Keystone Chiefs March to More Collegial Tune

When Carl L. Campbell coordinated the merger of two banks in 1986, he opted to give the emerging management hierarchy a unique twist. Instead of selecting a lead bank to head up the new Keystone Financial Corp., he decided on a merger of equals.

By giving the banks considerable leeway to set policies normally determined at the top, Keystone pushed one step further a pillar of super community success: the ability of local managers to customize products and services.

"Besides benefiting our customers, our management structure is an attractive feature to other banks that might want to join our network," said Mr. Campbell, president and chief executive officer at Keystone. "That increases shareholder value."

Projections on Target

Underscoring that point are performance figures by the Harrisburg, Pa.-based Keystone, the holding-company for Mid-State Bank, Altoona; Northern Central Bank, Williamsport; and Pennsylvania National Bank, Pottsville.

Mr. Campbell said analysts are on target with projections that the company will earn $2.35 a share this year, up 5.4% from the $2.23 chalked up a year ago. A third-quarter return-on-equity figure of 14.59% puts Keystone in the top 12% nationwide, he said.

Keystone, with assets of $2.77 billion, operates 93 offices in 20 Pennsylvania counties. But to joust more effectively with even smaller institutions in its submarkets, the company tailors its products and services for individual customers and demographic groups.

Package for Seniors

One example is Keystone Classic, a package of accounts and services targeted at senior citizens.

Under the program, Keystone offers a range of certificates of deposit and trust services. To boot, the company works with a subsidiary discount stockbroker, Keystone Brokerage.

"Seniors are savers and investors," Mr. Campbell said.

Ironically, Mr. Campbell noted, Keystone's superior performance might make it a tasty snack for a hungry competitor. But he says he'll meet that possibility head on.

"If we continue to build value in our organization, we'll be okay," he said. "We'll deal with any takeover from a position of strength."

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