What changed in this filing

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Item 1. Business

2024-03-29 compared with 2023-03-15 · 26 added, 28 removed, 250 unchanged (18% of the section changed)

6 unchanged sentences

The Bank was originally organized in 1864 as a national banking association.

On October 1, 2010, the Bank converted from a national banking association to a Pennsylvania chartered commercial bank under the supervision of the Pennsylvania Department of Banking and Securities and the Federal Deposit Insurance Corporation (the “FDIC”).

The Bank’s deposits are insured by the FDIC to the maximum extent of the law regulated by the FDIC and the Pennsylvania Department of Banking and Securities.

On October 1, 2010, the Bank converted from a national banking association to a Pennsylvania chartered commercial bank and trust company under the supervision of the Pennsylvania Department of Banking and Securities and the Federal Deposit Insurance Corporation (the “FDIC”).

The Bank’s deposits are insured by the FDIC to the maximum extent of the law, and it is regulated by the FDIC and the Pennsylvania Department of Banking and Securities.

The Bank is subject to regulation by the Federal Reserve Board governing reserves required to be maintained against certain deposits and other matters.

1 unchanged sentence

The Bank’s legal headquarters are located at 111 West Front Street, Berwick, Pennsylvania, from which it oversees the operations of its nineteen branch locations.

These locations consist of five branches within Columbia County, eight branches within Luzerne County, one branch in Montour County, four branches within Monroe County, and one loan production office within Northampton County, Pennsylvania.

A new, full-service branch is expected to open around the end of the first quarter of 2023 in Northampton County, Pennsylvania.

For further information, please refer to Item 2 – Properties, and Note 11 – Commitments and Contingencies in the notes to the consolidated financial statements.

9 unchanged sentences

The Bank is not a party to any collective bargaining agreement.

The Corporation’s internet website is www.firstkeystonecorp.fkc.bank and the Bank’s internet website is www.fkc.bank .

The Corporation’s internet website is firstkeystonecorp.fkc.bank and the Bank’s internet website is www.fkc.bank .

None of the information or contents of our website is incorporated into this Annual Report on Form 10-K.

8 unchanged sentences

The current population of the Bank’s primary five-county footprint has increased 2.6% since 2019 to 897,000 and is estimated to increase 1.3% to 909,000 by 2029.

As of June 30, 2022, the FDIC Summary of Deposits report market share data ranked the Bank 4th in the deposit market share out of the top 25 banks in the principal four-county deposit market, with 7.3% of deposits.

As of June 30, 2023, the FDIC Summary of Deposits report market share data ranked the Bank 8th in the deposit market share out of the top 25 banks in the principal five-county deposit market, with 4.7% of deposits.

The Bank’s headquarters, main office, and three of its branch offices are located in Berwick, Pennsylvania.

4 unchanged sentences

Additionally, the Bank contends with non-bank and online firms, such as consumer finance companies and financial technology companies, for loans, mutual funds and other investment alternatives for deposits.

The Bank vies for deposits based on the ability to provide a range of competitively priced products, quality service, competitive rates, online services and convenient locations and hours.

The Bank vies for deposits based on the ability to provide a range of competitively priced products, quality consultative service, competitive rates, enhanced online service and offerings and convenient locations and hours.

The challenge among its peers for loan origination generally relates to interest rates offered, products available, ease of process, quality of service, and loan origination fees charged.

3 unchanged sentences

Management strategically addresses growth opportunities versus competitive issues by formulating the new products and services to be offered, evaluating expansion opportunities of its existing footprint with new locations, as well as investing in the expertise of skilled employees.

The Bank continues to succeed in serving its customers by living up to its motto, “Yesterday’s Traditions.

Through relationship banking, the Bank continues to succeed in serving its customers by living up to its motto, “Yesterday’s Traditions.

Tomorrow’s Vision.”

2 unchanged sentences

The Bank’s major competitors in Columbia, Luzerne, Montour, Monroe, Northampton, and Lehigh Counties are:

· AgChoice Farm Credit

· First Northern Bank & Trust

· AgChoice Farm Credit, ACA

· Service 1 st Federal Credit Union

· Citizens Bank

· Citizens Bank, N.A.

· Fulton Bank, N.A.

· Susquehanna Community Bank

· Community Bank, N.A.

· Fulton Bank

· Honesdale National Bank

· Embassy Bank

· The Honesdale National Bank

· The Dime Bank

· Jersey Shore State Bank

· Embassy Bank for the Lehigh Valley

· Journey Bank

· ESSA Bank & Trust

1 unchanged sentence

· Fidelity Deposit and Discount Bank

· First Columbia Bank & Trust Co.

· First National Bank of PA

· Members 1 st Federal Credit Union

· NBT Bank, N.A.

· First National Bank of PA (FNB of PA)

· Peoples Security Bank

· First Northern Bank & Trust Co.

· Peoples Security Bank & Trust Co.

Concentration

The Corporation and the Bank are not dependent on deposits nor exposed by loan concentrations to a single customer or to a small group of customers, such that the loss of any one or more would not have a materially adverse effect on the financial condition of the Corporation or the Bank.

The Corporation has been successful in attracting municipal deposits, which make up 23.0% of total deposits at December 31, 2022.

The Corporation and the Bank are not dependent on deposits nor exposed by loan concentrations to a single customer or to a small group of customers, or sector or industry except as described below, such that the loss of any one or more would not have a materially adverse effect on the financial condition of the Corporation or the Bank.

The Corporation had been successful in attracting municipal deposits, which make up 17.3% of total deposits at December 31, 2023.

The largest deposit customer consisted of a municipality with deposit balances amounting to 4.9% of total deposits.

13 unchanged sentences

Federal and state banking laws and regulations govern, among other things, the scope of a bank’s business, the investments a bank may make, the reserves against deposits a bank must maintain, loans a bank makes and collateral it takes, and the activities of a bank with respect to mergers and consolidations and the establishment of branches.

other securities of the bank holding company or its subsidiaries and on taking such stock or securities as collateral for loans.

As a subsidiary of a bank holding company, the Bank is subject to certain restrictions imposed by the Federal Reserve Act on any extensions of credit to the bank holding company or its subsidiaries, on investments in the stock or other securities of the bank holding company or its subsidiaries and on taking such stock or securities as collateral for loans.

The Federal Reserve Act and Federal Reserve Board regulations also place certain limitations and reporting requirements on extensions of credit by a bank to principal shareholders of its parent holding company, among others, and to related interests of such principal shareholders.

68 unchanged sentences

As of December 31, 2023, the Bank maintained capital ratios above the required capital conservation buffer.

Under the initially proposed rules, accumulated other comprehensive income (“AOCI”) would have been included in a banking organization’s common equity tier 1 capital.

The final rules allow community banks to make a one-time election not to include these additional components of AOCI in regulatory capital and instead use the existing treatment under the general risk-based capital rules that excludes most AOCI components from regulatory capital.

The Bank elected to opt-out of this item with the filing of the March 31, 2015 Call Report.

The Corporation has assessed the impact of these changes on the regulatory ratios of the Corporation and the Bank on the capital, operations, liquidity and earnings of the Corporation and Bank, and concluded that the new rules did not have a material negative effect.

Federal Reserve Bank Small Bank Holding Company Policy

21 unchanged sentences

Further, the liability has the potential to far exceed the original amount of the loan issued by the Bank.

Currently, neither the Corporation nor the Bank is a party to any pending legal proceeding pursuant to any environmental statute, nor are the Corporation and the Bank aware of any circumstances that may give rise to liability under any such statute.

Currently, neither the Corporation nor the

Bank is a party to any pending legal proceeding pursuant to any environmental statute, nor are the Corporation and the Bank aware of any circumstances that may give rise to liability under any such statute.

Interest Rate Risk

28 unchanged sentences

Dodd-Frank is intended to affect a fundamental restructuring of federal banking regulation.

Among other things, Dodd-Frank created a new Financial Stability Oversight Council to identify systemic risks in the financial system and gave federal regulators new authority to take control of and liquidate financial firms.

Among other things, Dodd-Frank created a new Financial Stability Oversight Council to identify systemic risks in the financial system and gave

federal regulators new authority to take control of and liquidate financial firms.

Dodd-Frank additionally created a new independent federal regulator to administer federal consumer protection laws.

7 unchanged sentences

Deposit Insurance.

Dodd-Frank permanently increases the maximum deposit insurance amount for banks, savings institutions and credit unions to $250,000 per depositor, and extended unlimited deposit insurance to non-interest bearing transaction accounts through December 31, 2012.

Dodd-Frank permanently increased the maximum deposit insurance amount for banks, savings institutions and credit unions to $250,000 per depositor.

Dodd-Frank also broadens the base for FDIC insurance assessments.

47 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business