Shareholders of Keystone Financial Inc. on Thursday rejected a proposal that would have forced management to sell the company.

Activist shareholder Seymour Holtzman introduced the proposal in April, saying that shares of the $7 billion-asset company were undervalued. That proposal was defeated by an undisclosed margin.

Carl L. Campbell, Keystone's chairman and chief executive officer, said he was "pleased with the continued support of our shareholders, and optimistic about the future of Keystone."

Keystone is in the middle of a cost-cutting plan that it expects will shave $20 million of expenses per year. The company is consolidating its seven banks under one charter.

"The corporate restructuring efforts are progressing well," Mr. Campbell said.

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