Slide 1: First Keystone Corporation Annual Stockholders' Meeting May 5, 2016
First Keystone Corporation Annual Stockholders’ Meeting May 5, 2016
Slide 2: Welcome and forward-looking statements
Matthew Prosseda 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 currently av
Slide 3: Built with Pride, Built to Stay
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Slide 4: Welcome
Matthew Prosseda President and CEO Welcome
Slide 5: Diane Rosler, Senior Vice President CFO
Diane Rosler Senior Vice President CFO
Slide 6: Income Statement in Graphic Form
INCOME STATEMENT IN GRAPHIC FORM How we generated $39,408 in income: $21,607 55% $10,104 26% 7,697 19% PAID TO DE $1,807 5% fg BORROWING CoSTS $2,277 6% be | PROVISIONS FOR LOAN $11,012 a9 COMPUTERS, BUILDINGS & EQUIPMENT $3,084 83p PROFIT
Slide 7: Average Loan and Investment Balances
$412,543 $423,580 $436,040 $468,470 $509,605 $321,873 $321,208 $321,627 $356,043 $370,061 $280,000 $330,000 $380,000 $430,000 $480,000 $530,000 $580,000 2011 2012 2013 2014 2015 Average Loan and Investment Balances (Amounts in thousands) Loans Investments
Slide 8: Loan and Investment Yields
5.75% 5.45% 4.83% 4.51% 4.35% 4.83% 4.58% 3.85% 3.28% 3.14% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 2011 2012 2013 2014 2015 Loan and Investment Yields (tax equivalent) Loan Yields Investment Yields
Slide 9: Loan and Investment Income
$23,738 $23,103 $21,081 $21,127 $22,143 $15,564 $14,493 $12,252 $11,663 $11,638 $10,000 $15,000 $20,000 $25,000 2011 2012 2013 2014 2015 Loan and Investment Income (tax equivalent) (Amounts in thousands) Loan Income Investment Income
Slide 10: Average Total and Earning Assets
$821,148 $812,980 $838,560 $900,952 $954,593 $748,785 $747,579 $765,696 $825,683 $881,892 $725,000 $775,000 $825,000 $875,000 $925,000 $975,000 2011 2012 2013 2014 2015 Average Total and Earning Assets (amounts in thousands) Average Total Assets Average Earning Assets
Slide 11: Average Interest Bearing Deposits and Borrowings
$558,321 $538,549 $569,235 $566,243 $583,356 $92,265 $86,839 $75,296 $129,788 $151,607 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 2011 2012 2013 2014 2015 Average Interest Bearing Deposits and Borrowings (amounts in thousands) Average Interest Bearing Deposits Average Borrowings
Slide 12: Deposit and Borrowing Costs
Liability Costs 1.20% 0.85% 0.64% 0.52% 0.54% 2.91% 2.25% 1.77% 1.15% 1.19% 0.00% 1.00% 2.00% 3.00% 4.00% 2011 2012 2013 2014 2015 Deposit and Borrowing Costs Deposits Borrowings
Slide 13: Deposit and Borrowing Expense
Interest Expense $6,718 $4,556 $3,623 $2,954 $3,159 $2,687 $1,958 $1,331 $1,498 $1,807 $0 $5,000 $10,000 2011 2012 2013 2014 2015 Deposit and Borrowing Expense (amounts in thousands) Deposit Interest Borrowing Interest
Slide 14: Net Interest Margin
3.99% 4.16% 3.71% 3.43% 3.27% 3.25% 3.50% 3.75% 4.00% 4.25% 2011 2012 2013 2014 2015 Net Interest Margin
Slide 15: Net Interest Income
$29,897 $31,082 $28,397 $28,344 $28,847 $27,000 $28,000 $29,000 $30,000 $31,000 $32,000 2011 2012 2013 2014 2015 Net Interest Income (tax equivalent) (amounts in thousands)
Slide 16: Non-Interest Income and Expense
$4,320 $5,120 $4,905 $5,146 $5,566 $17,695 $19,587 $19,597 $21,208 $21,022 $0 $5,000 $10,000 $15,000 $20,000 $25,000 2011 2012 2013 2014 2015 Non - Interest Income and Expense* (amounts in thousands) Total Non-Interest Income Total Non-Interest Expense *Before Net Investment Securities Gains and FHL
Slide 17: Net Income After Taxes
$9,907 $10,170 $10,273 $10,211 $9,172 $8,000 $9,000 $10,000 $11,000 2011 2012 2013 2014 2015 Net Income After Taxes (amounts in thousands)
Slide 18: Earnings and Dividends per Share
$1.82 $1.86 $1.87 $1.84 $1.64 $0.97 $1.01 $1.04 $1.05 $1.08 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 2011 2012 2013 2014 2015 Earnings and Dividends per Share Earnings Dividends
Slide 19: Income Statement
Income Statement ($ in thousands, except per share data) 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, 2016 3 Months Ended March 31, 2015 %Change $6,659 1,300 $7,959 2
Slide 20: Balance Sheet
Balance Sheet ($ in thousands) 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 $ 9,
Slide 21: First Keystone Corporation 5 year Total Return Performance
80 100 120 140 160 180 200 220 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015 First Keystone Corporation NASDAQ Composite SNL Bank $500M-$1B Period Ending Index 12/31/10 12/31/11 12/31/12 12/31/13 12/31/143 12/31/15 First Keystone Corporation 100.00 123.32 152.58 163.41 168.05 181
Slide 22: Matthew Prosseda, President and CEO
Matthew Prosseda President and CEO
Slide 23: Treasury Constant Maturity Rate, 36 Years since 1980
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 10 - Year Treasury Constant Maturity Rate 36 Years since 1980
Slide 24: Treasury Constant Maturity Rate, 8 Years since 2008
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 10 - Year Treasury Constant Maturity Rate 8 Years since 2008
Slide 25: Total Revenue Mix
Net Interest Income 76% Non Interest Income 24% Total Revenue
Slide 26: PA Banks Average Net Interest Margin
3.1% 3.3% 3.5% 3.7% 3.9% PA Banks Average Net Interest Margin (TE)
Slide 27: Total Revenue Mix
Net Interest Income 76% Non Interest Income 24% Total Revenue
Slide 28: Strategic Goals
Strategic Goals • Growth in Earnings Assets • Growth in Non - Interest Income • Expense Control • Informed Interest Rate Risk Management
Slide 29: Relationship Development
Relationship Development • Small Business Banking • Residential Mortgage Lending • Wealth Management • Depositor Segmentation
Slide 30: Branch Redesign
Branch Redesign • Universal Banker • Cross - training of staff • Employee Development • Branch layout • Consultative Selling Model
Slide 31: Three Distinct Markets
Three Distinct Markets • Legacy Markets • Brand Awareness • New Markets • Tailored messages
Slide 32: Community Involvement
Community Involvement • Focus on Community Affiliations • Develop lists of the most influential organizations and events, by branch • Assign bankers to support key organizations • Network with other supporters • Social Media
Slide 33: Process Improvement
Process Improvement • Create efficiencies, best practices and conformity • Rebranding Rewards Checking • Fully utilize Core System capabilities • Enhance customer service by increasing turnaround and eliminating redundancies
Slide 34: Cyber Security/Technology Advancement
Cyber Security/Technology Advancement • Protection of sensitive customer data • Outreach for customer education • Employees make the bank safer • Maintain technological lead in Community Bank space
Slide 35: Strategic Goals
Strategic Goals • Growth in Earnings Assets • Growth in Non - Interest Income • Expense Control • Informed Interest Rate Risk Management
Slide 36: Thank You for Attending!
THANK YOU FOR ATTENDING! Our Key To a great bank is you!