NOTE 21. REGULATORY MATTERS

We are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet the minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital guidelines and the regulatory framework for prompt corrective action, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. Our capital amounts and classification are also subject to qualitative judgments by the regulators about risk weightings and other factors.

The most recent notifications from the Federal Reserve Board and the FDIC categorized S&T and S&T Bank as well capitalized under the regulatory framework for corrective action. There have been no conditions or events that we believe have changed S&T or S&T Bank's status during 2011 and 2010.

Tier 1 capital consists principally of shareholders' equity including preferred stock; excluding items recorded in accumulated other comprehensive gain/loss, less, goodwill and other intangibles. Total capital consists of Tier 1 capital plus junior subordinated debt and the ALL subject to limitation. We currently have $70.0 million in junior subordinated debt which is included in Tier 2 capital in accordance with current regulatory reporting requirements. For regulatory purposes, trust preferred securities totaling $20.0 million, issued by an unconsolidated trust subsidiary of S&T underlying such junior subordinated debt, are included in Tier 1 capital.

During 2011, we redeemed all of the Series A Preferred Stock. Refer to Note 22 Capital Purchase Program for additional disclosures. At December 31, 2010, Tier 1 capital included $106.1 million, representing Series A Preferred Stock of $108.7 million net of the unamortized discount of $2.6 million in accordance with the terms of the CPP and regulatory requirements.

Quantitative measures established by regulation to ensure capital adequacy require us to maintain minimum amounts and ratios of Total and Tier 1 capital to risk-weighted assets and Tier 1 capital to average assets. As of December 31, 2011 and 2010, we met all capital adequacy requirements to which we are subject.

The following table summarizes risk-based capital amounts and ratios for S&T and S&T Bank.


	Actual					For Capital Adequacy Purposes					To be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
(in thousands)

As of December 31, 2011
Total Capital (to Risk-Weighted Assets)
S&T	$	465,702		15.20	%	$	245,154		8.00	%	$	306,443		10.00	%
S&T Bank		429,837		14.11	%		243,699		8.00	%		304,623		10.00	%
Tier 1 Capital (to Risk-Weighted Assets)
S&T		356,484		11.63	%		122,577		4.00	%		183,866		6.00	%
S&T Bank		321,352		10.55	%		121,849		4.00	%		182,774		6.00	%
Leverage Ratio⁽¹⁾
S&T		356,484		9.17	%		155,526		4.00	%		194,408		5.00	%
S&T Bank		321,352		8.30	%		154,789		4.00	%		193,486		5.00	%
As of December 31, 2010
Total Capital (to Risk-Weighted Assets)
S&T	$	547,336		16.68	%	$	262,498		8.00	%	$	328,123		10.00	%
S&T Bank		405,049		12.42	%		260,944		8.00	%		326,180		10.00	%
Tier 1 Capital (to Risk-Weighted Assets)
S&T		435,823		13.28	%		131,249		4.00	%		196,874		6.00	%
S&T Bank		294,113		9.02	%		130,472		4.00	%		195,708		6.00	%
Leverage Ratio⁽¹⁾
S&T		435,823		11.07	%		157,513		4.00	%		196,891		5.00	%
S&T Bank		294,113		7.50	%		156,799		4.00	%		195,999		5.00	%

⁽¹⁾

Minimum requirement is 3.00 percent for the most highly-rated financial institutions.