote important?
A: If you do not return your proxy, it will be more difficult for DNB to obtain the necessary quorum to hold its special meeting. In addition, your failure to submit a proxy or vote in person, or failure to instruct your bank, broker or other nominee how to vote, or your abstention will have the same effect as a vote “AGAINST” approval of the DNB merger proposal.

The DNB merger proposal must be approved by the affirmative vote of at least a majority of the outstanding shares of DNB common stock entitled to vote on the merger agreement.

The DNB board of directors unanimously recommend that you vote “FOR” the merger proposal.

Q: If my shares of common stock are held in “street name” by my bank, broker or other nominee, will my bank, broker or other nominee automatically vote my shares for me?
A: No. Under stock exchange rules, banks, brokers and other nominees who hold shares of DNB common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokers and other nominees are not allowed to exercise their voting discretion with respect to the approval of matters determined to be “non-routine,” without specific instructions from the beneficial owner. Broker non-votes are shares held by a bank, broker or other nominee that are represented at the DNB special meeting, but with respect to which the bank, broker or other nominee is not instructed by the beneficial owner of such shares to vote on the particular proposal, and the bank, broker or other nominee does not have discretionary voting power on such proposal. If your bank, broker or other nominee holds your shares of DNB common stock in “street name,” your bank, broker or other nominee will vote your shares of DNB common stock only if you provide instructions on how to vote by filling out the voter instruction form sent to you by your bank, broker or other nominee with this proxy statement/prospectus. We believe that the DNB merger proposal, the DNB adjournment proposal and the DNB compensation proposal are “non-routine” proposals, and your bank, broker or other nominee can vote your shares of DNB common stock only with your specific voting instructions.
Q: Can I attend the special meeting and vote my shares in person?
A: Yes. All DNB shareholders, including shareholders of record and shareholders who hold their shares through banks, brokers or other nominees, are invited to attend the special meeting. If you are not a shareholder of record, you must obtain a proxy, executed in your favor, from the record holder of your shares, such as a

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bank, broker or other nominee, to be able to vote in person at the special meeting. If you plan to attend the special meeting, you must hold your shares in your own name or have a letter from the record holder of your shares confirming your ownership. In addition, you must bring a form of personal photo identification with you in order to be admitted. DNB reserves the right to refuse admittance to anyone without proper proof of share ownership or without proper photo identification.

Q: Can I change my vote?
A: Yes. If you are a holder of record of DNB common stock, you may revoke any proxy at any time before it is voted at the DNB special meeting by (1) signing and returning a duly executed proxy card with a later date or re-voting by phone or over the Internet at a later time, (2) delivering a written revocation letter to Gerald F. Sopp, DNB’s Corporate Secretary, or (3) attending the DNB special meeting and voting in person. Attendance at the DNB special meeting by itself will not automatically revoke your proxy or change your vote – you must cast a new vote at the DNB special meeting in order to revoke your prior vote. A revocation or later-dated proxy received by DNB after the vote will not affect the vote. The mailing address of DNB’s Corporate Secretary is: DNB Financial Corporation, 4 Brandywine Avenue, Downingtown, Pennsylvania 19335, Attention: Gerald F. Sopp. If you hold your shares in “street name” through a bank, broker or other nominee, you should contact your bank, broker or other nominee to revoke your proxy or change your vote.
Q: Will DNB be required to submit the proposal to approve the merger agreement and the transactions contemplated by the merger agreement to its shareholders even if the DNB board of directors has withdrawn, modified or qualified its recommendation?
A: Yes. DNB is required to submit the proposal to approve the merger agreement and the transactions contemplated by the merger agreement to its shareholders even if the DNB board of directors has withdrawn, modified or qualified its recommendation.
Q: What are the U.S. federal income tax consequences of the merger to DNB shareholders?
A: The merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (which we refer to as the “Code”), and it is a condition to the respective obligations of S&T and DNB to complete the merger that each of S&T and DNB receives a legal opinion to that effect. Accordingly, holders of DNB common stock are not expected to recognize any gain or loss for U.S. federal income tax purposes on the exchange of shares of DNB common stock for shares of S&T common stock in the merger, except with respect to any cash received instead of fractional shares of S&T common stock.

For further information, see “Material U.S. Federal Income Tax Consequences of the Merger.”

The U.S. federal income tax consequences described above may not apply to all holders of DNB common stock. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your independent tax advisor for a full understanding of the particular tax consequences of the merger to you.

Q: Are DNB shareholders entitled to appraisal or dissenters’ rights?
A: No. Under Pennsylvania law, holders of DNB common stock are not entitled to exercise appraisal or dissenters’ rights with respect to the proposed merger or the other transactions contemplated by the merger agreement.
Q: If I am a DNB shareholder, should I send in my DNB stock certificates now?
A: No. Please do not return your DNB stock certificates with your proxy. After the completion of the merger, an exchange agent selected by S&T will send you instructions for exchanging DNB stock certificates for the merger consideration. See “The Merger Agreement—Conversion of Shares; Exchange of Certificates.”
Q: What should I do if I hold my shares of DNB common stock in book-entry form?
A: You are not required to take any special additional actions if your shares of DNB common stock are held in book-entry form. After the completion of the merger, the exchange agent will send you instructions for converting your book-entry shares into the merger consideration, including shares of S&T common stock in book-entry form and any cash to be paid instead of fractional shares in the merger.

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Q: What should I do if I receive more than one set of voting materials?
A: DNB shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold shares of DNB common stock in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold such shares. If you are a holder of record of DNB common stock and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive or otherwise follow the voting instructions set forth in this proxy statement/prospectus to ensure that you vote every share of DNB common stock that you own.
Q: Whom may I contact if I cannot locate my DNB stock certificate(s)?
A: If you are unable to locate your original DNB stock certificate(s), you should contact DNB’s transfer agent, Computershare Shareholder Services, 211 Quality Circle, Suite 210, P.O. Box 30170, College Station, TX 77842-3170, or by telephone at (800) 368-5948.
Q: When do you expect to complete the merger?
A: S&T and DNB expect to complete the merger in the fourth quarter of 2019. However, neither S&T nor DNB can assure you of when or if the merger will be completed. S&T and DNB must first satisfy certain closing conditions, including obtaining the necessary DNB shareholder approval and regulatory approvals.
Q: What happens if the merger is not completed?
A: If the merger is not completed, DNB common shareholders will not receive any consideration for their shares of DNB common stock in connection with the merger. Instead, DNB will remain an independent, public company, and DNB common stock will continue to be traded on the NASDAQ. In addition, if the merger agreement is terminated in certain circumstances, DNB may be required to pay a termination fee. See “The Merger Agreement—Termination Fee” for a complete discussion of the circumstances under which a termination fee will be required to be paid.
Q: Where can I find the voting results of the DNB special meeting?
A: The preliminary voting results will be announced at the DNB special meeting. In addition, within four business days following certification of the final voting results, DNB will disclose the final voting results of its special meeting on a Current Report on Form 8-K filed with the SEC.
Q: Are there any risks that I should consider in deciding whether to vote for the approval of the merger agreement and the transactions contemplated by the merger agreement?
A: Yes. You should read and carefully consider the risk factors set forth in the “Risk Factors” section beginning on page 22 of this proxy statement/prospectus. You also should read and carefully consider the risk factors of S&T and DNB contained in the documents that are incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information.”
Q: Whom should I call with questions?
A: If you have any questions concerning the merger or this proxy statement/prospectus, would like additional copies of this proxy statement/prospectus or need help voting your shares of DNB common stock, you should contact Gerald F. Sopp, Executive Vice President and Chief Financial Officer, at 4 Brandywine Avenue, Downingtown, PA 19335, or by telephone at (484) 359-3138.

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SUMMARY

This summary highlights selected information from this proxy statement/prospectus. It may not contain all of the information that is important to you. We urge you to read carefully the entire proxy statement/prospectus, including the annexes, and the other documents to which we refer in order to fully understand the merger. See “Where You Can Find More Information.” Each item in this summary refers to the page of this proxy statement/prospectus on which that subject is discussed in more detail.

The Merger and the Merger Agreement (Page 33)

The terms and conditions of the merger are contained in the merger agreement, a copy of which is attached as Annex A to this proxy statement/prospectus. We encourage you to read the merger agreement carefully and in its entirety, as it is the legal document that governs the merger.

Pursuant to the merger agreement, DNB will merge with and into S&T, with S&T continuing as the surviving corporation. Immediately thereafter, DNB Bank, DNB’s wholly owned banking subsidiary, will merge with and into S&T’s wholly owned banking subsidiary, S&T Bank, with S&T Bank continuing as the surviving bank.

The Merger Consideration (Page 59)

If the merger is completed, DNB common shareholders will receive 1.22 shares of S&T common stock for each share of DNB common stock they hold immediately prior to the merger. S&T will not issue any fractional shares of S&T common stock in the merger. DNB shareholders who otherwise would be entitled to a fraction of a share of S&T common stock will receive an amount in cash (rounded to the nearest whole cent) equal to the product of (x) the fraction of a share of S&T common stock to which the holder would otherwise be entitled and (y) the average closing price per share, rounded to the nearest cent, of S&T common stock on the NASDAQ for the consecutive 10 trading days immediately preceding (but not including) the closing date of the merger.

For example, if you hold 125 shares of DNB common stock, you will receive 152 shares of S&T common stock and a cash payment instead of the 0.5 shares of S&T common stock that you otherwise would have received (125 shares × 1.22 = 152.5 shares).

The market value of the merger consideration will fluctuate with the market price of S&T common stock and will not be known at the time DNB shareholders vote on the merger. Any fluctuation in the market price of S&T common stock after the date of this proxy statement/prospectus will change the value of the shares of S&T common stock that DNB shareholders will receive.

Recommendation of DNB’s Board of Directors (Page 36)

The DNB board of directors unanimously recommends that DNB shareholders vote “FOR” the DNB merger proposal, “FOR” the DNB adjournment proposal and “FOR” the DNB compensation proposal.

The DNB board of directors has determined that the merger agreement and the merger are advisable and in the best interests of DNB and its shareholders and has unanimously approved the merger agreement and the transactions contemplated by the merger agreement. For the factors considered by the DNB board of directors in reaching its decision to approve the merger agreement and the transactions contemplated by the merger agreement, see “The Merger—DNB’s Reasons for the Merger; Recommendation of the DNB Board of Directors.”

Opinion of DNB’s Financial Advisor (Page 39 and Annex B)

In connection with the merger, DNB’s financial advisor, PNC FIG Advisory, Inc. (which we refer to as “PNC”), delivered its written opinion, dated June 5, 2019, to DNB’s board of directors to the effect that, as of such date and based upon and subject to various considerations set forth in the opinion, the exchange ratio provided for in the merger was fair to the holders of DNB common stock from a financial point of view.

The full text of PNC’s written opinion, which sets forth, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex B to this proxy statement/prospectus. The opinion was rendered for the benefit of DNB’s board of directors (in its capacity as such) in connection with its evaluation of the merger. The opinion is not intended to and does not constitute a recommendation to any DNB shareholder as to how such shareholder should vote or

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act with respect to the merger or any matter relating thereto. The opinion does not address the relative merits of the merger as compared to any other transaction or business strategy in which DNB might engage or the merits of the underlying decision by DNB to engage in the merger.

Treatment of DNB Equity Awards (Page 60)

At the effective time, each restricted stock award in respect of DNB common stock will vest in full and the restrictions thereon will lapse, and will be converted into a right to receive the merger consideration (less applicable tax withholdings) with respect to each share of DNB common stock subject to the award.

Information about the DNB Special Meeting (Page 26)

The DNB special meeting to consider and vote upon the approval of the merger agreement and the transactions contemplated by the merger agreement will be held on September 25, 2019, at 10:00 a.m. local time, at the Downingtown Country Club, located at 85 Country Club Drive, Downingtown, PA 19335. At the DNB special meeting, DNB shareholders will be asked to:

approve the DNB merger proposal;
approve the DNB adjournment proposal; and
approve the DNB compensation proposal.

Only holders of record at the close of business on August 19, 2019 will be entitled to vote at the DNB special meeting. Each share of DNB common stock is entitled to one vote on each proposal to be considered at the DNB special meeting. As of the record date, there were 4,334,782 shares of DNB common stock entitled to vote at the DNB special meeting. As of the record date, S&T and its subsidiaries did not hold any shares of DNB common stock.

As of the record date, the directors and executive officers of DNB and their affiliates beneficially owned and were entitled to vote approximately 507,568 shares of DNB common stock representing approximately 11.71% of the shares of DNB common stock outstanding on that date.

Approval of the DNB merger proposal requires the affirmative vote of a majority of the outstanding shares of DNB common stock entitled to vote on the proposal. Therefore, if you mark “ABSTAIN” on your proxy card or when voting by Internet or phone, fail to either submit a proxy or vote in person at the DNB special meeting or fail to instruct your bank, broker or other nominee how to vote with respect to the DNB merger proposal, it will have the same effect as a vote “AGAINST” the DNB merger proposal.

The approval of each of the DNB adjournment proposal and the DNB compensation proposal requires the affirmative vote of the holders of a majority of the votes cast by holders of DNB common stock entitled to vote at the DNB special meeting. Therefore, if you indicate “ABSTAIN” on your proxy card or when voting by Internet or phone, fail to either submit a proxy or vote in person at the DNB special meeting or fail to instruct your bank, broker or other nominee how to vote with respect to the DNB adjournment proposal or the DNB compensation proposal, it will have no effect on such proposals.

Parties to the Merger (Pages 31 and 32)

S&T Bancorp, Inc.

S&T Bancorp, Inc. is incorporated under the laws of the Commonwealth of Pennsylvania and is a bank holding company and a financial holding company registered with the Board of Governors of the Federal Reserve System (which we refer to as the “Federal Reserve Board”) under the Bank Holding Company Act of 1956, as amended (which we refer to as the “BHC Act”). S&T provides a wide range of banking services and products to its customers through its wholly owned bank subsidiary, S&T Bank, a Pennsylvania banking corporation. S&T Bank is a full service bank, providing services to its customers through locations in Pennsylvania, Ohio and New York. Through S&T Bank and S&T’s non-bank subsidiaries, S&T offers traditional banking services, which include accepting time and demand deposits and originating commercial and consumer loans, brokerage services and trust services, including serving as executor and trustee under wills and deeds and as guardian and custodian of employee benefits. S&T also manages private investment accounts for individuals and institutions through its registered investment advisor.

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The principal executive offices of S&T are located at 800 Philadelphia Street, Indiana, PA 15701, and its telephone number is (800) 325-2265. S&T’s website can be accessed at http://www.stbancorp.com. Information contained in S&T’s website does not constitute part of, and is not incorporated into, this proxy statement/prospectus. S&T common stock is quoted on the NASDAQ under the symbol “STBA.”

Additional information about S&T and its subsidiaries is included in documents incorporated by reference in this proxy statement/prospectus. See “Where You Can Find More Information.”

DNB Financial Corporation

DNB Financial Corporation, is incorporated under the laws of the Commonwealth of Pennsylvania and is registered with and supervised by the Federal Reserve Board under the BHC Act as a bank holding company. DNB First, National Association, DNB’s bank subsidiary, is a national banking association that is a member of the Federal Reserve System. DNB First is a full service commercial bank that has 14 full service branches providing a wide range of services to individuals and small to medium sized businesses in the southeastern Pennsylvania market area. DNB First also has a full-service wealth management group known as “DNB First Wealth Management,” and its financial subsidiary, DNB Financial Services, Inc. (also known as “DNB Investments & Insurance”) is a Pennsylvania licensed insurance agency, which, through a third-party marketing agreement with Cetera Investment Services, LLC, sells a broad variety of insurance and investment products.

The principal executive offices of DNB are located at 4 Brandywine Avenue, Downingtown, PA 19335, and its telephone number is (610) 269-1040. DNB’s website can be accessed at http://www.dnbfirst.com. Information contained in DNB’s website does not constitute part of, and is not incorporated into, this proxy statement/prospectus. DNB’s common stock is quoted on the NASDAQ under the symbol “DNBF.”

Additional information about DNB and its subsidiaries is included in documents incorporated by reference in this proxy statement/prospectus. See “Where You Can Find More Information.”

Interests of DNB’s Directors and Executive Officers in the Merger (Page 51)

DNB’s executive officers and directors may have interests in the merger that are different from, or in addition to, the interests of DNB’s stockholders generally. Such interests include, among others, accelerated vesting of outstanding DNB restricted stock awards and the elimination of certain holding period requirements that would otherwise be applicable to the vested awards, payments payable under change in control agreements between DNB and certain executive officers and rights to ongoing insurance coverage by the surviving corporation for acts or omissions occurring prior to the merger. These interests include S&T’s agreement to appoint two members of DNB’s board of directors to the S&T board of directors following the effective time of the merger. DNB’s board of directors was aware of and considered these interests, among other matters, when the board of directors approved the merger agreement and merger and recommended that DNB shareholders approve the DNB merger proposal.

For a more complete description of these interests, see “The Merger—Interests of DNB’s Directors and Executive Officers in the Merger” and “The Merger Agreement—Treatment of DNB Equity Awards.”

No Dissenters’ Rights (Page 56)

Under the Pennsylvania Business Corporation Law (which we refer to as the “PBCL”), holders of DNB common stock are not entitled to exercise appraisal or dissenters’ rights with respect to the proposed merger or the other transactions contemplated by the merger agreement.

Regulatory Approvals Required for the Merger (Page 56)

Subject to the terms of the merger agreement, both S&T and DNB have agreed to use their reasonable best efforts to obtain all regulatory approvals required or advisable to complete the transactions contemplated by the merger agreement, including the merger and the bank merger. These approvals include, among others, approval from the Federal Reserve Board, the Federal Deposit Insurance Corporation (which we refer to as the “FDIC”) and the Pennsylvania Department of Banking and Securities. On July 5, 2019, S&T filed applications to obtain regulatory approvals from the Federal Reserve Board and the FDIC. On July 17, 2019, S&T filed an application to obtain regulatory approval from the Pennsylvania Department of Banking and Securities. On August 9, 2019, DNB Bank submitted a notice filing with the Office of the Comptroller of the Currency (which we refer to as the “OCC”). On August 14, 2019, the Federal Reserve Bank of Cleveland, acting under authority delegated by the Federal Reserve Board, approved the application.

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Although S&T and DNB currently believe that we should be able to obtain all required regulatory approvals in a timely manner, we cannot be certain when or if we will obtain them or, if obtained, whether they will contain terms, conditions or restrictions not currently contemplated that will be detrimental to S&T after the completion of the merger or will contain a materially burdensome regulatory condition. The regulatory approvals to which completion of the merger is subject are described in more detail in “The Merger—Regulatory Approvals Required for the Merger.”

Governance Matters (Page 68)

Board of Directors

Immediately following the effective time of the merger, S&T will appoint two current members of the board of directors of DNB to S&T’s board of directors (which we refer to as the “S&T board of directors”). Each DNB member appointed to serve on the S&T board of directors must be designated by the Nominating and Corporate Governance Committee of the S&T board of directors and must otherwise comply with applicable governmental and eligibility requirements for service on the S&T board of directors. Subject to the approval of the S&T board of directors, these two directors will also be nominated for election at the next annual meeting of shareholders of S&T.

Officers

The officers of S&T in office immediately prior to the effective time, together with such additional persons as may thereafter be appointed, shall serve as the officers of the surviving corporation from and after the effective time of the merger in accordance with the bylaws of S&T.

No Solicitation (Page 69)

As more fully described in this proxy statement/prospectus and in the merger agreement, and subject to certain exceptions summarized below, DNB has agreed not to initiate, solicit, knowingly encourage or knowingly facilitate any inquiries or proposals with respect to, or engage or participate in any negotiations concerning, or provide nonpublic information or data to, or have or participate in any discussions with, any person relating to an alternative acquisition proposal. Notwithstanding these restrictions, in certain circumstances, the merger agreement provides that the DNB board of directors may participate in discussions or negotiations regarding an acquisition proposal or furnish nonpublic information regarding DNB in response to an unsolicited bona fide written acquisition proposal if the DNB board of directors concludes in good faith (in accordance with the merger agreement and after consultation with DNB’s outside legal counsel) that the failure to take such actions would more likely than not result in a violation of the directors’ fiduciary duties under applicable law. For a more complete summary of DNB’s non-solicitation obligations, see “The Merger Agreement—Agreement Not to Solicit Other Offers.”

In connection with its agreement not to solicit other proposals, none of DNB, the DNB board of directors or any of its committees will (1) withhold, withdraw or modify in any manner adverse to S&T (or propose publicly to do so) its recommendation of the merger agreement and the transactions contemplated by the merger agreement, (2) approve or recommend to its shareholders (or resolve to or publicly propose or announce its intention to do so) any alternative acquisition proposal or (3) within 10 business days after an alternative acquisition proposal is made public or any request by S&T, fail to publicly, finally and without qualification recommend against any alternative acquisition proposal or reaffirm its recommendation for DNB shareholders to approve the merger agreement and the transactions contemplated by the merger agreement (each of which we refer to as a “change in company recommendation”).

Conditions to Completion of the Merger (Page 71)

Currently, S&T and DNB expect to complete the merger in the fourth quarter of 2019. As more fully described in this proxy statement/prospectus and in the merger agreement, the completion of the merger depends on a number of conditions being satisfied or, where legally permissible, waived. These conditions include, among others, approval of the merger agreement by the shareholders of DNB, effectiveness of the registration statement containing this proxy statement/prospectus, approval of the listing on the NASDAQ of the S&T common stock to be issued in the merger, the absence of any law or order prohibiting the merger, the bank merger or any of the transactions contemplated by the bank merger, the parties’ readiness to consummate the bank merger immediately

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after the completion of the merger, the accuracy of the representations and warranties of the other party under the merger agreement (subject to the materiality standards set forth in the merger agreement), the performance by the other party of its respective obligations under the merger agreement in all material respects, receipt of certain required regulatory approvals and receipt of legal opinions by each company regarding the U.S. federal income tax treatment of the merger.

Neither S&T nor DNB can be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed. For a more complete summary of the conditions that must be satisfied or waived prior to completion of the merger, see “The Merger Agreement—Conditions to Completion of the Merger.”

Termination of the Merger Agreement (Page 72)

The merger agreement can be terminated at any time prior to completion of the merger by mutual consent or by either party in the following circumstances:

the merger has not been completed by June 5, 2020 (which we refer to as the “end date”), if the failure to complete the merger by the end date is not caused by the terminating party’s breach of the merger agreement;
any required regulatory approval has been denied by the relevant regulatory authority and this denial has become final and non-appealable, or a regulatory authority has issued a final, non-appealable injunction or order permanently enjoining or otherwise prohibiting the completion of the merger or the other transactions contemplated by the merger agreement; or
there is a breach by the other party that, if continuing on the closing date, would cause the failure of certain of the closing conditions described above to be satisfied, and such breach is not cured prior to the earlier of the end date and 30 business days following written notice of the breach.

In addition, S&T may terminate the merger agreement in the following circumstances:

the DNB board of directors (1) fails to recommend to the DNB shareholders that they approve the merger agreement and the transactions contemplated by the merger agreement or (2) effects a change in company recommendation with respect to the merger agreement or the transactions contemplated thereby; or
the DNB board of directors fails to comply in any material respect with its non-solicitation obligations described in “The Merger AgreementAgreement Not to Solicit Other Offers” or its obligations with respect to calling the DNB special meeting described in “The Merger AgreementDNB Shareholder Meeting and Recommendation of the DNB Board of Directors.

In addition, DNB may terminate the merger agreement at any time during the five-day period commencing with the later of the date the DNB shareholders approve the merger agreement and the transactions contemplated by the merger agreement and the date the last required regulatory approval is received (which date we refer to as the “determination date”), if both of the following conditions are satisfied:

the average closing price of S&T common stock as reported on the NASDAQ for the 20 consecutive trading days ending on the trading day prior to the determination date is less than 75% of the closing price of S&T common stock on the last trading day immediately before the public announcement of the merger agreement; and
S&T common stock underperforms the S&P 600 Bank Index by more than 25% during the same period, as determined by dividing the average closing prices of S&T common stock and the S&P 600 Bank Index, as applicable, for the 20 consecutive trading days ending on the trading day prior to the determination date by the closing price of S&T common stock and the S&P 600 Bank Index, as applicable, on the last trading day immediately before the public announcement of the merger agreement.

Termination Fee (Page 73)

If the merger agreement is terminated under certain circumstances, DNB may be required to pay to S&T a termination fee of $8 million. The termination fee could discourage other companies from seeking to acquire or merge with DNB.

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For a more complete summary of the circumstances in which DNB may be required to pay to S&T a termination fee, see “The Merger Agreement—Termination Fee.”

Voting Agreements (Page 73)

The directors and certain executive officers of DNB have each entered into voting agreements with S&T, solely in his or her capacity as a shareholder of DNB, pursuant to which he or she has agreed, among other things, to vote in favor of the DNB merger proposal and the other proposals presented at the DNB special meeting and against any alternative acquisition proposal. For more information regarding the voting agreements, see “The Merger Agreement—Voting Agreements.” As of the record date, DNB shareholders who are parties to the voting agreements beneficially owned and were entitled to vote approximately 507,568 shares of DNB common stock representing approximately 11.71% of the shares of DNB common stock outstanding on that date.

Accounting Treatment (Page 74)

S&T prepares its financial statements in accordance with accounting principles generally accepted in the United States (which we refer to as “GAAP”). The merger will be accounted for using the acquisition method of accounting. S&T will be treated as the acquirer for accounting purposes.

Material U.S. Federal Income Tax Consequences (Page 75)

The merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and it is a condition to the respective obligations of S&T and DNB to complete the merger that each of S&T and DNB receives a legal opinion to that effect. Accordingly, holders of DNB common stock are not expected to recognize any gain or loss for U.S. federal income tax purposes on the exchange of shares of DNB common stock for shares of S&T common stock in the merger, except with respect to any cash received instead of fractional shares of S&T common stock.

For further information, see “Material U.S. Federal Income Tax Consequences of the Merger.”

The U.S. federal income tax consequences described above may not apply to all holders of DNB common stock. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your independent tax advisor for a full understanding of the particular tax consequences of the merger to you.

The Rights of DNB Shareholders Will Change as a Result of the Merger (Page 78)

The rights of DNB shareholders will change as a result of the merger due to differences in S&T’s and DNB’s governing documents. While the rights of S&T and DNB shareholders are both governed by Pennsylvania law, differences in S&T’s and DNB’s articles of incorporation and bylaws, each as amended to date, affect those rights. Upon the completion of the merger, DNB shareholders will become shareholders of S&T, as the continuing legal entity in the merger, and the rights of DNB shareholders will therefore be governed by S&T’s articles of incorporation and bylaws, each as amended to date. For more detailed information regarding a comparison of your rights as a shareholder of S&T and DNB, see “Comparison of Shareholders’ Rights.”

Risk Factors (Page 22)

You should consider all the information contained in or incorporated by reference into this proxy statement/prospectus in deciding how to vote for the proposals presented in this proxy statement/prospectus. In particular, you should consider the factors described under the “Risk Factors” section beginning on page 22 of this proxy statement/prospectus.

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SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF S&T

The following table summarizes selected historical consolidated financial data of S&T for the periods and as of the dates indicated. This information has been derived from S&T’s consolidated financial statements filed with the SEC. Historical financial data as of and for the six months ended June 30, 2019 and June 30, 2018 are unaudited and include, in management’s opinion, all normal recurring adjustments considered necessary to present fairly the results of operations and financial condition of S&T. You should not assume the results of operations for past periods and for the six months ended June 30, 2019 and June 30, 2018 indicate results for any future period.

You should read this information in conjunction with S&T’s consolidated financial statements and related notes thereto included in S&T’s Annual Report on Form 10-K for the year ended December 31, 2018, and in S&T’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2019 and June 30, 2019, which are incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information.”

 
Six Months Ended
June 30,
Years Ended December 31,
($ in thousands, except per share data)
2019
2018
2018
2017
2016
2015
2014
Consolidated Balance Sheets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
7,334,605
 
$
7,097,346
 
$
7,252,221
 
$
7,060,255
 
$
6,943,053
 
$
6,318,354
 
$
4,964,686
 
Securities, at fair value
 
668,588
 
 
688,341
 
 
684,872
 
 
698,291
 
 
693,487
 
 
660,963
 
 
640,273
 
Loans held for sale
 
8,135
 
 
3,801
 
 
2,371
 
 
4,485
 
 
3,793
 
 
35,321
 
 
2,970
 
Portfolio loans, net of unearned income
 
6,033,200
 
 
5,786,118
 
 
5,946,648
 
 
5,761,449
 
 
5,611,419
 
 
5,027,612
 
 
3,868,746
 
Goodwill
 
287,446
 
 
287,446
 
 
287,446
 
 
291,670
 
 
291,670
 
 
291,764
 
 
175,820
 
Total deposits
 
5,856,700
 
 
5,393,533
 
 
5,673,922
 
 
5,427,891
 
 
5,272,377
 
 
4,876,611
 
 
3,908,842
 
Securities sold under repurchase agreements
 
14,154
 
 
44,724
 
 
18,383
 
 
50,161
 
 
50,832
 
 
62,086
 
 
30,605
 
Short-term borrowings
 
295,000
 
 
600,000
 
 
470,000
 
 
540,000
 
 
660,000
 
 
356,000
 
 
290,000
 
Long-term borrowings
 
69,791
 
 
46,062
 
 
70,314
 
 
47,301
 
 
14,713
 
 
117,043
 
 
19,442
 
Junior subordinated debt securities
 
45,619
 
 
45,619
 
 
45,619
 
 
45,619
 
 
45,619
 
 
45,619
 
 
45,619
 
Total shareholders’ equity
 
964,953
 
 
907,133
 
 
935,761
 
 
884,031
 
 
841,956
 
 
792,237
 
 
608,389
 
Consolidated Statements of Net Income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
158,214
 
$
139,610
 
$
289,826
 
$
260,642
 
$
227,774
 
$
203,548
 
$
160,523
 
Interest expense
 
37,031
 
 
24,276
 
 
55,388
 
 
34,909
 
 
24,515
 
 
15,997
 
 
12,481
 
Provision for loan losses
 
7,854
 
 
11,817
 
 
14,995
 
 
13,883
 
 
17,965
 
 
10,388
 
 
1,715
 
Net Interest Income After Provision for Loan Losses
 
113,329
 
 
103,517
 
 
219,443
 
 
211,850
 
 
185,294
 
 
177,163
 
 
146,327
 
Noninterest income
 
24,263
 
 
26,044
 
 
49,181
 
 
55,462
 
 
54,635
 
 
51,033
 
 
46,338
 
Noninterest expense
 
79,271
 
 
71,945
 
 
145,445
 
 
147,907
 
 
143,232
 
 
136,717
 
 
117,240
 
Net Income Before Taxes
 
58,321
 
 
57,616
 
 
123,179
 
 
119,405
 
 
96,697
 
 
91,479
 
 
75,425
 
Provision for income taxes
 
9,292
 
 
10,017
 
 
17,845
 
 
46,437
 
 
25,305
 
 
24,398
 
 
17,515
 
Net Income
$
49,029
 
$
47,599
 
$
105,334
 
$
72,968
 
$
71,392
 
$
67,081
 
$
57,910
 
Selected Per Share Data and Ratios Per Share Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per common share—basic
$
1.43
 
$
1.37
 
$
3.03
 
$
2.10
 
$
2.06
 
$
1.98
 
$
1.95
 
Earnings per common share—diluted
$
1.43
 
$
1.36
 
$
3.01
 
$
2.09
 
$
2.05
 
$
1.98
 
$
1.95
 
Dividends declared per common share
$
0.54
 
$
0.47
 
$
0.99
 
$
0.82
 
$
0.77
 
$
0.73
 
$
0.68
 
Dividend payout ratio
 
37.85
%
 
34.44
%
 
32.79
%
 
39.15
%
 
37.52
%
 
36.47
%
 
34.89
%
Common book value
$
28.11
 
$
25.91
 
$
26.98
 
$
25.28
 
$
24.12
 
$
22.76
 
$
20.42
 
Common tangible book value (non-GAAP)(1)
$
19.68
 
$
17.63
 
$
18.63
 
$
16.87
 
$
15.67
 
$
14.26
 
$
14.46
 
Profitability Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common return on average assets
 
1.37
%
 
1.37
%
 
1.50
%
 
1.03
%
 
1.08
%
 
1.13
%
 
1.22
%
Common return on average equity
 
10.43
%
 
10.71
%
 
11.60
%
 
8.37
%
 
8.67
%
 
8.94
%
 
9.71
%
Common return on average tangible common equity (non-GAAP)(2)
 
15.09
%
 
15.95
%
 
17.14
%
 
12.77
%
 
13.71
%
 
14.39
%
 
14.02
%

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Six Months Ended
June 30,
Years Ended December 31,
($ in thousands, except per share data)
2019
2018
2018
2017
2016
2015
2014
Capital Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity/assets
 
13.16
%
 
12.78
%
 
12.90
%
 
12.52
%
 
12.13
%
 
12.54
%
 
12.25
%
Tangible common equity/tangible assets (non-GAAP)(3)
 
9.59
%
 
9.07
%
 
9.28
%
 
8.72
%
 
8.23
%
 
8.24
%
 
9.00
%
Tier 1 leverage ratio
 
10.12
%
 
9.87
%
 
10.05
%
 
9.17
%
 
8.98
%
 
8.96
%
 
9.80
%
Common equity tier 1
 
11.35
%
 
11.18
%
 
11.38
%
 
10.71
%
 
10.04
%
 
9.77
%
 
11.81
%
Risk-based capital—tier 1
 
11.68
%
 
11.53
%
 
11.72
%
 
11.06
%
 
10.39
%
 
10.15
%
 
12.34
%
Risk-based capital—total
 
13.15
%
 
13.04
%
 
13.21
%
 
12.55
%
 
11.86
%
 
11.6
%
 
14.27
%
Asset Quality Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans/loans
 
0.75
%
 
0.37
%
 
0.77
%
 
0.42
%
 
0.76
%
 
0.70
%
 
0.32
%
Nonperforming assets/loans plus OREO
 
0.77
%
 
0.42
%
 
0.83
%
 
0.42
%
 
0.77
%
 
0.71
%
 
0.33
%
Allowance for loan losses/total portfolio loans
 
1.02
%
 
1.05
%
 
1.03
%
 
0.98
%
 
0.94
%
 
0.96
%
 
1.24
%
Allowance for loan losses/nonperforming loans
 
137
%
 
283
%
 
132
%
 
236
%
 
124
%
 
136
%
 
385
%
Net loan charge-offs (recoveries)/average loans
 
0.25
%
 
0.27
%
 
0.18
%
 
0.18
%
 
0.25
%
 
0.22
%
 
0.00
%

Explanation of Use of Non-GAAP Financial Measures

In addition to traditional measures presented in accordance with GAAP, S&T management uses, and this proxy statement/prospectus contains or references, certain non-GAAP financial measures identified below. S&T management believes these non-GAAP financial measures provide information useful to investors in understanding S&T’s underlying operational performance and S&T’s business and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Although S&T management believes that these non-GAAP financial measures enhance investors’ understanding of S&T’s business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with non-GAAP measures which may be presented by other companies.

Common tangible book value, common return on average tangible common equity and the ratio of tangible common equity to tangible assets exclude goodwill and other intangible assets in order to show the significance of the tangible elements of S&T’s assets and common equity. Total assets and total average assets are reconciled to total tangible assets and total tangible average assets. Total shareholders' equity and total average shareholders' equity are also reconciled to total tangible common equity and total tangible average common equity. These measures are consistent with industry practice.

13

TABLE OF CONTENTS

RECONCILIATIONS OF GAAP TO NON-GAAP RATIOS

 
June 30,
December 31,
(dollars in thousands)
2019
2018
2018
2017
2016
2015
2014
(1)   Common Tangible Book Value (non-GAAP)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total shareholders’ equity
$
964,953
 
$
907,133
 
$
935,761
 
$
884,031
 
$
841,956
 
$
792,237
 
$
608,389
 
Less: goodwill and other intangible assets
 
(289,701
)
 
(290,355
)
 
(290,047
)
 
(295,347
)
 
(296,580
)
 
(298,289
)
 
(178,451
)
Tax effect of other intangible assets
 
474
 
 
611
 
 
546
 
 
1,287
 
 
1,719
 
 
2,284
 
 
921
 
Tangible common equity (non-GAAP)
 
675,726
 
 
617,389
 
 
646,260
 
 
589,971
 
 
547,095
 
 
496,232
 
 
430,859
 
Common shares outstanding
 
34,330
 
 
35,010
 
 
34,684
 
 
34,972
 
 
34,913
 
 
34,810
 
 
29,796
 
Common tangible book value (non-GAAP)
$
19.68
 
$
17.63
 
$
18.63
 
$
16.87
 
$
15.67
 
$
14.26
 
$
14.46
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2)   Common return on Average Tangible Common Shareholders’ Equity (non-GAAP)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
98,870
 
$
95,987
 
$
105,334
 
$
72,968
 
$
71,392
 
$
67,081
 
$
57,910
 
Plus: amortization of intangibles
 
697
 
 
952
 
 
861
 
 
1,233
 
 
1,615
 
 
1,818
 
 
1,129
 
Tax effect of amortization of intangibles
 
(146
)
 
(200
)
 
(181
)
 
(432
)
 
(565
)
 
(636
)
 
(395
)
Net income before amortization of intangibles
 
99,421
 
 
96,739
 
 
106,014
 
 
73,769
 
 
72,442
 
 
68,263
 
 
58,644
 
Total average shareholders’ equity (GAAP Basis)
 
948,244
 
 
896,371
 
 
908,355
 
 
872,130
 
 
823,607
 
 
750,069
 
 
596,155
 
Less: average goodwill and average other intangible assets
 
(289,869
)
 
(290,609
)
 
(290,380
)
 
(295,937
)
 
(297,377
)
 
(278,130
)
 
(178,990
)
Tax effect of other intangible assets
 
509
 
 
659
 
 
614
 
 
1,493
 
 
1,992
 
 
2,283
 
 
1,109
 
Tangible average common shareholders’ equity (non-GAAP)
$
658,884
 
$
606,421
 
$
618,589
 
$
577,686
 
$
528,222
 
$
474,222
 
$
418,274
 
Common return on average tangible common shareholders’ equity (non-GAAP)
 
15.09
%
 
15.95
%
 
17.14
%
 
12.77
%
 
13.71
%
 
14.39
%
 
14.02
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(3)   Tangible Common Equity / Tangible Assets (non-GAAP)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total shareholders’ equity (GAAP basis)
$
964,953
 
$
907,133
 
$
935,761
 
$
884,031
 
$
841,956
 
$
792,237
 
$
608,389
 
Less: goodwill and other intangible assets
 
(289,701
)
 
(290,355
)
 
(290,047
)
 
(295,347
)
 
(296,580
)
 
(298,289
)
 
(178,451
)
Tax effect of other intangible assets
 
474
 
 
611
 
 
546
 
 
1,287
 
 
1,719
 
 
2,284
 
 
921
 
Tangible common equity (non-GAAP)
 
675,726
 
 
617,389
 
 
646,260
 
 
589,971
 
 
547,095
 
 
496,232
 
 
430,859
 
Total assets
$
7,334,605
 
$
7,097,346
 
$
7,252,221
 
$
7,060,255
 
$
6,943,053
 
$
6,318,354
 
$
4,964,686
 
Less: goodwill and other intangible assets
 
(289,701
)
 
(290,355
)
 
(290,047
)
 
(295,347
)
 
(296,580
)
 
(298,289
)
 
(178,451
)
Tax effect of other intangible assets
 
474
 
 
611
 
 
546
 
 
1,287
 
 
1,719
 
 
2,284
 
 
921
 
Tangible assets (non-GAAP)
$
7,045,378
 
$
6,807,602
 
$
6,962,720
 
$
6,766,195
 
$
6,648,192
 
$
6,022,349
 
$
4,787,156
 
Tangible common shareholders’ equity to tangible assets (non-GAAP)
 
9.59
%
 
9.07
%
 
9.28
%
 
8.72
%
 
8.23
%
 
8.24
%
 
9.00
%

14

TABLE OF CONTENTS

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF DNB

The following table summarizes selected historical consolidated financial data of DNB for the periods and as of the dates indicated. This information has been derived from DNB’s consolidated financial statements filed with the SEC. Historical financial data as of and for the six months ended June 30, 2019 and June 30, 2018 are unaudited and include, in management’s opinion, all normal recurring adjustments considered necessary to present fairly the results of operations and financial condition of DNB. You should not assume the results of operations for past periods and for the six months ended June 30, 2019 and June 30, 2018 indicate results for any future period.

You should read this information in conjunction with DNB’s consolidated financial statements and related notes thereto included in DNB’s Annual Report on Form 10-K for the year ended December 31, 2018, and in DNB’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2019 and June 30, 2019, which are incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information.”

You should note that the selected historical consolidated financial data includes certain non-GAAP financial measures calculated using non-GAAP amounts. DNB management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, DNB management believes the use of non-GAAP measures provides additional clarity when assessing DNB's financial results and use of equity. Disclosures of this type should not be viewed as substitutes for results determined to be in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.

 
Six Months ended
 
 
 
 
 
 
June 30,
2019
June 30,
2018
At or For the Year Ended December 31
(Dollars in thousands, except share data)
(unaudited)
(unaudited)
2018
2017
2016
2015
2014
RESULTS OF OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
24,879
 
$
22,202
 
$
46,175
 
$
43,385
 
$
29,179
 
$
24,478
 
$
23,596
 
Interest expense
 
5,996
 
 
4,107
 
 
9,371
 
 
5,720
 
 
3,324
 
 
2,712
 
 
2,311
 
Net interest income
 
18,913
 
 
18,095
 
 
36,804
 
 
37,665
 
 
25,855
 
 
21,766
 
 
21,285
 
Provision for credit losses
 
300
 
 
750
 
 
1,200
 
 
1,660
 
 
730
 
 
1,105
 
 
1,130
 
Non-interest income
 
2,618
 
 
2,605
 
 
5,245
 
 
5,418
 
 
6,364
 
 
5,009
 
 
4,958
 
Non-interest expense
 
14,790
 
 
14,270
 
 
27,875
 
 
28,021
 
 
24,641
 
 
19,029
 
 
18,632
 
Income before income taxes
 
6,441
 
 
5,680
 
 
12,974
 
 
13,402
 
 
6,848
 
 
6,641
 
 
6,481
 
Income tax expense
 
1,267
 
 
1,018
 
 
2,290
 
 
5,456
 
 
1,869
 
 
1,503
 
 
1,677
 
Net income
$
5,174
 
$
4,662
 
$
10,684
 
$
7,946
 
$
4,979
 
$
5,138
 
$
4,804
 
Preferred stock dividends & accretion of discount
 
 
 
 
 
 
 
 
 
 
 
50
 
 
135
 
Net income available to common stockholders
$
5,174
 
$
4,662
 
$
10,684
 
$
7,946
 
$
4,979
 
$
5,088
 
$
4,669
 
PER SHARE DATA