S&T Bancorp Inc. (NasdaqGS:STBA) (‘S&T') entered into a definitive agreement to acquire DNB Financial Corporation (NasdaqCM:DNBF) (‘DNB') for approximately $210 million on June 5, 2019. DNB shareholders will receive 1.22 shares of S&T stock for each share of DNB stock in an all-stock transaction. Each award of restricted shares of DNB common stock will vest in full, the restrictions thereon will lapse and each such award will be converted into the right to receive the merger consideration (less applicable tax withholdings) in respect of each share of DNB underlying such award. S&T will continue as the surviving entity in the merger. The transaction is expected to be a tax-free exchange to the shareholders of DNB. Immediately following the merger, DNB's wholly owned bank subsidiary, DNB First, National Association, will merge with and into S&T's wholly owned bank subsidiary, S&T Bank, with S&T Bank as the surviving entity in the bank merger. In case of termination under certain circumstances, DNB will pay S&T a termination fee of $8 million.

On October 21, 2019, the Board of Directors of S&T Bancorp, Inc. appointed two new members to its Board of Directors, William J. Hieb and Peter Barsz, to be effective as of immediately after, and subject to the occurrence of, the effective time of the merger. The transaction is subject to regulatory approvals (including the approval of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Pennsylvania Department of Banking), approval of DNB shareholders, S&T filing with NASDAQ a notification form for the listing of all shares of S&T common stock to be delivered as merger consideration, and NASDAQ shall not have objected to the listing of such shares of S&T common stock, effectiveness of the registration statement on Form S-4 for the issuance of S&T's consideration shares, receipt by each party of an opinion from its counsel to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended. A special meeting of DNB shareholders will be held on September 25, 2019 in connection with the merger. The terms of the merger agreement have been unanimously approved by the boards of directors of both S&T Bancorp and DNB Financial. The board of directors of DNB unanimously recommended that the shareholders of DNB vote for the approval of the merger. On June 5, 2019, PNC FIG Advisory Inc. delivered its written opinion, to DNB's board of directors to the effect that, the exchange ratio provided for in the merger was fair to the holders of DNB common stock from a financial point of view. As of August 21, 2019, the registration statement was declared effective. As of September 5, 2019, the transaction received all the required bank regulatory approvals. On September 25, 2019, the shareholders of DNB Financial approved the transaction at its Special Meeting of Shareholders. S&T and DNB expect to complete the transaction during the fourth quarter of 2019. As of October 24, 2019, the transaction is expected to be completed on or about November 30, 2019. S&T expects the merger to be accretive to earnings per share in 2020.

David Lazar and Adam Tarvin of Keefe, Bruyette & Woods, Inc. acted as financial advisors and Matthew M. Guest of Wachtell, Lipton, Rosen & Katz acted as legal advisor to S&T. PNC FIG Advisory Inc. (‘PNC') acted as financial advisor and Christopher S. Connell of Stradley Ronon Stevens & Young, LLP acted as legal advisors to DNB. Computershare Shareholder Services acted as transfer agent for DNB. DNB has agreed to pay PNC a fee for its services totaling approximately $2.1 million, a portion of which fee became payable upon presentation of PNC's opinion, and approximately $1.9 million of PNC's fee is contingent upon the closing of the merger. In addition, a portion of PNC's fee became payable after the signing of PNC's engagement agreement. DNB has engaged Georgeson to aid in the solicitation of proxies, for which DNB will pay a fee of approximately $10,500, plus reimbursement of expenses.

S&T Bancorp Inc. (NasdaqGS:STBA) completed the acquisition of DNB Financial Corporation (NasdaqCM:DNBF) on November 30, 2019.