Slide 1: Annual Shareholders' Meeting May 4, 2023
Annual Shareholders’ Meeting May 4, 2023
Slide 2: Annual Meeting of Shareholders
ANNUAL MEETING OF SHAREHOLDERS I. Introduction – Robert A. Bull, Chairman II. Call to Order III. Welcome IV. Ascertain Presence of a Quorum – David R. Saracino, Secretary V. Proposal No. 1 – Election of Directors VI. Proposal No. 2 – Ratification of Independent Auditors VII. Proposal No. 3 – Advisor
Slide 3: Introduction
Introduction ➢ Welcome to our IN PERSON Annual Shareholders Meeting ➢ Our results for 2022 & 1st quarter 2023 will be made by our CFO, Diane Rosler. ➢ Our President and CEO, Elaine Woodland’s, presentation will address some of the highlights of 2022 and will address our plans for the future. ➢ We wi
Slide 4: First Keystone Corporation Board of Directors
First Keystone Corporation Board of Directors
Slide 5: First Keystone Corporation Director Emeriti
First Keystone Corporation Director Emeriti DR. JOSEPH B. JEROME F. FABIAN CONAHAN, JR ROBERT E. BULL JOHN G. GERLACH
Slide 6: Diane C.A. Rosler, Chief Financial Officer
Diane C.A. Rosler Senior Vice President, Chief Financial Officer This presentation contains certain forward-looking statements, which are included pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, and reflect management’s beliefs and expectations based
Slide 7: Financial Highlights
(Dollars in thousands, except per share data) SUMMARY OF OPERATIONS Interest income Interest expense Net interest income (Credit) provision for loan losses Net income PER COMMON SHARE DATA Net income Dividends BALANCE SHEET DATA Total assets Total securities Net loans Total deposits Total stockholde
Slide 8: Loans, Deposits and Performance
——~_ LOANS # OF NEW LOANS, 2021 2022 2022 LOAN PORTFOLIO BREAKDOWN TOTAL NEW LOANS 81% 14% 4%1% HOME EQUITY I CONSUMER & OTHER COMMERCIAL li. MORTGAGES NET INCOME 2021 2022 PER SHARE @& & ANNUAL INCREASE/DECREASE @& & DEPOSITS 2021 2022 # OF NEW CORE DEPOSITS 2.554 & TOTAL NEW CORE DEPOSITS 76.605)
Slide 9: How we generated $51,744 in income
How we generated $51,744 in income: INCOME STATEMENT IN GRAPHIC FORM 21% $11,041 n w = « =) i) w 7) INCOME ON LOANS INCOME MAJOR COMPONENTS OF OTHER INCOME 2021 2022 [ATM FEES 6 DEBIT CARD INCOME P2155 ) TRUST DEPARTMENT FS.008 ) sense uence oF @ 2 Dollars in thousands # OTHER is) INCOME 52
Slide 10: How we used our $51,744 in income
How we used our $51,744 in income: SOF 935501 Sq Nvoruos 2 1034) 3SN3dx3_ || v XVL —| SWOONI LN3WdINOA 8 SONIATING ‘SYaLNdWOD 302 rl SYOLISOdaG =e OL aivd Dollars in thousands
Slide 11: Average Loan and Investment Balances
$200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 $550,000 $600,000 $650,000 $700,000 2018 2019 2020 2021 2022 $584,960 $621,598 $684,132 $736,839 $807,169 $341,826 $306,810 $312,537 $413,805 $419,164 Loans Investments Average Loan and Investment Balances (amounts in thousands)
Slide 12: Loan and Investment Yields
2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 2018 2019 2020 2021 2022 4.49% 4.78% 4.63% 4.49% 4.41% 3.47% 3.45% 3.05% 2.61% 3.02% Loan Yields Investment Yields Loan and Investment Yields (tax equivalent)
Slide 13: Average Interest-Bearing Deposits and Borrowings
$- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 2018 2019 2020 2021 2022 $596,401 $583,740 $658,889 $807,970 $794,742 $165,341 $157,379 $95,791 $89,918 $141,450 Average Interest Bearing Deposits Average Borrowings Average Interest-Bearing Deposits and Borrowings (amounts in thousands)
Slide 14: Deposit and Borrowing Costs
0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 2018 2019 2020 2021 2022 0.87% 1.14% 0.75% 0.39% 0.66% 2.07% 2.28% 1.48% 2.23% 2.58% Deposits Borrowings Liability Costs | Deposit and Borrowing Costs
Slide 15: Net Interest Spread and Net Interest Margin
2.50% 2.60% 2.70% 2.80% 2.90% 3.00% 3.10% 3.20% 3.30% 3.40% 3.50% 2018 2019 2020 2021 2022 2.98% 2.95% 3.25% 3.08% 2.96% 3.18% 3.23% 3.46% 3.22% 3.19% Net Interest Spread Net Interest Margin Net Interest Spread and Net Interest Margin (tax equivalent)
Slide 16: Net Income After Taxes, Tax Expense & Net Securities Gains/(Losses)
$(2,000) $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 2018 2019 2020 2021 2022 $9,211 $10,227 $11,837 $14,688 $14,024 $459 $1,114 $1,577 $2,321 $2,294 $(65) $911 $(58) $323 $(846) Net Income After Taxes Tax Expense Net Securities Gain/Loss Net Income After Taxes, Tax Expense & Net
Slide 17: Balance Sheet Unaudited
3 Months Ended March 31, 2023 3 Months Ended March 31, 2022 % Change Cash & Cash Equivalents $ 12,313 $ 9,899 24.4% Securites & Restricted Stocks 356,166 439,829 -19.0% Net Loans 855,041 770,091 11.0% Premises & Equipment, Net 19,807 17,994 10.1% Other Assets 67,320 59,274 13.6% Total Assets $ 1,310
Slide 18: Unaudited Income Statement
3 Months Ended March 31, 2023 3 Months Ended March 31, 2022 % Change Net Interest Income $ 7,804 $ 9,456 -17.5% Plus Non-Interest Income 1,452 1,389 4.5% Equals Operating Revenue 9,256 10,845 -14.7% Less Loan Loss Provision - 219 -100.0% Less Non-Interest Expense 7,753 6,516 19.0% Equals Pre-Tax Inc
Slide 19: FKC's Franchise Value
FKC’s Franchise Value ➢ History of solid investor returns ➢ Dividend Yield of 5.52% at 12/31/2022 & 5.67% at 3/31/2023 ➢ Historically strong capital position ➢ Investor-focused dividend policy ➢ Consistent financial performance ➢ Efficiency Ratio of 58.79% at 12/31/2022 & 81.45% at 3/31/2023 ➢ Commu
Slide 20: Elaine A. Woodland, President and CEO
Elaine A. Woodland This presentation contains certain forward-looking statements, which are included pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, and reflect management’s beliefs and expectations based on information currently available. These for
Slide 21: Making Connections, Corporate Culture and Commitment
Making Connections, Corporate Culture and Commitment ➢First Keystone Community Bank remains committed to connecting with our communities, each other, and building a culture that benefits our employees, customers, and shareholders. ➢We continued our focus in 2022 on increasing revenue from core opera
Slide 22: 2020 and 2021 were Extraordinary Times (COVID 19)
2020 and 2021 were Extraordinary Times (COVID 19) ➢ FKCB overcame challenges during the Pandemic by continuing to do what true community banks do best – we took care of our customers ➢ Provided more than 800 SBA PPP loans resulting in $32 million put back into local communities to keep businesses ru
Slide 23: 2022
2022 ➢Federal Reserve increased interest rates 7 times for a total of 4.25%, from March through December ➢Interest Expense increased by $3,765,000 primarily due to interest paid to depositors and increased interest paid on short term borrowings through FHLB ➢Increased interest rates affected the res
Slide 24: 2022 "Control What you can Control"
2022 “Control What you can Control” ➢Controlled non-interest expense ➢Total non-interest expense was 2.04% of Average Assets in 2022 ➢FKC is among the leaders in peer financial institution categories controlling non-interest expense ( i.e., operational efficiency)
Slide 25: Commitment to Community
Commitment to Community First Keystone Community Bank is YOUR community bank ➢ We are passionate about giving generously to the communities we serve, in both corporate and individual employee donations. ➢ Throughout the year, our employees donated $9,500 of their own funds during Denim Days, support
Slide 26: Commitment to Community
Commitment to Community PFIRST KEYSTONE CORPORATION
Slide 27: Commitment to Community
Commitment to Community ➢ In addition to the employee donations, FKCB provided Sponsorships and Donations to various schools and non-profit agencies throughout our communities. ➢ Examples include various fundraising walks and events, arts and food festivals, YMCAs, little leagues and school sports t
Slide 28: Education and Recognition
Education and Recognition ➢ We believe in employee development and support their education via in-house and externally-provided webinars on many pertinent subjects such as cyber-security, compliance and regulatory topics and professional development. ➢ We support and encourage attendance at a wide v
Slide 29: Education and Recognition
Education and Recognition ABA Stonier Graduate School of Banking with Wharton Leadership Certificate ➢ Christopher Zlobik, Sr. Vice President/ Chief Banking Officer Columbia Montour Chamber of Commerce Leadership Central Penn ➢ Tiffany Bienkowski, Asst Vice President/ Commercial Services Officer ➢ C
Slide 30: Management Experience
Name/Title Overall Banking Experience Number of years with First Keystone Community Bank Prior Positions held at First Keystone Community Bank Prior Experience Elaine A. Woodland President and CEO 42 years 30 years Teller, CSR, Acctg. Clerk, Commercial Loan Officer, Director of Lending, Chief Operat
Slide 31: Depth of Bench
Depth of Bench We are proud to have an additional 18 employees with us for more than 30 years! 50+ years: Linda Yerges – HR Consultant 40+ years: Donna Keefer, Sherri Sitler, Brenda Grasley, Susan Slusser, Tina Gray 30+ years: Bonnie Nevel, Alisha Kishbaugh, Lee Hess, Cheryl Wynings, Tina Roth, Dian
Slide 32: Recognition and Appreciation for Years of Service
Recognition and Appreciation for Years of Service Robert E. Bull Retired from Boards of Directors Effective April 1, 2022 First Keystone Corporation Chairman of the Board ~ July 5, 1983 – May 5, 2017 Director of the Board ~ July 5, 1983 – April 1, 2022 First Keystone Community Bank Chairman of the B
Slide 33: What else sets us apart?
What else sets us apart? ➢ First Keystone Community Bank is an FDIC Insured community bank ➢ The FDIC is an independent agency of the U.S. government that protects bank depositors against the loss of their insured deposits in the event that an FDIC-insured bank or saving association fails. ➢ Accordi
Slide 34: What sets us apart?
What sets us apart? ➢Relationship-based business model committed to building long-term trust with our customers ➢Well positioned to serve our customers and our communities – for nearly 159 years ➢Diversified loan and deposit portfolios ➢Local decision making ➢We live and work in your community ➢You
Slide 35: What sets us apart?
What sets us apart? ➢ Our risk management processes result in strong capital comparing well to our peers ➢ Our strategic plan prioritizes safety and soundness, profitability and growth – in that order ➢ Adhere to established banking practices “Yesterday’s Traditions…” ➢ Our loan portfolio consists o
Slide 36: Looking to the Future
Looking to the Future ➢ Branch Network Relocation and Expansion: ➢ 55 Briar Creek Plaza, Berwick PA ➢ Briar Creek Office relocated from and in-store branch in Giant Supermarket, Briar Creek Plaza ➢ Standalone storefront with expanded teller lines and dedicated customer service offices ➢ Same conveni
Slide 37: 1503 Linden Street, Bethlehem PA
1503 Linden Street, Bethlehem PA
Slide 38: Looking to the Future: Electronic Banking
Looking to the Future Electronic Banking ➢ Services available now: ➢ 24/7 phone support for issues with debit cards ➢ Ability to self-manage debit card controls and track spending through our mobile app ➢ Block/Unblock point of sale and ATM transactions, report lost or stolen cards, set Transaction
Slide 39: Looking to the Future: Tomorrow's Vision
Looking to the Future Tomorrow’s Vision….. ➢ Coming Fall 2023: ➢ Improved online banking experience ➢ Mobile Remote Deposit Capture, Business Mobile Remote Capture ➢ Financial Wellness and Budgeting Suite ➢ SavvyMoney Credit Score and Credit Education Suite ➢ Zelle ➢ Business Positive Pay
Slide 40: Looking to the Future
Looking to the Future ➢ First Keystone Corporation and First Keystone Community Bank are at an inflection point in our history. ➢ After successfully navigating the prior financial crisis (2008-2010) and the Covid-19 pandemic, FKCB and many other community banks face the challenge of an uncertain fut
Slide 41: Looking to the Future
Looking to the Future ➢ Our goal is to evolve without losing the values that have made the Bank successful. ➢ Profitability and growth are primary and competing goals. Driving efficiencies throughout the Bank, though important, will be weighed against the ongoing strong needs to invest and enhance r
Slide 42: Keys to our Success are expressed in our Mission Statement
Keys to our Success are expressed in our Mission Statement First Keystone Corporation and First Keystone Community Bank will be the independent financial services provider of choice to its customers and communities that it serves by providing quality, cost effective, customer focused financial servi
Slide 43: Commitment to You
Commitment to You ➢ For nearly 159 years, we have been committed to listening to our customers’ needs ➢ That commitment remains true today, and will remain into the future ➢ Our role as bankers is more important now than ever as we strive to provide financial access, support and guidance ➢ We recent
Slide 44: Commitment to You
Commitment to You The Board of Directors, management and the entire staff are firmly focused on increasing value for our customers, our communities and our shareholders. Thank you for your confidence and continued support of First Keystone Corporation.
Slide 45: Thank you for attending our May 4th, 2023 Annual Shareholders' Meeting
Thank you for attending our May 4th, 2023 Annual Shareholders’ Meeting!