Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
First Keystone Corporation maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) designed to ensure that information required to be disclosed in the reports that the Corporation files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those disclosure controls and procedures performed as of the end of the period covered by this report, the Chief Executive Officer and Chief Financial Officer of the Corporation concluded that the Corporation’s disclosure controls and procedures were not effective as of December 31, 2025.
Management’s Report on Internal Control Over Financial Reporting
The management of First Keystone Corporation is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934). The Corporation’s internal control system was designed to provide reasonable assurance to the Corporation’s management and Board of Directors regarding the preparation and fair presentation of published financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, the application of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that compliance with the policies or procedures may deteriorate.
The Corporation’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that fairly and accurately reflect the transactions and dispositions of the assets of the Corporation in reasonable detail, provide reasonable assurance that the transactions are recorded in a manner to reflect preparation of the financial statements in accordance with regulatory reporting requirements and accounting principles generally accepted in the United States of America, provide reasonable assurance that all expenditures and receipts of the Corporation are made in accordance with appropriate authorization by management or the Board of Directors of the Corporation (as applicable), and provide reasonable assurance regarding prevention (or timely detection and correction) of any unauthorized use, acquisition, or disposition of the Corporation’s assets that could have a material effect on the Corporation’s financial statements.
The management of First Keystone Corporation, along with participation of the Chief Executive Officer and the Chief Financial Officer, assessed the effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2025. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the Internal Control — Integrated Framework (2013). Based on management’s assessment, the Corporation’s internal control over financial reporting was not effective as of December 31, 2025 due to the material weakness described below.
Management identified a material weakness in the Corporation’s internal control over financial reporting related to the operation of the control related to the identification, evaluation, and documentation of certain problem loans, including conclusions related to non-accrual status, individual loan evaluation, and charge-off determination. The control did not operate effectively as of December 31, 2025. While certain loans were appropriately identified and monitored as substandard, the Corporation’s control activities did not sufficiently identify, evaluate, and document indicators of collectability and need for individual evaluation on a timely basis. Management did not timely conclude upon and process (1) a required move to non-accrual status for a commercial real estate loan relationship, (2) the need for individual evaluation and a specific allocation of the allowance for credit losses related to the commercial real estate loan relationship, and (3) a charge-off on a fully drawn commercial and industrial line of credit for which the collateral was determined insufficient to support the balance of the loan and for which collection was no longer probable. As a
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result of the ineffectiveness of the control, these matters were identified in the audit process and resulted in adjustments to the allowance for credit losses and related financial statement amounts. Accordingly, there is a reasonable possibility that a material misstatement to the Corporation’s annual or interim financial statements would not have been prevented or detected on a timely basis.
Management has initiated remediation measures to address the material weakness identified above. These actions include enhancements to the Corporation’s problem loan governance and review process. Henceforward, as part of the Corporation’s quarterly problem loan review process, management will consider all loans meeting the following criteria for possible classification as non-accrual status, need for individual loan evaluation, or possible charge-off: (1) any loans that are currently ninety days or more past due or without further payment remittance will be ninety days or more past due at quarter-end, (2) any loans that have been ninety days or more past due at any point during the current quarter, (3) any loans for which (during the current or prior fiscal year) the Corporation has advanced funds to pay delinquent real estate taxes, (4) any loans for which capitalized advances have caused the current principal balance to exceed the original loan balance or commitment, (5) any loans for which the Corporation has become aware of a reduction in cash flow of sufficient magnitude to make repayment collaterally-dependent, and (6) any loans for which repayment is contingent upon conversion (to cash) of receivables for which collectability is now in doubt.
Management believes that these actions, when fully implemented and operating for a sufficient period of time, will remediate the material weakness. As management continues to evaluate and work to improve its internal control over financial reporting, management may elect to take additional measures to address control deficiencies or may elect to modify the remediation plan as described above.
Changes in Internal Control over Financial Reporting
There were no changes in the Corporation’s internal control over financial reporting during the fiscal quarter ended December 31, 2025, that materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
During the year ended December 31, 2025, no director or officer of the Corporation adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not Applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information under the captions “Information As To Directors and Nominees,” “Principal Officers of the Bank and the Corporation,” “Committees of the Board of Directors” and “Section 16(A) Beneficial Ownership Reporting Compliance” are incorporated here by reference from First Keystone Corporation’s definitive proxy statement .
CODE OF ETHICS
The Corporation has adopted a Directors and Senior Management Code of Ethics, which applies to all members of the Board of Directors and to senior officers of the Corporation. It can be found on the Investor Relations section of our website at https://firstkeystonecorp.fkc.bank.
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ITEM 11. EXECUTIVE COMPENSATION
The information under the captions “Executive Compensation” and “Oversight of Executive Compensation and Director Nominations” are incorporated here by reference from First Keystone Corporation’s definitive proxy statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information under the caption “Share Ownership” is incorporated here by reference from First Keystone Corporation’s definitive proxy statement.
Equity Compensation Plan Information
Number of securities
remaining available
for future issuance
Number of securities
under equity
to be issued
Weighted-average
compensation plans
upon exercise of
exercise price of
excluding securities
outstanding options,
outstanding options,
reflected in column
warrants and rights
warrants and rights
(a)
Plan category
(a)
(b)
(c)
Equity compensation plans approved by shareholders
—
$
—
—
Equity compensation plans not approved by shareholders
—
—
—
Total
—
$
—
—
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information under the captions “Related Person Transactions” and “Governance of the Company” are incorporated here by reference from First Keystone Corporation’s definitive proxy statement.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information under the captions “Report of the Audit Committee” and “Proposal No. 2: Ratification of Independent Registered Public Accounting Firm” are incorporated here by reference from First Keystone Corporation’s definitive proxy statement.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) 1. Financial Statements
The following consolidated financial statements are included in Part II, Item 8, of this Report:
First Keystone Corporation and Subsidiary.
Reports of Independent Registered Public Accounting Firm (PCAOB ID 23 )
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income (Loss)
Consolidated Statements of Changes in Stockholders’ Equity
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Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
2. Financial Statement Schedules
Financial statements schedules are omitted because the required information is either not applicable, not required, or is shown in the financial statements or in their notes.
ITEM 16. FORM 10-K SUMMARY
None.
3. Exhibits
Exhibits required by Item 601 of Regulation S-K:
Exhibit Number Referred to
Item 601 of Regulation S-K
Description of Exhibit
3i
Articles of Incorporation, as amended (Incorporated by reference to Exhibit 3(i) to the Registrant’s Report on Form 8-K dated August 28, 2018).
3ii
By-Laws, as amended and restated (Incorporated by reference to Exhibit 3(ii) to the Registrant’s Report on Form 8-K dated August 28, 2018).
10.1(a)
Supplemental Employee Retirement Plan – J. Gerald Bazewicz (Incorporated by reference to Exhibit 10 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013). *
10.1(b)
Supplemental Employee Retirement Plan – David R. Saracino (Incorporated by reference to Exhibit 10 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013). *
10.1(d)
Supplemental Employee Retirement Plan – Elaine Woodland (Incorporated by reference to Exhibit 10 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013). *
Item 601 of Regulation S-K
Description of Exhibit
10.2
Management Incentive Compensation Plan (Incorporated by reference to Exhibit 10 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2018). *
10.4
First Keystone Corporation 1998 Stock Incentive Plan (Incorporated by reference to Exhibit 10 to Registrant’s Report on Form 10-Q for the quarter ended September 30, 2006). *
14
First Keystone Corporation Directors and Senior Management Code of Ethics (Incorporated by reference to Exhibit 99.1 to Registrant’s Report on Form 8-K dated August 27, 2013).
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19
Insider Trading Policy of First Keystone Corporation (Incorporated by reference to Exhibit 19 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2024).
21
List of Subsidiaries of the Issuer, filed with this annual report on Form 10-K. **
23.1
Consent of Baker Tilly US, LLP. **
31.1
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. **
31.2
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer. **
32.1
Section 1350 Certification of Chief Executive Officer. **
32.2
Section 1350 Certification of Chief Financial Officer. **
101.INS
XBRL Instance Document.**
101.SCH
XBRL Taxonomy Extension Schema Document.**
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document.**
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document.**
101.LAB
XBRL Taxonomy Extension Label Linkbase Document.**
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document.**
104
Cover Page Interactive Data File (Formatted as Inline XBRL and Contained in Exhibit 101)
* Denotes a compensatory plan.
** Filed herewith.
The Corporation will provide a copy of any exhibit upon receipt of a written request for the particular exhibit or exhibits desired. All requests should be addressed to the Corporation’s principal executive offices.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FIRST KEYSTONE CORPORATION
/s/ Jack W. Jones
Jack W. Jones
President and Chief Executive Officer
(Principal Executive Officer)
Date:
March 30, 2026
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
/s/ John E. Arndt
March 30, 2026
John E. Arndt, Vice Chairman/Director
Date
/s/ D. Matthew Bower
March 30, 2026
D. Matthew Bower, Director
Date
/s/ Robert A. Bull
March 30, 2026
Robert A. Bull, Chairman/Director
Date
/s/ Whitney B. Holloway
March 30, 2026
Whitney B. Holloway, Director
Date
/s/ Michael L. Jezewski
March 30, 2026
Michael L. Jezewski, Director
Date
/s/ Nancy J. Marr
March 30, 2026
Nancy J. Marr, Director
Date
/s/ William E. Rinehart
March 30, 2026
William E. Rinehart, Director
Date
/s/ Elaine A. Woodland
March 30, 2026
Elaine A. Woodland, Director
Date
/s/ Stacy L. Gordner
March 30, 2026
Stacy L. Gordner, Chief Financial Officer
Date
(Principal Financial Officer)
/s/ David R. Saracino
March 30, 2026
David R. Saracino, Secretary/Director
Date
/s/ Jack W. Jones
March 30, 2026
Jack W. Jones, President/
Chief Executive Officer/Director
Date
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.