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 event reported)     December 11, 2006
                                                ______________________________


                      First Keystone Financial, Inc.
______________________________________________________________________________
          (Exact name of registrant as specified in its charter)



        Pennsylvania                  000-25328                   23-2576479
______________________________________________________________________________
(State or other jurisdiction   (Commission File Number)         (IRS Employer
of incorporation)                                          Identification No.)



22 West State Street, Media, Pennsylvania                           19063
______________________________________________________________________________
(Address of principal executive offices)                         (Zip Code)



Registrant's telephone number, including area code           (610) 565-6210
                                                  ____________________________



                                Not Applicable
______________________________________________________________________________
         (Former name or former address, if changed since last report)



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))


ITEM 3.02 Unregistered Sales of Equity Securities
          ---------------------------------------

     On December 11, 2006, First Keystone Financial, Inc. (the "Company")
completed the sale in a private placement (the "Private Placement") of an
aggregate of 400,000 shares (the "Shares") of the Company's common stock, par
value $0.01 per share (the "Common Stock"), to qualified, accredited investors.
The price per Share was $16.00, provided, however, that directors, officers,
employees and consultants of the Company, who purchased an aggregate of 31,210
Shares, paid $19.20 per Share for the Shares they purchased in the Private
Placement.  As a result, the aggregate purchase price of the Shares was
approximately $6.5 million.

     Sandler O'Neill & Partners, L.P. ("Sandler O'Neill") acted as placement
agent for the Private Placement.  The aggregate commission paid Sandler O'Neill
in connection with the Private Placement was approximately $392,853.

     The Shares sold in the Private Placement were offered to accredited
investors in reliance on an exemption from the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act"). The shares have
not been registered under the Securities Act or any state securities laws and
the securities may not be offered or sold absent registration or an applicable
exemption from the registration requirements of the Securities Act and
applicable state securities laws.

     Under the terms of the Placement Agent Agreement dated as of December 4,
2006 with Sandler O'Neill, the Company agreed to use its best efforts to: (i)
file a registration statement (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission") within 90 days of the
closing of the Private Placement, to register the resale of the Shares, and
(ii) have the Registration Statement declared effective by the Commission
within 180 days after the closing of the Private Placement.  In addition,
executive officers and directors of the Company and its wholly owned subsidiary,
First Keystone Bank, entered into "lock-up" agreements with Sandler O'Neill
under which they will not offer or sell shares of Common Stock, subject to
certain exceptions, until 180 days after the closing of the Private Placement.

     The foregoing description of the Private Placement does not purport to be
complete and is qualified in its entirety by reference to the press release
attached hereto as Exhibit 99.1, which is incorporated herein by reference.

ITEM 5.03 Amendment to Articles of Incorporation or Bylaws; Change in Fiscal
          Year
          ------------------------------------------------------------------

     (a)  Effective December 6, 2006, the Board amended Section 2.8 of the
Company's Amended and Restated Bylaws to increase the maximum number days
between the record date established to determine stockholders entitled to
notice of or to vote at any meeting of stockholders and the related meeting
date from 50 days to 90 days as permitted by the Pennsylvania Business
Corporation law.  Section 2.8 of the Bylaws, as amended, is attached hereto
as Exhibit 3.1 and the description of the amendment is qualified in its entity
by reference to the amended Section 2.8 attached hereto as Exhibit 3.1 which
is incorporated herein by reference.

     (b)  Not applicable.

                                                                            2

ITEM 9.01 Financial Statements and Exhibits
          ---------------------------------

          (a)  Not applicable.
          (b)  Not applicable.
          (c)  Not applicable.
          (d)  Exhibits

          The following exhibits are filed herewith.

     Exhibit Number       Description
     -----------------    -----------------------------------------

     3.1                  Section 2.8, as amended, of the Company's
                          Amended and Restated Bylaws

     99.1                 Press release dated December 11, 2006

































                                                                            3



                                SIGNATURES


     Pursuant to the requirements 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.


                                      FIRST KEYSTONE FINANCIAL, INC.



Date:  December 12, 2006              By:  /s/ Rose M. DiMarco
                                           ---------------------------------
                                           Rose M. DiMarco
                                           Chief Financial Officer



































                                                                            4

EX-3.1

                                                                  Exhibit 3.1



Section 2.8, as amended:

2.8  Closing of Transfer Books and Fixing Record Date.  For the purpose of
determining stockholders entitled to notice of or to vote at any meeting of
stockholders, or any adjournment thereof, or entitled to receive payment of
any dividend, the Board of Directors may provide that the stock transfer books
shall be closed for a stated period not to exceed 90 days nor be less than
10 days preceding such meeting or payment date, and in such case, written or
printed notice thereof shall be mailed at least 10 days before the closing
thereof to each stockholder of record at the address appearing on the records
of the Corporation or supplied by such stockholder to the Corporation for the
purpose of notice.  In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a record date for any such determination of
stockholders, such date to be not more than 90 days and, in case of a meeting
of stockholders, not less than 10 days prior to the date on which the
particular action requiring such determination of stockholders is to be taken.

EX-99.1

                                                                 Exhibit 99.1



FIRST                                                    22 West State Street
KEYSTONE                                                 Media, PA 19063
FINANCIAL, INC.                                          610-565-6210


FOR IMMEDIATE RELEASE


                    FIRST KEYSTONE FINANCIAL ANNOUNCES
                      COMPLETION OF PRIVATE PLACEMENT

     Media, PA  December 11, 2006 -  (Nasdaq: FKFS) The Company reported today
completion of the private placement of 400,000 shares of common stock to
accredited investors for gross proceeds of approximately $6.5 million.  The
offering was undertaken by the Company to strengthen its capital position in
accordance with a capital plan designed to maintain the Company's capital at
prudent levels as well as reduce its debt-to-equity ratio below 50%. The
Company intends to use all of the net proceeds, estimated to be $5.8 million,
to redeem a portion of its outstanding trust preferred securities in June 2007.
The capital plan was adopted by the Company in April 2006 pursuant to the
supervisory agreement between the Company and the Office of Thrift Supervision
(the "OTS"). In connection with the offering, the Company agreed to appoint,
subject to the receipt of the non-objection of the OTS, Ned Vidinli of
Financial Stocks, Inc., to its Board of Directors as well as that of its
wholly owned subsidiary, First Keystone Bank.  Financial Stocks Capital
Partners IV L.P., an affiliate of Financial Stocks, Inc., purchased
approximately 222,000 shares of common stock in the offering.

     "The private placement was an important step in the implementation of our
capital plan," said Thomas M. Kelly, President and Chief Executive Officer of
the Company. "The proceeds from this offering materially improve our capital
position and will permit us to redeem a sufficient amount of our outstanding
trust preferred securities in June 2007 to bring our debt-to-equity ratio to
less than 50%. We also welcome the addition of Ned Vidinli to our Boards. Ned
has extensive knowledge of the capital markets and community banking," Mr.
Kelly continued.

     The shares of common stock sold in the private placement announced today
were offered to accredited investors in reliance on an exemption from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"). The securities have not been registered under the Securities
Act or any state securities laws and the securities may not be offered or
sold absent registration or an applicable exemption from the registration
requirements of the Securities Act and applicable state securities laws. In
connection with the offering, the Company has agreed, subject to certain terms
and conditions, to file a registration statement under the Securities Act
covering the resale of the shares purchased. This press release does not, and
will not, constitute an offer to sell or the solicitation of an offer to buy
shares.

     First Keystone Bank, the Company's wholly owned subsidiary, serves its
customers from eight full-service offices located in Delaware and Chester
Counties.

     Certain information in this release may constitute forward-looking
statements as that term is defined in the Private Securities Litigation Act of
1995.  Such forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from those estimated due
to a number of factors.  Persons are cautioned that such forward-looking
statements are not guarantees of future performance and are subject to various
factors, which could cause actual results to differ materially from those
estimated.  These factors include, but are not limited to, changes in general
economic and market conditions and the development of an interest rate
environment that adversely affects the interest rate spread or other income
from the Company's and the Bank's investments and operations.  The Company
does not undertake and specifically disclaims any obligation to publicly
release the result of any revisions which may be made to any forward-looking
statements to reflect the occurrence of anticipated or unanticipated events
or circumstances after the date of such statements.

CONTACT:  Thomas M. Kelly, President and Chief Executive Officer
          Rose M. DiMarco, Chief Financial Officer
          (610) 565-6210