Pennsylvania's Keystone Financial Inc. reported another down quarter but said that signs have emerged that its turnaround plan is working.

The Harrisburg-based company said it earned $24.2 million in the second quarter, compared with $25.3 million the year earlier. Keystone, which has $6.7 billion of assets, said it earned 50 cents per share, a penny less than the consensus estimate.

This was the second straight quarter Keystone undershot the analysts' consensus. In the first quarter, Keystone earned 42 cents per share, missing by 5 cents.

Keystone said the decline in net income was due to charges taken in connection with a continuing restructuring. Under pressure from an activist shareholder, Keystone has taken drastic measures in the past year to cut costs, including combining its seven charters into one.

The resulting bank has 175 branches in Pennsylvania, Maryland, and West Virginia.

There is some evidence that the cost-cutting is taking effect. Keystone's efficiency ratio improved to 56.55% in the quarter, from 57.57% a year earlier. And noninterest expense held steady, excluding a one-time restructuring charge.

"We are pleased with the progress we made this quarter," said Carl L. Campbell, chairman and chief executive. "We are beginning to realize the benefits of the reorganization."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.