Greetings, ladies and gentlemen. And welcome to the S&T Bancorp Third Quarter 2014 Earnings Conference Call. At this time, all lines are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Mark Kochvar, CFO. Thank you, sir. You may begin.

Thank you. Good afternoon and thank you for participating in today’s conference call. Before beginning the presentation, I want to take time to refer you to our statement about forward-looking statements and risk factors, which is on the screen in front of you. This statement provides the cautionary language required by the Securities and Exchange Commission for forward-looking statements that may be included in this presentation. A copy of the third quarter earnings release can be obtained by clicking on the Press Release link on your screen or by visiting our Investor Relations website at www.stbancorp.com. I would now like to introduce Todd Brice, S&T’s President and CEO, who will provide an overview of S&T’s results.

Well, thank you, Mark, and good afternoon, everyone. As we announced in this morning’s press release, we did report net income of $14.7 million or $0.49 per share for the quarter versus $14.7 million or $0.49 per share in Q2. Both net income and diluted earnings per share increased 20%, as compared to the third quarter of 2013 results of $12.7 million and $0.41 per share, respectively. The main drivers of our performance are once again solid loan growth, disciplined expense control and positive trends in our asset quality metrics, all of which have contributed to an improvement in the overall quality of our results this quarter. Q3 represents our ninth consecutive quarter of organic loan growth. For the period, loans increased $76.1 million or 8% annualized and really the growth was a nice mix of C&I and CRE, and it’s distributed throughout our core markets, as well as our newer ventures in Ohio and State College, where we are continue to see some nice momentum. Another bright spot is a favorable variance that we experienced in our non-interest expense numbers. Our quarter-over-quarter expenses were down $1.7 million or 5.7%. Mark will discuss some of the details in a few moments. But one of the main factors contributing to the lift in productivity is the -- experience that we are seeing from investments that we made in technology, with some of the efficiencies that we picked up, we have been able to manage our staff and reassign employees to other areas to support some of our growth initiatives. Asset quality continues to trend favorably as well. While we did incur more normalized revision expense of $1.5 million, net charge-offs are only $700,000 or 8% annualized. And in addition, non-performing assets declined by $1.7 million or right around 11% and now stand at $13.7 million or 0.36% of total loans plus OREO. Overall delinquency declined 5 basis points to 0.54%, a criticized and classified loans decreased $18 million or 10%. So looking forward, we expect to continue to maintain comparable levels as the economy in our markets continues to improve. We are also pleased with the performance this quarter and we like our position for future growth. We have the appropriate infrastructure in place to support our initiatives and we also like our position from a capital perspective to sustain both organic growth, as well as look for potential M&A opportunities. And finally, our Board of Directors has approved a 1% or 5.9% per share increase to our quarterly dividend to $0.18. Going back to the third quarter of 2013, this is a third time that we increased the dividend and it represents a 20% increase from that period. So with that, I just want to again thank everybody for your continued support of S&T Bank. And I will turn the program over to our Chief Lending Officer, David Antolik.

Hey, thanks Todd. Good afternoon everyone. As reported and primarily as a result of our commercial organic growth strategies, we experienced an increase of $76.1 million in total portfolio loans for the third quarter. We continue to see positive momentum in both our commercial real estate and C&I portfolios where we saw quarterly growth of $55.3 million and $24.2 million respectively. With regard to commercial construction, loan balances declined by $4.8 million, reflecting the seasonality in this portfolio as well as the completion of projects totaling $25 million that moved to the permanent commercial real estate category. Commitments for future construction funding remains strong and unchanged quarter-over-quarter at $200 million, negatively impacting the rate of our commercial real estate growth is a more aggressive permanent loan market. During the quarter, we received higher than historical payouts from permanent lenders on apartments, student housing and ops projects. We expect this appetite for quality real estate loans to continue within the permanent market. And while this poses an increased challenge, we remain confident in our ability to win and maintain relationships with quality customers to develop these types of projects. Our C&I growth was well diversified again this quarter as evidenced by increases in total number of accounts, total number of commitments, total growth commitments and total outstandings. Our efforts in Ohio continue to yield positive results that helped to accelerate loan growth as evidenced by $53 million increase in total loans from the two LPOs for Q3. During the quarter, we added two members to our Central Ohio banking team in order to round up our commercial and business banking production staff. We now have teams of eight talented seasoned and professional bankers in both Northeast and Central Ohio. We’re in the process of recruiting talent and developing strategies to further leverage the opportunities that we see in Ohio. In all of our markets and on all of our commercial and business banking teams, we continue to benefit from a credit delivery model that is customer focused and balanced by our strong credit risk practices. Finally, we believe that our balance sheet is well positioned for a potential increase in interest rates with 49% of loans tied to prime or LIBOR and another 20% of loans resetting as ARMs typically in three to five-year increments. And now Mark will provide you with some additional details on our financial results.

Thanks, Dave. The improvement in net interest income this quarter was primarily due to earning asset growth and a better asset mix. Average loans increased by almost $106 million higher than our period-end increase due to momentum from strong activity at the very end of the second quarter. Securities were also up by about $29.5 million as we continue to deploy excess cash. The net interest margin rate declined from last quarter due to some one-time items in the second quarter that accounted for about four basis points of the six basis point decline. Our net interest margin has been within a few basis points of 3.5% for the past 10 quarters. And we expect that to continue for the next several quarters short of any said moves. We did see a slight widening in the rate differential between new and pay off this quarter, all that widening was due to some higher rate loans that paid off in the third quarter. Non-interest income was overall relatively unchanged compared to last quarter. Consumer fees improved due to more activity in the summer season and our insurance benefited from higher renewals which occur in the third and first quarter. Decline in other was due to lower letter of credit fees, which fluctuates depending on renewal basis. Non-interest expense for the third quarter was lower than the second quarter by $1.7 million and helped to drive a lower efficiency ratio and a better quality of earnings. The two main items contributing to lower expenses this quarter were salaries and benefits and other. Salaries and benefit declined in part from continued bank wide attention deficiency as evidenced by a net decrease in FTE of 17 since the end of last year. The decline in other was primarily due to a decrease in the reserve for unfunded commitments, resulting from lower exposures and expected loss levels. Our tax rate for the quarter was unchanged from second quarter at about 25%. The year-to-date rate of just, under 24% is in line with our expectations for the fourth quarter. The risk-based capital ratios improved this quarter as earnings retention kept pace with loan growth. We expect to see an approximate decline of 75 basis points in our risk-weighted capital ratios with the implementation of Basel III in the first quarter of 2015. As Todd mentioned, we like where we are from capital perspective and continue to leverage our capital for strong organic growth or the right M&A opportunity. Thank you very much. At this time, I’d like to turn it over to the operator to provide instructions for asking questions.

Thank you. (Operator Instructions) Our first question comes from the line of Collyn Gilbert with KBW. Please proceed with your question.

Thanks. Good afternoon, gentlemen.

Hi, Collyn.

Mark, just to go back to your comments on the NIM. So you had indicated that this quarter it was an unusual gap between some higher-yielding loans that paid off versus the new yields that have put on. But going forward is that spread narrowing and is that really what's driving kind of this tight NIM, or are you still expecting better earning asset mix shift?

It will still be little bit better asset mix. I mean, we still anticipate loan growth and we still do have some cash on the balance sheet that we intend to wind down over time but we’ll still get some mix benefits. I think we had seen over the last several quarters, probably about seven or eight quarters, narrowing of the spread between new and what was paying off. I think this quarter was more of an anomaly, just because of the character of the loans that paid off. But I think we will see that, continue that on a narrowing trend going forward.

Okay. So, I guess the question is on the new loan origination yield, have they consistently been about the same and the variation is really coming from what’s paying off?

Right. For this Q3, we saw no change in the average new rate. What we saw was a little bit of a jump in the rate of the payoffs.

Okay. Okay. That's helpful. And then just -- I know, can you tell a little bit about just kind of how you are thinking about funding the balance sheet? I know that the borrowings moved up again a little bit this quarter. Are you doing some extensions or just talk maybe if you could about that?

As Dave mentioned, our LIBOR and prime portfolio is now just under half of the balance sheet and that’s where our net growth has come from over the course of the year that’s grown from 45%, again the year. So the incremental funding that we’ve done that hasn’t been from the deposit base has been short, both in borrowing portfolio and also in the CDs. From a strategic standpoint, we are going to be putting a lot more emphasis and effort internally on generating more deposits going into next year. So our hard goals are to self-fund from deposits more so than borrowings going forward into 2015.

Okay. That’s helpful. And then just finally, Todd, maybe if you could just talk about -- it sounds like you’re getting growth across a lot of the markets. How has the competition changed in some of the markets certainly and what are your doing in Ohio? And then I know you said the State College is looking good. Is that because there is less competition happening in those markets? Is it just a share game issue or are you actually seeing some economic growth in each of those markets?

I think it’s a little bit of a combination of all three depending on the market. So I think certainly in Western Pennsylvania, we’re seeing some nice activity across all sectors of our client base. A lot of it’s just having the right people, Collyn. Some of the teams we’re bringing on, they are not some, all the teams are very seasoned bankers, like Dave said, and they are bankers who have longstanding relationships in communities. So yes, some of its dealer market share and then just being positioned whenever clients are in the mood to expand or have a need to make an investment back into their company.

Are you seeing much of that? I mean, are you seeing borrowers kind of either line usage increase or just -- or them moving and looking to expand the companies?

Yeah, what was our line utilization this quarter? We just looked at it, but it was…

44%.

Yeah. So it was up significantly from where it was last year, year-to-date our existing line utilization.

Yes. So the total commitments were up significantly as well. So outstanding utilizations, total number of C&I clients, they’ve all increased.

Okay. Great. Okay. That was all I had. Thanks, guys.

Thank you.

Thank you. Our next question comes from the line of Matt Schultheis with Boenning & Scattergood. Please proceed with your question. Matt Schultheis - Boenning & Scattergood: Good afternoon.

Hi, Matt. Matt Schultheis - Boenning & Scattergood: I was just curious with your pace of organic growth. Has your appetite towards the M&A side of strategy changed at all?

I don’t think so, Matt. I mean, if you look at our history, it’s been a combination of organic growth. And then over -- when we found the right partner to partner up with, we pulled that lever too. And if you look at our history, again, it’s -- for the most parts, it’s been with companies that have been good performers. And so then you are able to kind of integrate them effectively and really just ramp them up very quickly just by layering on some additional capacity in their ability to borrow and maybe some additional products and services. So we’ll look at both. Matt Schultheis - Boenning & Scattergood: Okay. Does your change in geographic focus, say, Columbus to State College, does that mean that you will be willing to work on those areas, actually require something toward this stage?

Yeah. I think that’s a fair assessment. We have looked at some things in Ohio. We just haven’t quite filed something that really fits our model. But certainly State College received some nice activity and we got a good team of bankers up there. And after that center part of the state was, certainly we would consider as well. Matt Schultheis - Boenning & Scattergood: And then lastly with regards to that as we enter the budget and strategic branding season for banks, are you seeing more books or fewer book than say you did in the first half of the year?

I think it’s about the same. Well, I don’t think we’ve seen anything really driving a big impetus right now of above yet. But I think you’re probably right on the money. Banks are getting into that planning season, so that may increase over the next couple of months. Matt Schultheis - Boenning & Scattergood: Okay. Well, thank you.

Thanks Matt.

Thank you. Our next question comes from the line of Matthew Breese with Sterne Agee. Please proceed with your question.

Good afternoon, guys.

Hi, Matt.

Hi.

On the overall level of expenses, I know in the release you had noted that there was some timing issues. And going back to your earlier comments, I was just wondering, how much was related to the timing issue and related to that what would be good run rate going forward?

I mean, when we had a forecast for this quarter, it was about $29.3 million. So I’d say it’s up to about maybe $800,000 of that could be attributed to timing. So I think, kind of that mid 29 is still sort of a better run rate for us.

Okay. And then the difference, I’m assuming, would come from non-salary and benefit lines?

Right. I mean the biggest thing was this reserve for unfunded commitments that decreased this quarter. So that something that, may or may not -- I mean, it’s not something you can count on going that was about success. Yeah, that mean the variance there was about $500,000.

Right. Okay and then Todd, I think you had mentioned in your comments that you felt like the provision return to a more normal level this quarter. Considering charge-offs and the pace of growth, is the $1.5 million about right when we think about 2015 per quarter.

We think so, I mean we’re right now. I think our expectation if you $700,000 maybe a little late. But when you look at where we are year-to-date, we’re still in that recovery position. I mean, I think, kind of a normalized environment maybe in the 15 basis point range would be probably on the high-end. But from what we’re seeing, again, we like the trend that we’re seeing on delinquency related trends we’re seeing on our criticized and classified are non-performer. So kind of look into the crystal ball, those kind of give you first indications of what you’re going to see.

Right. Okay. And then given the disruption in the oil markets and the price of oil, I was just curious, has that any impact on activity on Western Pennsylvania?

We haven’t seen it as of yet. In fact, our C&I borrowers in that space continue to demand additional credit. So we’re keeping our eye on it though very closely. We know ultimately that the commodity prices going to drive activity. But at this time, we haven’t seen any negative result from the recent downturn in prices.

I think the other thing that sometimes, Matt, if you do see a little bit of a turn is okay, what happens with real estate prices. And I would argue that we hope today, vacancy rates to Western Pennsylvania are probably some of the lowest that we’ve seen in 30 years and there are somewhere lowest in the country right now in certain classes. So that could maybe migrate back to more normal kind of a vacancy environment. But again, I think, it’s a long term play. There will be some fluctuations in prices and there maybe some periods where it does have an impact on borrowing demand. We haven’t seen it yet but again, as Dave said, it’s something that we’re looking at. And also I think with some of the diversification into some of the other markets out in Ohio and State College will help to kind of offset, some of the -- maybe the organic growth that we’ve experienced from our core markets. So, I kind of like that diversification that you are getting into some new markets.

All right.

The other thing I just want to mention too as Dave didn’t mentioned in his comments, but he mentioned about hiring a couple of people out in Ohio and again, that kind of the lift out or adding talent to our bench has been very important to some of our growth. And he also hired a very solid C&I lender in the Pittsburg market that probably has 30-plus years of client relationships that will be coming over from a bigger competitor. And we expect that he is going to hit the ground running pretty quickly and will be able to generate some nice volumes for us as well.

Wonderful. Thanks for the color guys.

Thanks, Matt.

Thank you. (Operator Instructions) Our next question comes from the line of William Wallace with Raymond James. Please proceed with your question.

Good afternoon, guys. How are you?

Good. How are you doing, Wally?

Great, thanks. Most of my questions have been asked. But Mark, you mentioned there has been maybe a little bit of change of focus internally, shifting more towards deposit gathering. I wonder if you could expand on that a little bit just kind of give us a sense of what you guys are doing and what you’re targeting?

Why wouldn’t we call it a shift? I would say we are just adding that to the focus. I don’t think it’s going to lessen what we’re trying to do on the loan side at all. But we’re just trying to reorient the focus internally on deposits, establish better accountability with our lines of business the way we are organized, and set goals and expectations for people. We think with the decline that we saw on loans few years back, we all had plenty of deposits to work with and now that we’re in this growth mode. Just from a liquidity perspective over the longer term, we need to have those deposits keep pace with loans. We think we are more than capable to do that, but just something we need to refocus internal resources on.

Right. The other point I would like to make there, Wally, as you know the last couple years really the strategic focus of the organization has been asset generation. That will continue to be a focus, but also in conjunction with that, deposits are going to get more of an emphasis, as Mark said. And I think we have the right folks out on our team that will be able to achieve the goals that we are going to set for them and execute on our strategies.

Are you going to -- is there going to be some sort of compensation shift, or is it really just more turning management eyes to it as a tool when you’re reviewing lenders or how do you…?

It will be a combination. So as Mark stated, we are going to create a more stronger accountability here and there will be a shift in some of the commercial and business banking incentive plans to emphasize deposit generation as well. So combination.

As well as plans, I don’t know on the retail side of our operation as well.

Okay. And then along the same line, how has the experience from the deposit side been in your Akron and in Columbus markets?

It has been good.

So we do have -- we did get banking powers in Ohio, so we can accept deposits now, which is to open a branch. I don’t know that we’re going to be doing anything crazy on building on a retail network out there. But at some point, it may make sense to kind of maybe put a private banking type model of an office in out there. I would say we have treasury management people that work closely with our lending teams. They are able to put in the Remote Deposit Capture technology. So pretty much for every business client that we’re bring on board. We are getting deposits on along with the loan. So that’s the expectation and our folks out there are doing a very nice job in capturing that.

Okay. Thanks, guys. I appreciate the time.

Thanks, Wally.

Thank you. There are no further questions at this time. I would like to turn it back to management for closing comments.

I just want to thank everybody for participating in today’s call. And Mark and Dave and I appreciate the opportunity to discuss this quarter’s results and look forward to hearing from you in our next conference call. So hope we have good earnings season and we will talk in about 90 days. See you.

Thank you. Ladies and gentlemen, this concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.