Market Overview

First Keystone Announces First Quarter 2017 Earnings


First Keystone Corporation (OTC:FKYS), parent company of First
Keystone Community Bank, reported net income of $2,286,000 for the three
month period ended March 31, 2017. Net income for the first quarter of
2017 was $110,000, or 5.1% higher than the same period in 2016. Earnings
per share increased to $0.40, an increase over the first quarter of 2016
of 2.6%. Dividends per share were $0.27 per share for the three months
ended March 31, 2017 and 2016.

Net interest income declined by 2.7% due primarily to an increase in
interest paid on deposits and an increase in interest paid on short-term

Non-interest income excluding net investment security gains was $51,000
lower in 2017 as compared to 2016. Trust department fees, service
charges and fees on deposits and ATM fees and debit card income all
rose. Due to a decrease in new residential mortgage underwriting, gains
on sales of mortgage loans was down by $66,000.

Non-interest expense was higher in 2017 at $5,263,000. This is $123,000,
or 2.4% higher than in the same period in 2016, primarily driven by
increases in occupancy expense, professional services and PA shares

Total assets breached the $1 billion dollar mark for the first time in
the Bank's history. Total assets rose to $1,002,385,000 as of March 31,
2017, an increase of $21,559,000, or 2.2% as compared to March 31, 2016.
Net loans increased as did total deposits. Stockholder's equity
decreased as a result of a reduction in accumulated other comprehensive
income, the effect of rising rates on the market value of our investment

Management considers subsequent events occurring after the balance sheet
date for matters which may require adjustment to, or disclosure in, the
consolidated financial statements. The review period for subsequent
events extends up to and including the filing date of a public company's
consolidated financial statements when filed with the Securities and
Exchange Commission ("SEC"). Accordingly, the financial information in
this announcement is subject to change.

First Keystone Community Bank provides innovative business and personal
banking products that focus on "Yesterday's Traditions. Tomorrow's
Vision." The Bank currently operates offices in Columbia (5), Luzerne
(8), Montour (1), and Monroe (4) counties.

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., 800-223-6807.

Note: This press release may contain forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995. Actual
results and trends could differ materially from those set forth in such
statements due to various factors. These factors include operating,
legal and regulatory risks, changing economic and competitive conditions
and other risks and uncertainties.

For more information on First Keystone Community Bank or its parent
company, First Keystone Corporation, please contact Matthew P. Prosseda
at 570-752-3671.

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