8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest reported): October 28, 2022

FIRST KEYSTONE CORPORATION

(Exact name of registrant as specified in its Charter)

PENNSYLVANIA	000-21344	23-2249083
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.

111 West Front Street, Berwick, Pennsylvania	18603
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (570) 752-3671

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common stock	FKYS	OTC: Pink

ITEM 2.02.    RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On October 28, 2022, First Keystone Corporation, parent company of First Keystone Community Bank, announced its unaudited earnings for the period ending September 30, 2022. The press release announcing third quarter earnings is filed as Exhibit 99.1 and incorporated herein by reference.

ITEM 9.01.    FINANCIAL STATEMENTS AND EXHIBITS

(a)    Not applicable

(b)    Not applicable

(c)    Not applicable

(d)    Exhibits

Exhibit No.	Description
99.1	Press Release of First Keystone Corporation dated October 28, 2022.
104	Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document).

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, there unto duly authorized.

FIRST KEYSTONE CORPORATION
(Registrant)
By:	/s/ Elaine A. Woodland
Elaine A. Woodland
President and CEO
Date:	October 28, 2022

EX-99

Exhibit 99.1

FIRST KEYSTONE ANNOUNCES

THIRD QUARTER 2022 EARNINGS (UNAUDITED)

Berwick, Pennsylvania –October 28, 2022 First Keystone Corporation (OTC Pink: FKYS, the “Corporation”), parent company of First Keystone Community Bank, reported net income for the nine months ended September 30, 2022 of $10,869,000. Net income per share was $1.82 while dividends totaled $0.84 per share for the nine months ended September 30, 2022. Net income decreased by $637,000 or 5.5% as compared to the same period in 2021. The decrease was primarily due to less PPP loan fees and a decrease in non-interest income, mainly due to fewer sales of mortgage loans and net securities losses. These earnings declines were offset by increases in total interest income.

Total interest income increased by $2,387,000 or 7.6% as compared to the nine months ended September 30, 2021. The increase was chiefly due to increased interest rates and growth in commercial real estate loans and interest and dividend income earned on securities, offset by a $796,000 decrease in PPP loan fees due to the discontinuation of the SBA program. Total interest expense increased by $1,005,000 or 25.9% primarily due to a $713,000 increase in interest paid on short-term borrowings through the Federal Home Loan Bank.

Non-interest income decreased by $1,041,000 or 19.1% for the nine months ended September 30, 2022 as compared to the same period in 2021. Service charges and fees on deposits increased by $279,000, mainly due to more accounts being in overdraft status. This was offset by a $967,000 decrease in other income, mainly due to realizing net losses on the sales of mortgage loans in the amount of $38,000 versus recognizing $801,000 in net gains on the sales of mortgage loans in the same period in 2021. Net securities losses for the nine months ended September 30, 2022 of $181,000 were realized due to net losses on market value fluctuations on marketable equity securities held in the Corporation’s portfolio as compared to net gains during the same period of 2021.

Non-interest expense increased during the nine months ended September 30, 2022 to $19,822,000. The $811,000, or 4.3%, increase from the same period in 2021 was mainly the result of a $629,000 increase in salaries and employee benefits due to an increase in salaries expense and healthcare costs. Computer expense increased $201,000 due to several new software contracts that were implemented as the Corporation has continued to invest in new technology for increased security and efficiencies. The increases in non-interest expense were offset by decreases in ATM and debit card expense and data processing expense in the combined amount of $318,000, mainly due to new fees and the application of vendor relationship credits resulting from a contract negotiation.

Income tax expense decreased $34,000 during the nine months ended September 30, 2022, as compared to the same period in 2021, due to lower overall operating income. The Corporation recognized $191,000 and $303,000 of tax credits from low-income housing partnerships in the first nine months of 2022 and 2021, respectively.

Total assets decreased to $1,324,250,000 at September 30, 2022, a decrease of $65,689,000 or 4.7% as compared to September 30, 2021. Cash and cash equivalents decreased $121,815,000 as of September 30, 2022, compared to the same period in 2021. Cash was utilized to fund loan growth and purchase securities.

Securities and restricted stocks decreased $44,354,000 or 10.2% and net loans increased $87,967,000 or 11.8% during the nine months ended September 30, 2022, as compared to the same period in 2021. Deposits decreased $87,195,000 or 7.6% at September 30, 2022 as compared to September 30, 2021, due to a decrease in interest bearing deposits, primarily municipal deposits. Stockholders’ equity decreased $32,365,000 or 21.9% at September 30, 2022 as compared to September 30, 2021, principally due to a decrease in the market value of the securities portfolio resulting in anaccumulated other comprehensive loss position.

Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company’s consolidated financial statements when filed with the Securities and Exchange Commission (“SEC”). Accordingly, the financial information in this announcement is subject to change.

First Keystone Community Bank provides innovative business and personal banking products that focus on “Yesterday’s Traditions. Tomorrow’s Vision.” The Bank currently operates offices in Columbia (5), Luzerne (8), Montour (1), Monroe (4), and Northampton (1) counties.

Inquiries regarding the purchase of the Corporation’s stock may be made through the following brokers: RBC Dain Rauscher, 800-223-4207; Janney Montgomery Scott, Inc., 800-526-6397; Boenning & Scattergood, Inc., 800-883-1212; and Stifel Nicolaus & Co. Inc., 800-679-5446.

Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. These factors include operating, legal and regulatory risks, changing economic and competitive conditions and other risks and uncertainties.

For more information on First Keystone Community Bank or its parent company, First Keystone Corporation, please contact Elaine A. Woodland at 570-752-3671.

XML

Document and Entity Information	Oct. 28, 2022
Document and Entity Information
Entity Registrant Name	FIRST KEYSTONE CORPORATION
Document Type	8-K
Entity File Number	000-21344
Entity Tax Identification Number	23-2249083
Document Period End Date	Oct. 28, 2022
Entity Address, Address Line One	111 West Front Street
Entity Address, City or Town	Berwick
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	18603
City Area Code	570
Local Phone Number	752-3671
Written Communications	false
Soliciting Material	false
Pre-commencement Issuer Tender Offer	false
Pre-commencement Tender Offer	false
Amendment Flag	false
Title of 12(b) Security	Common stock
Trading Symbol	FKYS
Entity Incorporation, State or Country Code	PA
Entity Emerging Growth Company	false
Entity Central Index Key	0000737875