UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
x ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-12508
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
DNB FIRST 401(k) RETIREMENT PLAN
800 Philadelphia Street
Indiana, Pennsylvania 15701
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
S&T Bancorp, Inc.
800 Philadelphia Street
Indiana, Pennsylvania 15701
DNB FIRST 401(k) RETIREMENT PLAN
Years ended December 2019 and 2018
Table of Contents
| | | | | |
| Item 1 and 2. Financial Statements | |
| Page |
| Report of Independent Registered Public Accounting Firm | |
| Audited Financial Statements | |
| Statements of Net Assets Available for Benefits | |
| Statements of Changes in Net Assets Available for Benefits | |
| Notes to Financial Statements | |
| Supplemental Schedule | |
| Schedule H, Line 4(i)-Schedule of Assets (Held at End of Year) | |
| Signatures | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and the Administrator
of the DNB First 401(k) Retirement Plan
Opinion on the Financial Statements
We have audited the accompanying statement of net assets available for benefits (on-going basis) of the DNB First 401(k) Retirement Plan (the “Plan”) as of December 31, 2018, and the related statement of changes in net assets available for benefits (on-going basis) for the year then ended, and the statement of net assets available for benefits (in liquidation) as of December 31, 2019 and the related statement of changes in net assets available for benefits (in liquidation) for the year then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2019 and 2018, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
As described in Notes 1 and 2 to the financial statements, the board of directors of DNB First National Association, the predecessor to S&T Bank as plan sponsor, terminated the Plan on November 29, 2019 and a plan of liquidation was approved. As a result, the Plan has changed its basis of accounting from the going concern-basis used in presenting the 2018 financial statements to the liquidation basis used in presenting the 2019 financial statements.
Basis for Opinion
These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error of fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Supplemental Information
The supplemental information in the accompanying schedule of assets (held at end of year) as of December 31, 2019, has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.
/s/ Fischer Cunnane & Associates Ltd
Fischer Cunnane & Associates Ltd
Certified Public Accountants
We have served as the Plan’s auditor since 2004.
West Chester, Pennsylvania
June 8, 2020
DNB FIRST 401(k) RETIREMENT PLAN
Statements of Net Assets Available for Benefits
| | | | | | | | | | | |
| December 31 | | |
| 2019 (In Liquidation) | | 2018 |
| Assets: | | | |
| Cash | $ | 42,310 | | | $ | 50,048 | |
| Receivables: | | | |
| Employer's contribution | — | | | | 106,909 | |
| Dividends receivable | 54,807 | | | — | |
| Due from broker for securities sold | — | | | 28,337 | |
| Total receivables | 54,807 | | | 135,246 | |
| Investments: | | | |
| Money market funds | — | | | 3,531 | |
| Short-term investment funds | 838,286 | | | 675,544 | |
| Mutual funds | 7,567,128 | | | | 7,189,682 | |
| Company stock | 5,669,528 | | | 3,828,924 | |
| Total investments | 14,074,942 | | | 11,697,681 | |
| | | |
| Total Assets | 14,172,059 | | | 11,882,975 | |
| | | |
| Liabilities: | | | |
| Accrued expenses | 11,655 | | | | 6,766 | |
| Due to broker for securities purchased | — | | | | 50,048 | |
| Total liabilities | 11,655 | | | 56,814 | |
| | | |
| Net assets available for benefits | $ | 14,160,404 | | | $ | 11,826,161 | |
See accompanying notes to the financial statements.
DNB FIRST 401(k) RETIREMENT PLAN
Statements of Changes in Net Assets Available for Benefits
| | | | | | | | | | | |
| Years Ended December 31 | | |
| 2019 (In Liquidation) | | 2018 |
| Additions | | | |
| Contributions: | | | |
| Employer | $ | 354,826 | | | $ | 391,488 | |
| Employee-payroll | 873,364 | | | 942,420 | |
| Employee-rollover | 25,667 | | | 127,452 | |
| 1,253,857 | | | 1,461,360 | |
| | | |
| Investment income: | | | |
| Dividends | 326,380 | | | 432,360 | |
| Net appreciation in fair value of investments | 4,124,902 | | | — | |
| 4,451,282 | | | 432,360 | |
| Total Additions | 5,705,139 | | | 1,893,720 | |
| | | |
| Deductions | | | |
| Net depreciation in fair value of investments | — | | | (1,535,610) | |
| Distributions to participants | (3,331,262) | | | (1,693,374) | |
| Investment expenses | (39,634) | | | (31,892) | |
| | | |
| Total Deductions | (3,370,896) | | | (3,260,876) | |
| | | |
| Net (decrease) increase | 2,334,243 | | | (1,367,156) | |
| Net assets available for benefits at beginning of year | 11,826,161 | | | 13,193,317 | |
| Net assets available for benefits at end of year | $ | 14,160,404 | | | $ | 11,826,161 | |
See accompanying notes to the financial statements.
DNB FIRST 401(k) RETIREMENT PLAN
Notes to Financial Statements
Years ended December 31, 2019 and 2018
The following description of the DNB First 401(k) Retirement Plan (the "Plan") provides only general information. For more complete information about the Plan, including participation, vesting and benefit provisions, refer to the Plan Document, which can be obtained from S&T Bank ("S&T" or the "Plan Sponsor").
General. The Plan is a defined contribution plan that covers employees employed by DNB First National Association ("DNB"). Those employees eligible to participate in the Plan became eligible immediately when employment began. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
Plan Termination. On June 5, 2019, the parent companies of S&T and DNB entered into a definitive merger agreement (the "Merger Agreement”). The merger was completed on November 30, 2019. Immediately following the merger of the parent companies, DNB merged with and into S&T, with S&T as the surviving entity.
Per the terms of the Merger Agreement, the DNB Board of Directors adopted a resolution effective November 29, 2019 to terminate the Plan. Effective with the Plan's termination, all participants with an account balance remaining in the Plan became fully vested in all contribution sources, regardless of status or years of vested service. The Plan's termination also ceased employee and employer contributions into the Plan. Existing DNB employees who became S&T employees were eligible to participate in the Thrift Plan for Employees of S&T Bank on December 1, 2019. S&T succeeded DNB as Plan Sponsor, and was awaiting a favorable determination letter with regard to the termination from the Internal Revenue Service (the "IRS") at December 31, 2019. The IRS issued a favorable determination letter on April 9, 2020. Additional information about the termination is further described in Notes 4 and 9.
Contributions. Prior to the termination, the Plan allowed participants to contribute an amount up to 100% of eligible pre-tax annual compensation each year. For 2019 and 2018, this was limited to $19,000 and $18,500, respectively, excluding rollover contributions and catch-up contributions, as defined by the IRS. Plan provisions provide for an automatic elective deferral contribution feature and an automatic deferral escalation of 1% of eligible compensation per plan year for those participants who have elected to defer between 0% and 9% of eligible compensation. Participants could also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. DNB had the discretion to match contributions each year. In 2019 and 2018, DNB did not make any matching contributions. The Plan also allowed DNB to make additional discretionary contributions and qualified non-elective contributions. No additional discretionary contributions were made for 2019 and 2018. Qualified non-elective contributions (“QNEC”) for 2019 and 2018 were $354,826 and $391,488, respectively. Participants were not required to be an active participant at the end of the Plan year to be included in the qualified non-elective contributions. All qualified non-elective contributions were invested in the common stock of DNB Financial Corporation (the "Parent Company").
Vesting. Participants are 100% vested immediately in employee and employer matching contributions and qualified non-elective contributions plus actual earnings thereon. Participants are 100% vested in additional discretionary contributions made by the Company after three years of vested service. Effective January 1, 2017, participants who complete an hour of service on or after January 1, 2017 will become 100% vested in employer profit sharing contributions. All other participants remain on the three-year cliff vesting schedule. Pursuant to the termination of the Plan, however, participants are 100% vested in their account balances.
Participant Accounts. Each participant's account is credited with the participant's contributions and allocations of (a) DNB's contributions and (b) Plan earnings, and is charged with an allocation of administrative expenses and Plan losses. Allocation of expenses are based on participant earnings or account balances, as defined.
Participant Loans. The Plan does not allow Participants to borrow from their fund accounts.
Payment of Benefits. In general, amounts held in the participant’s account are not distributable until the participant terminates employment, reaches age 59-1/2, dies or becomes permanently disabled. At that time, the participant may receive a lump-sum amount equal to the vested value of his or her account. Participants may also withdraw funds in certain situations. However, upon receipt of a favorable determination letter from the IRS for the termination of the Plan, all participants will be required to
take total distributions of their accounts within 45 days of the Plan Sponsor providing notice of the favorable determination letter.
As of December 31, 2019 and 2018, $4,125,788 and $2,780,039, respectively, of the Plan's assets were allocated to the accounts of persons who have terminated employment with the Company, but have not been disbursed.
Forfeited Accounts. Forfeited accounts are used to reduce employer contributions, used to pay plan expenses or allocated among participant accounts at the discretion of the Company. During 2019 and 2018, forfeited accounts of $1,906 and $0, were used to pay Plan expenses. There were $14 and $1,906 of forfeited accounts available for use at December 31, 2019 and 2018, respectively.
Administrative Expenses. Each participant's account is charged with an allocation of certain administrative expenses. Allocations of expenses are based on participant earnings or account balances, as defined.
| | | | | |
| 2 | Summary of Significant Accounting Policies |
A summary of significant accounting policies consistently applied by management in the preparation of the accompanying financial statements follows:
Basis of Presentation. The financial statements of the Plan have been prepared in conformity with accounting principles generally accepted in the United States. Certain prior period disclosures have been revised to conform to current year's presentation. Effective November 29, 2019, the DNB Board of Directors adopted a resolution to terminate the Plan. As a result, the Plan's financial statements as of December 31, 2019 and for the year then ended have been prepared on the liquidation basis, in accordance with U.S. GAAP. This basis of accounting is considered appropriate when, among other things, liquidation of an entity is probable and the net realizable value of assets is reasonably determinable. Under the liquidation basis of accounting, assets are stated at their estimated net realized cash value and liabilities are stated at their anticipated settlement amounts. The estimated net realizable cash value for investments as of December 31, 2019 would be fair value. There were no material changes to the 2019 financial statements as a result of the change under the liquidation basis of accounting.
Use of Estimates. The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Investment Valuation and Income Recognition. The Plan’s investments are stated at fair value (see Note 7), with the exception of the Morley Stable Value Fund, which is discussed separately below. Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date. Capital gain distributions are included in dividend income. Net appreciation/(depreciation) includes the Plan’s gains and losses on investments bought and sold as well as held during the year.
Collective Investment Fund. On August 2, 2012, Plan management signed a participation agreement with Union Bond and Trust Company (UBTC) and began investing in the Morley Stable Value Fund, a collective investment fund. The Morley Stable Value Fund invests in investment contracts issued by insurance companies and other institutions.
The Plan’s investment in the Morley Stable Value Fund is included in the statement of net assets available for benefits at net asset value (NAV). NAV represents contributions made to the Morley Stable Value Fund, plus earnings, less participant withdrawals and administrative expenses. NAV is reported to the Plan by UBTC, through an independent pricing service approved by the Trustee. The statement of changes in net assets available for Plan benefits is prepared on a NAV basis. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investments at NAV.
The gross crediting interest rate for the Morley Stable Value fund was 2.23% and 2.55% for the years ended December 31, 2019 and 2018, respectively.
Payments of Benefits. Benefits are recorded when paid.
New Accounting Pronouncement. In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the
Disclosure Requirements for Fair Value Measurement, which amends certain disclosure requirements of Accounting Standards Codification (“ASC”) 820. ASU 2018-13 removed the requirement to disclose the amount of and reasons for transfers between level 1 and level 2 of the fair value hierarchy as well as the policy for timing of transfers between levels. The ASU also modified the disclosure for investments in certain entities that calculate NAV to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the Plan or announced the timing publicly. It also clarified the measurement uncertainty disclosure to communicate information about the uncertainty in measurement as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019. Plan management is currently evaluating the impact of the ASU on the financial statements but does not expect the adoption to have a material impact.
| | | | | |
| 3 | Transactions with Parties-in-Interest |
Newport Trust Company (“Newport Trust”) is the Trustee for all Plan investments. Newport Group Retirement Plan Services (“Newport”) is the Plan’s administrator and record-keeper; however, the Plan Sponsor retains primary responsibility for administration. The Plan’s investments include mutual and money market funds, collective investment funds, and S&T Common Stock. Newport and Newport Trust and its affiliates are parties-in-interest to the Plan. S&T Bancorp, Inc. is also a party-in-interest to the Plan.
At December 31, 2019 and 2018, the Plan held company common stock valued at $5,669,528 and $3,828,924, respectively. Pursuant to the Merger Agreement, all outstanding shares of DNB Financial Corporation common stock were exchanged for S&T Common Stock and cash as of the effective time of the merger and as provided in the terms of the Merger Agreement, including shares of DNB Financial Corporation common stock held in the Plan. Accordingly as of such date, the Plan’s holdings of DNB Financial Corporation common shares were converted to shares of S&T Common Stock.
The above transactions are not considered prohibited transactions under ERISA regulations.
The Plan is currently evidenced by a prototype document sponsored by Newport. Newport has received a determination letter dated March 31, 2014 from the IRS stating that the prototype document complies with Section 401(a) of the Internal Revenue Code. The Plan is deemed to comply with Section 401(a) of the Internal Revenue Code based on the favorable letter issued to Newport. The Plan administrator and the Plan’s tax counsel believe that the Plan has been and is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. On April 9, 2020, the the IRS issued a favorable determination letter that the termination of the Plan does not affect its qualified status.
Accounting principles generally accepted in the United States of America require Plan management to evaluate tax positions taken by the Plan and recognize a tax liability if the organization has taken an uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service. The Plan administrator has analyzed the tax positions taken by the Plan and has concluded that as of December 31, 2019, there are no uncertain positions taken, or expected to be taken that would require recognition of a liability or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan administrator believes it is no longer subject to income tax examinations for years prior to 2016.
During 2019 and 2018, the Plan's investments, including investments bought, sold, as well as held during the year, appreciated (depreciated) in fair value by $4,451,282 and ($1,103,250), respectively. The net appreciation (depreciation) in fair value, excluding dividends, interest and other investment income, for the years ending December 31, 2019 and 2018 was $4,124,902 and ($1,535,610), respectively.
Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statement of net assets available for benefits.
| | | | | |
| 6. | Administrative Expenses |
The Company may pay certain administrative expenses and consulting expenses of the Plan. All investment and related expenses are paid from the net assets of the Plan. Administrative and consulting expenses of $39,634 and $31,892 were incurred to parties-in-interest during 2019 and 2018, respectively. Certain expenses are paid through revenue sharing, rather than a direct payment. Such amounts are not material to the Plan’s financial statements.
| | | | | |
| 7. | Fair Value Market Measurements |
The Plan follows ASC 820, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Plan considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
ASC 820 also establishes a fair value hierarchy that categorizes the inputs to valuation techniques that are used to measure fair value into three levels:
•Level 1 includes observable inputs which reflect quoted prices for identical assets or liabilities in active markets at the measurement date.
•Level 2 includes observable inputs for assets or liabilities other than quoted prices included in Level 1 and it includes valuation techniques which use prices for similar assets and liabilities.
•Level 3 includes unobservable inputs which reflect the reporting entity’s estimates of the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk.
The asset’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
The following is a description of the valuation methods used for assets measured at fair value.
•Mutual funds and money market funds: Valued at the net asset value of shares held by the Plan at year end, based on observable market quotations.
•Common stock: The fair values of these securities are based on observable market quotations and are valued at the closing price reported on the active market on which the individual securities are traded.
•Collective investment funds: The Morley Stable Value Fund is valued based on the reported NAV. The NAV is used as a practical expedient to estimate fair value.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuations methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement.
The Plan follows ASC (Topic 962): Part (I) Fully Benefit-Responsive Investment Contracts, Part (II) Plan Investment Disclosures and Part (III) Measurement Date Practical Expedient. This three-part standard simplifies employee benefit plan reporting with respect to fully benefit-responsive investment contracts and plan investment disclosures, and provides for a measurement-date practical expedient.
The Fair Value of the Plan's assets by asset category are as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| December 31, 2019 | | | | | | |
| | | | | | | |
| Total | | Level 1 | | Level 2 | | Level 3 |
| Mutual funds | $ 7,567,128 | | $ 7,567,128 | | 0 | | 0 |
| Company Stock | 5,669,528 | | 5,669,528 | | 0 | | 0 |
| Total investments in the fair | | | | | | | |
| value hierarchy | $ 13,236,656 | | $ 13,236,656 | | 0 | | 0 |
| | | | | | | |
Investments measured at net asset value (1) | 838,286 | | | | | | |
| | | | | | | |
| Total investments measured at fair value | $ 14,074,942 | | | | | | |
| | | | | | | |
| | | | | | | |
| December 31, 2018 | | | | | | |
| | | | | | | |
| Total | | Level 1 | | Level 2 | | Level 3 |
| Mutual funds | $ 7,189,682 | | $ 7,189,682 | | 0 | | 0 |
| Money market funds | 3,531 | | 3,531 | | 0 | | 0 |
| Company Stock | 3,828,924 | | 3,828,924 | | 0 | | 0 |
| Total investments in the fair | | | | | | | |
| value hierarchy | $ 11,022,137 | | $ 11,022,137 | | 0 | | 0 |
Investments measured at net asset value (1) | 675,544 | | | | | | |
| | | | | | | |
| Total investments measured at fair value | $ 11,697,681 | | | | | | |
(1) In accordance with ASC 820-10, certain investments that are measured at fair value using the net asset value per share practical expedient have been excluded from the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statements of net assets available for benefits.
The following table summarizes investments measured at fair value based on net asset value per share at December 31, 2019 and 2018, respectively.
| | | | | | | | | | | | | | |
| Fair Value | Unfunded Commitments | Redemption Frequency | Redemption Notice Period (Plan Level) |
December 31, 2019
Morley Stable Value Collective Investment Fund | $838,286 | N/A | 30 days for non-competing options | 12 months(1) |
December 31, 2018
Morley Stable Value Collective Investment Fund | $675,544 | N/A | 30 days for non-competing options | 12 months |
(1) The Plan has received a waiver of the 12-month redemption notice period, and approved to liquidate on June 1, 2020.
| | | | | |
| 8. | Reconciliation to Form 5500 |
The following is a reconciliation of the Financial Statements to Form 5500 for the years ended December 31:
| | | | | | | | | | | | | | | | | |
| | | | | |
| 2019 | | | 2018 | |
| Net Assets Available for Benefits - per the Financial Statements | $ | 14,160,404 | | | $ | 11,826,161 |
| Less: Employer's Contribution Receivable | | — | | | | (106,909) |
| Less: Dividend Receivable | | (54,807) | | | | — | |
| Plus: Accrued Expenses | | 11,655 | | | | 6,766 |
| Net Assets Available for Benefits - per the Form 5500 | $ | 14,117,252 | | | $ | 11,726,018 |
| | | | | |
| Total Additions to Net Assets - per the Financial Statements | $ | 5,705,139 | | | $ | 1,893,720 | |
| Net Depreciation Included in Deductions | | — | | | | (1,535,610) | |
| Adjustment: Change in Employer Contribution Receivable | | 106,909 | | | | 1,043 | |
| Adjustment: Change in Employee Contribution Receivable | | — | | | | 43,394 | |
| Adjustment: Dividend Receivable | | (54,807) | | | | — | |
| Total Income - per the Form 5500 | $ | 5,757,241 | | | $ | 402,547 | |
| | | | | |
| Total Deductions to Net Assets - per the Financial Statements | $ | 3,370,896 | | | $ | 3,260,876 | |
| Net Depreciation Included in Deductions | | — | | | | (1,535,610) | |
| Adjustment: Change in Accrued Expenses | | (4,889) | | | | 865 |
| Total Expenses - per the Form 5500 | $ | 3,366,007 | | | $ | 1,726,131 | |
| | | | | |
Subsequent events are defined as events or transactions that occur after the statement of net assets available for benefits date, but before the financial statements are issued or are available to be issued. The Plan’s management has evaluated subsequent events through June 8, 2020, the date on which the financial statements were issued and determined that there have been no events that have occurred that would require adjustments to our disclosures in the financial statements except for the matters described in the following paragraphs.
Termination. On November 30, 2019, S&T Bancorp, Inc., the holding company for S&T, acquired DNB Financial Corporation, the holding company for DNB, in an all-stock transaction. DNB Financial Corporation's shareholders received 1.22 shares of S&T common stock for each share of the DNB Financial Corporation stock.
Pursuant to the the Merger Agreement, the board of directors of DNB adopted a resolution to terminate the Plan, effective November 29, 2019. As permitted by the Merger Agreement, the Plan will distribute assets to the participants as soon as practicable following receipt of a favorable determination letter from the IRS on the termination of Plan. To the extent permitted by the S&T Thrift Plan, employees who are actively employed as of the date immediately following the receipt of the IRS favorable determination letter may make rollover contributions of “eligible rollover distributions” (within the meaning of Section 401(a)(31) of the Code) from the Plan to the S&T Thrift Plan.
The Plan Sponsor received a favorable IRS determination letter dated April 9, 2020 for the termination of the Plan. The participants have been notified by letter that they must inform the Plan Administrator of their form of distribution by May 31, 2020. The Plan balances for participants who do not respond will be transferred to a default Individual Retirement Account.
Coronavirus Pandemic. The coronavirus pandemic could materially and adversely affect the Plan, its operations, and its performance. Government imposed quarantines have caused market performance of the investments to decline. Additionally, on March 27, 2020, the CARES Act was signed into law which provides the Plan, Plan Sponsor, and participant relief. If adopted
by the Plan, key features of the CARES Act may have a significant affect on the operations of the Plan. The Plan Sponsor did not adopt the CARES Act relief provisions, since the Plan is being terminated. Management of the Plan is unable to accurately predict how the coronavirus will affect the results of Plan operations because of the severity and duration of the pandemic are uncertain. However, the Plan is expected to have all balances distributed to the participants by June 30, 2020, so Plan operations are not anticipated to be materially impacted.
Supplemental Schedule
| | | | | | | | | | | | | | | | | | | | |
| DNB FIRST 401(k) RETIREMENT PLAN | | | | | | |
| Form 11-K | | | | | | |
| Schedule H, Line 4i - Assets (Held at End of Year) | | | | | | |
| EIN: 25-0776600 Plan number: 008 | | | | | | |
| Party-in-interest (a) | Identity of Issuer (b) | Description of Investment (c) | | Cost (d) | | Current Value (e) |
| AB Large Cap | Registered Investment Company - AB Large Cap Growth I | | ** | | $ | 663,274 | |
| American Funds | Registered Investment Company - American Europacific Growth | | ** | | 215,413 | |
| American Funds | Registered Investment Company - Capital World Bond | | ** | | 51,354 | |
| Columbia | Registered Investment Company - Columbia Small Cap Value II | | ** | | 72,132 | |
| Delaware Investments | Registered Investment Company - Delaware Emerging Markets | | ** | | 138,150 | |
| DFA Funds | Registered Investment Company - DFA Global Equity Port | | ** | | 59,425 | |
| DFA Funds | Registered Investment Company - DFA Global Real Estate | | ** | | 142,754 | |
| Fidelity Investments | Registered Investment Company - Fidelity 500 Index | | ** | | 633,592 | |
| Fidelity Investments | Registered Investment Company - Fidelity Int'l Index | | ** | | 51,917 | |
| Hartford | Registered Investment Company - Hartford Midcap Y | | ** | | 216,786 | |
| Hartford | Registered Investment Company - Hartford Small Cap Growth | | ** | | 225,975 | |
| JP Morgan | Registered Investment Company - JP Morgan Mid Cap Value | | ** | | 198,819 | |
| Lord Abbet | Registered Investment Company - Lord Abbett High Yield | | ** | | 75,160 | |
| Metropolitan | Registered Investment Company - Metropolitan West Total Return BD PL | | ** | | 400,755 | |
| Morley Capital | Collective Investment Fund - Morley Stable Value Fund CL 25 | | ** | | 838,286 | |
| * | S&T Bancorp Inc. | Employer Security - S&T Bancorp, Inc. - Corporation Common Stock | | ** | | 5,669,528 | |
| T Rowe Funds | Registered Investment Company - T Rowe Price Retirement 2005 | | ** | | 176,743 | |
| T Rowe Funds | Registered Investment Company - T Rowe Price Retirement 2015 | | ** | | 18,774 | |
| T Rowe Funds | Registered Investment Company - T Rowe Price Retirement 2020 | | ** | | 121,657 | |
| T Rowe Funds | Registered Investment Company - T Rowe Price Retirement 2025 | | ** | | 63,284 | |
| T Rowe Funds | Registered Investment Company - T Rowe Price Retirement 2030 | | ** | | 25,477 | |
| T Rowe Funds | Registered Investment Company - T Rowe Price Retirement 2035 | | ** | | 69,425 | |
| T Rowe Funds | Registered Investment Company - T Rowe Price Retirement 2040 | | ** | | 4,750 | |
| T Rowe Funds | Registered Investment Company - T Rowe Price Retirement 2045 | | ** | | 37,613 | |
| T Rowe Funds | Registered Investment Company - T Rowe Price Retirement 2050 | | ** | | 2,731 | |
| T Rowe Funds | Registered Investment Company - T Rowe Price Retirement 2055 | | ** | | 20,734 | |
| T Rowe Funds | Registered Investment Company - T Rowe Price Retirement 2060 | | ** | | 31,566 | |
| The Vanguard Group, Inc. | Registered Investment Company - Vanguard Equity Inc FD Admiral | | ** | | 320,578 | |
| The Vanguard Group, Inc. | Registered Investment Company - Vanguard Life Strategy Growth FD I | | ** | | 1,324,312 | |
| The Vanguard Group, Inc. | Registered Investment Company - Vanguard Life Strat Mod Growth Fund I | | ** | | 1,183,442 | |
| The Vanguard Group, Inc. | Registered Investment Company - Vanguard Life Strategy Income Fund I | | ** | | 156,485 | |
| The Vanguard Group, Inc. | Registered Investment Company - Vanguard Life Strat Conserve Grth Fd I | | ** | | 453,884 | |
| The Vanguard Group, Inc. | Registered Investment Company - Vanguard Mid Cap Index Fund Admiral | | ** | | 131,399 | |
| The Vanguard Group, Inc. | Registered Investment Company - Vanguard Small Cap Index Admiral | | ** | | 115,187 | |
| The Vanguard Group, Inc. | Registered Investment Company - Vanguard Total BD Mkt Admiral | | ** | | 163,581 | |
| | | | | | $ | 14,074,942 | |
| * Represents party-in-interest transactions. | | | **Cost omitted for participant directed accounts. | | | |
SIGNATURES
The Plan.
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | | | | |
| | |
| | DNB First 401(k) Retirement Plan |
| | |
| June 9, 2020 | | /s/ Mark Kochvar |
| | Mark Kochvar |
| | Senior Executive Vice President & Chief Financial Officer |
