8-K
FIRST KEYSTONE CORP (FKYS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
______________
Date of Report (Date of earliest event reported): May 7, 2020
First Keystone Corporation
(Exact name of Registrant as specified in its charter)
| Pennsylvania | 2-88927 | 23-2249083 |
|---|---|---|
| (State or other<br><br> <br>jurisdiction of<br><br> <br>incorporation) | (Commission<br><br> <br>File Number) | (IRS Employer<br><br> <br>Identification No.) |
| 111 West Front Street, Berwick, Pennsylvania | 18603 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
(570) 752-3671
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications<br>pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting material<br>pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ¨ | Pre-commencement communications<br>pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ¨ | Pre-commencement communications<br>pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol | Name of each exchange on which registered |
|---|---|---|
| Common stock | FKYS | OTC: Pink |
CURRENT REPORT ON FORM 8-K
| ITEM 5.07 | Submission of Matters to a Vote of Security Holders |
|---|
On May 7, 2020, First Keystone Corporation (the “Corporation”) held a Virtual Annual Meeting of Shareholders. A total of 5,816,895 shares of the Corporation’s common stock were entitled to vote as of March 13, 2020, the record date for the Annual Meeting. There were 4,352,388 shares present in person or by proxy at the Annual Meeting, at which the shareholders were asked to vote on three proposals. Set forth below are the matters acted upon by the shareholders at the Virtual Annual Meeting, and the final voting results of each such proposal.
Proposal No. 1 – Election of Class C Directors
The shareholders voted to elect three (3) Class C Directors to serve for a term of three (3) years and until their successor is elected and qualified. The results of the vote were as follows:
| Name | For | Withheld | Broker Non-Votes |
|---|---|---|---|
| D. Matthew Bower | 3,164,112 | 172,771 | 1,015,505 |
| Robert A. Bull | 3,030,379 | 306,504 | 1,015,505 |
| Elaine A. Woodland | 3,253,371 | 83,512 | 1,015,505 |
Proposal No. 2 – Ratification of the Selection ofIndependent Registered Public Accounting Firm for Fiscal Year 2020
The shareholders voted to ratify the selection of Baker Tilly Virchow Krause, LLP as the Corporation’s independent registered public accounting firm for the fiscal year 2020. The results of the vote were as follows:
| For | Against | Abstain | Broker Non-Votes |
|---|---|---|---|
| 4,298,899 | 35,494 | 17,995 | 0 |
Proposal No. 3 – Advisory Voteon Executive Compensation
The shareholders voted, on an advisory basis, to approve the compensation of the Company’s named executive officers as disclosed in the Company’s proxy statement. The results of the vote were as follows:
| For | Against | Abstain | Broker Non-Votes |
|---|---|---|---|
| 3,255,237 | 60,904 | 20,742 | 1,015,505 |
| ITEM 7.01 | Regulation FD Disclosure |
|---|
On May 7, 2020, members of management gave presentations at the Annual Meeting. A copy of these slides and related material is included in this report as Exhibit 99.1 and is furnished herewith.
| ITEM 9.01 | F****inancial Statements and Exhibits |
|---|
(d) Exhibits.
| Exhibit Number | Description |
|---|---|
| 99.1 | Annual Meeting Presentation Slides |
| 99.2 | Press release dated May 8, 2020 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, thereunto duly authorized.
| FIRST KEYSTONE CORPORATION | |
|---|---|
| (Registrant) | |
| Dated: May 8, 2020 | /s/ Elaine A. Woodland |
| Elaine A. Woodland | |
| President & Chief Executive Officer |
Exhibit 99.1
Annual Shareholders’ Meeting May 7, 2020
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 – Advisory Vote on Executive Compensation VIII. Management Presentations I. Diane Rosler II. Elaine Woodland IX. Questions X. Results of Voting XI. Closing Comments / Adjournment
• 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 an abbreviated version of what had been " normal.“ There will be a shortened presentation on our results for 2019 & 1 st quarter 2020 made by our CFO, Diane Rosler. • Our President and CEO's presentation will address COVID - 19 actions we have taken to protect our customers and employees and will address our preparation plans for the future. • We WILL conduct the normal business portion of the meeting. • To supplement today's annual meeting, we will release a more detailed presentation of today's meeting as part of the investor presentation on Form 8(K). • Unlike our typical previous Annual Meetings, we will not be spending much time focusing on the past. You may find our results for 2019 in our 10(K) filing and 1st Quarter 2020 in our 10(Q) filing. These documents provide very detailed information. Introduction
First Keystone Corporation Board of Directors
First Keystone Corporation Director Emeriti
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 forward - looking statements are inherently subject to significant risks and uncertainties, including changes in general economic and financial market conditions, the Corporation’s ability to effectively carry out its business plans and changes in regulatory or legislative requirements . Other factors that could cause or contribute to such differences are changes in competitive conditions, and pending or threatened litigation . Although management believes the expectations reflected in such forward - looking statements are reasonable, actual results may differ materially . Senior Vice President, Chief Financial Officer
FIRST KEYSTONE CORPORATION
FIRST KEYSTONE CORPORATION RETURN ON ASSETS
FIRST KEYSTONE CORPORATION
FIRST KEYSTONE CORPORATION
$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)
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)
$- $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)
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
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 )
$(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) $911 Net Income After Taxes Tax Expense Net Securities Gain/Loss Net Income After Taxes, Tax Expense & Net Securities Gains/(Losses) (amounts in thousands)
3 Months Ended March 31, 2020 3 Months Ended March 31, 2019 % Change Net Interest Income 7,376$ 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 2,250 2,381 -5.5% Less Income Tax Expense 197 138 42.8% Equals Net Income 2,053$ 2,243$ -8.5% Earnings Per Share 0.35$ 0.39$ -10.3% Return on Assets 0.81% 0.88% -8.0% Return on Equity 6.21% 7.54% -17.6% Income Statement (amounts in thousands, except per share data) *Includes $538,000 of recognized losses on the holding company's equity securities portfolio for the mark to market adjustment for the current quarter. These are not realized losses due to sales of the stocks. Unaudited
March 31, 2020 March 31, 2019 % Change Cash & Cash Equivalents & Restricted Stocks 9,045$ 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 Bearing Deposits 153,029$ 142,184$ 7.6% Interest Bearing Deposits 581,768 555,236 4.8% Total Deposits 734,797 697,420 5.4% Borrowings 156,379 166,479 -6.1% Other Liabilities 5,881 5,507 6.8% Stockholders' Equity 130,150 121,362 7.2% Liabilities and Stockholders' Equity 1,027,207$ 990,768$ 3.7% Balance Sheet (amounts in thousands) Unaudited
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 banking strategy • Economic diversity in the markets we serve • Strong experienced management team and over 200 dedicated employees • Our shareholders
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 » Lock down tips on Financial education, Fun activities, Free resources, Banking tools
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 forward - looking statements are inherently subject to significant risks and uncertainties, including changes in general economic and financial market conditions, the Corporation’s ability to effectively carry out its business plans and changes in regulatory or legislative requirements . Other factors that could cause or contribute to such differences are changes in competitive conditions, and pending or threatened litigation . Although management believes the expectations reflected in such forward - looking statements are reasonable, actual results may differ materially . President and CEO
“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
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
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 Zlobik President CEO Acting Director of Lending Sr VP CFO Sr VP Chief Credit Officer Sr VP IT Manager & ISO VP Sr Trust Officer VP Compliance & CRA Officer VP HR Manager VP Branch Administrator VP Deposit Ops Officer
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, Federal Reserve, U.S. Sec. of Treasury, FDIC, Small Business Administration and Federal Home Loan Bank. Covid - 19 Impact
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
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
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 to enable customers to ask questions and receive immediate response » Increase in automated Telephone Banking service calls » Reallocated resources and increased the number of employees responding to customer phone calls » Increased Mobile Remote Deposit Limits & waived Telephone Transfer Fees » Waived early close - out fee for Christmas Clubs Covid - 19 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 deposit as well as Online Banking, Mobile, Telephone Banking » Continuing to serve customers in person on an appointment basis » Approving consumer, residential mortgage and commercial loan payment deferrals and modification requests » Processed $16,264,000 in Stimulus ACH Deposits through May 1, 2020 » Processed and obtained approval for 449 loans through the SBA Payroll Protection Program (“PPP”) for $ 32,462,000 Covid - 19 Impact
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
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 » Providing $4,000 donation to local Food Banks » Co - Sponsored Berwick United Way mask giveaway Covid - 19 Impact
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 letter for all employees » Encryption and Data Loss prevention controls maintained » Currently have 35 employees working from home » All Social Distancing guidelines implemented and followed Covid - 19 Impact
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. » Vendor visitation restricted » Eliminated unnecessary employee travel » Focus on Morale – “Denim Days”, Business Casual, CONNECT Covid - 19 Impact
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
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 Analyst, Credit Dept Manager, Commercial Lender Diane C.A. Rosler Sr VP, CFO, Cashier 29 years 29 years Purchasing Agent, Acctg Manager, Primary Financial Officer Has worked her entire career at First Keystone Community Bank Mark J. McDonald Sr VP, Chief Credit Officer 34 Years 14 ½ years Commercial Services Officer, Credit Admn . Manager Branch Manager, Mortgage Loan Officer, Mortgage Loan Underwriter, Mortgage Loan Dept. Mgr., Credit Analyst, Relationship Mgmt Development Trainee, Underwriting Analyst, Commercial Lender, Loan Workout Officer Jeffrey T. Wozniak Sr VP, Sr IT Manager and Info Security Officer 18 years 18 years It Specialist, Network Specialist, Network Admin., IT Manager Has worked his entire career at First Keystone Community Bank Rebecca A. Hooper VP, Sr Trust Officer 17 Years 17 Years Trust Clerk, Trust Admin., Asst Trust Officer, Trust Officer Has worked her entire career at First Keystone Community Bank Kevin Krieger VP, Compliance Officer and CRA Officer 41 years Full Time plus 2 years Part Time 12 years BSA Officer Compliance Consultant, Training Manager, Teller, Teller Supervisor, Bookkeeping Clerk, Proof Clerk, Control Department Clerk, Fed Funds Desk Manager, Branch Manager/Loan Officer, Microfilm Clerk (PT) June George VP, Branch Administrator 34 Years 23 Years Consumer Loan Underwriter, Regional Manager (PCB) Mellon Bank, Pocono Community Bank Chris Zlobik VP, Deposit Operations Officer 9 Years 9 Years Computer Applications Analyst, Asst IT Manager Served in the Navy 1992 - 1994, worked in other industries and started his banking career in Nov 2010 Senior Management Depth of Bench
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 superior financial performance and value to our shareholders. We will be a leading community bank that offers high quality service in response to the needs of the consumers within our market area. We focus on strong customer relationships and compete on the basis of value, convenience, and delivery of high quality services. The delivery of these services will be done by skilled, sales - oriented, customer service personnel, supported by a broad - based, experienced organization employing “state - of - the - art” technological resources. First Keystone Community Bank intends to be a good corporate citizen committing its resources (financial and human) for the betterment of the communities we serve. First Keystone Community Bank recognizes and values the contribution of our employees. To them, we pledge to provide opportunity for a high level of job satisfaction and an equitable exchange for their services.
Thank you!
Exhibit 99.2
FIRST KEYSTONE CORPORATION HOLDS VIRTUALANNUAL MEETING –
ANNOUNCES RE-ELECTIONS AND PROMOTIONS
Berwick, Pennsylvania – May 8, 2020 – First Keystone Corporation (OTC PINK: FKYS), the parent company of First Keystone Community Bank, recently held its 2020 Virtual Annual Meeting of Shareholders. It was announced that D. Matthew Bower, Robert A. Bull and Elaine A. Woodland were re-elected as a Class C Directors to serve for a three-year term and until their successors are properly elected and qualified. They will serve on the Board of Directors for First Keystone Corporation, and its subsidiary, First Keystone Community Bank.
First Keystone Community Bank announced the following employee promotions: Steve Kotch, Loan Workout Officer, Tiffany Bienkowski, Credit Analyst II; Rachel Jennings, Post-Closing Document Review Specialist; John Dougherty, Community Office Manager; and Sandy Cole, Community Office Manager were promoted to Assistant Vice President. Connor Welch, Credit Analyst II; Christopher Matthews, Credit Analyst II; Yolanda Francis, Community Office Manager; Nikki Dietterick Covino, Keystone Banker III; and Cindy Laidacker, Human Resources Specialist, were promoted to Officer.
“First Keystone has recognized these employees for their outstanding service to the Bank and its customers,” stated Elaine A. Woodland, President and Chief Executive Officer.
First Keystone Community Bank is an independently owned community bank since 1864 and presently operates branches in Columbia (5), Luzerne (8), Montour (1), and Monroe (4) counties and a loan production office in Northampton county. First Keystone Community Bank provides innovative business and personal banking products that focus on “Yesterday’s Traditions. Tomorrow’s Vision.”
Inquiries regarding the purchase of the Corporation’s stock may be made through the following brokers: RBC Dain Rauscher, 800-223-4207; Janney Montgomery Scott, Inc., 800-526-6397; Boenning & Scattergood, Inc., 800-883-1212; and Stifel Nicolaus & Co. Inc., 800-679-5446.
For more information on First Keystone Community Bank or its parent company, First Keystone Corporation, please contact Elaine A. Woodland at 570-752-3671.