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 8, 1999
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 December 8, 1999.
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 8, 1999 Donald F. Holt
----------------------------------
Executive Vice President &
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release of Keystone Financial, Inc. dated
December 8, 1999.
<PAGE>
CONTACT:
Elizabeth Braungard
Phone: (717)231-5732
OR
Jacquelyn Basso
Phone: (717)231-5723
December 08, 1999
FOR IMMEDIATE RELEASE
Keystone Financial announces settlement in Devon litigation
HARRISBURG, PA--Keystone Financial, Inc., (NASDAQ:KSTN) today announced an
agreement in principle under which it will pay approximately $30 million to a
group of 43 school districts and local governments to settle a class-action suit
they filed against Mid-State Bank in Altoona, a Keystone subsidiary now part of
Keystone Financial Bank, N.A. The settlement is subject to the consent of
Keystone's insurance carrier, the parties signing a formal written agreement and
to the approval of Blair County Judge Hiram A.
Carpenter III.
The settlement does not resolve four other pending lawsuits filed by a total of
seven school districts that did not join in the class-action litigation. Active
discussions on this matter are continuing. Keystone has offered to settle with
these plaintiffs on the same basis as the class action settlement and has
reserved approximately $21 million for such claims.
The class-action plaintiffs filed the civil suit in 1997 in the Blair County
Court of Common Pleas to recover investment losses. They claimed that the bank
should have known that the school districts'investment advisor, Devon Capital
Management, had allegedly mishandled the investment of school district funds.
Mid-State Bank provided custodial services to Devon Capital Management. Devon's
principal, John Gardner Black, has been indicted, pleaded innocent and is
awaiting trial in federal court on 134 counts including alleged fraud.
Keystone Chairman and CEO Carl L. Campbell said that the bank was just as much a
victim as the school districts. "This is a unique situation involving a single
customer," Campbell said. "Mr. Black and his companies created a complex
situation. The bank and the school districts wound up pitted against each other
in sorting it out."
Keystone Financial--Devon
Page two
Campbell added, "We reached this decision because of the uncertainties of
litigation not to mention the time, cost and distraction associated with such
cases. We were concerned that this case could have taken our attention away from
serving our customers. We believe settling in this way is the most responsible
action for all parties involved--for the school districts and local governments,
our shareholders, our customers and our associates. This allows us to move
forward."
Campbell said the costs associated with resolving this litigation would not have
a detrimental effect on the company's financial stability. An undetermined
portion of the payment may be recovered under claims filed with Keystone's
insurance carrier.
Keystone Financial, Inc., with assets of approximately $7 billion, is the
fourth-largest financial institution headquartered in Pennsylvania. Its
subsidiary, Keystone Financial Bank, N.A., serves customers in Pennsylvania,
Maryland, and West Virginia.
