For further information, contact:
Faye E. Feger
Senior Vice President &
Director of Corporate Finance
(717) 231-5705
Harrisburg, PA - July 18, 2000: Keystone Financial, Inc.
("Keystone")(NASDAQ:KSTN), today reported results for the quarter and six-months
ended June 30, 2000.
For the second quarter, Keystone reported net income of $20.2 million or
earnings per share of $0.41, compared with $24.6 million or $0.50 per share for
the prior year. Amounts for the six months ended June 30, 2000 were net income
of $40.0 million or $0.82 per share, compared with $45.7 million or $0.92 per
share for the same period last year. Amounts for 1999 exclude special charges
associated with internal restructuring which reduced earnings per share by $0.01
for the second quarter and by $0.26 for the six months ended June 30, 1999.
While earning asset levels increased 4.6% from the same quarter last year, the
current interest rate environment created pressure on the net interest margin,
resulting in a declined level of net interest income. Similarly, mortgage
banking revenue was constrained by reduced demand for fixed-rate mortgages
associated with higher interest rates. Credit quality remains strong and assets
totaled $7 billion at June 30.
As announced on May 17, Keystone intends to merge with M&T Bank Corporation of
Buffalo, New York, creating a banking franchise with combined assets of
approximately $30 billion and 450 branches located throughout New York,
Pennsylvania, Maryland and West Virginia.
Mr. Campbell noted that the merger, which is subject to the approval of
stockholders of both companies, as well as various regulatory agencies, is on
target to be completed in the fourth quarter of 2000. "Once completed," Mr.
Campbell said, "our combined organization, as one of the leading financial
institutions in the area, will be in a strong position to gain additional market
share."
Keystone Financial, Inc., the fourth largest financial institution headquartered
in Pennsylvania, is the holding company for Keystone Financial Bank, NA, which
has 175 branches throughout Pennsylvania, Maryland, and West Virginia and a
Mobile Bank which operates throughout the tri-state area. Keystone also operates
Martindale Andres & Co., an investment management services provider; Keystone
Financial Mortgage Co.; MMC&P, a retirement benefit services firm; Keystone
Brokerage, Inc., offering full service investment planning and discount
brokerage; and a 24-hours-a-day, seven days a week Telephone Banking Center. For
more information, Keystone can be reached on the Internet at www.keyfin.com.
<PAGE>
Financial Highlights
(dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Quarter Ended June 30, Year-to-Date
Earnings 2000 1999 (3) Change 2000 1999 (3) Change
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Interest Income (1) $66,006 $66,924 (1)% $129,600 $133,624 (3)%
Provision for Credit Losses 4,637 3,950 17 8,425 6,613 27
Noninterest Income 25,175 28,655 (12) 48,810 54,311 (10)
Net Securities Gains 119 20 495 204 445 (54)
Noninterest Expense 55,931 53,396 5 110,134 111,082 (1)
Net Income 20,194 24,627 (18) 40,049 45,738 (12)
Earnings Per Share:
Basic $0.41 $0.50 (18)% $0.82 $0.93 (12)%
Diluted 0.41 0.50 (18) 0.82 0.92 (11)
Dividends Per Share 0.29 0.29 - 0.58 0.58 -
Performance Indicators
--------------------------------------------------------------------------------------------
Return on Average Assets 1.16 % 1.48 % 1.16 % 1.37 %
Return on Average Equity 14.51 17.49 14.35 15.49
Net Interest Margin 4.07 4.31 4.03 4.26
Provision for Credit Losses/
Average Loans (2) 0.41 0.36 0.37 0.30
Noninterest Expense/Revenues 61.34 55.87 61.73 59.11
June 30,
At Period End 2000 1999 Change
-----------------------------------------------------------------------
Investments $1,666,136 $1,612,212 3 %
Loans 4,609,584 4,432,600 4
Total Assets 7,038,933 6,748,497 4
Deposits 5,039,143 5,026,958 -
Shareholders' Equity 566,312 576,151 (2)
Book Value per Share $11.54 $11.89
Equity to Assets Ratio 8.05 % 8.54 %
Risk Adjusted Capital/
Assets Ratio 11.82 12.63
Asset Quality
-----------------------------------------------------------------------
Nonperforming Assets to Loans 0.89 % 0.73 %
Loans 90 Days Past Due 0.45 0.56
-----------------------------------------------------------------------
Total Risk Elements to Loans 1.34 % 1.29 %
-----------------------------------------------------------------------
Allowance for Credit Losses
to Loans 1.34 % 1.35 %
Allowance to Nonperforming Loans 162 206
Net Charge-Offs to Average Loans (2) 0.32 0.35
-----------------------------------------------------------------------
(1) Fully taxable-equivalent
(2) Annualized
(3) Where applicable, 1999 amounts are reported exclusive of special charges
associated with the unification of Keystone's seven banks under a single
charter.
</TABLE>
