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) November 26, 1996
KEYSTONE FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 0-11460 23-2289209
State or other jurisdiction (Commission File Number) (IRS Employer ID No.)
of incorporation)
One Keystone Plaza, P.O.Box 3660, Harrisburg, Pennsylvania 17105-3660
(Address of principal executive offices) (ZIP CODE)
Registrant's telephone number including area code: (717) 233-1555
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Item 5. Other Events
The following document is filed as an exhibit to this Form 8-K:
I. Press Release of Keystone Financial, Inc.
dated November 26, 1996.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Keystone Financial, Inc.
(Registrant)
Date: December 3, 1996 /s/ Donald F. Holt
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Donald F. Holt
Senior Vice President &
Controller
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release of Keystone Financial, Inc. dated
November 26, 1996.
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Press Release - for Immediate Relase For Further Information Contact:
November 26, 1996 Donald F. Holt
(717)231-5704
KEYSTONE FINANCIAL AGREES TO ACQUIRE
FIRST FINANCIAL CORPORATION OF WESTERN MARYLAND
HARRISBURG, PA, November 26 --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 First Financial Corporation of
Western Maryland, (NM:NASDAQ:FFWM), Cumberland, MD.
First Financial, a thrift holding company with one banking subsidiary,
First Federal Savings Bank of Western Maryland, has approximately $345 million
in assets and operates ten community offices in Allegany, Garrett and Washington
Counties, Maryland.
First Financial had operating net income of $1.2 million during the three
months ended September 30, 1996, which produced a return on assets of 1.47% and
a return on equity of 11.75%.
Under terms of the agreement, each shareholder of First Financial will
receive common stock, at a fixed exchange rate of 1.29 shares of Keystone for
each First Financial share, or an equivalent amount of cash. The stock issuance
will amount to 55% to 60% of the total consideration. Based on the $26.50 per
share closing bid price of Keystone on November 25, 1996, the value per share of
First Financial approximates $34.19, and aggregates $74 million. In connection
with the agreement, First Financial gave Keystone an option to purchase 19.9% of
its outstanding common stock under certain circumstances.
First Financial's banking operations will be combined with those of
American Trust Bank, N.A., the Keystone member bank currently providing
financial services to these markets.
"First Financial is a well-managed organization with a proud tradition of
providing quality service to its customers. We are pleased to be able to expand
our Maryland banking operations through the addition of First Financial," Carl
L. Campbell, President and Chief Executive Officer of Keystone commented. "The
merger with First Financial provides Keystone with valuable operating
efficiencies and strengthens our market position," he added.
--more--
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Patrick J. Coyne, Chairman of the Board, President and Chief Executive
Officer of First Financial commented, "We are pleased to have the opportunity to
join a quality organization such as Keystone. The combination will provide
numerous benefits to our customers, including an expanded array of new products
and services."
The agreement is subject to approval by regulatory agencies and
shareholders of First Financial. Completion of the acquisition is expected
during the first half of 1997. (First Financial was represented by Alex. Brown
in this transaction.)
Keystone Financial has five member banks -- American Trust Bank
N.A.,Cumberland, MD; Frankford Bank, Horsham, PA; Northern Central Bank,
Williamsport, PA; Mid-State Bank, Altoona, 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; and
Keystone Financial Dealer Center, Williamsport, PA. KeyCall Phone Banking Center
is also located in Cumberland, MD. This telephone banking center has recently
begun the first phase of its operations, outbound telemarketing, and is expected
to be fully operational during late 1997.
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Keystone Financial, Inc.
Acquisition Of First Financial Corporation Of Western Maryland
Announcement Date: November 26, 1996
Agreement Terms: Keystone will issue Common Stock to each
shareholder of FFWM, at a fixed exchange ratio of 1.29
shares of Keystone for each FFWM share, or an equivalent
amount of cash. The stock portion will amount to 55% to
60% of the total consideration.
Accounting Method: Purchase
Approximate Deal Value: $34.19/share(1); $74.0 million aggregate
Multiples: Price/Earnings(3) 15.26 x
Price/Book(2) 1.80 x
Price/Market 1.23 x
First Financial Corporation Of Western Maryland
Financial History
($ in 000's) QUARTER ENDED FISCAL YEAR ENDED JUNE 30,
- ------------ ------------- --------------------------
9/30/96 1996 1995 1994
------- ---- ---- ----
Assets $345,505 $321,994 $329,375 $345,646
Loans, net 270,365 243,113 223,066 219,504
Allowance for Loan Losses 7,855 7,795 8,590 4,561
Deposits 280,705 274,756 283,360 301,208
Equity 40,368 41,707 38,470 40,267
Provision for Credit Losses 75 600 5,985 780
Net Income 1,215(3) 3,600 (1,219) 4,059
ROAA 1.47%(3) 1.09% N/A 1.18%
ROAE 11.75%(3) 8.97% N/A 9.97%
Equity/Assets 11.69% 12.20% 11.66% 11.86%
NIM 4.48% 4.52% 4.11% 3.63%
Non-Performing Assets (NPA) $ 6,100 $ 6,420 $ 7,648 $ 6,700
NPA as % of Total Assets 1.77% 1.99% 2.32% 1.94%
Allowance/Loans 2.83% 3.11% 3.71% 2.04%
Shares Outstanding 2,124,336 2,176,739 2,130,212 2,105,650
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(1) Keystone closing bid price as of November 25, 1996 was $26.50.
(2) Book value at September 30, 1996, was $19.00.
(3) Exclusive of a $1.17 million, net of income tax benefit, non-recurring
SAIF assessment charge.
