FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

 (X) Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
                                     Act
             of 1934 for the fiscal year ended December 31, 1998
                                      OR
   ( ) Transition report pursuant to Section 13 or 15(d) of the Securities
                                   Exchange
                    Act of 1934 for the transition period
                           from ________to_________
------------------------------------------------------------------------------
           Commission File Number 0-11460 KEYSTONE FINANCIAL, INC.
                           Pennsylvania 23-2289209
                (State of Incorporation) (IRS Employer ID No.)
                                P.O. Box 3660
                              One Keystone Plaza
                           Front and Market Streets
                          Harrisburg, PA 17105-3660
                          Telephone: (717) 233-1555
------------------------------------------------------------------------------
Securities  registered pursuant to section 12(g) of the Act: Common Stock, $2.00
par value.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No_____

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant as of February 28, 1999:

Common Stock $2.00 Par Value -- $1,736,637,000

The number of shares outstanding of the registrant's class of common stock as of
February 28, 1999:

Common Stock $2.00 Par Value -- 49,259,000.

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the annual  shareholder report for the year ended December 31, 1998,
are  incorporated  by  reference  into Parts I and II and  portions of the Proxy
Statement of Keystone Financial,  Inc. for the 1999 annual shareholders  meeting
are incorporated by reference into Part III.

                                      1
<PAGE>

                                   FORM 10-K
                                     INDEX


PART I
-----------

Item 1    Business                                                   3

Item 2    Properties                                                 9

Item 3    Legal Proceedings                                          9

Item 4    Submission of Matters to a Vote of Security Holders        9

PART II
-----------

Item 5    Market for Registrant's Common Equity and Related
             Stockholder Matters                                    10

Item 6    Selected Financial Data                                   10

Item 7    Management's Discussion and Analysis of Financial
              Condition and Results of Operation                    10

Item 7A   Quantitative and Qualitative Disclosures about            10
              Market Risk

Item 8    Financial Statements and Supplementary Data               10

Item 9    Changes in and Disagreements with Accountants on          10
             Accounting and Financial Disclosure

PART III
------------

Item 10   Directors and Executive Officers of the Registrant        10

Item 11   Executive Compensation                                    10

Item 12   Security Ownership of Certain Beneficial Owners and
             Management                                             10

Item 13   Certain Relationships and Related Transactions            10

PART IV
-----------

Item 14   Exhibits, Financial Statement Schedules and Reports       11
             on Form 8-K

                               2

<PAGE>
                                    PART I

ITEM 1 - BUSINESS

Introduction

Keystone  Financial,  Inc.  (Keystone) was formed in 1984 as a result of mergers
between predecessor bank holding companies.  With assets of $7 billion, Keystone
is the third largest bank holding company  headquartered  in the Commonwealth of
Pennsylvania.

Keystone is the parent of Keystone  Financial  Bank, N.A. (the bank) and various
nonbank  subsidiaries.  The bank  operates in thirty-one Pennsylvania  counties,
three Maryland  counties and one county in West Virginia.  Prior to December 31,
1998,  Keystone was the holding  company for seven banks:  American  Trust Bank,
N.A.,  Financial Trust Company,  Keystone Bank,  N.A.,  Keystone  National Bank,
Mid-State  Bank and Trust  Company,  Northern  Central  Bank,  and  Pennsylvania
National Bank and Trust Company.  These seven former banks were combined on that
date to form Keystone Financial Bank.

Nonbank  subsidiaries  offer a variety of financial  services including discount
brokerage  services,  sales of mutual funds and annuities,  asset management and
investment  advisory  services,  reinsurance,  mortgage  banking,  and community
development.  None of the nonbank subsidiaries  constitute a significant portion
of Keystone's business.  At December 31, 1998, Keystone and its subsidiaries had
2,965 full-time equivalent employees.

Keystone  and its  subsidiaries  do not  have  any  portion  of  their  business
dependent  upon a single or a limited  number  of  customers,  the loss of which
would have a material adverse effect on their business;  no substantial  portion
of their loans and  investments  are  concentrated  within a single  industry or
group of related  industries.  Keystone has one  reportable  segment - community
banking.  Refer to the "Notes to  Consolidated  Financial  Statements  - Segment
Reporting" section of Exhibit 13.1 for additional information. The businesses of
Keystone are not seasonal in nature. For a further  description of the nature of
Keystone's  business,  refer to the  section  entitled  "Nature  of  Operations"
contained within Exhibit 13.1.

Keystone's  stock is traded in the  over-the-counter  market under the symbol of
KSTN and is included in the National Market System of NASDAQ.

Legislation and Competition

Changes  in  banking  legislation  since  1982 have  increased  the  competition
experienced by banks and bank holding  companies and expanded the  opportunities
to grow geographically and offer new types of financial  services.  Beginning in
1982,  amendments  to the  Pennsylvania  Banking  Code  provided  for the phased
elimination of geographical branching restrictions on Pennsylvania banks and for
the phased elimination of limitations on the number of Pennsylvania banks a bank
holding  company could own.  Amendments in 1986 further  provided for the phased
implementation  of interstate  banking.  Effective  March 4, 1990,  Pennsylvania
state-chartered  and national  banks could  establish or acquire  branch offices
anywhere  in the state,  there were no longer any  limitations  on the number of
Pennsylvania  banks a bank holding  company could own and a bank holding company
located in any state or the District of Columbia could, subject to a reciprocity
requirement, acquire a Pennsylvania bank or bank holding company.

The Federal Interstate Banking and Branching Efficiency Act of 1994 has extended
to a nationwide  basis the process of removing the legal  barriers to interstate
banking which formerly existed under various state laws. Effective September 29,
1995,  the Act  permits  bank  holding  companies  in any state to acquire  bank
holding  companies or banks located in any other state.  Effective June 1, 1997,
the Act  permits a bank in one state to merge  with a bank in  another  state as
long as neither state had enacted legislation prior to

                                       3
<PAGE>

that date to prohibit interstate branching.  Only Texas and Montana adopted such
legislation. A bank may establish a de novo branch in another state or acquire a
branch in another  state  without  acquiring  the entire bank only if  expressly
permitted  by the law of the state where the new or acquired  branch is located.
Pennsylvania  has enacted  legislation to permit de novo  interstate  branching,
subject to a reciprocity requirement.

The result of these developments has been an increased volume of merger activity
involving  Pennsylvania  banks and bank  holding  companies  since 1982;  larger
banking   organizations  have  sought  to  position  themselves  to  enter  into
state-wide and interstate banking;  smaller banking organizations have sought to
increase their size in order to remain  competitive on a regional  basis. At the
same time,  deregulation of the banking industry has increased the opportunities
to offer  new  types of  financial  services  and  enhanced  the  potential  for
competition from savings and loan associations,  insurance companies,  brokerage
firms, and other nonbank financial institutions.

The  market in which  Keystone's  banking  subsidiaries  operate  is  considered
competitive. Banks and bank holding companies with significant operations in the
Keystone  market  areas  range in size from less than $100  million to over $150
billion in assets.

In addition to commercial  banks,  competitors  for loans,  deposits,  and other
services include savings and loan  associations,  insurance  companies,  finance
companies,  credit unions, brokerage houses, direct lending by federal and state
governments, and a proliferation of other types of financial institutions.

Keystone  differentiates  itself from its financial  institution  competitors by
combining the localness of a community  bank with a diverse line of products and
services typically only offered by much larger banks.  Keystone operates through
twenty  local  market  teams  to  ensure  close   personal   service  and  local
decision-making.

As a one-stop  financial  partner to  customers,  Keystone's  offerings  include
investment management and estate planning, mutual funds, annuities,  transaction
services  and  insurance  products.   Keystone's  associates  are  "Relationship
Bankers",  who emphasize  long-term  relationships  with  customers by providing
superior service that results in value-added pricing.

Although  Keystone  expects that  competition  will  increase as a result of the
factors  described  herein,  the effects  thereof,  if any, on Keystone  are not
readily ascertainable.

Regulation and Supervision

The business of Keystone and its subsidiaries is subject to extensive regulation
and supervision under federal and state banking laws and other federal and state
laws and  regulations.  In general,  these laws and regulations are intended for
the  protection of the customers and depositors of Keystone's  subsidiaries  and
not for the  protection  of  Keystone or its  shareholders.  Set forth below are
brief  descriptions of selected laws and regulations  applicable to Keystone and
its  subsidiaries.  These  descriptions  are not intended to be a  comprehensive
description of all laws and  regulations to which Keystone and its  subsidiaries
are  subject  or to  be  complete  descriptions  of  the  laws  and  regulations
discussed. The descriptions of statutory and regulatory provisions are qualified
in their  entirety by reference  to the  particular  statutes  and  regulations.
Changes in applicable  statutes,  regulations  or  regulatory  policy may have a
material effect on Keystone and its business.

Regulation and Supervision of Bank Holding Companies

Keystone is subject to regulation  under the Bank Holding Company Act of 1956. A
bank holding  company is required to file annual  reports and other  information
concerning its business operations and those of its subsidiaries
                                       4
<PAGE>

with the Board of  Governors  of the Federal  Reserve  System  (Federal  Reserve
Board).  A bank holding company and each of its subsidiaries are also subject to
examination by the Federal Reserve Board.

The Bank Holding  Company Act requires the prior approval of the Federal Reserve
Board in any case where a bank  holding  company  proposes to acquire  direct or
indirect  ownership  or  control  of more  than 5% of the  voting  shares of any
bank(unless it already owns a majority of such bank's voting  shares),  to merge
or  consolidate  with any  other  bank  holding  company  or to  acquire  all or
substantially  all of the assets of any bank. The Act further  provides that the
Federal Reserve Board shall not approve any such acquisition of voting shares or
assets or any such merger or consolidation:  (i) that would result in a monopoly
or would be in  furtherance  of any  combination  or conspiracy to monopolize or
attempt to  monopolize  the business of banking in any part of the United States
or (ii) the effect of which may be  substantially  to lessen  competition  or to
tend to create a monopoly  in any section of the  country,  or that in any other
manner would be in restraint of trade, unless the anticompetitive effects of the
proposed  transaction  are  clearly  outweighed  in the public  interest  by the
probable  effect of the  transaction in meeting the convenience and needs of the
community to be served.

The Bank Holding  Company Act prohibits a bank holding company from engaging in,
or from acquiring direct or indirect ownership or control of more than 5% of the
voting  shares  of, any  company  engaged in  nonbanking  activities  unless the
Federal Reserve Board,  by order or regulation,  has found such activities to be
so closely  related to banking or to  managing or  controlling  banks as to be a
proper incident thereto. The Federal Reserve Board has by regulation  determined
that  certain  activities  are so closely  related to banking or to  managing or
controlling  banks as to permit bank holding  companies and subsidiaries  formed
for the  purpose  to engage in such  activities,  subject to Board  approval  in
certain  cases.  These  activities  include  making,  acquiring,  brokering,  or
servicing loans and other extensions of credit; providing certain investment and
financial advice;  leasing personal property;  providing certain  bookkeeping or
financially-oriented  data processing services; acting as an insurance agent for
certain types of credit related insurance, and securities brokerage.

Keystone  Financial,  Inc.,  is an affiliate of its  subsidiary  bank within the
meaning of the Federal Reserve Act (Act).  As an affiliate,  Keystone is subject
to certain  restrictions  imposed by the Act on extensions of credit by the bank
to Keystone,  on investment in the stock or other  securities of Keystone by the
bank and on the taking of such stock or securities  as  collateral  for loans to
any  borrower.  Further,  under the Bank  Holding  Company  Act, a bank  holding
company and its  subsidiaries  are  prohibited  from engaging in certain  tie-in
arrangements  in connection  with any extension of credit,  lease or sale of any
property or the furnishing of services.

The Federal Reserve Board has adopted capital adequacy guidelines under which it
assesses  the adequacy of capital in examining  and  supervising  a bank holding
company  and in  analyzing  applications  filed with the Board.  Keystone  is in
compliance  with  all  existing  capital  adequacy  guidelines,   including  the
risk-based guidelines. For a discussion of these capital adequacy guidelines and
Keystone's  capital  position,  reference is made to the caption  "Shareholders'
Equity", contained within the Financial Review section of Exhibit No. 13.1.

Regulation and Supervision of Banks

Keystone's  federally-chartered national bank is supervised by the Office of the
Comptroller of Currency (OCC), which conducts regular  examinations of the bank.
Deposits are federally-insured by the FDIC. In addition, the bank is subject, in
certain instances,  to the regulation of the Federal Reserve Board. The areas of
operation of the bank which are subject to regulation by federal and state laws,
regulations  and  regulatory  agencies  include,  among other  things,  reserves
against deposits, maximum interest rates for specific classes

                                       5
<PAGE>

of  loans,   truth-in-lending   disclosure,   permissible  types  of  loans  and
investments, trust operations, issuance of securities, and payment of dividends.
In  addition,  national  banks are subject to capital  adequacy  and  risk-based
capital  guidelines  similar to those  adopted by the Federal  Reserve Board for
bank holding companies,  as referred to above.  Keystone's subsidiary bank is in
compliance with all such guidelines.

National  banks must  obtain  approval  from the OCC before  establishing  a new
branch. Any merger of financial  institutions in which the resulting institution
is a national  bank is also subject to the prior  approval of the OCC. Any other
merger in which the resulting  institution is a federally insured bank or thrift
institution would, depending upon the nature of the merged institution,  require
the prior  approval  of the  Federal  Reserve  Board,  the FDIC or the Office of
Thrift Supervision and, in the case of a resulting state-chartered  institution,
the  applicable  financial  institution  regulatory  authority of the chartering
state.

As an affiliate of Keystone,  the bank is subject to  provisions  of the Federal
Reserve Act which  restrict the ability of banks to extend credit to affiliates,
to  invest  in the  stock  or  securities  thereof,  or to take  such  stock  or
securities as collateral for loans to any borrower.

The business  and earnings of the bank are affected by the monetary  policies of
the Federal  Reserve Board which regulate the money supply in order to influence
rates of inflation and economic  growth.  Among the techniques used to implement
these   objectives  are  open  market  dealings  in  United  States   Government
securities,  changes in the discount rate for bank  borrowings  from the Federal
Reserve Banks and changes in the reserve requirements  against bank deposits and
borrowings.  Changes in these policies can influence to a significant degree the
overall growth and  distribution of bank loans,  investments  and deposits,  the
interest  rates  charged  by banks on loans  and the cost to banks of  obtaining
funds,  as well as the  ability of banks to compete for loans and for funds with
other types of financial institutions.

In 1994,  Congress  enacted  the Riegle  Community  Development  and  Regulatory
Improvement Act ("CDRIA"),  a broad-based law primarily focused on ensuring that
banks deliver services to financially under served communities.  In that regard,
CDRIA  established  a fund to award  financial  grants to community  development
financial  institutions  and to promote  their  partnering  with  banks.  Beyond
community development, CDRIA made numerous changes to many provisions of federal
banking law, for example,  stream-lining  the bank holding  company  application
process,   liberalizing  the  makeup  of  national  bank  boards  of  directors,
simplifying the establishment of bank service corporations, modifying management
interlock rules, and tightening  currency  transaction  reporting under the Bank
Secrecy Act. CDRIA also amended an array of consumer protection laws,  including
the Truth in Lending Act, the Real Estate  Settlement  Procedures  Act, The Fair
Credit  Reporting  Act,  the  Consumer  Leasing  Act,  and  the  Flood  Disaster
Protection Act.

Late in 1996,  Congress  enacted the Economic  Growth and  Regulatory  Paperwork
Reduction Act(EGARPRA),  which, like CDRIA, amended a variety of banking laws by
relieving certain regulatory burdens on banks and bank holding companies.  Among
other things,  EGARPRA  eliminated per branch capital  requirements for national
banks,  eliminated branch applications for automated teller machines,  expedited
procedures  for bank  holding  companies  to  engage in  permissible  nonbanking
activities,  modified rules for  qualification  of bank  directors,  liberalized
standards  for loans to bank  insiders,  and  streamlined  the bank  examination
process. In addition,  EGARPRA  recapitalized the Savings Association  Insurance
Fund of FDIC through special  assessments on banks and thrift  institutions  and
prepared for the development of a common bank charter for all insured depository
institutions.  EGARPRA also amended the Fair Credit  Reporting  Act and the Home
Mortgage   Disclosure  Act  and  freed  banks  from   liability   under  certain
circumstances for environmental cleanup of real estate taken as loan collateral.

                                       6
<PAGE>

Changing conditions in the economy and in the financial industry can be expected
to continue to result in changes in legislation  and  regulatory  policies which
will affect the business of banks and competition  between banks and among banks
and other types of financial institutions.

Statistical Disclosure

The consolidated  statistical  disclosures  found in the sections of Exhibit No.
13.1 entitled,  "Selected Financial Data", "Financial Review", and "Supplemental
Financial Information",  are incorporated herein by reference. Also incorporated
herein by  reference  are the  following  consolidated  statistical  disclosures
appearing in the Notes to Consolidated  Financial  Statements section of Exhibit
No. 13.1: the  discussion of "Interest and Fees on Loans"  appearing in the note
captioned "Summarized  Accounting Policies",  the note captioned  "Investments",
and the table of total  nonaccrual  and  restructured  loan balances and related
annual interest data appearing in the note captioned "Loans and Leases".

                                        7
<PAGE>

Executive Officers of the Corporation

Except  as  otherwise  noted,  each  executive  officer  has held  the  position
indicated  for at least  five  years,  serves  at the  pleasure  of the Board of
Directors and is not elected for any specific term of office.

Name                  Age     Office with Keystone and/or Subsidiary
----------------     -----    -------------------------------------------

Carl L. Campbell      55      Chairman (May 1998) and Chief Executive Officer

                              Prior to May of 1998, Mr. Campbell served as
                              President and Chief Executive Officer.


Mark L. Pulaski       45      President (May 1998) and Chief Operating
                              Officer (November 1997)

                              From  November  1997 until May 1998,  Mr.  Pulaski
                              served as Vice Chairman,  Chief Operating  Officer
                              and Chief  Financial  Officer (CFO).  From 1995 to
                              November 1997,  Mr.  Pulaski was Senior  Executive
                              Vice  President,   CFO  and  Chief  Administrative
                              officer (CAO) of the  Corporation.  Prior to 1995,
                              he served as Executive Vice President, CFO and CAO
                              of the Corporation.

Ben G. Rooke          49      Executive Vice President, Vice Chairman (May
                              1998), Counsel and Secretary

George R. Barr, Jr.   47      Executive Vice President (December 1998) and
                              Deputy General Counsel

                              Prior to December 1998, Mr. Barr served as
                              Senior Vice President.

James M. Deitch       45      Executive Vice President (December 1998)

                              Prior to December  1998, Mr. Deitch served as Vice
                              Chairman and Chief Operating  Officer of Financial
                              Trust  Company (a former  subsidiary  of Keystone)
                              and  Chairman  and  Chief  Executive   Officer  of
                              Keystone  National  Bank (a former  subsidiary  of
                              Keystone).

Edwin R. Eckberg      53      Executive Vice President (December 1998)

                              Prior to December 1998, Mr. Eckberg served as
                              Senior Vice President.

Donald F. Holt        42      Executive Vice President (December 1998)and
                              Chief Financial Officer (May 1998)

                              Mr. Holt previously served as Senior Vice
                              President (through December 1998) and Corporate
                              Controller (through May 1998)

Robert E. Leech       53      Executive Vice President (December 1998)

                              Prior to December 1998, Mr. Leech served as
                              President and Chief Executive Officer of
                              Trust/Asset Management Division.

                                        8
<PAGE>

Name                  Age     Office with Keystone and/or Subsidiary
----------------     -----    -------------------------------------------

Robert R. Wozniewicz  50      Executive Vice President (December 1998)

                              Prior to December 1998, Mr. Wozniewicz served as
                              Chairman, President, and Chief Executive Officer
                              of American Trust Bank, N.A., a former
                              subsidiary of Keystone.

ITEM 2 - PROPERTIES

The  headquarters of Keystone  Financial,  Inc. and Keystone  Financial Bank are
located at One Keystone Plaza, Harrisburg,  Pennsylvania,  in a leased building.
The lease expires in 2002 with three  consecutive  renewal options each for five
years. This building also houses a full-service branch of the bank and an office
for Martindale Andres & Company, a subsidiary of Keystone.

Keystone  Financial  Bank  has  a  total  of  177  branches  located  throughout
Pennsylvania,  Maryland and West Virginia. Of these 177 branches,  127 are owned
and the  remainder  are leased.  Six of the branches  are owned by Key Trust,  a
subsidiary of Keystone, and leased to the bank.

The bank owns  the premises of its automated Telephone Banking Center located in
Cumberland, Maryland.   The bank also  owns  operations centers  located in  the
following Pennsylvania towns: Bellwood, Williamsport, and St. Clair.

Keystone and the bank lease office  space for various  administrative  and back-
office functions in three buildings in Altoona,  including a building owned by a
partnership  in which a Keystone  board  member is a partner.  The  premises for
various branches include administrative offices.

Keystone owns the  headquarters  for its Asset  Management  Division,  which are
located in Harrisburg, Pennsylvania.

Of  the  nonbanking  subsidiaries,  Martindale  Andres  and  Company  and  MMC&P
Retirement   Benefits   Services  are  headquartered  in  leased  facilities  in
Pennsylvania.

In conjunction with the unification of its seven banks and related  reduction in
support  staff,   Keystone  is  currently   reviewing  its  branch  network  and
administrative  offices  occupancy needs. This review may result in decisions to
dispose of certain properties or terminate certain leases.  Such dispositions or
terminations are not expected to have a material impact on Keystone's  financial
condition or results of operations.

ITEM 3 - LEGAL PROCEEDINGS

Disclosure not required.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of 1998.

                                   9
<PAGE>
                                    PART II

ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS

Information for this item is incorporated  herein by reference to the section of
Exhibit No. 13.1 entitled "Market Prices and Dividends".

ITEM 6 - SELECTED FINANCIAL DATA

The  section  entitled  "Selected   Financial  Data"  of  Exhibit  No.  13.1 is
incorporated herein by reference.

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATION

The section  entitled  "Financial  Review" of Exhibit  No. 13.1 is incorporated
herein by reference.

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following sections of Exhibit No. 13.1 are incorporated herein by reference:
"Financial  Review-Investments",  "Financial Review - Asset/Liability Management
and Market Risk",  "Summarized  Accounting Policies - Financial  Derivatives and
Other Hedging Activity", "Notes to Consolidated Financial Statements - Financial
Derivatives, Hedging Activity, and Commitments".

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The sections of Exhibit No. 13.1 entitled  "Consolidated  Financial Statements",
and  notes  thereto,  and  "Quarterly  Information  -  Income  Performance"  are
incorporated herein by reference.

ITEM  9     -   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                AND FINANCIAL DISCLOSURE

None.
                                    PART III

ITEM 10     -   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

ITEM 11     -   EXECUTIVE COMPENSATION

ITEM 12     -   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

ITEM 13     -   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information  required by Part III, Items 10-13,  is  incorporated  herein by
reference to the information appearing under the following captions in the Proxy
Statement for Keystone's 1999 Annual Meeting of Shareholders:

-- Introduction
-- Management Proposal - Election of Directors
-- Executive Compensation
-- Other Information Concerning Directors and Executive Officers
-- 5% Beneficial Owners of Common Stock

The other  information  appearing  in such Proxy  Statement,  including  without
limitation  that  information  appearing  under the  captions  "Human  Resources
Committee 1998 Report on Executive Compensation" and "Stock Price Performance
Graph", is not incorporated herein.

                                       10

<PAGE>

                                     PART IV

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K

(a)(1)(2)  The response  to this portion of Item 14 is listed below.
(a)(3)     Listing of Exhibits - The exhibits are listed on the Exhibit Index
             beginning on page 14 of this Form 10-K.
(b)        Reports on Form 8-K are listed below.
(c)          Exhibits - The exhibits  listed on the Exhibit  Index  beginning on
             page 14 of this Form 10-K are filed herewith or are incorporated by
             reference.
(d)        Schedules - listed under Item 14 (a)(1)(2) below.

Item 14(a)(1)(2) List of Financial Statements and Financial Statement
Schedules

The  following  consolidated  financial  statements  and  report of  independent
auditors of Keystone  Financial,  Inc. and subsidiaries,  included in the annual
report  of the  registrant  to its  shareholders  for the  year  ended  December
31,1998, are incorporated by reference in Item 8:

  Report of independent auditors

  Consolidated statements of condition - December 31, 1998, and 1997

  Consolidated statements of income - Years ended December 31, 1998, 1997,
     and 1996

  Consolidated  statements  of  changes  in  shareholders'equity  - Years  ended
     December 31, 1998, 1997, and 1996

  Consolidated  statements of cash flows - Years ended December 31, 1998,  1997,
     and 1996

  Notes to consolidated financial statements

Schedules  to  the  consolidated  financial  statements  as  per  Article  9  of
Regulation  S-X  are  not  required  under  the  related   instructions  or  are
inapplicable,  and therefore  have been omitted.  The following  report of other
auditors  required  by Item  2-05  of  Regulation  S-X is  filed  herewith  as a
financial statement schedule: Report of Beard & Company, Inc.

Item 14(b)  Reports on Form 8-K

During the quarter ended December 31, 1998,  the registrant  filed the following
reports on Form 8-K:


 Filing Date            Item              Description
--------------------    -----       ----------------------------------------

October 20, 1998          5         Earnings release for the third quarter

November 23, 1998         5         Press release announcing unification of
                                    seven bank subsidiaries

                                       11
<PAGE>
                          INDEPENDENT AUDITOR'S REPORT

Board of Directors and Shareholders
Financial Trust Corp
Carlisle, Pennsylvania

      We have audited the consolidated balance sheet of Financial Trust Corp and
subsidiaries as of December 31, 1996, and the related consolidated statements of
income,  shareholders'  equity  and cash  flows  for the year  then  ended  (not
presented  herein).  These financial  statements are the  responsibility  of the
Corporation's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

      We conducted  our audit in accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

      In our opinion,  the 1996 consolidated  financial  statements  referred to
above  present  fairly,  in all material  respects,  the  financial  position of
Financial  Trust Corp and  subsidiaries as of December 31, 1996, and the results
of its operations and its cash flows for the year then ended in conformity  with
generally accepted accounting principles.

                                           /s/ BEARD & COMPANY, INC.
                                           --------------------------
Reading, Pennsylvania
February 28, 1997
                                       12

<PAGE>

SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                      (Registrant)Keystone Financial, Inc.

                                                 By:    /s/ Carl L. Campbell
                                                 ---------------------------
                                                 Chief Executive Officer

                                                 Date:   March 25, 1999

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed on March 25,  1999,  by the  following  persons on behalf of the
registrant and in the capacities indicated.

/s/ Carl L. Campbell             /s/ Mark L. Pulaski
-----------------------          ----------------------
Chief Executive Officer          President, Chief Operating Officer
& Chairman                       & Director

                                 /s/ Donald F. Holt
                                 ----------------------
                                 Executive Vice President and
                                 Chief Financial Officer

A. Joseph Antanavage, Jr         /s/ June B. Barry
-----------------------          ----------------------
Director                         Director

/s/ George T. Brubaker           /s/ Paul I. Detwiler, Jr.
-----------------------          ----------------------
Director                         Director

/s/ Donald Devorris              /s/ Gerald E. Field
-----------------------          ----------------------
Director                         Director

/s/ Philip C. Herr, II           /s/ Allan W. Holman, Jr.
-----------------------          ----------------------
Director                         Director

/s/ Richard G. King              /s/ Uzal H. Martz, Jr.
-----------------------          ----------------------
Director                         Director

/s/ Max A. Messenger             /s/ William L. Miller
-----------------------          ----------------------
Director                         Director

/s/ Don A. Rosini                /s/ James I. Scheiner
-----------------------          ----------------------
Director                         Director

/s/ F. Dale Schoeneman           /s/ Molly D. Shepard
-----------------------          ----------------------
Director                         Director

/s/ Ronald C. Unterberger        /s/ G. William Ward
-----------------------          -----------------------
Director                         Director

/s/ Ray L. Wolfe
-----------------------
Director
                                       13
<PAGE>

                                  EXHIBIT INDEX
                    (Pursuant to Item 601 of Regulation S-K)

Exhibit                  Description and Method
  No.                          of Filing
----------------------------------------------------------------------------
 3.1    Restated Articles of Incorporation of Keystone Financial, Inc., as
        amended through July 29, 1996, incorporated by reference to Exhibit
        4.1 of Form S-4 of Keystone Financial, Inc. (No. 333-20283) filed on
        January 23, 1997.

 3.2    By-Laws of Keystone Financial, Inc., as amended November 19, 1998, filed
        herewith.

 4.1    Keystone Financial,  Inc. Series A Junior Participating  Preferred Stock
        Purchase  Rights  Agreement  dated  January 25,  1990,  incorporated  by
        reference to Exhibit 1 to Form 8-A filed on February 9, 1990.

 4.2    Amendment  No.  1 to  Series  A  Junior  Participating  Preferred  Stock
        Purchase  Rights  Agreement  dated  December 20, 1990,  incorporated  by
        reference to Exhibit 2 to the Form 8 Amendment dated December 20, 1990.

        The registrant  hereby agrees to furnish to the Commission  upon request
        copies of the  instruments  defining  the  rights of the  holders of the
        long-term debt of the registrant and its consolidated subsidiaries.

10.1*   Keystone Financial, Inc., Corporate Directors Deferred Compensation
        Plans, incorporated herein by reference to Exhibit 10.1 of Form 10-K of
        Keystone Financial, Inc. for the year ended December 31, 1994.

10.2*   Keystone Financial, Inc. 1988 Stock Incentive Plan, originally filed as
        Exhibit 10.2 of Form 10-K of Keystone Financial, Inc., for the year
        ended December 31, 1993, filed herewith.

10.3*   Keystone  Financial,  Inc.  Management  Incentive  Compensation  Plan as
        amended and restated,  originally  filed as Exhibit 10.3 of Form 10-K of
        Keystone  Financial,  Inc., for the year ended December 31, 1993,  filed
        herewith.

10.4*   Form of employment agreement between Keystone Financial, Inc. and
        Executive Officer Campbell, filed herewith.

10.5*   Form of employment agreement between Keystone Financial, Inc. and
        Executive Officers, Pulaski, Rooke, and Leech, filed herewith.

10.6*   Keystone Financial, Inc. 1995 Management Stock Purchase Plan,
        incorporated herein by reference to Exhibit C of the Proxy Statement
        of Keystone Financial, Inc., dated April 7, 1995.

10.7*   Keystone  Financial,  Inc.  Savings  Restoration  Plan,  as amended  and
        restated  effective  January 1, 1994, and as corrected on June 14, 1994,
        incorporated  herein  by  reference  to  Exhibit  10.7 of  Form  10-K of
        Keystone Financial, Inc., for the year ended December 31, 1994.

10.8*   Keystone Financial, Inc. Supplemental Retirement Income Plan, originally
        filed as Exhibit 10.7 of Form 10-K of Keystone Financial, Inc., for the
        year ended December 31, 1993, filed herewith.

10.9*   Keystone Financial, Inc. 1990 Non-Employee Directors' Stock Option
        Plan, as amended, originally filed as Exhibit 10.8 of Form 10-K of
        Keystone Financial, Inc. for the year ended December 31, 1993, filed
        herewith.

                                      14
<PAGE>

Exhibit                  Description and Method
  No.                          of Filing
-----------------------------------------------------------------------------
10.10*  Keystone Financial, Inc. 1992 Stock Incentive Plan, incorporated
        herein by reference to Exhibit 10.10 of Form 10-K of Keystone
        Financial, Inc., for the year ended December 31, 1997.

10.11*  Keystone Financial, Inc. 1992 Director Fee Plan, as amended,
        incorporated herein by reference to Exhibit 10.11 of Form 10-K of
        Keystone Financial, Inc. for the year ended December 31, 1994.

10.12*  Keystone Financial, Inc. form of Executive Split Dollar Agreements, Form
        A and Form B,  incorporated herein by reference to Exhibit 10.1 of Form 
        10-K of Keystone Financial, Inc., for  the year ended December 31, 1993.

10.13*  Keystone Financial, Inc. 1995 Non-Employee Directors' Stock Option
        Plan, incorporated herein by reference to Exhibit B of the Proxy
        Statement of Keystone Financial, Inc., dated April 7, 1995.

10.14*  Keystone   Financial,   Inc.   Management   Stock   Ownership   Program,
        incorporated  herein  by  reference  to  Exhibit  10.15 of Form  10-K of
        Keystone Financial, Inc., for the year ended December 31, 1995.

10.15*  Keystone Financial, Inc. 1996 Performance Unit Plan, incorporated
        herein by reference to Exhibit 99.16 of Amendment No. 1 to Form S-4 of
        Keystone Financial, Inc. (No. 333-20283), filed on March 10, 1997.

10.16*  Keystone Financial, Inc. 1997 Stock Incentive Plan, as amended
        November 19, 1998, filed herewith.

10.17*  Keystone  Financial,   Inc.  Supplemental  Deferred  Compensation  Plan,
        incorporated  herein  by  reference  to  Exhibit  10.19 of Form  10-K of
        Keystone Financial, Inc., for the year ended December 31, 1997.

10.18*  Form of  employment  agreement  between  Keystone  Financial,  Inc.  and
        executive officer Deitch, filed herewith.

10.19*  Form of change of control agreement between Keystone Financial, Inc.
        and executive officers Barr, Eckberg, Holt, and Wozniewicz, filed
        herewith.

10.20*  Employment Agreement between Keystone Financial, Inc. and Director
        Wolfe, incorporated herein by reference to Exhibit 99.9 of Form S-4 of
        Keystone Financial, Inc. (No. 333-20283), filed on January 23, 1997.

11.1    The statement  regarding  computation of per share earnings  required by
        this  exhibit is  contained  in the note to the  consolidated  financial
        statements  captioned  "Earnings  Per Share," filed as a part of Exhibit
        13.1.

12.1    Statement regarding computation of ratios, filed herewith.

13.1    Portions of the Annual  Report to  Shareholders  of Keystone  Financial,
        Inc., for the year ended December 31, 1998, filed herewith.

21.1    Subsidiaries of Registrant, filed herewith.

23.1    Consent of Ernst & Young LLP, independent auditors, filed herewith.

23.2    Consent of Beard & Company, Inc., independent auditors, filed herewith.

27.1    Financial Data Schedule, filed herewith.

*The exhibits marked by an asterisk (*) are management contracts or compensatory
 plans or arrangements.

                                       15

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