FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from ____________to ______________
Commission File Number 0-11460
KEYSTONE FINANCIAL, INC.
Pennsylvania 23-2289209
(State of Incorporation) (IRS Employer I.D. No.)
ONE KEYSTONE PLAZA
FRONT & MARKET STREETS
P.O. BOX 3660
HARRISBURG, PA 17105-3660
(Address of principal executive offices)
(717) 233-1555
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X or No_______
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock ($2 par value): 48,930,000 as of April 30, 2000.
<PAGE>
KEYSTONE FINANCIAL, INC.
INDEX PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Statements of Condition - March 31, 2000
and December 31, 1999 3
Consolidated Statements of Income - Three months
ended March 31, 2000 and 1999 4
Consolidated Statements of Cash Flows - Three months ended
March 31, 2000 and 1999 5
Notes to Consolidated Financial Statements 6
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
ITEM 3. Quantitative and Qualitative Disclosures about
Market Risk 12
PART II. OTHER INFORMATION
Items 1,2,3, 4 and 5 have been omitted since they are not applicable.
ITEM 6. Exhibits and Reports on Form 8-K 12
(a) Exhibits
(b) Reports on Form 8-K
Signatures 13
<PAGE>
14
PART I. ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF CONDITION (in thousands, except share data)
- --------------------------------------------------------------------------------
March 31, December 31,
2000 1999
ASSETS
- --------------------------------------------------------------------------------
Cash and due from banks $207,764 $334,273
Federal funds sold 170,000 -
Interest bearing deposits with banks 2,118 877
Investment securities available
for sale 1,078,117 1,073,338
Investment securities held to
maturity (fair values:
2000-$568,165; 1999-$575,368) 580,853 588,201
Loans held for resale 119,542 110,203
Loans and leases 4,532,893 4,459,546
Allowance for credit losses (60,614) (59,975)
- --------------------------------------------------------------------------------
Net Loans 4,472,279 4,399,571
Premises and equipment 117,960 118,762
Other assets 263,713 262,283
- --------------------------------------------------------------------------------
TOTAL ASSETS $7,012,346 $6,887,508
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Noninterest-bearing deposits $711,793 $652,613
Interest-bearing deposits 4,339,856 4,307,721
- --------------------------------------------------------------------------------
Total Deposits 5,051,649 4,960,334
Federal funds purchased and security
repurchase agreements 289,410 316,130
Other short-term borrowings 100,000 50,000
- --------------------------------------------------------------------------------
Total Short-Term Borrowings 389,410 366,130
FHLB borrowings 749,637 728,776
Long-term debt 130,018 129,920
Other liabilities 135,281 152,323
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 6,455,995 6,337,483
- --------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
- --------------------------------------------------------------------------------
Preferred stock: $1.00 par value, authorized
8,000,000 shares; none issued or outstanding --- ---
Common stock: $2.00 par value,
authorized 100,000,000; issued
48,843,604 - 2000 and 48,731,057 - 1999 97,687 97,462
Surplus 169,788 167,939
Retained earnings 306,781 301,118
Deferred KSOP benefit expense (182) (207)
Net unrealized securities losses, net of tax (17,723) (16,287)
- --------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 556,351 550,025
- --------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $7,012,346 $6,887,508
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the unaudited consolidated
financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data)
- --------------------------------------------------------------------------------
Three Months Ended
March 31,
2000 1999
INTEREST INCOME
- --------------------------------------------------------------------------------
Loans and fees on loans $ 94,468 $ 92,342
Investments - taxable 23,185 22,635
Investments - tax exempt 3,429 2,715
Federal funds sold & other 1,420 1,271
Loans held for resale 2,634 1,614
- --------------------------------------------------------------------------------
125,136 120,577
- --------------------------------------------------------------------------------
INTEREST EXPENSE
- --------------------------------------------------------------------------------
Deposits 46,265 43,989
Short-term borrowings 4,573 3,713
FHLB borrowings 10,575 5,907
Long-term debt 2,337 2,338
- --------------------------------------------------------------------------------
63,750 55,947
- --------------------------------------------------------------------------------
NET INTEREST INCOME 61,386 64,630
Provision for credit losses 3,788 2,663
- --------------------------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT LOSSES 57,598 61,967
- --------------------------------------------------------------------------------
NONINTEREST INCOME
- --------------------------------------------------------------------------------
Trust and investment advisory fees 7,108 6,674
Service charges on deposit accounts 4,833 4,337
Fee income 6,161 6,259
Mortgage banking income 1,480 3,582
Reinsurance income 937 847
Other income 3,116 3,957
Net gains - equity securities --- 428
Net gains (losses) - debt securities 85 (3)
- --------------------------------------------------------------------------------
23,720 26,081
NONINTEREST EXPENSE
- --------------------------------------------------------------------------------
Salaries 21,932 23,831
Employee benefits 4,155 5,623
Occupancy expense (net) 5,049 4,739
Furniture and equipment expense 5,831 5,370
Special charges --- 19,148
Other expense 17,236 18,123
- --------------------------------------------------------------------------------
54,203 76,834
- --------------------------------------------------------------------------------
Income before income taxes 27,115 11,214
Income tax expense 7,260 2,899
- --------------------------------------------------------------------------------
NET INCOME $19,855 $ 8,315
- --------------------------------------------------------------------------------
PER SHARE DATA
- --------------------------------------------------------------------------------
Net income:
Basic $0.41 $0.17
Diluted $0.41 $0.17
Dividends $0.29 $0.29
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the unaudited consolidated
financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
- --------------------------------------------------------------------------------
Three Months Ended
March 31,
2000 1999
- --------------------------------------------------------------------------------
OPERATING ACTIVITIES:
Net Income $19,855 $ 8,315
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for credit losses 3,788 2,663
Provision for depreciation & amortization 5,333 6,253
Deferred income taxes 7,261 (4,101)
Special charges accrual (1,167) 8,220
School district settlement (34,013) ---
Sale of loans held for resale 53,189 76,450
Origination of loans held for resale (62,316) (84,729)
Decrease in interest receivable 3,179 8,031
Increase in interest payable 10,415 3,105
Other (5,279) 18,839
- --------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 245 43,046
- --------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Net (increase) decrease in interest-bearing
deposits with banks (1,241) 537
Available for sale securities:
Sales --- 7,633
Maturities 188,810 532,013
Purchases (195,050) (505,210)
Held to maturity securities:
Maturities 15,468 43,196
Purchases (8,039) (18,721)
Net (increase) decrease in loans (82,833) 42,174
Purchases of loans --- (3,368)
Proceeds from sales of loans 6,262 6,803
Purchases of premises and equipment (3,517) (3,937)
Other 23 (496)
- --------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (80,117) 100,624
- --------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Net increase (decrease) in deposits 91,315 (121,897)
Net increase in short-term borrowings 23,280 62,761
Proceeds from FHLB borrowings 65,000 ---
Repayments of FHLB borrowings (44,139) (10,792)
Repayment of long-term debt (27) (143)
Acquisition of treasury stock --- (72,607)
Cash dividends (14,192) (14,134)
Other 2,126 4,927
- --------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 123,363 (151,885)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 43,491 (8,215)
Cash and cash equivalents at beginning of period 334,273 332,322
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $377,764 $324,107
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the unaudited consolidated
financial statements.
Notes To Consolidated Financial Statements
BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
for interim financial information and instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, these statements do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States. However, in the opinion of management, all adjustments
necessary for a fair presentation have been included and such adjustments were
of a normal recurring nature.
Operating results for the three-month period ended March 31, 2000 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 2000.
For further information, refer to the audited consolidated financial statements,
footnotes thereto, and the Financial Review for the year ended December 31,
1999, as contained in the annual report to shareholders.
COMPREHENSIVE INCOME
Sources of comprehensive income not included in net income are limited to
unrealized gains and losses on certain investments in debt and equity
securities. The disclosure of comprehensive income is as follows (in thousands):
Three Months Ended March 31,
2000 1999
- ------------------------------------------- ----------------- ------------------
Before Net of Before Net of
Tax Tax Tax Tax
------- --------- -------- ---------
Net Income $19,855 $8,315
Unrealized securities gains (losses)
arising during the period (2,124) (1,381) (6,984) (4,540)
Less: Reclassification adjustment for
securities gains included in net
income 85 55 425 276
- ------------------------------------------- ------- --------- -------- ---------
(2,209) (1,436) (7,409) (4,816)
- ------------------------------------------- ------- --------- -------- ---------
Comprehensive Income $18,419 $3,499
=========================================== ======= ========= ======== =========
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OVERVIEW
Keystone Financial, Inc. (Keystone) is the fourth largest financial institution
headquartered in Pennsylvania. Keystone offers a wide-range of financial
products and services through its bank and specialized nonbank subsidiaries
located in Pennsylvania, Maryland, West Virginia and Delaware.
The purpose of this review is to provide additional information necessary to
fully understand the consolidated financial condition and results of operations
of Keystone. Throughout this review, net interest income and the yield on
earning assets are stated on a fully taxable-equivalent basis. Balances
represent average daily balances, unless otherwise indicated. In addition,
income statement comparisons are based on results for the first quarter of 2000
compared to the same period of 1999 unless otherwise indicated.
FORWARD LOOKING STATEMENTS
From time to time, Keystone has and will continue to make statements which may
include "forward-looking" information. Keystone cautions that "forward-looking"
information disseminated through financial presentations should not be construed
as guarantees of future performance. Furthermore, actual results may differ from
expectations contained in such "forward-looking" information as a result of
factors which are not predictable. Financial institution performance can be
affected by any number of factors, many of which are outside of management's
direct control. Examples include, but are not limited to, the effect of
prevailing economic conditions; the overall direction of government policies;
unforeseen changes in the general interest rate environment; the actions and
policy directives of the Federal Reserve Board; competitive factors in the
marketplace; and business risks associated with the management of the credit
extension function and fiduciary activities. Each of these factors could affect
estimates, assumptions, uncertainties, and risks considered in the development
of "forward-looking" information, and could cause actual results to differ
materially from management's expectations regarding future performance.
SUMMARY OF FINANCIAL RESULTS
Keystone recognized net income of $19.9 million or $0.41 per share for the first
quarter of 2000, roughly equal to the $0.42 per diluted share recognized in the
first quarter of 1999, before special charges. First quarter 1999 amounts
including special charges resulted in reported earnings per share of $0.17. The
earnings for the first quarter of 2000 resulted in a return on average assets of
1.16% and return on average equity of 14.18%.
Keystone's performance, like that of many other regional banks, was influenced
by increasing interest rates, which resulted in a tightening margin and a
decline in the level of mortgage banking revenue.
Net interest income declined 5% from the first quarter of 1999 as the net
interest margin dropped from 4.22% to 3.99%. Due to a sharp increase in interest
rates, Keystone's funding costs increased at a pace in excess of the rate of
growth in earning asset yields. Despite the effect of increasing interest rates,
Keystone experienced loan growth in the quarter, following several periods of
declining balances.
The provision for credit losses increased 42% and reflected the influence of
higher loan growth and its impact on the level of the allowance. Net charge-off
levels for the first quarter of 2000 were 0.28% of average loans, consistent
with the same quarter of 1999. Asset quality remained constant and reflected a
decline in the level of risk elements expressed as a percentage of loans from
1.35% at March 31, 1999 to 1.30% at March 31, 2000.
While rising interest rates negatively impacted mortgage banking income, other
categories of noninterest revenue demonstrated growth. Improvement occurred in
trust and investment management fees, service charges on deposits and electronic
banking revenue.
Keystone's 1999 restructuring was successful in reducing core noninterest
expense levels 6% from the first quarter of 1999. The employee base was reduced
11% due to efficiencies gained from unification of the separate bank charters.
Keystone will realize a full year's benefit from reduced operating expenses
during 2000.
<PAGE>
AVERAGE STATEMENT OF CONDITION
The average balance sheets for the three months ended March 31, 2000 and 1999
were as follows (in thousands):
- --------------------------------------------------------------------------------
Change
2000 1999 Volume %
- --------------------------------------------------------------------------------
Cash and due from banks $187,187 $182,718 $4,469 2%
Federal funds sold and other 99,217 103,007 (3,790) (4)
Investments 1,686,022 1,749,994 (63,972) (4)
Loans held for resale 119,744 81,314 38,430 47
Loans 4,490,075 4,444,509 45,566 1
Allowance for credit losses (61,051) (60,978) (73) ---
- --------------------------------------------------------------------------------
Net loans 4,429,024 4,383,531 45,493 1
Intangible assets 53,470 59,853 (6,383) (11)
Other assets 320,082 226,585 93,497 41
- --------------------------------------------------------------------------------
TOTAL ASSETS $6,894,746 $6,787,002 $107,744 2%
- --------------------------------------------------------------------------------
Noninterest-bearing deposits $657,453 $661,527 $ (4,074) (1)
Interest-bearing deposits 4,338,246 4,468,226 (129,980) (3)
Short-term borrowings 343,413 353,721 (10,308) (3)
FHLB borrowings 725,546 421,325 304,221 72
Other long-term debt 129,914 130,190 (276) ---
Other liabilities 137,151 138,410 (1,259) (1)
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 6,331,723 6,173,399 158,324 3
- --------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY 563,023 613,603 (50,580) (8)
- --------------------------------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $6,894,746 $6,787,002 $107,744 2%
- --------------------------------------------------------------------------------
Loan growth totaling $160 million or 4% occurred throughout the commercial and
consumer categories during the quarter. Such growth was offset by declines
attributable to the run-off of indirect automobile loans and leases to result in
a net increase of $46 million. Increases in loans held for resale are
attributable to the timing of residential mortgage sales.
The increase in other assets is partially attributable to investment in
bank-owned life insurance. The decline in shareholders' equity is attributable
to share repurchase activity that took place in the first half of 1999.
<PAGE>
NET INTEREST INCOME
The following table summarizes, on a fully taxable equivalent basis, changes in
net interest income and net interest margin for the three months ended March 31,
2000 and 1999 (in thousands):
- --------------------------------------------------------------------------------
Increase/
2000 1999 (Decrease)
Yield/ Yield/ Yield/
Amount Rate Amount Rate Amount Rate
- --------------------------------------------------------------------------------
Interest income $127,344 8.00% $122,647 7.77% $4,697 0.23
Interest expense 63,750 4.63 55,947 4.22 7,803 0.41
- --------------------------------------------------------------------------------
Net interest income $ 63,594 $ 66,700 $(3,106)
Interest spread 3.37% 3.55% (0.18)
Impact of noninterest
funds 0.62 0.67 (0.05)
-------------------------------------------------------------------------------
Net interest margin 3.99% 4.22% (0.23)
-------------------------------------------------------------------------------
Net interest income declined $3.1 million or 5% in the first quarter of 2000
compared with the same period in 1999. Due to the liability-sensitive position
of Keystone's balance sheet, the overall cost of funds was impacted by the
increasing interest rate environment to a more significant extent than loan
yields. As a result, the net interest margin decreased 23 basis points.
Interest income increased $4.7 million or 4% in the first quarter. The
improvement was attributable to an increase of 23 basis points in the total
yield on earning assets and a slight increase in the volume of earning assets.
Interest expense increased $7.8 million or 14% for the first quarter, as the
total cost of funds increased 41 basis points. In addition to the impact of
deposit repricing associated with the higher interest rate environment,
Keystone's cost of funds has been impacted by deposit runoff and greater
reliance on higher cost FHLB borrowings.
PROVISION FOR CREDIT LOSSES
The provision for credit losses reached $3.8 million for 2000, compared with
$2.7 million for 1999. The increased expense was responsive to loan growth
occurring during the quarter. The allowance for loan losses expressed as a
percentage of total loans at March 31, 2000 was comparable to the same period of
1999 (1.34% versus 1.36%). Refer to the asset quality section of this report for
additional information related to the allowance for credit losses.
NONINTEREST INCOME
Excluding securities gains from both periods, total noninterest sources of
revenue decreased $2 million or 8% in 2000. While Keystone experienced nearly 7%
growth in trust and investment advisory fees and 11% growth in service charges
on deposits, mortgage originations and the associated mortgage banking revenue
were adversely impacted by the higher interest rate environment. While mortgage
originations remained strong in total, originations to date in 2000 have
primarily been variable rate mortgages, which Keystone is holding in its loan
portfolio. In early 1999, consumer preferences for fixed-rate products generated
higher levels of mortgage banking income as such credits were sold in the
secondary market. As a consequence of the decline in loans sold, mortgage
banking revenue declined $2.1 million or 59%. Other income in 1999 included a
gain on the sale of a branch which did not recur for 2000, contributing to a $.8
million decline.
NONINTEREST EXPENSE
Excluding special charges Keystone incurred in 1999 related to its internal
restructuring, total noninterest expenses declined 6%. The most significant
improvements occurred in salaries and benefits as a result of efficiencies
gained through the restructuring which enabled Keystone to reduce its level of
full-time equivalent employees from 2,965 at December 31, 1998 to 2,509 at March
31, 2000. Other expense demonstrated a decline of $.9 million or 5% as increased
expenses associated with revenue improvement initiatives such as marketing and
professional consulting were more than offset by reduced processing, telephone
and tax expenses, attributable in part to the restructuring.
Both occupancy and furniture and equipment expense demonstrated slight increases
due to technological improvements.
INCOME TAXES
Income tax expense for 2000 was $7.3 million, resulting in an effective tax rate
of 27%, comparable to Keystone's effective tax rate of 26% for the first quarter
of 1999.
ASSET QUALITY
Keystone's allowance for credit losses reached $60.6 million or 1.34% of loans
at March 31, 2000, comparable to the ratio at the end of 1999. Annualized net
charge-offs expressed as a percentage of average loans remained stable at .28%
for the first quarter of 1999 and 2000.
The following table provides a comparative summary of the activity in the
allowance for credit losses for the three-month periods ended March 31, 2000 and
1999(in thousands).
- -----------------------------------------------------
2000 1999
- -----------------------------------------------------
Allowance for Credit Losses:
Balance at beginning of period $59,975 $60,274
Loans charged-off:
Commercial (263) (773)
Real estate secured (827) (900)
Consumer (2,816) (1,888)
Lease financing (529) (146)
- -----------------------------------------------------
Total loans charged-off (4,435) (3,707)
- -----------------------------------------------------
Recoveries:
Commercial 54 112
Real estate secured 730 306
Consumer 463 171
Lease financing 39 38
- -----------------------------------------------------
Total recoveries 1,286 627
- ------------------------------------------------------
Net loans charged-off (3,149) (3,080)
Provision for credit losses 3,788 2,663
- ------------------------------------------------------
Balance at end of period $60,614 $59,857
- ------------------------------------------------------
<PAGE>
The following table has been provided to compare nonperforming assets and total
risk elements at March 31, 2000 to the balances at the end of 1999, in both
absolute dollars and as a percentage of loans. This presentation is supplemented
by a comparison of various coverage ratios.
March 31, December 31,
(dollars in thousands) 2000 1999
- --------------------------------------------------------------------------------
Nonaccrual loans $35,055 $27,183
Restructurings 833 841
Other real estate 3,203 3,170
- --------------------------------------------------------------------------------
Nonperforming assets 39,091 31,194
Loans 90 days or more past due 20,031 22,508
- --------------------------------------------------------------------------------
Total risk elements $59,122 $53,702
- --------------------------------------------------------------------------------
Ratio to period-end loans:*
Nonperforming assets .86% .70%
90-days past due .44 .50
- --------------------------------------------------------------------------------
Total risk elements 1.30% 1.20%
- --------------------------------------------------------------------------------
Coverage Ratios:
Ending allowance to nonperforming loans 169% 214%
Ending allowance to risk elements** 108% 119%
Ending allowance to annualized
net charge-offs 4.8X 2.5X
- --------------------------------------------------------------------------------
* The denominator consists of period-end loans and ORE. **Excludes ORE.
During the first quarter, a few commercial loans migrated into nonaccrual status
from the less-severe delinquent categories, causing the increase in risk
elements. Management has identified no systemic credit quality issues associated
with the commercial loan portfolio.
Management's determination of the adequacy of the allowance is based on periodic
evaluations of the loan portfolio and other relevant factors. This evaluation is
inherently subjective as it requires material estimates, including, but not
limited to, the amounts and timing of expected future cash flows or the fair
value of collateral on impaired loans; estimated losses on installment and
residential mortgage loans; and general amounts for historical loss experience,
economic conditions, known deterioration in certain classes of loans or
collateral, trends in delinquencies, uncertainties in estimating losses, and
inherent risks in the various portions of the loan portfolio, all of which may
be susceptible to significant change.
In determining the adequacy of the allowance for loan losses, management also
makes allocations to specific problem commercial loans or pools of loans with
consideration given to the above factors. While allocations are made to specific
loans and pools of loans, the allowance is available for all loan losses. Based
on its evaluation of loan quality, management believes that the allowance for
credit losses at March 31, 2000 is adequate to absorb potential losses within
the loan portfolio.
CAPITAL MANAGEMENT
Keystone's regulatory capital measures, which include the leverage ratio, "Tier
1" capital, and "Total" capital ratios, continued to be well in excess of both
regulatory minimums and the thresholds established for "well capitalized"
institutions. The following comparative presentation of these ratios and
associated regulatory standards is provided:
Regulatory Standards
---------------------------
March 31, December 31, Well Minimum
2000 1999 Capitalized Requirement
- ---------------------------------------------------------------------------
Leverage ratio 7.93% 7.48% 5.00% 4.00%
Tier 1 10.51% 10.54% 6.00% 4.00%
Total capital ratio 11.73% 11.78% 10.00% 8.00%
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
At March 31, 2000, there have been no material changes to the information on
this topic presented in the December 31, 1999 Annual Report.
PART II
ITEM 6(a) Exhibits
Exhibit # Description
---------- -------------
10 Executive Incentive Compensation Plan
11 Statement Re Computation of Per Share Earnings
12 Statement Re Computation of Ratios
27 Financial Data Schedule
ITEM 6(b) Reports on Form 8-K
During the quarter ended March 31, 2000, the registrant filed the following
reports on Form 8-K:
Date of Report Item Description
- --------------- ----- ---------------------------------------
January 18, 2000 5 Earnings release for the fourth quarter
March 23, 2000 5 Press release announcing dividend declaration
<PAGE>
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 thereunto duly authorized.
DATE: May 12, 2000
/s/ Carl L. Campbell
- ----------------------------
Carl L. Campbell
President & Chief
Executive Officer
DATE: May 12, 2000
/s/ Donald F. Holt
- ----------------------------
Donald F. Holt
Executive Vice President &
Chief Financial Officer
<PAGE>
KEYSTONE FINANCIAL, INC.
EXECUTIVE INCENTIVE COMPENSATION PLAN
EFFECTIVE JANUARY 1, 2000
<PAGE>
ii
KEYSTONE FINANCIAL, INC.
EXECUTIVE INCENTIVE COMPENSATION PLAN
TABLE OF CONTENTS
Page
ARTICLE I OBJECTIVES 1
Section 1.01 Objectives 1
Section 1.02 Application of this Amended and Restated Plan 1
ARTICLE II DEFINITIONS 2
Section 2.01 Definitions 2
ARTICLE III ADMINISTRATION OF THE PLAN 4
Section 3.01 Committee and Agents 4
Section 3.02 Rules and Regulations 4
Section 3.03 Quorum 4
Section 3.04 Plan Interpretation 4
Section 3.05 Notice of Participation 4
Section 3.06 Costs 4
Section 3.07 Unsecured Creditor 4
Section 3.08 Authority of Board and Committee 4
Section 3.09 Amended, Modification or Termination 5
Section 3.10 Claim and Appeal Procedure 5
ARTICLE IV PARTICIPATION ELIGIBILITY 7
Section 4.01 Designation of Groups 7
Section 4.02 Participants 7
Section 4.03 New Participating Entities 7
Section 4.04 Termination of Employment 7
Section 4.05 Death, Retirement, Disability, Leave of Absence or Transfer 7
Section 4.06 Directors 7
ARTICLE V DETERMINATION OF INCENTIVE COMPENSATION AWARD
AND DISCRETIONARY BONUS 8
Section 5.01 Required Financial Performance Levels 8
Section 5.02 Performance Criteria 8
Section 5.03 Determination of Salary Percentage
and Allocation of Performance Criteria 8
Section 5.04 Determination of Incentive Compensation Award 9
Section 5.05 Determination of Discretionary Bonus 9
ARTICLE VI PAYMENT TO PARTICIPANTS AND DEFERRALS 10
Section 6.01 Timing of Payment 10
Section 6.02 Payment in Common Stock 10
Section 6.03 Deferral of Payment 11
Section 6.04 Beneficiary Designation 11
Section 6.05 Deferral Account 11
Section 6.06 Deemed Investment Elections 12
Section 6.07 Payment of Deferred Amounts 13
Section 6.08 Amount of Deferred Payment 13
Section 6.09 Automatic Cash Out 13
Section 6.10 Hardship Withdrawal 14
Section 6.11 Tax Withholding 14
ARTICLE VII MISCELLANEOUS PROVISIONS 15
Section 7.01 No Recourse 15
Section 7.02 Expense 15
Section 7.03 Merger or Consolidation 15
Section 7.04 Legal Costs 15
Section 7.05 Gender and Number 15
Section 7.06 Construction 15
Section 7.07 Non-alienation 15
Section 7.08 No Employment Rights 16
Section 7.09 Minor or Incompetent 16
Section 7.10 Illegal or Invalid Provision 16
APPENDIX A PARTICIPATING EMPLOYERS A-1
<PAGE>
16
ARTICLE I
OBJECTIVES
Section 1.01 - Objective. The Executive Incentive Compensation Plan
(Plan) is designed to achieve the following objectives:
(a) Increase the profitability and growth of Keystone Financial in a
manner which is consistent with the goals of Keystone, its
stockholders and its associates.
(b) Provide executive compensation which is competitive with other
bank holding companies and banks and provide the potential for
payment of meaningful cash awards.
(c) Attract and retain personnel of outstanding ability and encourage
excellence in the performance of individual responsibilities.
(d) Motivate and reward those members of management who contribute to
the success of Keystone.
(e) Allow the flexibility which permits revision and strengthening
from time to time to reflect changing organizational goals and
objectives.
The intent of this Plan, which is effective as of January 1, 2000, is
profit enhancement through quality performance.
Section 1.02 - Application of this Amended and Restated Plan. The
amended and restated Plan set forth herein is generally effective as of January
1, 2000. This Plan was formerly referred to as the Keystone Financial, Inc.
Management Incentive Compensation Plan and was restated as the Executive
Incentive Compensation Plan effective January 1, 2000. To the extent there is
any inconsistency between this amended and restated Plan and a Deferral Election
filed with the Committee, or the time of payment provisions of the prior Plan,
with respect to deferred Incentive Compensation Awards for Award Years which
began prior to January 1, 1994, the Deferral Election or prior Plan time of
payment provisions shall control.
<PAGE>
ARTICLE II
DEFINITIONS
Section 2.01 - Definitions. As used herein, the following words and
phrases shall have the meanings below, unless the context clearly indicates
otherwise:
(a) "Associate" shall mean any individual employed and classified by
Keystone or a Participating Entity as a common-law employee. The
term "Associate" shall not include any independent contractor
engaged by Keystone or a Participating Entity, even if
reclassified by Keystone, a Participating Entity or the Internal
Revenue Service (or other governmental authority or court of law)
as a common-law employee, for any period prior to the date the
reclassification is made regardless of the effective date of the
reclassification.
(b) "Award Year" shall mean a calendar year beginning on or after
January 1, 2000.
(c) "Beneficiary" shall mean the person or persons, natural or legal,
designated in writing by the Participant to receive any benefits
under the Plan which may become payable in the event of the
Participant's death or, if none is designated or surviving at the
time of the Participant's death, the Participant's surviving
spouse shall be the Beneficiary or, if there is no surviving
spouse, then the estate of the Participant shall be the
Beneficiary.
(d) "Board" shall mean the Board of Directors of Keystone.
(e) "Committee" shall mean the Human Resources Committee of the Board.
(f) "Deferral Account" shall mean the bookkeeping account established
on the books and records of Keystone or a Participating Entity, as
applicable, for a Participant to reflect the deferred Incentive
Compensation Award credited to the Participant for an Award Year
and adjustments thereto under the various provisions of the Plan.
The use of the term Deferral Account shall not mean, under any
circumstances, that a Participant or Beneficiary, or the
Participant's estate, shall have title to any specific assets of
Keystone or a Participating Entity.
(g) "Deferral Election" shall mean the written notice in the form
prescribed by the Committee or its delegate, filed with the
Committee, which indicates the portion of an Incentive
Compensation Award which the Participant elects to defer in
accordance with the terms of the Plan. No Deferral Election shall
be effective until it is received and acknowledged by the
Committee or its delegate.
(h) "Disability" shall mean the total and permanent disability of a
Participant, as defined by any Long-Term Disability Plan,
maintained by Keystone or a Participating Entity which is
applicable to the Participant, as in effect at the time of
determination.
(i) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
(j) "Fair Market Value" shall mean the fair market value of one share
of Keystone Financial, Inc. Common Stock as determined pursuant
to Section 6.02.
(k) "Financial Performance" shall mean the financial performance of
Keystone and/or a Participating Entity as determined from time to
time by the Committee or its delegate.
(l) "Group" shall mean the group to which a Participant is assigned in
accordance with Section 4.01.
(m) "Incentive Compensation Award" shall mean the dollar amount of
compensation awarded to the Participant for an Award Year as
determined under Article V of the Plan.
(n) "Keystone" shall mean Keystone Financial, Inc.
(o) "Participant" shall mean an Associate who has been designated by
the Committee to be a participant in the Plan in accordance with
Section 3.05, and only for as long as such designation remains in
effect.
<PAGE>
(p) "Participating Entity" shall mean Keystone and any other subsidiary
of Keystone, affiliate bank of Keystone, or other affiliated
entity of Keystone, which elects to participate in the Plan with
respect to its Associates and is approved by the Board or the
Committee to participate in the Plan, with such status as a
Participating Entity and participation in the Plan ceasing
automatically on the date the subsidiary of affiliate ceases to be
a subsidiary or affiliate of Keystone. The participating entities
from time to time are listed on Appendix A attached hereto and as
amended from time to time.
(q) "Plan" shall mean the Keystone Financial, Inc. Executive Incentive
Compensation Plan, amended and restated effective January 1, 2000,
as set forth herein, and as it may be amended from time to time
hereafter.
(r) "Salary" shall mean the Participant's base salary from Keystone or
a Participating Entity.
<PAGE>
ARTICLE III
ADMINISTRATION OF THE PLAN
Section 3.01 - Committee and Agents. Full power and authority to
administer the Plan shall be vested in the Committee. The Committee may appoint
a secretary who may, but need not be, a member of the Committee. The Committee
may also employ such other agents as it deems appropriate to assist it with the
administration of the Plan.
Section 3.02 - Rules and Regulations. The Committee shall, from time to
time, establish rules, forms and procedures of general application for the
administration of the Plan.
Section 3.03 - Quorum. A majority of the members of the Committee shall
constitute a quorum for purposes of transacting business relating to the Plan.
The acts of a majority of the members present (in person, or by conference
telephone ) at any meeting of the Committee at which there is a quorum shall be
valid acts of the Committee. Acts reduced to and approved unanimously in writing
by all the Committee members shall also be valid acts.
Section 3.04 - Plan Interpretation. The Committee shall have the full
power and authority to construe and interpret the Plan, and make all
determinations of Incentive Compensation Awards under the Plan, approve all
Associates who are to participate in the Plan, determine the Group to which a
Participant is assigned under Section 4.01, and determine all facts and other
issues relating to claims and appeals under the Plan.
Section 3.05 - Notice of Participation. The Committee shall send a
written notice, in the form prescribed by the Committee or its delegate,
informing the Associate that he or she has been selected to be a Participant in
the Plan and specifying the period for which such designation is to remain in
effect, and the group to which the Participant is assigned. No Associate shall
have the right to become a Participant and shall not be a Participant until the
date specified in the notice. Furthermore, being designated a Participant does
not guarantee an Associate that an Incentive Compensation Award will be earned
or that such Associate will be permitted to defer receipt of an Incentive
Compensation Award pursuant to Section 6.05.
Section 3.06 - Costs. All costs and expenses involved in the
administration of the Plan shall be borne by Keystone or the Participating
Entity.
Section 3.07 - Unsecured Creditor. The Plan constitutes a mere promise
by Keystone or the Participating Entity to make benefit payments in the future.
Keystone's and the Participating Entities' obligations under the Plan shall be
an unfunded and unsecured promise to pay. Keystone and the Participating
Entities shall not be obligated under any circumstances to fund their respective
financial obligations under the Plan. Any of them may, in its discretion, set
aside funds in a trust or other vehicle, subject to the claims of its creditors,
in order to assist it in meeting its obligations under the Plan, if such
arrangement will not cause the Plan to be considered a funded deferred
compensation plan under ERISA, or the Internal Revenue Code of 1986, as amended,
and provided, further, that any trust created by Keystone or a Participating
Entity and any assets held by such trust to assist Keystone or the Participating
Entity in meeting its obligations under the Plan will conform to the terms of
the model trust, as described in Rev. Proc. 92-64, 1992-2 C.B. 422 or any
successor. The Participants and their Beneficiaries shall have the status of,
and their rights to receive payments of earned Incentive Compensation Awards
shall be no greater than the rights of, general unsecured creditors of Keystone
or the applicable Participating Entity.
Section 3.08 - Authority of Board and Committee. Any determination or
action of the Committee or the Board and the records of the Committee shall be
final, conclusive and binding on all participants and Beneficiaries, and their
beneficiaries, heirs, personal representatives, executors and administrators,
and upon Keystone, the Participating Entities and all other persons having or
claiming to have any right or interest in or under the Plan. No Participant
shall participate in any decision of the Board or the Committee which directly
or indirectly affects the Participant's Deferral Election or Deferral Account.
Section 3.09 - Amended, Modification or Termination. The Board, in its
sole discretion, may amend, modify or terminate the Plan at any time and from
time to time, provided that no such amendment, modification, or termination
shall reduce the Participant's or Beneficiary's vested interest in the Deferral
Account as of the day before any such amendment, modification or termination,
unless consented to by the affected Participant or by the Beneficiary if the
Participant is deceased.
Section 3.10 - Claim and Appeal Procedure.
(a) In the event of a claim by a Participant or a Participant's
Beneficiary for or in respect of any benefit under the Plan or the
method of payment thereof, such Participants or Beneficiary shall
present the reason for his claim in writing to the Committee, in c/o
Keystone HR Compensation, Harrisburg, or such other person or entity
designated and communicated by the Committee. The Committee shall
within ninety (90) days after the receipt of such written claim, send
written notification to the Participant or Beneficiary as to its
disposition, unless special circumstances require an extension of time
for process- ing the claim. If such an extension of time for
processing is required, written notice of the extension shall be
furnished to the claimant prior to the termination of the initial
ninety (90) day period. In no event shall such extension exceed a
period of ninety (90) days from the end of such initial period. The
extension notice shall indicate the special circumstances requiring an
extension of time and the date by which the Committee expects to
render the final decision.
In the event the claim is wholly or partially denied, the written
notification shall state the specific reason or reasons for the
denial, include specific references to pertinent Plan provision on
which the denial is based, provide an explanation of any additional
material or information necessary for the Participant or Beneficiary
to perfect the claim and a statement of why such material or
information is necessary, and set forth the procedure by which the
Participant or Beneficiary may appeal the denial of the claim. If
the claim has not been granted and notice is not furnished within the
time period specified in the preceding paragraph, the claim shall be
deemed denied for the purpose of proceeding to appeal in accordance
with paragraph (b) below.
(b) In the event a Participant or Beneficiary wishes to appeal the denial
of his claim, he may request a review of such denial by making written
application to the Committee, in c/o Keystone HR Compensation,
Harrisburg, or such other person or entity designated and communicated
by the Committee, within sixty (60) days after receipt of the written
notice of denial (or the date on which such claim is deemed denied if
written notice is not received within the applicable time period
specified in paragraph (a) above). Such Participant or Beneficiary (or
his duly authorized representative) may, upon written request to the
Committee, review documents which are pertinent to such claim, and
submit in writing issues and comments in support of his position.
Within sixty (60) days after receipt of the written appeal (unless an
extension of time is necessary due to special circumstances or is
agreed to by the parties, but in no event more than one hundred and
twenty (120) days after such receipt), the Committee shall notify the
Participant or Beneficiary of its final decision. Such final decision
shall be in writing and shall include specific reasons for the
decision, written in a manner calculated to be understood by the
claimant, and specific references to the pertinent Plan provisions on
which the decision is based. If an extension of time for review is
required because of special circumstances, written notice of the
extension shall be furnished to the claimant prior to the commencement
of the extension. If the claim has not been granted and written notice
is not provided within the time period specified above, the appeal
shall be deemed denied.
(c) If a Participant or Beneficiary does not follow the procedures set
forth in paragraphs (a) and (b) above, he shall be deemed to have
waived his right to appeal benefit determinations under the Plan. In
addition, the decisions, actions and records of the Committee shall be
conclusive and binding upon Keystone, the Participating Entities and
all persons having or claiming to have any right or interest in or
under the Plan.
<PAGE>
ARTICLE IV
PARTICIPANT ELIGIBILITY
Section 4.01 - Designation of Groups. An Associate who is designated by
the Committee as a Participant for an Award Year shall be a member of a Group,
as determined from time to time by the Committee or its delegate. With respect
to a Participant who moves from one Group to another during an Award Year, such
Participant shall be treated as a member of each Group for the period of time in
that Group during the Award Year and the Participant's actual Salary for the
period in each Group shall be used to calculate the Incentive Compensation Award
applicable for the period of time in each Group.
Section 4.02 - Participants. Except as otherwise provided in this
Section 4.02, an Associate who is not a Participant as of the first day of an
Award Year shall not be a Participant for that Award Year. A new Associate of
Keystone or a Participating Entity hired during an Award Year, and an Associate
promoted to a Group during the Award Year who was not a Participant at the
beginning of the Award Year, may become a Participant during an Award Year and
participate in the Plan for such Award Year on a pro-rata basis.
Section 4.03 - New Participating Entities. Except as otherwise provided
in this Section 4.03, a Participating Entity may only join the Plan as of the
first day of an Award Year. An entity which becomes a subsidiary, affiliate
bank, or other affiliate of Keystone during an Award Year or for other reasons
is not participating in the Plan at the beginning of the Award Year may become a
Participating Entity during an Award Year and participate in the Plan for such
Award Year on a pro-rata basis, or other basis specified by the Committee, if
the Participating Entity joins the Plan effective not later than six (6) months
after the beginning of the Award Year. Notwithstanding the above, the Committee,
in its sole discretion, may provide in writing that a Participating Entity shall
join the Plan more than six (6) months after the beginning of an Award Year and
shall specify in such writing the basis on which the Participating Entity's
Participants shall be eligible for an Incentive Compensation Award for the first
Award Year.
Section 4.04 - Termination of Employment. A Participant who voluntarily
or involuntarily terminates employment with Keystone and all Participating
Entities prior to the end of an Award Year will forfeit any right to an
Incentive Compensation Award for the Award Year during which termination occurs,
except as otherwise provided in Section 4.05 below or as otherwise determined by
the Committee or its delegate.
Section 4.05 - Death, Retirement, Disability, Leave of Absence or
Transfer. If, during an Award Year, a Participant dies, retires, terminates
employment because of Disability, is granted a leave of absence, or is
transferred to a non-Participating Entity or out of all Groups, the Committee
may, at its discretion or under such uniform rules as it may prescribe, make a
partial or full Incentive Compensation Award to the Participant for the Award
Year.
Section 4.06 - Directors. A member of the Board who is not an Associate
in one of the Groups may not participate in the Plan.
<PAGE>
ARTICLE V
DETERMINATION OF INCENTIVE COMPENSATION AWARD AND DISCRETIONARY BONUS
Section 5.01 - Required Financial Performance Levels. In order for an
Incentive Compensation Award to be made for an Award Year, the following
performance levels must be met:
(a) The minimum level of Financial Performance established by the
Committee for an Award Year for Keystone or a Participating Entity
must be met before any Incentive Compensation Award based on
Keystone's or such Participating Entity's Financial Performance
can be made.
(b) Keystone's Financial Performance for the Award Year must be at
least two-thirds (or such other percentage established by the
Committee) of the minimum level of Financial Performance
established for Keystone under (a) above.
(c) The Committee shall establish from time to time and communicate
to Participants the minimum performance rating required and the
minimum, maximum and other intermediate percentages within the
performance criteria established under Section 5.02 for purposes
of calculating the Incentive Compensation Award for an Award
Year; provided, however, that, notwithstanding any other provision
of the Plan to the contrary, any Participant who receives less
than the minimum performance rating on any performance appraisal
report during an Award Year or has received a final written
warning shall be ineligible for an Incentive Compensation Award
for that Award Year.
Section 5.02 - Performance Criteria.
-----------------------------------
(a) The Incentive Compensation Award for a Participant may be
calculated in part on the basis of Keystone's Financial
Performance and in part on the basis of the Financial Performance
of the Participating Entity who employs the Participant.
(b) Effective beginning with the 1994 Award Year, in addition to the
Financial Performance criteria referred to in paragraph (a) above,
the Incentive Compensation Award for a Participant may be
calculated in part based on the Participant's individual
performance and/or performance of the Participant's job unit,
the levels of which will be measured by general criteria (e.g.,
revenues, margins, cost management, quality, customer service,
etc.) and in part may consist of a discretionary piece based on
the Participant's individual performance measured by personal
behavioral criteria (e.g. attitude, teamwork, etc.). Guidelines
for determining the requirements for achieving the various
performance levels will be developed by the Committee or its
delegate and communicated to Participants from time to time during
the Award Year.
(c) The Committee may, in its sole discretion, change or eliminate the
performance criteria referred to in paragraphs (a) or (b) above,
and may establish new or additional performance criteria, from
time to time, provided that the applicable performance criteria
are communicated to affected Participants.
Section 5.03 - Determination of Salary Percentage and Allocation of
Performance Criteria. The Committee shall determine and, itself or through its
delegate, communicate to Participants from time to time the percentage of a
Participant's Salary to be taken into account for purposes of determining a
Participant's Incentive Compensation Award for an Award Year. The Committee
shall also determine and, itself or through its delegate, communicate to
Participants the percentages of the performance criteria established under
Section 5.02 above which are applicable to Participants in each Group, and for
this purpose may subdivide each Group into Keystone Participants and
Participating Entity Participants, or such other subgroups as it may determine.
Section 5.04 - Determination of Incentive Compensation Award. The
amount of a Participant's Incentive Compensation Award for an Award Year, if
any, shall be determined by the Committee or its delegate in accordance with the
terms of the Plan and shall be communicated in writing to the Participants.
Section 5.05 - Determination of Discretionary Bonus. The Committee may
grant, from time to time in its sole discretion, a bonus to any Participant
based on any criteria it determines. Such bonus, if specifically designated by
the Committee as payable under this Plan, shall be subject to such provisions of
the Plan as it shall specify; provided, however, that such bonus may not be
subject to the provisions of Section 6.03 regarding elective deferrals or the
provisions of Section 6.07 regarding the Participant's election of the form of
payment.
<PAGE>
ARTICLE VI
PAYMENT TO PARTICIPANTS AND DEFERRALS
Section 6.01 - Timing of Payment. An Incentive Compensation Award for
an Award Year shall be paid to the Participant, or in the case of death to the
Participant's Beneficiary, on or before June 15th of the next year, unless the
Participant has made an election to defer receipt until a later date by filing a
Deferral Election with the Committee which is effective for the Award Year in
accordance with Section 6.04.
Section 6.02 - Payment in Common Stock. At the discretion of the
committee which administers the Keystone Financial, Inc. 1992 Stock Incentive
Plan ( the "SIP Committee") or any similar plan in effect from time to time (
the "SIP ") , Incentive Compensation Awards payable on or after January 1, 1994
under any Section of this Article VI may be paid in whole or in part in shares
of Keystone Financial, Inc. Common Stock, provided, however, that with respect
to Participants subject to Section 16 of the Securities Exchange Act of 1934,
such shares must be paid in a manner consistent with the provisions of and as
provided in the SIP. The number of shares of Common Stock to be paid would be
determined by dividing the cash payment which would otherwise be made by the
Fair Market Value on the date on which the payment is to be made. Any fractional
share shall be paid in cash. A Participant shall be considered, on the date as
of which Fair Market Value is determined for purposes of the stock distribution,
as a shareholder of Keystone with respect to the shares to be distributed.
For purposes of this Section 6.02, Fair Market Value is the mean
between the following prices, as applicable, for the date as of which Fair
Market Value is to be determined, as quoted in The Wall Street Journal (or in
such other reliable publication as the SIP Committee or its delegate, in its
discretion, may determine to rely upon):
(a) if the Common Stock is listed on the New York Stock Exchange, the
highest and lowest sales prices per share of the Common Stock as
quoted in the NYSE-Composite Transactions listing for such date,
(b) if the Common Stock is not listed on the New York Stock Exchange,
the highest and lowest sales prices per share of Common Stock for
such date on (or on any composite index including) the principal
United States securities exchange registered under the Securities
Exchange Act of 1934 on which the Common Stock is listed, or
(c) if the Common Stock is not listed on any exchange referred to in
paragraphs (a) or (b) above, the highest and lowest sales prices
per share of the Common Stock for such date on the National
Association of Securities Dealers Automated Quotations System or
any successor system then in use ("NASDAQ").
If there are no such sale price quotations for the date as of which
Fair Market Value is to be determined, but there are such sale price quotations
within a reasonable period both before and after such date, then Fair Market
Value shall be determined by taking a weighted average of the means between the
highest and lowest sales prices per share of the Common Stock as so quoted on
the nearest date before and the nearest date after the date as of which Fair
Market Value is to be determined. The average should be weighted inversely by
the respective numbers of trading days between the selling dates and the date as
of which Fair Market Value is to be determined. If there are no such sale price
quotations on or within a reasonable period both before and after the date as of
which Fair Market Value is to be determined, then Fair Market Value shall be the
mean between the bona fide bid and asked prices per share of Common Stock as so
quoted for such date on NASDAQ, or if none, the weighted average of the means
between such bona fide bid and asked prices on the nearest trading date before
and the nearest trading date after the date as of which Fair Market Value is to
be determined in the manner described above in this Section 6.02.
10
If the Fair Market Value of the Common Stock cannot be determined on
the basis previously set forth in this Section 6.02 on the date as of which Fair
Market Value is to be determined, the SIP Committee or its delegate shall in
good faith determine the Fair Market Value of the Common Stock on such date.
Fair Market Value shall be determined without regard to any restriction other
than a restriction which, by its terms, will never lapse.
Section 6.03 - Deferral of Payment. A Participant who is determined by
the Committee or its delegate to be in the group of Participants constituting a
select group of management or highly compensated Associates of Keystone and
Participating Entities for purposes of Title I of ERISA may elect to defer
receipt of all or part (but not less than $1,000) of his or her Incentive
Compensation Award for an Award Year, with payment of deferred amounts to be
made following termination of employment or death as provided in Section 6.07.
In order for a Deferral Election to be effective, a Participant must complete
and file the appropriate forms provided the Committee, in accordance with
procedures established by the Committee, prior to the beginning of the Award
Year or not more than thirty (30) days from the date of becoming a Participant
if after the beginning of an Award Year. A Deferral Election will be effective
with respect to Incentive Compensation Awards attributable to services performed
by the Participant after the election becomes effective and shall continue in
effect for future Award Years until rescinded by the Participant in writing on a
form provided by and delivered to the Committee prior to January 1 of the Award
Year for which the recission is to be effective. Notwithstanding the foregoing,
no election to defer an Incentive Compensation Award shall be effective for a
Participant who has made a hardship withdrawal from the Keystone Financial
401(k) Savings Plan ( the "401(k) Plan") (a) for a period of 12 months from the
date of such hardship withdrawal, if the hardship withdrawal has been made in
reliance on Treasury Regulation Section 1.401(k) - 1(d)(2)(iv)(B) and the
deferred Incentive Compensation Award would constitute an employee elective
contribution or employee contribution under an employer plan within the meaning
of Treasury Regulation Section 1.401(k)-1(d)(2)(iv)(B)(4) or any successor
regulation or (b) for such other period as required for suspension of deferrals
under this Plan pursuant to the provisions of the 401(k) Plan.
Section 6.04 - Beneficiary Designation. A Participant may file with the
Committee or its delegate a completed designation of Beneficiary Form as
prescribed by the Committee or its delegate. Such designation may be made,
revoked or changed by the Participant at any time before death or receipt of the
balance of the Deferral Account, but such designation of Beneficiary will not be
effective and supersede all prior designations until it is received and
acknowledged by the Committee or its delegate. If the Committee has any doubt as
to the proper Beneficiary to receive payments hereunder, the Committee shall
have the right to withhold such payments until the matter is finally
adjudicated. However, any payment made in good faith shall fully discharge the
Committee, Keystone, the Participating Entities and the Board from all further
obligations with respect to that payment.
Section 6.05 - Deferral Account. The Committee shall cause a Deferral
Account to be established and maintained only on the books of Keystone or the
Participating Entity for each Participant who elects to defer payment of all or
part of his or her Incentive Compensation Award pursuant to Section 6.03. Such
account shall be credited with the portion of each Incentive Compensation Award
deferred, adjusted quarterly as provided below, and shall be debited for any
payment to the Participant or the Participant's Beneficiary. A separate
subaccount within the Deferral Account shall be maintained for each Award Year
with respect to which a Participant's Deferral Election provides for a number of
installment payments which is different from the Participant's Deferral Election
applicable to other Award Years, and as otherwise determined by the Committee.
(a) The amount in the Participant's Deferral Account shall be adjusted
on a quarterly basis as of the last day of each calendar quarter
to reflect net earnings, gains or losses for the quarter. The
adjustment for earnings, gains or losses for each quarter shall be
equal to the amount determined under (1) or (2) below as follows:
1) Moody's Long-Term Corporate Bond Rates. The total amount
determined by multiplying (A) one hundred and five percent
(105%) of the average of the Moody's Long-Term Corporate
Bond Rates for the three (3) months in the preceding
calendar quarter (current calendar quarter, effective
January 1, 1994) divided by twelve, by (B) the balance in
the Participant's Deferral Account as of the end of each
month in the current quarter; or
2) Deemed Investment Options. The total amount determined by multiplying
the rate earned (positive or negative by each fund available as
described in (A) and (B) below (taking into account earnings
distributed and share appreciation (gains) or depreciation (losses) on
the value of shares of the fund) for each month of the current calendar
quarter by the portion of the balance in the Participant's Deferral
Account as of the end of each such month, respectively, which is deemed
to be invested in the fund pursuant to Section 6.06 below. Subject to
elimination, modification, or addition by the Committee, the following
shall be the funds available for the Participant's deemed investments
pursuant to Section 6.06 below.
A. Keystone Financial, Inc. 401(k) Savings Plan Funds-These funds are the
same funds as those available for investment from time to time under
the Keystone Financial, Inc. 401(k) Savings Plan other than any fund
which invests in Keystone Financial, Inc. stock.
B. Other Options - In addition to, or in lieu of, the investment options
described in A. above,other funds may be established from time to time
as determined by the Committee, and the Committee may provide any other
form of investment option it determines to be advisable; provided,
however, that such funds and options shall be made available and
communicated to all Participants on a uniform basis.
Section 6.06 - Deemed Investment Elections.
------------------------------------------
(a) The Participant shall designate, on a form provided by the
Committee, the percentage, in ten percent (10%) multiples (or such
other percentage as permitted from time to time by the Committee),
of the deferred Incentive Compensation Award that is to be deemed
invested in the available funds under Section 6.05(b), with the
balance of the deferred Incentive Compensation Award to receive
interest credit according to Section 6.05(a)(1) above. Said
designation shall be effective on a date specified by the
Committee or its delegate and remain in effect and apply to all
subsequent deferred Incentive Compensation Awards until changed as
provided below.
(b) A Participant may elect to change, on a calendar quarter basis,
the deemed investment election under paragraph (a) above with
respect to future deferred Incentive Compensation Awards among one
or more of the options then available by written notice to the
Committee, on a form provided by the Committee (or by voice or
other form of notice permitted by the Committee), at least 30 days
before the first day of the calendar quarter as of which the
change is to be effective, with such change to be effective for
amounts credited to the Deferral Account on or after the effective
date.
(c) A Participant may elect to reallocate the balance of the Deferral
Account, subject to any limitations imposed by the Committee or
its delegate, on a calendar quarter basis, in ten percent (10%)
multiples (or such other percentage as permitted from time to time
by the Committee) among the deemed investment options then
available. A Participant may make such an election by written
notice to the Committee, on a form provided by the Committee (or
by voice or other form of notice permitted by the Committee), at
least 30 days before the first day of the calendar quarter as of
which the transfer election is to be effective, with such transfer
to be based on the value of the Deferral Account on the last day
of the preceding quarter.
(d) The election of deemed investments among the options provided
above shall be the sole responsibility of each Participant.
Keystone, the Participating Entities, Associates, and Committee
members are not authorized to make any recommendation to any
Participant with respect to such election. Each Participant
assumes all risk connected with any adjustment to the value of his
Deferral Account. Neither the Committee, Keystone, nor the
Participating Entities in any way guarantees against loss or
depreciation.
(e) All payments from the Plan shall be made from the Participant's
Deferral Account (or from the applicable subaccount)
proportionately from each of the deemed investment funds in which
the Deferral Account (or applicable subaccount) is invested at the
time of the payment.
Section 6.07 - Payment of Deferred Amounts.
------------------------------------------
(a) Deferred Incentive Compensation Awards shall be paid in a lump sum
or annual installments, for a period not to exceed ten years, to
the Participant as indicated on the Participant's Deferral
Election form. The first payment to the Participant shall be made
on March 1 (or of March 1 is not a business day, on the first
proceeding business day) of the calendar year following the
calendar year during which the Participant's termination of employ
ment with Keystone and all Participating Entities occurs. For this
purpose, termination of employment includes voluntary or
involuntary termination of employment due to retirement or any
other reason other than death, including disability, and shall be
the date reflected on Keystone's or the Participating Entity's
records as the Participant's termination date.
(b) In the event of the Participant's death prior to commencement of
installment payments due under the Plan, the first installment
payment to the Beneficiary shall be made shall be made on March 1
(or of March 1 is not a business day, on the first proceeding
business day) of the calendar year following the calendar year
during which the Participant's death occurs and shall be paid in
the same form of payment as would have been applicable to the
Participant had the Participant survived.
(c) In the event of the Participant's death after commencement of
installment payments to the Participant but prior to full payment
of the installments due, the remaining installments due under the
Plan in respect of the Participant shall continue to the
Beneficiary on the same basis as they would have been paid to the
Participant. The first payment to the Beneficiary shall be made on
the later of the date payment would otherwise be made or the last
day of the second month following the month in which the
Participant's death occurs and shall include all payments due to
the Beneficiary following death and prior to the first payment.
(d) In the event the Participant's deferral account balance is less
than $5,000 on the payment commencement date the balance of the
account will be paid to the Participant or if applicable the
designated Beneficiary in a single lump sum on that date, or
within 30 days thereafter, in lieu of all payments which otherwise
would be made under the Plan with respect to the Participant.
Section 6.08 - Amount of Deferred Payment. If a lump sum payment is
elected for a deferred Incentive Compensation Award for an Award Year, such
payment shall be equal to the value of the Participant's Deferral Account as
adjusted on the last day of the calendar quarter prior to the date the lump sum
payment is to be made. If annual installments are elected as the payment method
for a deferred Incentive Compensation Award, the amount of the first installment
shall be calculated by dividing the lump sum value of the Participant's Deferral
Account, as determined above, by the number of installments to be paid. Each
later installment shall be determined on the same basis as the first installment
except that the value shall be divided by the number of installments remaining
to be paid. Amounts held pending distribution from the Plan shall continue to be
credited with earnings, gains or losses on a quarterly basis pursuant to Section
6.05.
Section 6.09 - Automatic Cash Out. The Plan is intended to constitute
an unfunded plan for tax purposes and for purposes of Title I of ERISA and is
intended to be maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees of
Keystone and Participating Entities and to qualify for the exclusions from Title
I of ERISA which are provided for in Sections 201(2), 301(a)(3) and 401(a) (1)
of ERISA. Notwithstanding any provision in this Plan to the contrary, in the
event that the Department of Labor, or any other regulatory or other body,
issues final regulations which provide, or a court issues a final determination,
that the Plan does not qualify for any of such exclusions under ERISA, the Board
may amend Section 6.03 of the Plan to change the deferral eligibility
provisions, and the Committee or the Board may revoke the designation of all or
some Employees as Participants for the current or future Award Years, and the
Committee or the Board may take such other action as it determines to be
appropriate in order for the Plan to qualify for such exclusions. In addition,
Participants who are precluded from participating in the deferral provision of
Section 6.03 because of this Section 6.09 shall have the balance in their
Deferral Account, determined as of the end of the preceding calendar quarter,
plus the amount of any Incentive Compensation Award deferred during the current
calendar quarter, distributed in a single lump sum as soon as practicable after
it is determined that their deferrals should cease, and such Participant's
Deferral Elections shall be void and of no further effect. Keystone, the
Participating Entities, the Committee and the Board shall have no liability to
any Participant who receives a distribution from the Plan or whose participation
is otherwise affected by reason of this Section 6.09.
Section 6.10 - Hardship Withdrawal. Notwithstanding the terms of any
Deferral Election made by a Participant hereunder, the Committee may permit
withdrawal of all or a portion of the amounts credited to a Participant's
Deferral Account, upon the request of the Participant or the Participant's
representative, or following the death of a Participant upon the request of a
Participant's Beneficiary or such Beneficiary's representative, if the Committee
determines that the Participant or Beneficiary, as the case may be, is
confronted with an unforeseeable emergency. For this purpose, an unforeseeable
emergency is an unanticipated emergency caused by an event that is beyond the
control of the Participant or Beneficiary and that would result in severe
financial hardship to the Participant or Beneficiary if an early hardship
withdrawal were not permitted. The Participant or Beneficiary shall provide to
the Committee such evidence as the Committee may require to demonstrate that
such emergency exists and financial hardship would occur if the withdrawal were
not permitted. Any withdrawal under this Section 6.10 shall be limited to the
amount necessary to meet the emergency. For purposes of the Plan, a hardship
shall be considered to constitute an immediate and unforeseen financial hardship
if the Participant has an unexpected need for cash to pay for expenses incurred
by him or a member of his immediate family (spouse and/or natural or adopted
children) such as those arising from illness, casualty loss, or death. Cash
needs arising from foreseeable events, such as the purchase or building of a
house or education expenses will not be considered to be the result of an
unforeseeable financial emergency. Payment shall be made, as soon as practicable
after the Committee approves the payment and determines the amount of the
payment, in a single lump sum from the portion of the Deferral Account
representing Award Years beginning on or after January 1,1994 with the longest
number of installment payments being first, and then from the portion of the
Deferral Account representing Award Years beginning prior to January 1, 1994
with the latest payment commencement dates first, and then from the portion of a
Deferral Account, in each case in accordance with Section 6.06 (e).
Section 6.11 - Tax Withholding. All Incentive Compensation Awards,
whether or not deferred under the Plan, shall be subject to Federal income,
FICA, and other tax withholding as required by applicable law. At the time that
tax withholding is required, if an amount is payable in cash under the Plan to
the Participant the amount of the required tax withholding shall be withheld
from and reduce such cash payment. If , however, an amount is not then payable
in cash or the cash payable under the Plan to the Participant is less than the
required withholding, the Participant shall pay, by check or money order payable
to Keystone or the Participant Entity employing the Participant, not later than
the date such withholding is required, the amount of the required tax
withholding or, at the sole election of Keystone or such Participating Entity,
the amount of required tax withholding shall be withheld from their compensation
or amounts payable to the Participant. The Participant shall hold Keystone or
such Participating Entity harmless in acting to satisfy the withholding
obligation in this manner.
<PAGE>
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01 - No Recourse. If the Financial Performance taken into
account for determination of an Incentive Compensation Award is found to be
incorrect by Keystone's independent certified public accountants at any time
during the following calendar year and was more than the correct amount, there
shall be no recourse by Keystone directly against any person or estate. However,
Keystone shall have the right to correct such error by reducing by the entire
excess amount any subsequent payments yet to be made under the Plan for all
Award Years. Any underpayments as a result of such error in the Financial
Performance taken into account shall be corrected within six (6) months after
the accountants report the error to the Committee provided that the Committee
confirms the error.
Section 7.02 - Expense. For purposes of determining Financial
Performance, Incentive Compensation Awards shall be treated as an expense for
book purposes in the fiscal year of Keystone or the Participating Entity, as
applicable, in which the Incentive Compensation Award is earned by a
Participant, as opposed to subsequent fiscal year(s) during which the Incentive
Compensation Award is paid, except as determined otherwise by the Committee or
its delegate.
Section 7.03 - Merger or Consolidation. All obligations for amounts
earned but not yet paid under this Plan shall survive any merger, consolidation
or sale of all or substantially all of Keystone's or a Participating Entity's
assets to any entity, and be the liability of the successor to the merger or
consolidation or the purchaser of assets, unless otherwise agreed to by the
parties thereto.
Section 7.04 - Legal Costs. A Participant will be reimbursed by
Keystone ( or its successor) or the Participating Entity (or its successor) for
any and all expenses incurred in successfully enforcing, by judgment of a court
of competent jurisdiction and after all appeals have been exhausted, the
Participant's right to receive payments under the terms of this Plan.
Section 7.05 - Gender and Number. The masculine pronoun whenever used
in the Plan shall include the feminine and vice versa. The singular shall
include the plural and the plural shall include the singular whenever used
herein unless the context requires otherwise.
Section 7.06 - Construction. The provisions of the Plan shall be
construed, administered and governed by the laws of the Commonwealth of
Pennsylvania, including its statute of limitations provisions, to the extent not
preempted by ERISA or other applicable Federal law. Titles of Articles and
Sections of the Plan are for convenience of reference only and are not to be
taken into account when construing and interpreting the provisions of the Plan.
Section 7.07 - Non-alienation. Except as may be required by law,
neither the Participant nor any Beneficiary shall have the right to , directly
or indirectly, alienate, assign, transfer, pledge, anticipate or encumber
(except by reason of death) any amount that is or may be payable hereunder,
including in respect of any liability of a Participant or Beneficiary for
alimony or other payments for the support of a spouse, former spouse, child or
other dependent, prior to actually being received by the Participant or
Beneficiary hereunder, nor shall the Participant's or Beneficiary's rights to
benefit payments under the Plan be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of the Participant or Beneficiary or to the debts,
contracts, liabilities, engagements, or torts of any Participant or Beneficiary,
or transfer by operation of law in the event of bankruptcy or insolvency of the
Participant or any Beneficiary, or any legal process. Notwithstanding the
foregoing, the Committee may in its sole discretion, recognize and establish
procedures for administering a domestic relations or other family court order
providing for the Plan to pay all or a portion of a Participant's Deferral
Account to or for the benefit of a Participant's spouse, former spouse or
children, provided that such order does not require the Plan to make payment
prior to the time payment would otherwise be made to the Participant pursuant to
the terms of the Plan as in effect from time to time and that it meets such
other requirements as the Committee shall specify.
Section 7.08 - No Employment Rights. Neither the adoption of the Plan
nor any provision of the Plan shall be construed as a contract of employment
between Keystone or a Participating Entity and any Associate or Participant, as
a guarantee or right of any Associate or Participant, or to future or continued
employment with Keystone or a Participating Entity, or as a limitation on the
right of Keystone or a Participating Entity to discharge any of its Associates
with or without cause. Specifically, designation as a Participant does not
create any rights, and no rights are created under the Plan, with respect to
continued or future employment or conditions of employment.
Section 7.09 - Minor or Incompetent. If the Committee determines that
any Participant or Beneficiary entitled to a payment under the Plan is a minor
or incompetent by reason of physical or mental disability, it may, in its sole
discretion, cause any payment thereafter becoming due to such person to be made
to any other person for his benefit, without responsibility to follow
application of amounts so paid. Payments made pursuant to this provision shall
completely discharge Keystone, the Participating Entities, the Plan, the
Committee and the Board.
Section 7.10 - Illegal or Invalid Provision. In case any provision of
the Plan shall be held illegal or invalid for any reason, such illegal or
invalid provision shall not affect the remaining parts of the Plan, but the Plan
shall be construed and enforced without regard to such illegal or invalid
provision.
<PAGE>
APPENDIX A
PARTICIPATING EMPLOYERS
For the purposes of Section 2.01, the term "Participating Entity" includes the
following as of January 1, 1993 and thereafter:
- -------------------------------- -----------------------------------------------
Name Effective Date
- -------------------------------- -----------------------------------------------
Keystone Financial, Inc. January 1, 1993
- -------------------------------- -----------------------------------------------
Frankford Bank, N.A. January 1, 1994 until 1997 when merged into
Keystone Bank, N.A.
- -------------------------------- -----------------------------------------------
Keystone Bank, N.A. January 1, 1997 until 1999 when merged into
Keystone Financial Bank, N.A.
- -------------------------------- -----------------------------------------------
Northern Central Bank January 1, 1993 until 1999 when merged into
Keystone Financial Bank, N.A.
- -------------------------------- -----------------------------------------------
Mid-State Bank and Trust Company January 1, 1993 until 1999 when merged into
Keystone Financial Bank, N.A.
- -------------------------------- -----------------------------------------------
Pennsylvania National Bank January 1, 1993 until 1999 when merged into
and Trust Company Keystone Financial Bank, N.A.
- -------------------------------- -----------------------------------------------
American Trust Bank, N.A. January 1, 1994 until 1999 when merged into
Keystone Financial Bank, N.A.
- -------------------------------- -----------------------------------------------
Financial Trust Corporation January 1, 1997 until 1999 when merged into
Keystone Financial Bank, N.A..
- -------------------------------- -----------------------------------------------
Keystone Financial January 1, 1996
Mortgage Corporation
- -------------------------------- -----------------------------------------------
Keystone National Bank January 1, 1997 until 1999 when its assets were
acquired by Keystone Financial Bank, N.A.
- -------------------------------- -----------------------------------------------
Keystone Financial Bank, N.A. January 1, 1999
- -------------------------------- -----------------------------------------------
This Appendix A may be revised and replaced from time to time without formal
amendment of the Plan, subject to signature by an elected officer of Keystone
Financial, Inc.
- ------------------------------ ----------------------
Signature Date Signed
Name and Officer Title of Signer
- --------------------------------
The following is a reconciliation of the numerators and denominators of the
basic and diluted earnings per share computations (in thousands, except per
share data):
- --------------------------------------------------------------------------------
Three Months Ended
March 31,
2000 1999
- --------------------------------- ------------------ ---------------------
Numerator - Net Income $19,855 $ 8,315
Denominators:
Basic shares outstanding 48,805 49,595
Dilutive option effect 65 519
- --------------------------------- ------------------ ---------------------
Dilutive shares outstanding 48,870 50,114
- --------------------------------- ------------------ ---------------------
EPS:
Basic $0.41 $0.17
Diluted $0.41 $0.17
- --------------------------------- ------------------ ---------------------
Ratio of Earnings to Fixed Charges:
- --------------------------------------------------------------------------------
Three Months Ended
(in thousands) March 31,
- --------------------------------------------------------------------------------
2000 1999
- --------------------------------------------------------------------------------
1. Income before taxes $27,115 $11,214
2. Fixed charges:
a. Interest expense $63,750 $55,947
b. Interest component of rent expense 771 670
- --------------------------------------------------------------------------------
c. Total fixed charges (line 2a.+ line 2b.) 64,521 56,617
d. Interest on deposits 46,265 43,989
- --------------------------------------------------------------------------------
e. Fixed charges excluding interest on
deposits (line 2c.-line 2d.) $18,256 $12,628
- --------------------------------------------------------------------------------
3. Income before taxes plus fixed charges:
a. Including interest on deposits $91,636 $67,831
(line 1.+ line 2c.)
b. Excluding interest on deposits 45,371 23,842
(line 1.+ line 2e.)
- --------------------------------------------------------------------------------
4. Ratio of earnings to fixed charges:
a. Including interest on deposits
(line 3a. divided by line 2c.) 1.42x 1.20x
b. Excluding interest on deposits
(line 3b. divided by line 2e.) 2.49x 1.89x
- --------------------------------------------------------------------------------
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the first
quarter 10-Q and is qualified in its entirety by reference to such 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 207,764
<INT-BEARING-DEPOSITS> 2,118
<FED-FUNDS-SOLD> 170,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,078,117
<INVESTMENTS-CARRYING> 580,853
<INVESTMENTS-MARKET> 568,165
<LOANS> 4,532,893
<ALLOWANCE> 60,614
<TOTAL-ASSETS> 7,012,346
<DEPOSITS> 5,051,649
<SHORT-TERM> 389,410
<LIABILITIES-OTHER> 135,281
<LONG-TERM> 879,655
0
0
<COMMON> 97,687
<OTHER-SE> 458,664
<TOTAL-LIABILITIES-AND-EQUITY> 7,012,346
<INTEREST-LOAN> 94,468
<INTEREST-INVEST> 26,614
<INTEREST-OTHER> 4,054
<INTEREST-TOTAL> 125,136
<INTEREST-DEPOSIT> 46,265
<INTEREST-EXPENSE> 63,750
<INTEREST-INCOME-NET> 61,386
<LOAN-LOSSES> 3,788
<SECURITIES-GAINS> 85
<EXPENSE-OTHER> 54,203
<INCOME-PRETAX> 27,115
<INCOME-PRE-EXTRAORDINARY> 19,855
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,855
<EPS-BASIC> .41
<EPS-DILUTED> .41
<YIELD-ACTUAL> 3.37
<LOANS-NON> 35,055
<LOANS-PAST> 20,031
<LOANS-TROUBLED> 833
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 59,975
<CHARGE-OFFS> 4,435
<RECOVERIES> 1,286
<ALLOWANCE-CLOSE> 60,614
<ALLOWANCE-DOMESTIC> 60,614
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
