Keystone Financial Inc. said Friday that it would lay off up to 250 of its 3,000 employees next year as part of a cost- cutting plan.

The $6.9 billion-asset banking company hopes to reduce overhead expenses by 10%, or about $20 million annually by yearend 1999.

Keystone intends to take an as-yet-undetermined charge against first- quarter earnings. The charge would pay for severance, computer systems, and expenses related to merging its seven bank charters into one.

The company, which operates primarily in central Pennsylvania and Maryland, now operates under seven bank names. When the banks are merged they would operate under the Keystone brand name.

Merging the computer system would also simplify year-2000 issues, the bank said.

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