First Keystone Announces Second Quarter 2026 Earnings (Unaudited)
First Keystone Corporation (OTCID: FKYS), parent company of First Keystone Community Bank, reported an increase in total interest income of $2,124,000 or 5.7%, as compared to the six months ended June 30, 2025. The increase was predominantly due to interest earned on increased balances of interest-bearing deposits held at the Federal Reserve Bank compared to the same period in 2025. Total interest expense increased by $952,000 or 5.1% overall, mainly due to an increase of $598,000 in interest expense related to deposits. The increased deposit interest for the six months ended June 30, 2026 is mainly due to an increase of $1,961,000 in expense related to retail CDs, offset by a decrease of $784,000 in expense related to other retail deposits and a decrease of $579,000 in expense related to brokered CDs. Average retail CD balances have increased $116,059,000 at June 30, 2026 vs. June 30, 2025, while average other interest-bearing retail deposit account balances decreased by $3,184,000 overall during the six month period. Average brokered CD balances were $78,329,000 for the six months ended June 30, 2026 vs. $99,871,000 for the six months ended June 30, 2025. The net effect of derivative agreements decreased net interest income by $555,000 for the six months ended June 30, 2026 and increased net interest income by $346,000 for the six months ended June 30, 2025. These derivative agreements are part of the Corporation’s interest rate risk management strategy and are intended to mitigate exposure to changes in market interest rates. The provision for credit losses for the six month period decreased by $1,203,000 to a credit balance of $689,000 for the six months ended June 30, 2026 compared to expense of $514,000 for the six months ended June 30, 2025. The decrease in the provision for credit losses was mainly the result of a decrease of $9,439,000 in the principal balance of loans from $959,770,000 at June 30, 2025 to $950,331,000 at June 30, 2026. There were also two larger charge-offs completed during the first six months of 2025 which impacted the balance of the provision for credit losses for the six months ended June 30, 2025.
