UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 20, 1996
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FINANCIAL TRUST CORP
(Exact name of registrant as specified in its charter)
Pennsylvania 0-10756 23-2229155
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
1415 Ritner Highway, Carlisle, Pennsylvania 17013
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (717) 243-8003
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Not Applicable
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Not Applicable
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not Applicable
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not Applicable
ITEM 5. OTHER EVENTS
Keystone Financial, Inc. has signed a definitive
agreement to acquire Financial Trust Corp. Under the
terms of the agreement, each share of Financial Trust
Corp will be converted into 1.65 shares of Keystone,
pursuant to a fixed exchange ratio.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
Not Applicable
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not Applicable
(b) Not Applicable
(c) Exhibits - Press release dated December 20, 1996
ITEM 8. CHANGE IN FISCAL YEAR
Not Applicable
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Financial Trust Corp
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(Registrant)
December 23, 1996 By /s/ Bradley S. Everly
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(Date) (Signature)
Bradley S. Everly
Senior Vice President and
Chief Financial Officer
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Exhibit 1
PRESS RELEASE - For Immediate Release For Further Information Contact:
Ray L. Wolfe
December 20, 1996 (717) 241-7701
KEYSTONE FINANCIAL AGREES TO ACQUIRE
FINANCIAL TRUST CORP
HARRISBURG, PA, December 20, 1996--Keystone Financial, Inc.,
(NM:NASDAQ:KSTN), the fifth largest bank holding company in Pennsylvania, today
announced that it has signed a definitive agreement to acquire Financial Trust
Corp, (NM:NASDAQ:FITC), Carlisle, PA.
Financial Trust, a bank holding company with four member banks and
approximately $1.2 billion in assets, operates 48 community offices in seven
counties in Pennsylvania and Maryland. Financial Trust's banking subsidiaries
include, Financial Trust Company, Carlisle, PA; Chambersburg Trust Company,
Chambersburg, PA; First National Bank and Trust Company, Waynesboro, PA; and
Washington County National Bank, Williamsport, MD. For the nine month period
ended September 30, 1996, Financial Trust reported net income of $15.1 million,
or $1.77 per share, which produced a return on average assets of 1.73% and a
return on average equity of 14.20%.
Under terms of the agreement, each share of Financial Trust will be
converted into 1.65 shares of Keystone, pursuant to a fixed exchange ratio.
Based on the $26.50 per share closing bid price of Keystone on December 19,
1996, the value per share of Financial Trust approximates $43.73 and aggregates
$371 million.
"Financial Trust is an outstanding banking organization, with a proud
history of excellence in customer service and financial performance. The market
area of Financial Trust, which is strong and growing, is an excellent fit with
Keystone's existing franchise," Carl L. Campbell, president and chief executive
officer of Keystone said. "Our association with Financial Trust significantly
strengthens our market position in Central Pennsylvania and Maryland, and
affords us opportunities to achieve operating economies and enhanced revenue
growth arising from a wider distribution of our products and services. The
merger is expected to contribute to earnings per share growth in 1998," he
concluded.
"Keystone is a super community banking organization committed to service to
the customer and the community. This commitment has been an important ingredient
in their success and should facilitate the smooth integration of our two
institutions," Ray L. Wolfe, chairman and chief executive officer of Financial
Trust commented. "Our complementary cultures and solid financial records,
combined with the strength of Keystone's expanded product line, cause us to be
excited about our future prospects," he concluded.
The agreement is subject to approval by regulatory agencies and
shareholders of both Financial Trust and Keystone Financial. Completion of the
merger is expected during the first half of 1997. At that time, Mr. Wolfe will
serve as chairman of the board of Keystone, and he and two other Financial Trust
directors will join the Keystone Board of Directors. Concurrent with closing,
Keystone expects to record a pre-tax charge of approximately $10 million to
cover merger-related expenses.
Keystone Financial has five member banks--American Trust Bank, N.A.,
Cumberland, MD; Frankford Bank, N.A., Horsham, PA; Mid-State Bank, Altoona, PA;
Northern Central
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Bank, Williamsport, PA; and Pennsylvania National Bank, Pottsville, PA -- which
together operate 147 offices in Pennsylvania, Maryland and West Virginia.
Keystone also operates several non-banking companies providing specialized
services including Keystone Financial Mortgage Company, Lancaster, PA;
Martindale Andres & Co., (asset management firm), West Conshohocken, PA; Keysone
Dealer Finance Center, Williamsport, PA, and KeyCall Phone Banking Center,
Cumberland, MD.
Upon completion of the acquisition of Financial Trust and the previously
announced acquisition of First Financial Corporation of Western Maryland, a
thrift holding company headquartered in Cumberland, MD with approximately $345
million in assets, the assets of Keystone will increase 30% to approximately
$6.7 billion and Keystone will operate over 200 offices in Pennsylvania,
Maryland and West Virginia.
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Exhibit 1
Keystone Financial, Inc.
Acquisition of Financial Trust
Announcement Date: December 20, 1996
Agreement Terms: Keystone will issue Common Stock to each shareholder
of FITC, at a fixed exchange ratio of 1.65 shares of
Keystone for each FITC share.
Accounting Method: Pooling of interests
Approximate Deal Value: $43.73/share (1); $371 million aggregate
Multiples: Price/Earnings (2) 18.5 x
Price/Book (3) 2.54 x
Price/Market 1.50 x
Financial Trust
Financial History
<TABLE>
<CAPTION>
($ in 000's) Nine Months
ended
9/30/96 1995 1994
------- ---- ----
<S> <C> <C> <C>
Assets $1,227,405 $1,138,437 $1,090,576
Loans 773,213 731,150 707,495
Allowance for Loan Losses 11,343 11,038 11,268
Deposits 975,905 931,720 898,859
Equity 146,424 141,072 125,869
Provision for Credit Losses 599 709 840
Net Income 15,102 18,135 16,429
ROAA 1.73% 1.64% 1.53%
ROAE 14.20% 13.81% 13.52%
Equity/Assets 11.93% 12.39% 11.54%
NIM 5.10% 5.06% 4.95%
Non-Interest Income/Revenues 13.9% 13.0% 12.8%
Non-Interest Expense/Revenues 52.1% 52.3% 53.9%
Non-Perfoming Assets (NPA) $1,592 $3,195 $3,456
NPA as % of Total Assets 0.13% 0.28% 0.32%
Allowance/Loans 1.47% 1.51% 1.60%
Shares Outstanding 8,495,595 8,541,987 8,542,331
</TABLE>
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(1) Keystone closing bid price as of December 19, 1996 was $26.50.
(2) EPS for nine months ended September 30, 1996 was $1.77 and was annualized.
(3) Book value at September 30, 1996 was $17.24.
