AUDIT COMMITTEE CHARTER
Pursuant to Article III, Section 303, of the By-Laws of S&T Bancorp, Inc. (S&T), the Board of Directors (the "Board") has formed the Audit Committee (the "Committee"). This Charter is intended to identify the purpose, composition, authority and responsibilities of the Committee.
The Committee is established to oversee S&T's accounting and financial reporting processes and the audits of its financial statements and assist Board oversight of (1) S&T's compliance with legal and regulatory requirements, (2) the qualifications, independence and performance of the independent auditor, and (3) the performance of S&T's internal audit, risk management and regulatory compliance functions.
Committee members are appointed annually by the Board and may be replaced by the Board. The Committee shall be comprised of three or more members. All members must meet the independence requirements of NASDAQ, the Securities and Exchange Commission and any standards of independence as may be prescribed for purposes of any applicable laws and regulations relating to the Committee's duties and responsibilities.
All members must have the requisite ability to read fundamental financial statements, including S&T's balance sheet, income statement and cash flow statement. In addition, the Board shall determine that at least one member has past finance or accounting experience or any other comparable financial oversight experience or background which results in the member's financial sophistication, as prescribed by NASDAQ rules.
The Board shall select one member of the Committee as its chairperson. The Committee may delegate to its chairperson such power and authority as the Committee deems to be appropriate, except such powers and authorities required by law or regulation to be exercised by the whole Committee or a subcommittee of at least two members.
The Committee shall meet at least once every fiscal quarter, or more frequently if circumstances dictate. The Committee may meet in executive session periodically at the Committee's discretion. At least annually, the Committee will meet with the senior internal auditor, the senior risk/compliance manager and the independent auditor to discuss any matters that the Committee or any of these persons or firms believes should be discussed privately, and without management present. Members of the Committee may participate in a meeting of the Committee by means of conference call or similar communications equipment by means of which all persons participating in the meeting can hear each other.
COMMITTEE AUTHORITY AND RESPONSIBILITIES
The Committee's primary responsibility is oversight. S&T's management is responsible for the preparation, presentation and integrity of S&T's financial statements, and, with the internal audit department, is responsible for maintaining appropriate accounting and financial reporting policies and internal controls and procedures that provide for compliance with accounting standards and applicable laws and regulations relating to disclosures and financial reporting. The independent auditor shall report directly to the Committee but is accountable to the Committee and the Board. The independent auditor is responsible for planning and executing a proper audit of S&T's annual financial statements, reviewing S&T's quarterly financial statements prior to filing of each quarterly report and performing other procedures as directed by the Committee or required by laws, regulations or accounting standards. The Committee members are not, and do not represent themselves as performing the functions of, auditors or accountants.
The Committee's responsibilities include performance of the duties required of an audit committee at S&T's subsidiaries to the extent required and permitted by applicable laws and regulations. The Committee may meet simultaneously as a Committee of S&T and any other S&T affiliate.
In fulfilling his or her responsibility, each member of the Committee is entitled to rely in good faith upon S&T's records and upon information, opinions, reports or statements presented by any of S&T's officers or employees, or by any other person as to matters the member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of S&T. Each member of the Committee also may rely in good faith upon actions taken by other committees of the Board as committed to such committees under the resolutions and other directives of the Board.
To carry out this oversight responsibility, the Committee shall have the following specific duties and authority with regard to the independent auditor, internal audit, financial reporting, internal controls and risk management/compliance.
1. Directly appoint, retain, compensate, evaluate and terminate the independent auditor, and retain the sole authority to approve all audit engagement fees and terms.
a. The independent auditor's internal quality control procedures.
i. The most recent internal quality control review, or peer review, of the independent auditors, or
1. Review the performance of the internal audit department, including the proposed audit plans for the coming year and the results of internal audits and management's responses thereto.
Financial Reporting and Internal Controls
1. Discuss with management and/or the independent auditor:
a. The scope of the annual audit and the annual audited financial statements and quarterly financial statements, as applicable, including S&T's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and financial control disclosure procedures;
1. Review the performance of the risk management/compliance department.
Reporting and Recommendations
1. Prepare any report or other disclosures required by the rules of the SEC to be included in S&T's annual proxy statement.
In addition to the foregoing, the Committee will perform such other functions as may be committed to it under the resolutions and other directives of the Board.
RESOURCES AND AUTHORITY
The Committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to select, retain, terminate, and approve the fees and other retention terms of special or independent counsel, accountants or other experts and advisors, as it deems necessary or appropriate, without seeking approval of the Board or management. S&T will provide appropriate funding to the Committee to compensate the independent auditor, to compensate any advisors retained by the Committee and to pay for ordinary administrative expenses of the Committee.