Slide 1: First Keystone Corporation Annual Stockholders' Meeting May 10, 2018
First Keystone Corporation Annual Stockholders’ Meeting May 10, 2018
Slide 2: Robert A. Bull, Chairman
Robert A. Bull Chairman
Slide 3: Forward-looking statements
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 b
Slide 4: Income Statement in Graphic Form
INCOME STATEMENT IN GRAPHIC FORM How we generated $38,439 in income: INCOME ON LOANS INVESTMENT INCOME OTHER INCOME OTHER OVERHEAD INCOME TAX EXPENSE PROFIT Dollars in thousands
Slide 5: Average Total and Earning Assets
$838,560 $900,952 $954,593 $985,089 $1,001,985 $765,696 $825,683 $881,892 $910,637 $927,179 $725,000 $775,000 $825,000 $875,000 $925,000 $975,000 $1,025,000 2013 2014 2015 2016 2017 Average Total Assets Average Earning Assets Average Total and Earning Assets (amounts in thousands)
Slide 6: Average Loan and Investment Balances
$436,040 $468,470 $509,605 $518,145 $536,054 $321,627 $356,043 $370,061 $389,176 $388,488 $280,000 $330,000 $380,000 $430,000 $480,000 $530,000 $580,000 2013 2014 2015 2016 2017 Loans Investments Average Loan and Investment Balances (amounts in thousands)
Slide 7: Loan and Investment Yields
4.83% 4.51% 4.35% 4.33% 4.30% 3.81% 3.28% 3.14% 2.97% 3.11% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 2013 2014 2015 2016 2017 Loan Yields Investment Yields Loan and Investment Yields (tax equivalent)
Slide 8: Loan and Investment Income
$21,081 $21,127 $22,143 $22,420 $23,057 $12,252 $11,663 $11,638 $11,564 $12,077 $5,000 $10,000 $15,000 $20,000 $25,000 2013 2014 2015 2016 2017 Loan Income Investment Income Loan and Investment Income (tax equivalent) (amounts in thousands)
Slide 9: Average Interest Bearing Deposits and Borrowings
$569,235 $566,243 $583,356 $609,219 $607,222 $75,296 $129,788 $151,607 $139,402 $154,892 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 2013 2014 2015 2016 2017 Average Interest Bearing Deposits Average Borrowings Average Interest Bearing Deposits and Borrowings (amounts in thousands)
Slide 10: Deposit and Borrowing Costs
0.64% 0.52% 0.54% 0.56% 0.70% 1.77% 1.15% 1.19% 1.33% 1.50% 0.00% 1.00% 2.00% 2013 2014 2015 2016 2017 Deposits Borrowings Liability Costs | Deposit and Borrowing Costs
Slide 11: Interest Expense: Deposit and Borrowing Expense
$3,623 $2,954 $3,159 $3,425 $4,232 $1,331 $1,498 $1,807 $1,857 $2,316 $0 $1,000 $2,000 $3,000 $4,000 $5,000 2013 2014 2015 2016 2017 Deposit Interest Borrowing Interest Interest Expense | Deposit and Borrowing Expense (amounts in thousands)
Slide 12: Net Interest Margin
3.79% 3.45% 3.30% 3.18% 3.11% 3.90% 3.77% 3.70% 3.59% 3.67% 3.00% 3.30% 3.60% 3.90% 4.20% 2013 2014 2015 2016 2017 First Keystone Community Bank Peer Banks Net Interest Margin – Source: FFIEC UBPR
Slide 13: Non-Interest Income and Expense
$4,905 $5,146 $5,566 $5,165 $5,233 $19,597 $21,208 $21,022 $20,348 $21,521 $0 $5,000 $10,000 $15,000 $20,000 $25,000 2013 2014 2015 2016 2017 Total Non-Interest Income Total Non-Interest Expense *Before Net Investment Securities Gains, Gains from life insurance proceeds and FHLB Prepayment Penalties
Slide 14: Net Income After Taxes
$10,273 $10,211 $9,172 $9,472 $8,648 $8,500 $8,750 $9,000 $9,250 $9,500 $9,750 $10,000 $10,250 $10,500 2013 2014 2015 2016 2017 Net Income After Taxes (amounts in thousands)
Slide 15: Return on Assets
1.23% 1.13% 0.97% 0.94% 0.85% 1.17% 1.12% 1.03% 1.01% 0.88% 0.75% 0.85% 0.95% 1.05% 1.15% 1.25% 2013 2014 2015 2016 2017 First Keystone Community Bank Peer Banks Return on Assets – Source: FFIEC UBPR
Slide 16: Return on Equity
10.46% 10.40% 9.07% 8.77% 8.16% 11.07% 10.04% 9.16% 9.13% 8.21% 7.00% 8.00% 9.00% 10.00% 11.00% 12.00% 2013 2014 2015 2016 2017 First Keystone Community Bank Peer Banks Return on Equity – Source: FFIEC UBPR
Slide 17: Earnings and Dividends per Share
$1.87 $1.84 $1.64 $1.68 $1.52 $1.04 $1.05 $1.08 $1.08 $1.08 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 2013 2014 2015 2016 2017 Earnings Dividends Earnings and Dividends per Share
Slide 18: Income Statement
Income Statement Net Interest Income +Non - Interest Income =Operating Revenue - Loan Loss Provision =Pre - Tax Income - Income Tax Expense =Net Income Earnings Per Share 3 Months Ended March 31, 2018 3 Months Ended March 31, 2017 %Change $6,490 1,259 $7,749 50 5,895 $1,804 27 $1,777 0.2 (18.1) (3.3
Slide 19: Balance Sheet
Balance Sheet Cash & Cash Equivalents Investment Securities Net Loans Premises & Equip., Net Other Assets Total Assets Non - Interest Bearing Deposits Interest Bearing Deposits Total Deposits Borrowings Other Liabilities Stockholders’ Equity Liabilities and Stockholders’ Equity $ 11,783 349,137 565,
Slide 20: First Keystone Corporation 10 year Total Return Performance
40 90 140 190 240 290 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 First Keystone Corporation NASDAQ Composite SNL Bank $500M-$1B First Keystone Corporation – 10 year Total Return Performance
Slide 21: Elaine A Woodland, Interim President and CEO
Elaine A Woodland Interim President and CEO 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 cu
Slide 22: Performance Improvement Strategy
Performance Improvement Strategy • Top Line Revenue Growth • Control Expenses • Allocation of resources
Slide 23: Top Line Revenue Growth: Residential Mortgage Direct Mail
Top Line Revenue Growth Marketing Initiatives: • Residential Mortgage Direct Mail Campaign
Slide 24: Top Line Revenue Growth: Core Deposit Growth Direct Mail
Top Line Revenue Growth Marketing Initiatives: • Core Deposit Growth Direct Mail Campaign – PNC leaving Mocanaqua – Wells Fargo leaving Plymouth – BB&T leaving Shavertown
Slide 25: Top Line Revenue Growth: PNC leaving Mocanaqua
Top Line Revenue Growth Marketing Initiatives: • PNC leaving Mocanaqua
Slide 26: Marketing Initiatives: Digital Campaign
Top Line Revenue Growth Marketing Initiatives • Digital Campaign – Goal: Grow Core Deposits – Strong presence on websites that pertain to banking – Market to consumers based on search history
Slide 27: Lehigh Valley LPO opened in Bethlehem, PA
Top Line Revenue Growth Lehigh Valley LPO opened in Bethlehem, PA on May 7, 2018 Staffed by two commercial loan officers, and Loan Assistant: Michael Reis – 17 years in lending, all in Lehigh Valley Resident of Lehigh Valley for 17 years Michael Santiago – 27 years in financial services 17 years in
Slide 28: RPRS (Right Person, Right Seat) Existing Staff
Top Line Revenue Growth RPRS (Right Person, Right Seat) Existing Staff • Training Initiatives • Right level of staffing to position for growth • Depth and Breadth of Department Heads
Slide 29: Management Banking Experience
Name/Title Overall Banking Experience Number of years with FKCB Prior Positions held at FKCB Prior Experience Elaine A. Woodland Interim President and CEO 37 Years 25 Years Teller, CSR, Acctg Clerk, Commercial Loan Officer, Director of Lending, COO Credit Analyst, Credit Dept Manager, Commercial Len
Slide 30: RPRS New Hires and OnBoarding
RPRS New Hires and OnBoarding • Hire the Right Person for the Right Seat – Always • Redesign OnBoarding process • New Hires exhibit our Core Values
Slide 31: Core Values Apply to Everyone
Core Values Apply to Everyone • Dedicated to our Customers’ Needs • Be Accountable • Collaborative Team Player • Pro - Active Problem Solver • Be Positive, Fun and Optimistic
Slide 32: Top Line Revenue Growth: Customer Engagement
Top Line Revenue Growth Customer Engagement Need to ensure that we provide superior customer service, not only in our eyes, but as our customers perceive our service
Slide 33: Customer Engagement
Customer Engagement • Customer Survey • Employee Survey • Right Products and Services • Ease of doing business with us
Slide 34: Control Expenses
Control Expenses • Top Down, Bottom Up • Line item review of expenses • Identify areas of improvement
Slide 35: Control Expenses Cont.
Control Expenses Cont. • Room for expense reduction – Review day to day processes and procedures – Use technology for process improvements – Streamline procedures • Spend money wisely to position us for future growth
Slide 36: Community Involvement
Community Involvement • “Community” is in our name • Proud to partner with customers and our communities • We are connected to local people and understand the needs of the our communities
Slide 37: Community Involvement Photos: ALS Denim Day
Community Involvement Photos ALS – Denim Day
Slide 38: Community Involvement Photos: ALS Walk
Community Involvement Photos Cont. ALS – walk participation
Slide 39: Community Involvement Photos: Veteran's Luncheon
Community Involvement Photos Cont. Veteran’s Luncheon
Slide 40: Community Involvement Photos: Mountain Top Little League
Community Involvement Photos Cont. Mountain Top Little League
Slide 41: Community Involvement Photos: Run for the Red
Community Involvement Photos Cont. Run for the Red
Slide 42: Community Involvement Photos: Winterfest Downtown Stroudsburg
Community Involvement Photos Cont. Winterfest Downtown Stroudsburg
Slide 43: Community Involvement extends into education
Community Involvement Cont. Community Involvement extends into education • Financial Literacy Programs • Pennsylvania Free Enterprise Week • Community Bank Case Study Competition • Stock Market Game
Slide 44: Community Involvement: The Bank for Your Community
Community Involvement Cont. Our aim is to be: First Keystone Community Bank…….. The Bank for Y our Community
Slide 45: Thank You for Attending!
THANK YOU FOR ATTENDING! Our Key To a great bank is you!