A super community bank that wasn't for sale has decided to sell out to a growing Pennsylvania bank that's trying to become a regional powerhouse.

Financial Trust Corp., Carlisle, Pa., has agreed to be acquired by Keystone Financial Inc., the state's fifth-largest bank holding company, in an all-stock deal worth about $371 million.

The announcement this month ended a relatively quiet time in central Pennsylvania's merger market. One of the few actions was Keystone Financial's Nov. 26 announcement that it had agreed to acquire $345 million-asset First Financial Corporation of Western Maryland, Cumberland.

James M. Schutz, a senior analyst at Chicago Corp. , said Financial Trust's stock price, which was about $29 per share before the announcement last week, was not artificially inflated by any takeover premium. Its stock was trading at $39.75 at midday on Friday.

"The entire central Pennsylvania market has been very quiet for the last year and a half," Mr. Schutz said. "I think as a result of that, premiums disappeared."

Under the agreement with Keystone Financial, $1.2 billion-asset Financial Trust would retain its four banks in Maryland and Pennsylvania. And Ray L. Wolfe, chairman and chief executive officer of Financial Trust, would take over as chairman of Keystone Financial, a spot never filled at the 11-year-old holding company.

Mr. Wolfe said Financial Trust hadn't been for sale. But after some discussions, Harrisburg-based Keystone Financial made an offer board members just couldn't refuse.

"If we were going to do something, we wanted to do something with an organization such as Keystone," he said. "It would be the least disruptive."

Analysts expressed mixed opinions and some surprise about the proposed transaction, which is expected to be completed in the first half of next year.

Mr. Schutz said Financial Trust is a good fit for Keystone Financial. The smaller company operates 48 branches in seven counties in Pennsylvania and Maryland.

"Financial Trust has long been a high-performance bank in central Pennsylvania," Mr. Schutz said. "It's really known for its dominant position, particularly in Cumberland County and Franklin County."

Chip Wittman, an analyst at Wheat First Butcher Singer in Richmond, Va., said the deal is a winning situation for Financial Trust shareholders, but less lucrative for Keystone Financial stockholders.

"It's the Keystone shareholders who are going to pay the price," Mr. Wittman said, referring to the expensive sale price of 19 times earnings. He said that Financial Trust is an extremely lean and profitable institution, so there might not be much opportunity for cost savings.

Keystone Financial expects to record a pretax charge of about $10 million to cover merger-related expenses.

The acquisition would create a $6.7 billion-asset institution that could become a prime takeover target or a profitable, aggressive regional bank.

It also would help Keystone Financial surpass its crosstown archrival, $5.6 billion-asset Dauphin Deposit Corp., in asset size. "It really creates a new banking powerhouse in Pennsylvania," Mr. Wittman said.

"It has accomplished for us a rather strategic objective," said Mark L. Pulaski, senior executive vice president at Keystone Financial: "to give us legitimacy of a banking practice in the Greater Harrisburg area and in Maryland."

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