Slide 1: Annual Shareholders' Meeting May 7, 2020
Annual Shareholders’ Meeting May 7, 2020
Slide 2: Annual Meeting of Shareholders agenda
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 – Adviso
Slide 3: Introduction: virtual meeting format
• COVID - 19 , and the resulting guidance for Social Distancing, has created the necessity of holding our first ever Virtual Annual Shareholders Meeting. We appreciate your understanding of the required change and we miss being with you in person. • Due to this change, our presentation today will be
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
Slide 6: Diane C. A. Rosler
Diane C. A. Rosler 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
Slide 7: Financial Highlights
114 FIRST KEYSTONE CORPORATION FINANCIAL HIGHLIGHTS (Collar in thousands. except per share date) 2019S -2018.—S = «2017_—S 2016-2015 ‘SUMMARY OF OPERATIONS Interest income $ 38527 $ 35573 $32268 $ SI6d3 $37 Interest expense 102438620 654852824966 Net interest income 28284 © 26953 25.720 26361 26,745
Slide 8: Return on Assets
FIRST KEYSTONE CORPORATION RETURN ON ASSETS
Slide 9: How we generated income
IN GRAPHIC FORM y How we generated $45,456 in income: INCOME STATEMENT FIRST KEYSTONE TOrERINCOME: CORPORATION (OTHER NON:INTEREST INCOME ITEMS. 2018 2019 securities § INCOME Dollars in thousands Ie
Slide 10: How we used our income
] ‘A How we used our $45,456 in income: FIRST KEYSTONE CORPORATION
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 2015 2016 2017 2018 2019 $509,605 $518,145 $536,054 $584,960 $621,598 $370,061 $389,176 $388,488 $341,826 $306,810 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% 2015 2016 2017 2018 2019 4.35% 4.33% 4.30% 4.49% 4.78% 3.14% 2.97% 3.11% 3.47% 3.45% 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 2015 2016 2017 2018 2019 $583,356 $609,219 $607,222 $596,401 $583,740 $151,607 $139,402 $154,892 $165,341 $157,379 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% 2015 2016 2017 2018 2019 0.54% 0.56% 0.70% 0.87% 1.14% 1.19% 1.33% 1.50% 2.07% 2.28% 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% 2015 2016 2017 2018 2019 3.15% 3.03% 2.93% 2.98% 2.95% 3.27% 3.16% 3.09% 3.18% 3.23% 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 2015 2016 2017 2018 2019 $9,172 $9,472 $8,648 $9,211 $10,227 $1,971 $1,845 $1,455 $459 $1,114 $2,131 $1,764 $938 $(65) $911 Net Income After Taxes Tax Expense Net Securities Gain/Loss Net Income After Taxes, Tax Expense & Net Securities Gains/(
Slide 17: Income Statement
3 Months Ended March 31, 2020 3 Months Ended March 31, 2019 % Change Net Interest Income 7,376$ 6,821$ 8.1% Plus Non-Interest Income* 983 1,507 -34.8% Equals Operating Revenue 8,359 8,328 0.4% Less Loan Loss Provision 194 92 110.9% Less Non-Interest Expense 5,915 5,855 1.0% Equals Pre-Tax Income 2,2
Slide 18: Balance Sheet
March 31, 2020 March 31, 2019 % Change Cash & Cash Equivalents & Restricted Stocks 9,045$ 13,440$ -32.7% Securites 291,797 292,208 -0.1% Net Loans 654,437 611,221 7.1% Premises & Equipment, Net 19,244 19,906 -3.3% Other Assets 52,684 53,993 -2.4% Total Assets 1,027,207$ 990,768$ 3.7% Non-Interest Be
Slide 19: FKC's Franchise Value
FKC’s Franchise Value • History of solid investor returns – Dividend Yield of 4.36% at 12/31/19 & 6.75% at 3/31/20 • Historically strong capital position • Investor - focused dividend policy • Consistent financial performance – Efficiency Ratio of 64.91% at 12/31/19 & 64.41% at 3/31/20 • Community b
Slide 20: Marketing strategy during pandemic crisis
Marketing strategy during pandemic crisis » Via Bank website, Direct email, Social Media, Print media, Billboards, Radio and TV – » COVID - 19 Customer communications of bank operational changes » Bank existing and newly developed products & services » Community appreciation & involvement messages »
Slide 21: Elaine A. Woodland
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
Slide 22: Unprecedented Times
“Unprecedented Times” » Prime Lending Rate dropped 1.50% in two decreases: March 4 and March 16 » March 9, 2020 DOW dropped 2200 points » “Stay at Home” order issued by Governor Wolf on March 23, 2020 Covid - 19 Impact
Slide 23: Were we Ready? – YES
Were we Ready? – YES » First Keystone Community Bank has prepared and regularly updates a full Business Continuity Plan (BCP) and Pandemic Plan » Plans are reviewed , tested , and approved by the Board of Directors annually » Customer and Employee Safety are #1 concerns Covid - 19 Impact
Slide 24: Teamwork
TEAMWORK » BCP Team met regularly to address PA Government, PA Department of Health and CDC guidelines and regulation as events unfolded » BCP Team consisted of: Covid - 19 Impact Elaine A Woodland Diane Rosler Mark McDonald Jeff Wozniak Rebecca Hooper Kevin Krieger Kim Heller June George Chris Zlob
Slide 25: Teamwork
TEAMWORK » Disinfectant supplies inventoried, common high traffic areas identified , measures put in place to help keep employees and customers safe » Pa Bankers CEO Peer exchange conference calls regularly attended. Industry experts in attendance included: PA Dept. of Banking and Securities, Federa
Slide 26: Change in Business Model
Change in Business Model » Online Account Opening increased 200% since February » Mobile Remote Deposits increased 50% in volume to $356 thousand in April 2020 » Automated Telephone Banking handled 29,000 calls in April compared to an average of 16,400 in previous months Covid - 19 Impact
Slide 27: Future
Future » Knowledge gained will be used to enhance and improve BCP Plan » Created a library of Federal guidelines, First Keystone Community Bank documentation , loan modification and stimulus check information, core system documentation for future reference Covid - 19 Impact
Slide 28: Customer Impact
Customer Impact » 16 of 18 branches remain open via drive - thru only (open Sat. as well and Main branch open Sun.) » Marketing and Social Media initiatives implemented to provide customer updates and education » Provided Fraud and Scams Education via social media » Launched Chat Box on our Website
Slide 29: Customer Impact
Customer Impact » Waived early withdrawal penalties for CDs » Increased Loan Authority of Officers' Loan Committee to handle Payment Deferral requests quickly » Introduced new consumer unsecured Line of Credit "Keystone Quick Cash" » Continue to serve our customers through drive - thru, ATMs, night
Slide 30: Changes as we prepare to re-open our lobbies
As we prepare to re - open our lobbies you will see changes: » Continue to follow employee and customer mask wearing mandate of PA Dept. of Health guidelines and social distancing » Sneeze Shields for Teller and Customer Service areas » Floor distance markers Covid - 19 Impact
Slide 31: Community
Community » Opened parking lots at Shickshinny and Mifflinville for school lunch distribution programs » Donated funds to Central Susquehanna Community Foundation Disaster Relief Fund » Participate in the # LightItBlue initiative honoring Healthcare Workers, First Responders, Essential Workers » Pro
Slide 32: Employee
Employee » Managers reviewed personnel, split and divided staff for employee and Bank safety and security » Work from home alternative made available for employees - following Gov. Wolf and Dept. of Health guidance » Provided a Telecommuting agreement for all employees working from home and travel l
Slide 33: Employee
Employee » Mandatory Mask mandate of April 20, 2020 strictly adhered to by 100% of our employees » Feel ill, fever above 103.1 - stay home » Strictly adhering to PA Dept of Health guidelines, FMLA, HIPAA » Meetings held virtually. No in - person meetings exceeding 10 people, each 6 feet apart. » Ven
Slide 34: Shareholder
Shareholder » Annual meeting held virtually - first time in our history » We remain true to our mission s tatement and goals upon which we were founded over 150 years ago » Thank you for your understanding , and attendance Covid - 19 Impact
Slide 35: 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 39 years 27 years Teller, CSR, Acctg Clerk, Commercial Loan Officer, Director of Lending, COO Credit An
Slide 36: Keys to our Success: Mission Statement
Keys to our Success are expressed in our Mission Statement Our mission is to be the financial provider of choice of a broad selection of quality banking and related financial services, including trust services, to individuals, businesses, and households in the Bank’s service area and thereby deliver
Slide 37: First Keystone Community Bank contact
y First \ Keystone COMMUNITY BANK. ——" 888-759-2266 | www.fke.bank