First Keystone Corporation, the parent company of First Keystone Community Bank, reported unaudited financial results for the nine months ended September 30, 2026. The company announced these results on October 30, 2026, noting a significant increase in net income compared to the same period in the previous year.
For the nine months ended September 30, 2026, First Keystone reported total net income of $9,475,000. This represents an increase of $2,700,000, or 39.9%, compared to the nine months ended September 30, 2025. Net income per share for the period was $1.50, while dividends totaled $0.84 per share.
The company attributes the increase in earnings to higher interest income and a reduction in credit loss provisions. Total interest income rose by $3,195,000, or 5.6%, driven by interest earned on increased balances of interest-bearing deposits held at the Federal Reserve Bank. Conversely, total interest expense increased by $957,000, or 3.3%, largely due to a change in the interest rate on subordinated debt. The rate on this debt increased from a fixed 4.375% to a floating rate of 7.745% as of the September 30, 2026 interest payment.
First Keystone also experienced a recovery of credit losses for the nine-month period, totaling $1,125,000. This is a decrease of $1,894,000 compared to the expense of $769,000 recorded in the prior year. The reduction was driven by lower provisions for credit losses related to owner-occupied, non-farm, non-residential loans, as well as decreases in outstanding principal balances and loss rates for multifamily and non-owner occupied loans.
Non-interest income increased by $594,000, or 10.9%, for the nine months ended September 30, 2026. This growth was primarily due to improved net securities gains of $537,000, resulting from changes in the mark-to-market adjustment on held equity securities. However, other non-interest income decreased by $201,000, partly offset by gains from life insurance proceeds and increases in ATM and debit card fees.
On the balance sheet, total assets increased to $1,726,469,000 as of September 30, 2026, an increase of $144,092,000, or 9.1%, from the previous year. Cash and cash equivalents saw a substantial increase of $184,869,000, or 125.5%, due to higher deposit balances. Deposits overall increased by $123,299,000, or 10.3%, driven by increases in retail certificates of deposit.
