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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.     )

x    Filed by the Registrant  

¨    Filed by a Party other than the Registrant  

Check the appropriate box:

S&T Bancorp, Inc.

(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):

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S&T Bancorp, Inc.

800 Philadelphia Street

Indiana, Pennsylvania 15701

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

April 20, 2009

To the Shareholders of

S&T Bancorp, Inc.:

Notice is hereby given that the Annual Meeting of Shareholders of S&T Bancorp, Inc. (“S&T”) will be held on April 20, 2009, at 10:00 a.m., Eastern Time, at the S&T Training and Support Center, located at 355 North Fifth Street, Indiana, Pennsylvania 15701, for the purpose of considering and voting on the following matters:

Only shareholders of record at the close of business on March 6, 2009 are entitled to notice of and to vote at such meeting or any adjournment thereof.

By Order of the Board of Directors,

/s/ Robert E. Rout

Indiana, Pennsylvania

March 20, 2009

IMPORTANT

YOUR VOTE IS IMPORTANT. IN ORDER TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY AS SOON AS POSSIBLE IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED STATES.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ELECTION AS DIRECTORS OF THE NOMINEES NAMED IN THIS PROXY STATEMENT, FOR THE RATIFICATION OF THE SELECTION OF KPMG LLP AS AN INDEPENDENT REGISTERED ACCOUNTING FIRM FOR FISCAL YEAR 2009, AND FOR THE NON-BINDING ADVISORY PROPOSAL ON THE COMPENSATION OF S&T’S EXECUTIVE OFFICERS.

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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF

PROXY MATERIALS FOR THE 2009 ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON APRIL 20, 2009.

S&T’s Proxy Statement for the 2009 Annual Meeting of Shareholders, and S&T’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 are available at http://materials.proxyvote.com/783859.

IMPORTANT NOTICE REGARDING DELIVERY OF SECURITY HOLDER DOCUMENTS

The Securities and Exchange Commission (the “SEC”) has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivering a single proxy statement addressed to those shareholders. This process is commonly referred to as “householding.”

S&T has implemented “householding” in an effort to reduce the number of duplicate mailings to the same address. This process benefits both shareholders and S&T, because it eliminates unnecessary mailings delivered to your home and helps to reduce S&T’s expenses. “Householding” is not being used, however, if S&T has received contrary instructions from one or more of the shareholders sharing an address. If your household has received only one annual report and one proxy statement, S&T will deliver promptly a separate copy of the annual report and the proxy statement to any shareholder who contacts S&T’s transfer agent, American Stock Transfer & Trust Company (“AST”), by calling their toll-free number, 1-800-937-5449, or by mail to the attention of the Shareholder Relations Department at 59 Maiden Lane, Plaza Level, New York, New York 10038. You can also notify S&T that you would like to receive separate copies of S&T’s annual report and proxy statement in the future by calling AST. Even if your household has received only one annual report and one proxy statement, S&T will continue to send a separate proxy card for each shareholder residing at your address. Please note, however, that if you also hold shares of S&T in “street name” (e.g., in a brokerage account or retirement plan account) you may continue to receive duplicate mailings.

Each proxy card should be signed, dated and returned in the enclosed self-addressed envelope. If your household has received multiple copies of S&T’s annual report and proxy statement, you can request the delivery of single copies in the future by calling AST, as instructed above, or your broker, if you hold the shares in “street name.”

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S&T BANCORP, INC.

2009 PROXY STATEMENT

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S&T BANCORP, INC.

PROXY STATEMENT FOR

ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD APRIL 20, 2009

INTRODUCTION

This Proxy Statement is being furnished to shareholders of S&T Bancorp, Inc. (“S&T”) in connection with the solicitation of proxies by the Board of Directors of S&T (the “S&T Board”) for use at the Annual Meeting of Shareholders, and any adjournments thereof, to be held at the time and place set forth in the accompanying notice (“Annual Meeting”). This Proxy Statement is being mailed to shareholders on or about March 20, 2009. At the Annual Meeting, shareholders of S&T will be asked to elect eight directors of S&T to serve a one-year term, to approve the ratification of the selection of KPMG LLP as an independent registered public accounting firm for the fiscal year 2009, and to approve a non-binding, advisory proposal on the compensation of S&T’s executive officers.

All shareholders are urged to read this Proxy Statement carefully and in its entirety.

MEETING INFORMATION

Date, Place and Time

The Annual Meeting will be held on April 20, 2009, at 10:00 a.m., Eastern Time, at the S&T Training and Support Center, located at 355 North Fifth Street, Indiana, Pennsylvania.

Record Date, Voting Rights

The securities that can be voted at the Annual Meeting consist of shares of common stock of S&T, par value $2.50 per share (“Common Stock”), with each share entitling its owner to one vote on all matters. Only holders of the Common Stock at the close of business on March 6, 2009 (the “Record Date”) will be entitled to notice of and to vote at the Annual Meeting. There were 3,227 record holders of the Common Stock and 27,637,317 shares of Common Stock outstanding as of the Record Date.

A quorum is required for the transaction of business at the Annual Meeting. A “quorum” is the presence at the meeting, in person or represented by proxy, of the holders of the majority of the outstanding shares. Abstentions are counted for purposes of determining presence or absence of a quorum, but are not considered a vote cast under Pennsylvania law. Abstentions will not affect the outcome of a vote on a particular matter. Shares held by brokers in street name and for which the beneficial owners do not vote on a particular proposal because the brokers do not have discretionary voting power and have not received instructions from the beneficial owners to vote on that item are called “broker non-votes.” Broker non-votes are counted to determine if a quorum is present, but are not considered a vote cast under Pennsylvania law. Broker non-votes will not affect the outcome of a vote on a particular matter.

The director nominees will be elected by a plurality of the votes cast at the Annual Meeting, which means that the eight nominees receiving the most votes will be elected. A withheld vote on any nominee will not affect the voting results. All other matters to be considered at the Annual Meeting, if any, require the affirmative vote of a majority of the votes cast at the meeting on the item to be approved.

Voting and Revocation of Proxies

If the appropriate enclosed form of proxy is properly executed and returned to S&T in time to be voted at the Annual Meeting, the shares represented thereby will be voted in accordance with the instructions marked

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thereon. Executed but unmarked proxies will be voted “FOR” the director nominees proposed by the S&T Board, which are presented in this Proxy Statement, “FOR” the ratification of the selection of KPMG LLP as an independent registered accounting firm for fiscal year 2009, and “FOR” the non-binding advisory proposal on the compensation of S&T’s executive officers. Except for procedural matters incident to the conduct of the Annual Meeting, S&T does not know of any matters other than those described in the Notice of Annual Meeting that are to come before the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons named in the accompanying proxy will vote the shares represented by the proxies in their discretion on such matters as recommended by a majority of the S&T Board.

The presence of a shareholder at the Annual Meeting will not automatically revoke such shareholder’s proxy. However, shareholders may revoke a proxy at any time prior to its exercise by filing with the Secretary of S&T a written notice of revocation, by delivering to S&T a duly executed proxy bearing a later date or by attending the Annual Meeting and voting in person.

Solicitation of Proxies

The cost of soliciting proxies in the form enclosed herewith will be borne by S&T. In addition to the solicitation of proxies by mail, S&T, through its directors, officers and regular employees, may also solicit proxies personally or by telephone. S&T also will request persons, firms and corporations holding shares of Common Stock in their names or in the name of their nominees, which are beneficially owned by others, to send proxy material to and obtain proxies from the beneficial owners and will reimburse the holders for their reasonable expenses in so doing.

PRINCIPAL BENEFICIAL OWNERS OF S&T COMMON STOCK

Under Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), a beneficial owner of a security is any person who directly or indirectly has or shares voting power or investment power over such security. Such beneficial owner under this definition need not enjoy the economic benefit of such securities. The following are the only shareholders known to S&T to be deemed to be a beneficial owner of 5% or more of Common Stock as of December 31, 2008:

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S&T is not aware of any other person who beneficially owns more than 5% of any class of securities of S&T other than those listed above.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires S&T’s directors and executive officers, and persons who own more than 10% of S&T’s stock, to report to the SEC certain of their transactions with respect to S&T’s Common Stock. The SEC reporting rules require that changes in beneficial ownership generally be reported on Form 4 within two business days after the date on which the change occurs. A Form 3 to report stock holdings in S&T must be filed within ten days of when a director, executive officer or person who owns more than 10% of S&T’s stock becomes subject to Section 16(a) of the Exchange Act.

During 2008, all directors and executive officers timely filed all required reports of beneficial ownership and changes in beneficial ownership, with the exception of the following:

Director Thomas A. Brice did not file Form 4 within two business days for shares for which he became beneficial owner as the executor of an estate. Director Joseph A. Kirk did not file Form 4 within two business days for two sales of shares indirectly owned. Director Alan Papernick did not file Form 4 within two business days for shares purchased indirectly for his grandchildren or for the sale of 535 shares directly owned. Director Charles A. Spadafora did not file Form 4 within two business days for shares sold from an irrevocable trust. Director Christine J. Toretti did not file Form 4 within two business days for the purchase of 463 shares directly owned. These late filings were inadvertent, and the required filings have since been made.

Executive Officers David G. Antolik, Todd D. Brice, Edward C. Hauck, Tony E. Kallsen, Thomas E. Kiral, Mark Kochvar, Michelle Petrovsky, Malcolm E. Polley, Robert E. Rout, David P. Ruddock and Gregor T. Young, who were the recipients of the December 15, 2008 grant of restricted shares of Common Stock as long-term incentive awards did not file a Form 4 within two business days of the grant date. The exact number of restricted shares could not be calculated until S&T’s 2008 earnings per share was finalized in January 2009. These filings were included on each officer’s Form 5 for year-end 2008 filed with the SEC on February 17, 2009.

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BENEFICIAL OWNERSHIP OF S&T COMMON STOCK BY DIRECTORS AND OFFICERS

The following table sets forth, as of March 6, 2009, the amount and percentage of Common Stock beneficially owned by each director, each nominee for director and the Named Executive Officers (as defined below) of S&T, as well as the directors and executive officers of S&T as a group. Unless otherwise indicated, all persons listed below have sole voting and investment power of all shares of Common Stock. The business address of each of S&T’s directors and officers is 800 Philadelphia Street, Indiana, Pennsylvania 15701.

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PROPOSAL 1—ELECTION OF DIRECTORS

General

The By-laws of S&T provide that the number of directors constituting the S&T Board will consist of not less than 12 nor more than 25, with the exact number to be fixed and determined from time to time by resolution of a majority of the S&T Board. Currently, the S&T Board has fixed the number of directors to 17. The S&T Board has determined that the following directors are independent under the NASDAQ listing standards: Mr. Brenzia, Mr. Delaney, Mr. Donnelly, Mr. Grube, Mr. Jones, Mr. Kirk, Mr. Milano, Mr. Papernick, Mr. Rebich and Mr. Spadafora.

At the 2008 annual meeting, amendments were approved and adopted by S&T’s shareholders to Article Nine of S&T’s Articles of Incorporation and Sections 206 and 207 of S&T’s By-laws to declassify the S&T Board, remove the class designations for each of the director’s terms and institute annual voting for each director to serve a one-year term. Annual elections will be phased in as current terms of directors expire. Current directors will serve the remainder of their three-year terms until 2009, 2010 and 2011, and annual elections will begin for those directors upon expiration of their terms. All directors will be elected annually beginning in 2011. Directors elected by the S&T Board to fill vacancies will serve only until the next annual meeting of the shareholders.

Certain information about the Nominees whose current terms will expire at the 2009 Annual Meeting and who are presently members of the S&T Board and the S&T Bank Board, is set forth below:

Director Nominees to be Elected at the 2009 Annual Meeting:

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Certain information about the directors whose terms continue, who are directors of S&T and S&T Bank, is set forth below:

Directors Whose Terms Expire at the 2010 Annual Meeting:

Directors Whose Terms Will Expire at the 2011 Annual Meeting:

THE S&T BOARD RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES.

CORPORATE GOVERNANCE

Board and Committee Meetings

The S&T Board has implemented a formal policy that strongly encourages director attendance at the annual meeting of shareholders. In 2008, all of S&T’s directors attended the annual meeting of shareholders, except for Director Toretti who was unable to attend due to personal reasons that were unavoidable and for good cause.

During 2008, the S&T Board held thirteen board meetings, with the following number of meetings held by the S&T Board committees: Audit, five; Compensation and Benefits, six; Nominating and Corporate Governance, six; and Wealth Management Group Oversight, four. All directors attended at least 75% of the total number of meetings of the S&T Board and committees, except for director Toretti who attended 69% of meetings, due to personal reasons that were unavoidable and for good cause. Directors Brenzia, Rebich, and Urtin were appointed in June 2008 and attended at least 75% of the meetings subsequent to their appointment.

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Audit Committee

The members of the Audit Committee are John Brenzia, Jeffrey Grube, Frank Jones, Joseph Kirk, James Milano and Robert Rebich, Jr. All members meet the independence standards for audit committees established by the SEC and NASDAQ. A written charter approved by the S&T Board governs the committee and includes the provisions required by the NASDAQ listing standards. A copy of the charter is included on S&T’s website www.stbancorp.com, under Corporate Governance. The committee has provided information regarding the functions performed by the committee and its membership in the “Report of the Audit Committee,” included in this Proxy Statement on page 40. James V. Milano has been designated by the S&T Board as S&T’s “audit committee financial expert.” The S&T Board has determined that Mr. Milano meets the qualifications of an audit committee financial expert under SEC regulations adopted under the Sarbanes-Oxley Act of 2002. Mr. Milano is a CPA with 20 years of public accounting experience, including managing partner of Datemasch Milano & Associates and four years of experience serving as CFO of NEP Supershooters L.P. He has a BS in business administration and an MS in taxation. This experience and education gives Mr. Milano an understanding of U.S. generally accepted accounting principles and financial statements; the ability to assess general applications of such principles in connection with accounting for estimates, accruals and reserves; experience preparing, auditing, analyzing or evaluating financial statements presenting a breadth and level of complexity of accounting issues that are comparable to S&T’s financial statements; an understanding of internal control over financial reporting; and an understanding of audit committee functions.

Compensation and Benefits Committee

The members of the Compensation and Benefits Committee (“Compensation Committee”) are John Delaney, Michael Donnelly, Joseph Kirk, Alan Papernick, Robert Rebich, Jr., and Charles Spadafora. The Compensation Committee’s function is to recommend to the S&T Board action on executive compensation and compensation and benefit changes brought to it by management. A written charter approved by the S&T Board governs the committee. A copy of the charter is included on S&T’s website www.stbancorp.com, under Corporate Governance. The Compensation Committee is comprised entirely of independent board members, as defined by NASDAQ listing standards.

Additionally, because S&T is participating in the Troubled Asset Relief Program (“TARP”) Capital Purchase Program (“CCP”) established by the U.S. Department of Treasury (“U.S. Treasury”) under the Emergency Economic Stabilization Act of 2008 (“EESA”), the Compensation Committee has additional responsibilities under the EESA, as amended by the American Recovery and Reinvestment Act of 2009 (the “ARRA”). Those additional responsibilities include the following:

The report of the Compensation Committee is on page 25.

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Nominating and Corporate Governance Committee

The members of the Nominating and Corporate Governance Committee (the “Nominating Committee”) are John Brenzia, John Delaney, Michael Donnelly, Jeffrey Grube, Frank Jones and James Milano. The Nominating Committee was formed in 2003, and the functions of this committee are to assist the S&T Board in reviewing the qualifications and independence of the members of the S&T Board and its various committees on a periodic basis as well as the composition of the S&T Board as a whole; to oversee the evaluation of the performance of the S&T Board and its committees as a whole; to select director nominees for election by shareholders; and to provide guidance to the S&T Board on corporate governance issues. In addition, the Nominating Committee reviews all transactions with related parties, see page 38. A written charter approved by the S&T Board governs the committee. A copy of the charter is included on S&T’s website www.stbancorp.com, under Corporate Governance. The committee is comprised entirely of independent board members, as defined by NASDAQ listing standards.

The Nominating Committee has adopted, and the S&T Board has ratified, a corporate policy for identifying and evaluating candidates for membership on the S&T Board. The Nominating Committee identifies potential candidates based on suggestions from directors, officers of S&T and S&T shareholders. The Nominating Committee will consider shareholder nominations for directors in accordance with the procedure set forth in Section 202 of S&T’s Bylaws and applicable law. The procedure provides that a notice relating to the nomination must be timely given in writing to the Secretary of S&T prior to the meeting. To be timely, the notice must be delivered not earlier than the close of business on the 120th day, nor later than the close of business on the 60th day, immediately preceding the meeting. Such notice must be accompanied by the nominee’s written consent to be named in the applicable proxy statement and contain information relating to the business experience and background and the nominee’s holdings of Common Stock and information with respect to the nominating shareholder. There are no differences in the manner in which the Nominating Committee evaluates candidates for membership on the S&T Board based on whether such candidate is recommended by a shareholder, the Nominating Committee, or by any other source.

The Nominating Committee takes into account all factors and criteria it considers appropriate, which includes but is not limited to: high personal and professional integrity; sound judgment and exceptional ability; business experience; area of residence in relationship to S&T’s geographic market; other directorship experience that would be beneficial to the S&T Board and management of S&T; diversity of experience relative to that of other S&T directors, age, gender, minority status, level and type of education; whether the candidate will be effective in serving the long-term interests of S&T’s shareholders; whether the candidate has sufficient time and energy to devote to the affairs of S&T; whether the candidate possesses a willingness to challenge and stimulate management and the ability to work as part of a team; whether the candidate meets the independence requirements of the NASDAQ listing standards; whether the candidate is free from conflicts of interest with S&T; and any other factors related to the ability and willingness of a new director to serve, or an existing director to continue his or her service.

The Nominating Committee may engage a third party search firm to assist it in identifying director candidates, but the Nominating Committee did not do so in 2008. S&T has not received any shareholder nominations for consideration for this Annual Meeting. Accordingly, S&T has not rejected or refused such candidates.

Shareholder Communications with Directors

Shareholders who desire to communicate with the S&T Board or a specific director should send any communication, in writing, to S&T Bancorp, Inc., 800 Philadelphia Street, Indiana, Pennsylvania 15701, ATTN: Corporate Secretary. Any such communication should state the number of shares beneficially owned by the shareholder. S&T’s Corporate Secretary will initially review all communications received in accordance with the Shareholders Communication Policy adopted by the S&T Board. The Corporate Secretary will relay all such

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communications to the appropriate director or directors on a periodic basis unless the Corporate Secretary determines that the communication does not relate to the business or affairs of S&T or the functioning or constitution of the S&T Board or any of its committees; relates to routine or insignificant matters that do not warrant the attention of the S&T Board; is an advertisement or other commercial solicitation or communication; is frivolous or offensive; or is otherwise not appropriate for delivery to directors. The director or directors who receive any such communication will have discretion to determine whether the subject matter of the communication should be brought to the attention of the full S&T Board or one or more of its committees and whether any response to the person sending the communication is appropriate. Any such response will be made through S&T’s management and only in accordance with S&T’s policies and procedures, applicable laws and regulations relating to the disclosure of information.

Code of Conduct and Ethics

S&T has earned its reputation as a respected leader in the communities it serves and in the financial services industry by conducting business in an ethical, responsible and professional manner. S&T is proud of the high standards of quality and service that have been its hallmark through the years. These qualities represent fundamental business practices and apply to all directors, officers and employees.

The S&T Board has adopted a Code of Conduct for directors, officers and employees, which is posted on S&T’s website www.stbancorp.com, under Corporate Governance. The Code of Conduct addresses the professional, honest and candid conduct of each director, officer and employee; conflicts of interest, disclosure process, compliance with laws, rules and regulations (including insider trading laws); corporate opportunities, confidentiality, fair dealing, protection and proper use of company assets; and encourages the reporting of any illegal or unethical behavior. A waiver for an executive officer or director of S&T may be made only by the Audit Committee and must be promptly disclosed as required by SEC or NASDAQ rules. S&T will disclose any such waivers, as well as any amendments to the Code of Conduct, on S&T’s website. Shareholders may obtain a printed copy of the Code of Conduct by contacting the Secretary at the address previously provided.

Director Independence

The S&T Board determines annually that a majority of directors serving on the S&T Board are independent as defined in Rule 4200(a) (15) of listing standards of NASDAQ. In 2008, the S&T Board also considered all direct and indirect transactions described in “Transactions with Related Parties” and “Compensation Committee Interlocks and Insider Participation” in determining whether the director is independent. There were no other related party transactions other than those described in the aforementioned sections of this Proxy Statement. The Nominating Committee has the delegated responsibility to evaluate each director’s qualifications for independence for the S&T Board and for the committees of the S&T Board. Following review of the objective measures, the Nominating Committee and S&T Board also consider on a subjective basis each director’s personal and/or business relationships, regardless of dollar amount.

On February 16, 2009, the S&T Board determined the following directors are independent under NASDAQ Rule 4200(a)(15): Mr. Brenzia, Mr. Delaney, Mr. Donnelly, Mr. Grube, Mr. Jones, Mr. Kirk, Mr. Milano, Mr. Papernick, Mr. Rebich and Mr. Spadafora. As discussed above, all members on the Compensation Committee and the Nominating Committee are independent under this NASDAQ rule. In addition, the S&T Board determined the independence of directors for service on the Audit Committee under Exchange Act Rule 10A-3 and NASDAQ Rule 4350. As discussed above, all members on the Audit Committee are independent under Exchange Act Rule 10A-3 and NASDAQ Rule 4350.

Compensation Committee Interlocks and Insider Participation

During 2008, S&T Bank made payments of $150,261 for the purchase and maintenance of vehicles from a company owned by Director Spadafora. In addition, S&T Bank made payments of $115,448 for the purchase of goods and services from companies owned or controlled by Director Donnelly.

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During 2008, S&T Bank made payments for the purchase and maintenance of vehicles and the lease of a parking lot from companies owned or controlled by Director Delaney for $137,833 and $48,000, respectively. The terms of the parking lot lease agreement provide for monthly payments of $4,000 until April 30, 2010 with additional four successive renewal options of five years each and one successive renewal option of four years. The monthly rent will be increased for each renewal term based on the Consumer Price Index.

In addition, S&T Bank may make extensions of credit to members of the Compensation Committee in the ordinary course of business and on the same terms as available to others. See “Transactions with Related Parties.”

PROPOSAL 2: RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2009

The Audit Committee of the S&T Board appointed the firm of KPMG LLP, independent registered public accounting firm to audit and report on S&T’s financial statements for the fiscal year ending December 31, 2009. Action by shareholders is not required by law in the appointment of independent accountants. However, the S&T Board considers this selection to be an important issue and therefore is submitting the selection of KPMG LLP for ratification by the shareholders. If the shareholders do not ratify this selection, the selection will be reconsidered by the Audit Committee.

KPMG LLP has no direct or indirect financial interest in S&T or in any of its subsidiaries, nor has it had any connection with S&T or any of its subsidiaries in the capacity of promoter, underwriter, voting trustee, director, officer or employee. Representatives of KPMG LLP will be present at the Annual Meeting and will be afforded an opportunity to make a statement if they desire to do so. It also is expected they will be available to respond to appropriate questions.

Fees Paid to Independent Registered Public Accounting Firm

During the fiscal years ended December 31, 2007 and December 31, 2008, KPMG LLP served as S&T’s independent registered public accounting firm (“Independent Accountants”).

Fees for professional services provided by our Independent Accountants in each of the last two fiscal years, in each of the following categories are:

“Audit Fees” includes fees for audit services associated with the annual audit, the reviews of S&T’s quarterly reports on Form 10-Q, accounting consultations and SEC registration statements.

“Audit-Related Fees” includes fees related to due diligence for the merger of IBT Bancorp, Inc. (“IBT”) into S&T in 2008.

“Tax Fees” includes a transaction cost recovery solutions study related to the IBT merger in 2008 and a construction tax planning study related to various existing bank buildings in 2007.

“Other Fees” includes fees related to an engagement for assessing the adequacy and effectiveness of S&T’s internal audit function.

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All 2007 and 2008 fees were paid to KPMG LLP except for Audit Related Fees paid to Ernst & Young LLP of $56,850 in 2007 and $27,900 in 2008 respectively.

Pre-Approval Policies and Procedures

The Audit Committee is responsible for the approval of all services performed by the Independent Accountants. All services provided by the Independent Accountants in 2008 were pre-approved by the Audit Committee. The Audit Committee is required to pre-approve all audit and non-audit services performed by the Independent Accountants to assure that the provision of such services does not impair the Independent Accountant’s independence. In addition, any proposed services exceeding pre-approved cost levels will require specific pre-approval by the Audit Committee. The Audit Committee may delegate pre-approval authority to one or more of its members. The member or members to whom such authority is delegated will report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Audit Committee does not delegate its responsibilities to pre-approve services performed by the Independent Accountants to management.

THE S&T BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE

SELECTION OF KPMG LLP AS AN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

FOR FISCAL YEAR 2009.

PROPOSAL 3: ADVISORY VOTE ON S&T’S EXECUTIVE COMPENSATION

Background of the Proposal

On January 16, 2009, S&T sold a series of its preferred stock and common stock purchase warrants to the U.S. Treasury under the TARP CPP created under EESA. On February 17, 2009 the President of the United States signed into law the ARRA. The ARRA contains a requirement that those financial institutions, like S&T, which have sold preferred stock and issued warrants to the U.S. Treasury under the CPP, permit a separate and non-binding shareholder vote to approve the compensation of such financial institution’s executive officers. The SEC has recently issued guidance that requires participants in the Capital Purchase Program to submit to shareholders annually for their approval the executive compensation arrangements as described in the Compensation Discussion and Analysis and the tabular disclosure regarding named executive officer compensation (together with the accompanying narrative disclosure) in their proxy statements.

Executive Compensation

S&T believes that its compensation policies and procedures, which are reviewed and approved by the Compensation Committee, encourage a culture of pay for performance and are strongly aligned with the long- term interests of shareholders. Like most companies in the financial services sector, the recent and ongoing financial downturn has had a significant negative impact on the price of S&T’s Common Stock, even though S&T’s 2008 results of operations increased over the prior year. Consistent with the objective of aligning the compensation of S&T’s executive officers with the annual and long-term performance of S&T and the interests of S&T’s shareholders, these factors were also reflected in the compensation of the chief executive officer, chief financial officer and the three other most highly compensated executive officers of S&T (collectively, the “Named Executive Officers”) for 2008, and in a number of executive compensation-related actions that have been taken by S&T and the Compensation Committee with respect to 2009.

One of the main objectives of S&T’s executive compensation program is to align a significant portion of each executive officer’s total compensation with the annual and long-term performance of S&T and the interests of S&T’s shareholders. S&T’s Management Incentive Plan is a short-term cash incentive award that more closely aligns the interests of shareholders and senior management by making a greater percentage of an executive officer’s total compensation dependent on the annual performance of S&T (the corporate component) and the achievement of individual departmental goals (the individual component). Annually, the Compensation Committee establishes specific incentive opportunities under the Management Incentive Plan. Depending upon

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the level of success in meeting the established goals, the Named Executive Officers can earn up to 35% of their respective annual salaries, with the award based 50% on the corporate component and 50% on the individual component. The award for the president and chief executive officer is based 100% on the corporate component. The Compensation Committee reviews and approves the awards, after the public release of S&T’s earnings per share for the prior year. In 2008, the corporate component of the award in 2008 was based on a predetermined incremental range for earnings per share goals from $2.26 to $2.50, with award percentages ranging from 0% to 125%, respectively. To achieve 100% of the corporate component, the earnings per share goal was $2.44. In 2008, S&T’s earnings per share was $2.28; therefore, the Named Executive Officers, earned 8.33% of the corporate component of the award. The individual component for each Named Executive Officer was also reviewed and approved by the Compensation Committee, as more fully described in the “Compensation Discussion and Analysis” in this Proxy Statement.

The S&T Bank Incentive Program for Senior Management (“Incentive Program”) is considered an important long-term element in S&T’s compensation program, and is intended to reward the executive for contributing to increasing shareholder value with sustained earnings growth into the future. This performance-based incentive plan offers an incentive award to an executive officer based upon the achievement of predetermined incremental earnings per share goals for the year. The award, at the discretion of the Compensation Committee, will equal a percentage of the executive’s salary and be delivered in the form of restricted shares of common stock. In 2008, the predetermined range of earnings per share goals was $2.26 through $2.44, with award percentages ranging from 0% to 25%, respectively. In 2008, Named Executive Officers earned an award of 2.5% of their respective salaries by achieving a one percent increase in earnings per share. The restricted shares of common stock were granted by the Compensation Committee on December 15, 2008 and will vest equally over a period of four years commencing on January 1, 2010. Under this long-term incentive program in 2007, the Named Executive Officers earned an award of 25% of their respective salaries due to achievement of S&T 2007 target earnings per share of $2.26, which was 9.7% over 2006 earnings per share.

With respect to 2009, the Compensation Committee has suspended the awards under the Management Incentive Plan and the S&T Bank Incentive Program for Senior Management and certain other corporate-wide incentive plans as described in the “Short-Term Incentive Award” under “Compensation Discussion and Analysis” in this Proxy Statement.

S&T and the Compensation Committee remain committed to the compensation philosophy, policies and objectives outlined under “Compensation Discussion and Analysis.” Named Executive Officer compensation for 2008 reflects the effectiveness of S&T’s executive compensation program in fulfilling its objectives during times of economic difficulty and more challenging financial performance. The Compensation Committee will continue to review all elements of the executive compensation program and take any steps it deems necessary to continue to fulfill the objectives of the program.

Shareholders are encouraged to carefully review the “Compensation Discussion and Analysis” and “Executive Compensation” sections of this Proxy Statement for a detailed discussion of S&T’s executive compensation program.

As required by the ARRA and the guidance provided by the SEC, the S&T Board has authorized a shareholder vote on S&T’s executive compensation plans, programs and arrangements as reflected in the Compensation Discussion and Analysis, the disclosures regarding named executive officer compensation provided in the various tables included in this Proxy Statement, the accompanying narrative disclosures and the other compensation information provided in this Proxy Statement. This proposal, commonly known as a “Say on Pay” proposal, gives S&T’s shareholders the opportunity to endorse or not endorse S&T’s executive pay program and policies through the following resolution:

“RESOLVED, that the holders of the common stock of S&T approve the compensation of S&T’s executives named in the Summary Compensation Table of S&T’s Proxy Statement for the 2009 Annual

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Meeting of Shareholders, including the Compensation Discussion and Analysis, the Executive Compensation tables and the related disclosure contained in the Proxy Statement.”

Vote Required; Effect

Approval of S&T’s executive compensation policies and procedures would require that the number of votes cast in favor of the proposal exceed the number of votes cast against it. Abstentions and broker non-votes will not be counted as votes cast and therefore will not affect the determination as to whether S&T’s executive compensation policies and procedures are approved. Because this shareholder vote is advisory, it will not be binding upon the Board. However, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements.

THE S&T BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF THIS ADVISORY PROPOSAL ON EXECUTIVE COMPENSATION. UNLESS MARKED TO THE CONTRARY, PROXIES RECEIVED BY S&T WILL BE VOTED “FOR” THIS PROPOSAL.

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EXECUTIVE OFFICERS OF THE REGISTRANT

As of March 20, 2009, the executive officers of S&T are:

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COMPENSATION DISCUSSION AND ANALYSIS

Compensation Approval Process

Executive compensation decisions are made by the six-member Compensation and Benefits Committee (the “Compensation Committee”) of the S&T Board. Each member of the Compensation Committee is a non-employee director and qualifies as an independent director under the NASDAQ listing standards. The Compensation Committee independently decides the compensation that S&T will pay the chief executive officer. For the remaining executive officers, the chief executive officer makes recommendations to the Compensation Committee, which reviews and approves the recommendations. The Compensation Committee meets in an executive session to discuss and finalize its decisions regarding the chief executive officer’s compensation. The S&T Board reviews all decisions relating to the compensation of executive officers, except for decisions about awards under the S&T Bancorp, Inc. 2003 Incentive Stock Plan (the “2003 Plan”), which are made solely by the Compensation Committee. The Compensation Committee may delegate to its chairperson such power and authority as the Compensation Committee deems to be appropriate, except such powers and authorities required by law or regulation to be exercised by the whole Compensation Committee or a subcommittee of at least two members.

The Compensation Committee operates under a written charter, which it reviews, modifies as necessary and reaffirms on an annual basis.

Compensation Philosophy

The Compensation Committee considers overall corporate performance as well as individual initiative and achievements when reviewing and approving all compensation decisions relating to the chief executive officer and the other executive officers named in the Summary Compensation Table (the “Named Executive Officers”). The policy of the Compensation Committee is to provide compensation that is competitive within the banking industry of financial institutions of similar size and product offerings, to attract and retain qualified executives; is integrated with S&T’s corporate performance goals, the primary goal being earnings growth; rewards exceptional individual performance within the assigned area of operational responsibility; and, importantly, aligns the interests of senior management with the interests of S&T’s shareholders. The Compensation Committee also believes that compensation should recognize short- and long-term performance and include both cash and equity components. To meet the objectives of its policy, the Compensation Committee has established a compensation program for senior management, including the Named Executive Officers, which includes the following elements:

Compensation Program

The Compensation Committee reviews the compensation programs established by peer banks for executives having similar responsibilities to S&T’s executives to establish competitive benchmarks for S&T’s compensation program. The peer banks are similar in size and scope to S&T, and operate both inside and outside S&T’s geographic market. While subject to change based on market and other relevant qualitative factors, the Compensation Committee includes the following peer banks in its comparison: National Penn Bancshares, Inc.; F.N.B. Corporation; Park National Corporation; First Commonwealth Financial Corporation; WesBanco, Inc.; Community Bank System, Inc.; Harleysville National Corporation; BancFirst Corporation; First Financial Bancorp; Sandy Spring Bancorp, Inc.; Republic Bancorp, Inc.; and City Holding Company (collectively, the

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“Peer Banks”). In addition, the Compensation Committee considers general industry peer group information contained in the SNL Financial Comparison Report.

In September 2008, S&T engaged Towers Perrin to provide consultative services with regard to S&T’s 2008 compensation program for executive officers, defined as executive vice president and higher, and to update the firm’s comprehensive assessment of S&T’s executive compensation program that was completed in the fall of 2005. The engagement was also intended to assist the Compensation Committee in its consideration of the 2009 compensation program for S&T’s executive officers. Towers Perrin reviewed the base salary, annual and long-term incentives for S&T’s eleven executive officers, including the Named Executive Officers, and compared S&T’s compensation program with publicly-available compensation information of the Peer Banks and Towers Perrin’s survey data effective July 2008. The assessment considered the 2008 target total direct compensation, which was comprised of the following components: base salary, short-term (annual) incentive and long-term incentive. The assessment found that the target total direct compensation for the chief executive officer was below the market median for the Peer Banks, and for the other Named Executive Officers was generally at or above the market median for the Peer Banks. The target total direct compensation for the lower level executives was slightly below the market median. The study concluded that S&T’s executive compensation program was conservative in view of S&T’s high performance. The Towers Perrin consultant presented his findings to the chief executive officer, the chief financial officer and the Compensation Committee in a written report on November 17, 2008 (“Towers Perrin Assessment”).

Salaries

The purpose of base salary is to provide competitive and fair base compensation that recognizes the executives’ roles, responsibilities, contributions, experiences and performance. Base salary represents a fixed and guaranteed element of compensation that reflects executives’ long-term performance and market pay level for the role. Base salaries are targeted to be competitive with the practices of the Peer Banks. The Compensation Committee sets each executive’s individual pay annually to reflect individual experiences, expertise, performance and contributions in the role.

The Compensation Committee reviews and approves the salaries of the chief executive officer and president annually in December. The Compensation Committee compared the chief executive officer’s salary and performance against the Peer Banks, and approved a salary for 2008 of $525,000 for Mr. Miller, which was a 7.14% increase from his 2007 salary. The Compensation Committee decided on this increase due to the effects of inflation but also to recognize Mr. Miller’s leadership in achieving earnings per share goals for 2007 and for successfully negotiating and signing a definitive agreement with IBT. Mr. Miller was the chief executive officer until his retirement on April 21, 2008. Mr. Miller continues in his capacity of chairman of the board with the usual compensation package for a non-employee director.

Mr. Brice was named president and chief executive officer upon Mr. Miller’s retirement. Previously, Mr. Brice was S&T’s president and chief operating officer. Mr. Brice’s salary in 2008 was $375,000, which was a 25% increase from his 2007 salary. In December 2007, Mr. Miller, the chief executive officer, recommended to the Compensation Committee that this increase was warranted due to the effects of inflation, his leadership over service-related lines of business during a successful year and his expanded responsibilities as president and chief executive officer upon Mr. Miller’s retirement in April 2008. Mr. Brice’s salary was not increased further when he was named president and chief executive officer. Mr. Brice’s 2008 salary was in approximately the 26^th percentile of chief executive officers at the Peer Banks. In December 2008, the Compensation Committee increased Mr. Brice’s 2009 salary by 13.3% to $425,000, due to the effects of inflation and to his leadership in his new role as chief executive officer, including his role in the successful integration of IBT into S&T. The Compensation Committee also considered the results of the Towers Perrin Assessment that noted Mr. Brice’s salary was below the market median for the Peer Banks. Mr. Brice’s 2009 salary is in approximately the 60^th percentile of the 2008 salaries of the Peer Banks.

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The salaries for the other Named Executive Officers are reviewed by the president and chief executive officer on an annual basis in December. The Compensation Committee reviewed and approved the salary recommendations for the other Named Executive Officers with the president and chief executive officer for 2009. The Compensation Committee considered the results of the Towers Perrin Assessment during this process. Prior to his retirement, Mr. Miller reviewed the salary increases for 2008 for the other Named Executive Officers with Mr. Brice. Subsequently, the Compensation Committee reviewed and approved the salary recommendations for 2008 for the other Named Executive Officers with Messrs. Miller and Brice.

In 2008, the salary for Mr. Rout, the chief financial officer, chief administrative officer and secretary, was $300,000, which was a 20% increase from his 2007 salary due to the effects of inflation, to his leadership over his respective area of responsibility during a successful year, including his role in the acquisition of IBT, and to his expanded responsibilities in anticipation of Mr. Miller’s retirement, including his new role as chief administrative officer. In his expanded role, Mr. Rout assumed oversight responsibility for S&T’s credit administration function, which was in addition to his ongoing responsibilities as chief financial officer and corporate secretary. Mr. Rout’s 2008 salary was in approximately the 42^nd percentile of chief financial officers at the Peer Banks. In December 2008, Mr. Rout’s 2009 salary was increased by 8.3% to $325,000. The increase for Mr. Rout was due to the effects of inflation and to his leadership over his respective area of responsibility during a successful year, including his role in the integration of IBT into S&T.

In 2008, the salary for Mr. Hauck, the chief operating officer and retail banking support services group manager, was $275,000, which was an 18.53% increase from his 2007 salary due to the effects of inflation, to his leadership over his respective areas of responsibility during a successful year, including his role in the acquisition of IBT, and to his expanded responsibilities in anticipation of Mr. Miller’s retirement, including his new role as chief operating officer. Mr. Hauck’s 2008 salary was in approximately the 82^nd percentile of chief operating officers and similarly situated officers at the Peer Banks. In December 2008, Mr. Hauck’s 2009 salary was increased 9.1% to $300,000. The increase for Mr. Hauck was due to the effects of inflation and to his leadership over his respective areas of responsibility during a successful year, including his role in the integration of IBT into S&T.

In 2008, the salary for Mr. Antolik, the chief lending officer, was $240,000, which was a 20% increase from his 2007 salary, due to his promotion to this position, as well as his successful leadership in the commercial lending area. Mr. Antolik’s 2008 salary was in the 95^th percentile for similarly situated officers at the Peer Banks. In December 2008, Mr. Antolik’s 2009 salary was increased 10.4% to $265,000, due to the effects of inflation and to his leadership over the commercial lending area during a successful year following the retirement of the former chief lending officer on December 31, 2007.

In 2008, the salary for Mr. Young, the investment management and trust services group manager, was $213,000, which was a 3.9% increase from his 2007 salary, due to the effects of inflation and to his leadership over S&T’s wealth management services area during a successful year. Mr. Young’s 2008 salary was in the 67^th percentile for similarly situated officers at the Peer Banks. In December 2008, Mr. Young’s salary was increased 5.6% to $225,000, due to the effects of inflation and to his leadership over S&T’s wealth management services area during a successful year, including his role in the integration of IBT into S&T.

Short-Term Incentive Award

Effective January 1, 1999, the Compensation Committee commenced the administration of a Management Incentive Plan as a short-term cash incentive award to more closely align the interests of shareholders and senior management by making a greater percentage of senior management’s total compensation dependent on the annual performance of S&T and the achievement of individual departmental goals.

Annually, the Compensation Committee establishes specific short-term cash incentive goals under the Management Incentive Plan. Depending upon the level of success in meeting the established goals, the Named

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Executive Officers can earn up to 35% of their respective annual salaries, with 50% of the award based on the achievement of earnings per share goals (corporate component) and 50% of the award based on the participant’s individual and business unit performance (individual component). The award for the president and chief executive officer is based 100% on the corporate component. The Compensation Committee reviews and approves the awards in January, after the public release of S&T’s earnings per share for the prior year. The corporate component of the award in 2008 was based on a predetermined incremental scale for earnings per share goals that ranged from $2.26 to $2.50, with award percentages ranging from 0% to 125%, respectively. To achieve 100% of the corporate component, the earnings per share goal was $2.44. In 2008, S&T’s earnings per share was $2.28; therefore, senior management, including the Named Executive Officers, earned 8.33% of the corporate component of the award.

In 2008, Mr. Brice, as president and chief executive officer, had the opportunity to earn a short-term incentive award of $131,250 (35% of his 2008 base salary of $375,000). Since his award is based 100% on the corporate component, Mr. Brice earned an award of $10,933, or 8.33% of $131,250. In addition to earning 8.33% of the corporate component of their awards, the other Named Executive Officers were eligible to earn 50% of their short-term incentive award based on the individual component. The individual component for each Named Executive Officer is reviewed and approved prior to the beginning of the award year by the Compensation Committee. Messrs. Rout, Hauck and Antolik earned 100% of the individual component of their awards, and their total short-term incentive awards were $56,873; $52,134; and $45,499, respectively. Mr. Young earned 90% of the individual component of his award, for a total award of $36,653.

In 2007, the earnings per share target was $2.26, which S&T achieved; therefore, senior management, including the Named Executive Officers, earned a Management Incentive Plan award in 2007, which was received in January 2008. In 2007, the chief executive officer and the president were eligible to earn 100% of their short-term incentive awards based upon achieving the earnings per share target. Messrs. Miller and Brice earned awards of $171,500 and $105,000, respectively, due to achieving the earnings per share target. Mr. Rout earned an award of $87,500, which was 100% of his potential award. Mr. Hauck earned 95% of the individual component, for a total award of $79,250. Mr. Antolik earned 90% of the individual component, for a total award of $66,500. Mr. Young earned 75% of the individual component, for a total award of $62,750.

S&T has suspended the Management Incentive Plan for 2009 in response to the challenging economic environment, but intends to resume this short-term incentive plan in future years as the economic environment improves, subject to the restrictions on S&T’s executive compensation programs resulting from its participation in the TARP. (These restrictions are discussed below under the section entitled “American Recovery and Reinvestment Act of 2009.”)

Long-Term Incentive Award

The Compensation Committee has increasingly weighted the Named Executive Officers’ actual compensation packages toward programs contingent upon S&T’s level of long-term performance (three years or greater). This compensation element is intended to reward the executive for contributing to increasing shareholder value with sustained earnings growth into the future. The Compensation Committee believes that stock ownership by management and stock-based performance compensation arrangements are beneficial in aligning management and shareholders’ interests and serves as an executive retention tool through vesting requirements. The S&T Bank Incentive Program for Senior Management (the “Incentive Program”) is used as a mechanism for determining awards pursuant to the 2003 Plan, and is considered an important long-term element in S&T’s compensation program.

In 2006, in response to the anticipated costs of expensing stock options under Financial Accounting Standard No. 123(R) (“FAS 123R”), the Compensation Committee discontinued its practice of granting nonstatutory stock options annually.

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In lieu of an annual stock option grant, the Compensation Committee, pursuant to its authority under the 2003 Plan, adopted the Incentive Program, a performance-based incentive plan whereby senior management will earn an incentive award based upon the achievement of predetermined incremental earnings per share goals for the following year. Depending upon the level of earnings per share goal achieved, the award, at the discretion of the Compensation Committee, will equal a percentage of the executive’s salary and be delivered in the form of restricted shares of common stock. In addition, the Compensation Committee has established additional guidelines that limit senior management to selling only 25% of the vested restricted shares of common stock for current tax liabilities, until the officer achieves the stock ownership guidelines, as described below.

The award in 2008 was based on a predetermined incremental scale for earnings per share goals that ranged from $2.26 to $2.44, with award percentages ranging from 0% to 25%, respectively. In 2008, the Named Executive Officers earned an award of 2.5% of their respective salaries by achieving a one percent increase in earnings per share over the prior year. The restricted shares of common stock were granted by the Compensation Committee on December 15, 2008 and vest equally over a period of four years commencing on January 1, 2010. The number of restricted shares granted is based on the average of the high and low prices of Common Stock during the 30 day period ending on the date of the grant. The numbers of shares awarded to the Named Executive Officers were: Mr. Brice, 305; Mr. Rout, 244; Mr. Hauck, 224; Mr. Antolik, 195; and Mr. Young, 173.

In 2007, the Named Executive Officers earned an award of 25% of their respective salaries by achieving a ten percent increase in earnings per share. The restricted shares of common stock were granted by the Compensation Committee on December 17, 2007 and vest equally over a period of four years commencing on January 1, 2009. The numbers of shares awarded to the Named Executive Officers were: Mr. Miller, 4,007; Mr. Brice, 2,453; Mr. Rout, 2,044; Mr. Hauck, 1,897; Mr. Antolik, 1,635; and Mr. Young, 1,676.

S&T has suspended the Incentive Program for 2009 in response to the challenging economic environment, but intends to resume this program in future years as the economic environment improves, subject to the restrictions on S&T’s executive compensation programs resulting from its participation in TARP. (These restrictions are discussed below under the section entitled “American Recovery and Reinvestment Act of 2009”.)

Certain Other Benefits

S&T provides other benefits, or perquisites, to the Named Executive Officers that are comparable to the other benefits provided at the Peer Banks viewed as a whole. The Compensation Committee believes that perquisites should be limited in scope and value. The primary perquisites for an executive are the payment of the initiation fees and dues for golf or social memberships at a private club, company contributions to a qualified defined benefit plan and a nonqualified deferred compensation plan, a company car or car allowance and company paid life insurance premiums.

S&T considers a social or country club to be an appropriate venue to entertain customers and to participate in various community functions. S&T pays for senior management to belong to one or more private clubs, since this level of management has significant customer contact and involvement in the community. Expenses of a personal nature or related to a spouse are not paid by S&T.

S&T Bank maintains the Thrift Plan for Employees of S&T Bank (the “Thrift Plan”), which is a qualified defined contribution plan. All employees may participate in the Thrift Plan with elective salary deferrals, or 401(k) contributions. During 2008, S&T Bank made matching contributions equal to 100% of the first 1% of the employees’ eligible compensation and 50% of the next 5% of the employees’ eligible compensation, up to a maximum of 3.5% of the employees’ eligible compensation. S&T considers the matching contributions to the Thrift Plan as an important incentive for employees to contribute toward their own retirement savings. In 2008, S&T made matching contributions to the Thrift Plan for each Named Executive Officer: Mr. Brice, $7,750; Mr. Rout, $8,969; Mr. Hauck, $10,310; Mr. Antolik, $8,050; and Mr. Young, $7,175.

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In 2008, S&T Bank also made a year-end profit sharing contribution to the Thrift Plan equal to 3% of the employees’ eligible compensation for a total contribution of $1,063,172. Year-end profit sharing contributions are based on the performance of S&T, compared to earnings per share goals. The earnings per share goals in 2008 ranged from 2% to 8% for targets from $2.26 to $2.62, respectively. The compensation taken into account for determining the amount of contributions made on behalf of a participant is subject to qualified plan limits ($230,000 in 2008). S&T believes that the year-end profit sharing contribution provides an incentive to employees, including executives, with respect to the achievement of corporate earnings goals. In 2008, S&T made a year end profit sharing contribution of $6,900 to the Thrift Plan for each Named Executive Officer. S&T does not plan to make a year-end profit sharing contribution for 2009 in response to the challenging economic environment.

The Compensation Committee also administers a cash incentive plan for all employees under the level of senior vice president, whereby these employees earn a cash award consistent with the ranges set for the year-end profit sharing contribution. For 2008, this award was 3% of employees’ salaries and is payable after a one year vesting period. S&T expects to pay approximately $884,800 to its employees for this award in January 2010.

S&T Bank established the S&T Bancorp, Inc. Supplemental Savings, Make-Up and Deferred Management Incentive Plan (the “Nonqualified Plan”) in 1995 in order to provide certain management employees, including executives, the ability to make up for certain benefits that would normally be provided under S&T Bank’s qualified plans except for federal tax laws setting annual compensation limits for qualified plans and additional limitations related to highly compensated employees. The Nonqualified Plan was amended for compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and other guidance promulgated thereunder (“Section 409A”) in December 2008. S&T Bank makes employer contributions to this plan that cannot be made to the qualified plans due to the aforementioned limits. During 2008, S&T contributed to the Nonqualified Plan for Mr. Brice $8,867; Mr. Rout $4,474; Mr. Hauck $1,978; Mr. Antolik, $2,678; and Mr. Young, $2,477.

S&T’s executives frequently drive vehicles on company business. Therefore, S&T provides either a company car or a car allowance to executives. Executives are responsible for reporting the amount of personal use of company cars to S&T, so that the taxable income from such use can be reported in the executives’ compensation. Executives who do not have a company car receive an annual car allowance of $7,200 that is fully taxable compensation.

Other benefits generally provided to all officers and full-time employees include a qualified defined benefit plan and the S&T Bank Welfare Benefit Plan. The latter has provisions for medical reimbursement, dental coverage, vision care coverage, long-term disability income, a health reimbursement account and life insurance. Relocation benefits also are reimbursed but are individually negotiated when they occur. If S&T hires or initiates a transfer of an employee with special skills and requires a relocation of more than 35 miles, the employee is eligible for reimbursement of the costs of house hunting trips, closing on the sale of the old home and the purchase of the new home, temporary living quarters and moving household goods and furniture. In these circumstances, S&T will also gross up taxable relocation reimbursements for federal taxes.

Stock Ownership Guidelines

The Compensation Committee continues to believe that stock ownership in S&T is important to align shareholder and management interests. On December 17, 2007, the Compensation Committee adopted stock ownership guidelines for certain executives beginning on January 1, 2008. Under the guidelines, Messrs. Brice, Rout, Hauck and Antolik should own Common Stock having a market value equal to at least three times base salary; executive vice presidents, including Mr. Young, should own at least two times base salary; and senior vice presidents at least one times base salary. Currently, the Named Executive Officers do not meet the ownership guidelines, due to the adverse market environment for financial institution stocks, which has also affected the Common Stock. The guidelines do not establish a deadline for compliance with the stock ownership

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requirements; however, as noted earlier, the executives are limited to selling 25% of vested shares of restricted stock until meeting these guidelines.

In addition to stock options and unvested restricted shares, Mr. Brice directly or indirectly owns 56,190 shares of Common Stock.

Employment Agreements

S&T does not provide employment agreements for any of the Named Executive Officers. S&T believes in a policy of “at will” employment arrangements.

Change in Control

In designing compensation arrangements for senior management, the Compensation Committee understands that the hiring and retention of quality senior management talent could be hindered if S&T offers no protection against the possible loss of compensation or position through a change in control. Further, S&T believes that it is important to reduce the conflict of interest that senior management could experience in a change of control situation. In accordance with its general philosophy that senior management’s interest be aligned with shareholders’ interests, effective January 1, 2007, S&T entered into change in control agreements with selected officers in senior management, including all the Named Executive Officers. On December 31, 2008, S&T restated these change in control agreements to comply with the requirements of Section 409A. The primary terms and compensation payments contemplated by agreements remain unchanged. The agreements provide for the following:

The agreements define “good reason” as the occurrence of any of the following (without the executive’s consent) after a change in control:

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An executive may not terminate his or her employment for Good Reason more than six months after the initial existence of the conditions constituting Good Reason.

A “change in control” is defined in the agreements as the occurrence of any of the following:

The agreements specifically exclude public stock offerings by S&T and convertible debt offerings by S&T from the definition of “change in control.”

Payments under the agreements will be made no later than ten business days after the date of termination, subject to a six-month delay for compliance with Section 409A, if necessary. (See “Tax Considerations” described herein). Each agreement provides that if the executive’s employment is terminated, without cause, within the three or two years of a change in control, as applicable for that particular executive, he will receive life insurance, health, disability and other welfare benefits substantially similar in all respects to those which the executive was receiving immediately prior to the triggering event. These additional benefits will continue for three years for the president and chief executive officer and for two years for the other Named Executive Officers. Each agreement provides that, in the event any benefit received by a Named Executive in connection with a change in control or in connection with the termination of the Named Executive’s employment (whether pursuant to the agreement or any other plan, arrangement or agreement) (collectively, the “Total Benefits”) would be subject to the excise tax imposed under Section 4999 of the Code (the golden parachute excise tax), then the Total Benefits will be reduced to the extent necessary so that no portion of the Total Benefits is subject

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to such excise tax. The Compensation Committee believes that the agreement provides reasonable protection to the individual members on the senior management team and thereby aligns senior management’s interest with S&T’s shareholders.

In addition, any change in control payments may be limited under the EESA and the ARRA. See “Legislative and Regulatory Considerations” described herein.

Tax Considerations

The Compensation Committee believes that it has structured the compensation program to comply with Code Sections 162(m) and 409A. Section 162(m) of the Code generally denies a deduction to any publicly held corporation for compensation paid to its chief executive officer and its four other highest paid executive officers to the extent that any such individual’s compensation exceeds $1 million. “Qualified Performance-based compensation” (as defined for purposes of Section 162(m)) is not taken into account for purposes of calculating the $1 million compensation limit, provided certain disclosure, shareholder approval and other requirements are met. The Compensation Committee is monitoring the effects of S&T’s compensation programs with regard to Section 162(m). To date, S&T has not suffered a loss of compensation deduction as a result of the $1 million limitation, and the Compensation Committee intends to take actions to minimize S&T’s exposure to nondeductible compensation expense under Section 162(m) of the Code. While keeping this goal in mind, however, the Compensation Committee reserves the right to maintain flexibility with respect to S&T’s executive compensation programs, including the awarding of compensation that may not be deductible when it believes that such payments are appropriate and in the best interests of the shareholders.

The EESA added new Section 162(m)(5) to the Code to create a reduced deduction limit of $500,000 for institutions participating in certain TARP programs. Section 162(m)(5) differs from the general provisions of Section 162(m) described above in several ways, including (but not limited to) counting a covered executive’s performance-based compensation and commissions toward the $500,000 deduction limit. As explained below, S&T received assistance under TARP on January 16, 2009. As a condition of receiving this assistance, S&T has agreed not to take any deduction in excess of the reduced limit under Section 162(m)(5) of the Code. The Compensation Committee is monitoring the effects of S&T’s compensation programs under Section 162(m)(5) and may take future action as necessary to minimize S&T’s exposure to nondeductible compensation payments under Section 162(m)(5).

Section 409A is a relatively recent provision of the Code. If an executive is entitled to nonqualified deferred compensation benefits that are subject to Section 409A of the Code, and such benefits do not comply with Section 409A of the Code, the executive would be subject to adverse tax treatment, including accelerated income recognition (in the first year that benefits are no longer subject to a substantial risk of forfeiture) and a 20% penalty tax pursuant to Section 409A of the Code. Compensation and benefit arrangements were required to be amended to comply with Section 409A of the Code as of January 1, 2009. S&T adopted Section 409A compliance amendments prior to January 1, 2009 (as required) and will continue to monitor its existing and future plans and arrangements for continued compliance with Section 409A of the Code.

Legislative and Regulatory Considerations

Recent legislation and regulation likely will be a determining factor in the future regarding the compensation of our Named Executive Officers. Consequently, our executive compensation program may undergo significant change and prior actions of the Compensation Committee may not be predictive of future action. One result of the new legislation will be that the Compensation Committee will have less flexibility with future compensation decisions regarding the Named Executive Officers.

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Emergency Economic Stabilization Act of 2008

On January 16, 2009, S&T sold a series of its preferred stock and common stock purchase warrants to the U.S. Treasury under TARP CPP created under the EESA. As a result of this transaction, S&T became subject to certain executive compensation requirements under TARP CPP, the EESA, and U.S. Treasury regulations. Those requirements apply to S&T’s Named Executive Officers: Messrs. Brice, Rout, Hauck, Antolik and Young (collectively, the “SEOs”). Those requirements are:

American Recovery and Reinvestment Act of 2009

On February 17, 2009, the President of the United States signed into law the ARRA. The ARRA provides for new restrictions on executive compensation for participants in the TARP CPP. The ARRA amends the executive compensation and corporate governance provisions of EESA.

Key features of the ARRA are:

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ARRA requires both the U.S. Treasury and the SEC to issue rules to implement these new executive compensation restrictions. As a result, until U.S. Treasury and the SEC publish their new rules, many aspects of the above restrictions will not be clear.

After the U.S. Treasury and the SEC publish these rules, the Compensation Committee will consider these new limits on executive compensation and determine how they impact S&T’s executive compensation program.

Letter Agreements with SEOs

The SEOs have agreed in writing to restrictions on their compensation resulting from S&T’s participation in the TARP CPP. These amendments, among other things: (1) prohibit S&T from paying any “excess parachute payments” within the meaning of Section 280G(b) of the Code during any CPP covered period beyond the amount allowed under the EESA; (2) subjects any bonus and incentive compensation paid during a CPP covered period to recovery or clawback if the payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria (as noted above); and (3) noted that each compensation, bonus, incentive, change-in-control and other benefit plan is amended to the extent necessary to give effect to provisions (1) and (2).

COMPENSATION COMMITTEE REPORT

We, the Compensation Committee of the Board of Directors of S&T Bancorp, Inc. (“S&T”), have reviewed and discussed the Compensation Discussion and Analysis included in this Proxy Statement with S&T’s management, and, based on such review and discussion, have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and S&T’s Annual Report on Form 10-K for the year ended December 31, 2008.

Compensation Committee:

Alan Papernick (Chairman);

John Delaney;

Michael Donnelly;

Joseph Kirk;

Robert Rebich, Jr.; and

Charles Spadafora

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EXECUTIVE COMPENSATION

The following table provides information concerning remuneration of the Chief Executive Officer, the Chief Financial Officer and the three other most highly compensated Executive Officers of S&T (collectively, the “Named Executive Officers”) during 2008. S&T has not entered into any employment agreements with any of the Named Executive Officers.

Summary Compensation Table for Fiscal Year 2008

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Grants of Plan-Based Awards for Fiscal Year 2008

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Effect of ARRA. The ARRA directs the U.S. Treasury to issue rules to implement new standards for executive compensation for CPP participants, including a prohibition on most types of incentive compensation other than certain grants of restricted stock. These new standards likely will preclude the grant of stock options to the Named Executive Officers during the period S&T has outstanding obligations to the U.S. Treasury under CPP. ARRA permits grants of “long-term” restricted stock, but only to the extent the value of the stock does not exceed one-third of the total amount of annual compensation of the employee receiving the stock, the stock does not “fully vest” until after all CPP-related obligations have been satisfied, and any other conditions which the U.S. Treasury may specify have been met. S&T likely will continue to make grants of restricted stock. However, the extent of S&T’s use of restricted stock grants, and the changes that S&T will make to the terms of the grants in order to comply with ARRA, cannot be determined until U.S. Treasury issues regulations to implement the new executive compensation standards.

Outstanding Equity Awards At 2008 Fiscal Year-End

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Option Exercises and Stock Vested in Fiscal Year 2008

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Pension Benefits