Slide 1: First Keystone Corporation Annual Shareholder Meeting
FIRST KEYSTONE CORPORATION Annual Shareholder Meeting - May 17, 2011
Slide 2: Matthew Prosseda, Chief Executive Officer
Matthew Prosseda Chief Executive Officer iq FIRST KEYSTONE CORPORATION K Annual Shareholder Meeting - May 17, 2011
Slide 3: First Keystone Corporation
FIRST KEYSTONE CORPORATION Annual Shareholder Meeting - May 17, 2011
Slide 4: Total Assets (in Millions)
2005 | $512 2006 | $526 2007 | $681 2008 | $715 2009 | $758 2010 | $797 Total Assets (in Millions)
Slide 5: Total Deposits
~" 2005 | $363 - 2006 | $384 2007 | $493 2008 | $505 2009 | $581 2010 | $627 4 Total Deposits
Slide 6: Total Stockholder's Equity (in Millions)
2005 | $53.4 2006 | $53.4 2007 | $70.9 2008 | $69.1 2009 | $74.2 2010 | $79.1 Total Stockholder’s Equity (in Millions)
Slide 7: Total Deposits vs. Loans
— “Deposits Loans — $363 | $235 | 2005 ” $384 | $252 | 2006 . $493 | $377 | 2007 $505 | $408 | 2008 “ $581 | $407 | 2009 $627 | $410 | 2010 Total Deposits vs. Loans (in Millions)
Slide 8: Tax Equivalent Net Interest Income
2005 | $16.6 2006 | $15.3 2007 | $15.5 2008 | $21.4 2009 | $24.2 2010 | $27.2 "Tax Equivalent Net Income 4 Net Interest Income iN (in Millions)
Slide 9: Composition of Revenue
“*Net Interest Income Non-Interest Income 2005 | $16.6 | $3.8 2006 | $15.3 | $3.8 . 2007 | $15.5 | $4.2 2008 | $21.4 | $4.0 » 2009 | $24.2 | $4.3 2010 | $27.2 | $5.8 ‘Tex Equivatent Net Income VW Composition of Revenue iN (in Millions)
Slide 10: Net Income (in Thousands)
2005 | $6,847 2006 | $6,190 2007 | $6,127 2008 | $7,551 2009 | $7,937 2010 | $8,961 Net Income (in Thousands)
Slide 11: Earnings per Share
a / 2005 | $1.48 "2006 | $1.35 2007 | $1.31 2008 | $1.39 2009 | $1.46 2010 | $1.65 Earnings (per Share)
Slide 12: Dividends per Share
2005 | $0.78 2006 | $0.85 2007 | $0.88 2008 | $0.89 2009 | $0.92 2010 | $0.93 Dividends (per Share)
Slide 13: Income Statement
March 31,2011 March 31, 2010 %Change Net Interest Income $6,831 $5,964 14.5 +Non-interest Income $963 $1,096 (12.1) =Operating Revenue $7,794 $7,060 10.4 -Loan Loss Provision $300 $200 50,0 -Non-Interest Expense $4,304 $4,121 4.4 =Pre-Tax Expense $3,190 $2,739 16.5 -Income Tax Expense $694 $552 25.7
Slide 14: Balance Sheet
March 31, 2011 March 31, 2010 % Change Cash Due From Banks $30,412 $34,368 (11.5) Investment Securities $309,266 $292,989 5.6 Loans - Net $404,136 $399,541 1.2 Fixed Assets $12,011 $11,844 14 Other Assets $53,458 $50,749 5.3 Total Assets $809,283 $789,491 25 Liabilities and Capitals Non - Interest B
Slide 15: Treasury Yield Curve - Selected Dates
4.00 3.00 2.00 1.00 1 Month 3Month = Month 1 Year 2Year 3 Year 5 year 7 Year 10Year 20 Year 30 Year mesiSep 24,07 mmmJan 28,'08 ==elan 23,09 —=Jan29,10 <=mmJan28,11 ===Apr25, 11 y Treasury Yield Curve I~ Selected Dates
Slide 16: Elaine Woodland, Senior Lending Officer
Elaine Woodland Senior Lending Officer Kk FIRST KEYSTONE CORPORATION iN Annual Shareholder Meeting - May 17, 2011
Slide 17: 2010 was a Challenging Year in Lending
2010 was a Challenging Year in Lending Minimal Loan Growth Near Record Charge-offs Significant Additions to Loan Reserve Kk FIRST KEYSTONE CORPORATION iN Annual Shareholder Meeting - May 17, 2011
Slide 18: Total Gross Loans Outstanding
a 2008 2009 2010 Commercial Loans $258,119 $258,753 $269,290 Including Real Estate Secured Real Estate $136,288 $138,092 $131,981 Primarily Residential Mortgage Loans Consumer Loans $15,291 $10,802 $8,781 Total $409,698 $407,647 $410,052 Kk Total Gross Loans Outstandin (in Thousands
Slide 19: Commercial Loan Growth
Commercial Loans = — “Including Real Estate Secured ih 2008 | $258,119 _ 2009 | $258,753 S95 2010 | $269,290 Kk Commercial Loan Growth
Slide 20: Activity in the Allowance for Loan Losses
————————— 2008 2009 2010 Balance — January 1 $5,046 $5,195 $5,322 Provision charged to operations $700 $800 $2,575 Loans charged off -$739 -$734 -$2,262 Recoveries $188 $61 $66 Balance — December 31 $5,195 $5,322 $5,701 Kk Activity in the Allowance for Loan Losses (in Thousands)
Slide 21: Commercial Loans by Grade
Grade: December 31 2010 March 31 2011 1-6 Pass $249,043 $254,401 7 Special Mention $9,638 $3,553 8 Substandard $10,382 $12,183 9 Doubtful $227 $224 $269,290 $270,361 Kk Commercial Loans Gross Loans (in Thousands)
Slide 22: Residential Mortgage Home Equity Loan Promotion
Residential Mortgage Home Equity Loan Promotion Loans Generated $29,556,760 September 1, 2010 —- December 31, 2010 Sold in 2010 $24,607,883 214 Loans Gain $824,685 Generated $10,173,911 Commercial Loan Promotion Goals Began May 2011 New Relationships $30,000,000 New Money Kk FIRST KEYSTONE CORPORATI
Slide 23: Kevin Miller, Chief Operating Officer
Kevin Miller Chief Operating Officer Kk FIRST KEYSTONE CORPORATION iN Annual Shareholder Meeting - May 17, 2011
Slide 24: Highlights
* Market Share ¢ Deposit Growth * New Branches * Building projects ¢ New products and services Kk Highlights
Slide 25: Market Share
The following deposit study is from the FDIC. The results are as of June 2010. Market Share
Slide 26: FDIC Deposit Survey - Berwick Market
(June 2009 - June 2010) First Keystone Community Bank First Columbia Bank and Trust PNC Bank M&T Bank FNB Bank Berwick Market $8,000.00 $6,000.00 $4,000.00 $2,000.00 es $(2,000.00) ‘$(4,000.00) Kk FDIC Deposit Survey - Berwick Market 2009 % of Market $301,934.00 72.66% $26,638.00 6.41% $32,140.00 7.
Slide 27: FDIC Deposit Survey - County Market Share
FDIC Deposit Survey - Columbia, Luzerne, Montour, Northumberland, Monroe (June 2009 - June 2010) 2009 %of Market 2010 %of Market Gain/Loss Offices in Market PNC Bank $1,813,569.00 17.60% — $1,845,560.00 17.39% $31,991.00 36 ‘Wells Fargo (Wachovia) $1,268,429.00 12.31% — $1,235,713.00 11.64% ($32,716
Slide 28: Deposit Growth
Deposit Growth totals at First Keystone. December 31, 2009 vs. December 31, 2010. Deposit Growth
Slide 29: Deposit Growth by Branch
12/31/2009 — 12/31/2010 2 Deposit Comparison Gain/Loss 12/31/2009 12/31/2010 20,000,000.00 Branch Name Balance Balance Main Office 202,676 228,136 Stroudsburg. 78,522 76,300 15,000,000.00 Salem Township 51266 62.323 Scott Township 43,529 42,641 Hanover Township 40,683 39,370 +10,000,000.00 Kingston
Slide 30: Plymouth Branch Opening June 27, 2011
Our newest branch is scheduled to open June 27%, 2011 Plymouth Branch
Slide 31: Plymouth Branch
Former M&T Location 49 Million Dollar Market. (Only Bank left is Wells Fargo Wachovia) Branch Manager: Linda Meshinski Opening Date: June 27, 2011 Kk Plymouth Branch
Slide 32: Branch 17
Plans are underway for Branch# 17. Our goal is to be ready for business by the end of 2011. Kk Branch 17
Slide 33: Online Account Opening
© Branch# 17 is our online branch. ¢ You will be able to open * Checking * Savings * Certificate of Deposit. * Online, anytime! Kk Online Account Opening
Slide 34: Berwick Giant
The Berwick Giant Store location is in for a change... Berwick Giant
Slide 35: Briar Creek Giant - New Location
Kk Briar Creek Giant — New Location
Slide 36: Transforming Downtown Berwick
We are transforming downtown Berwick.... 111 W Front St, Berwick, PA
Slide 37: Main Office Expansion
eee -\ Main Office Expansion
Slide 38: Slide 38
Slide 39: Bump-up!
It’s time to step-up to something great! Bump-up!
Slide 40: Bump-up Certificate of Deposit
35 month Certificate of Deposit 1.75% rate Bump —up option available with a primary checking account. Kk Bump-up!
Slide 41: First Keystone Corporation
FIRST KEYSTONE CORPORATION Annual Shareholder Meeting - May 17, 2011