First Keystone Corporation Reports 86% Increase in Net Income to $1.96 Million for Q1 2026

First Keystone Corporation reported a net income of $1.96 million for the first quarter of 2026, reflecting a significant increase of 86% compared to $1.05 million in the same period last year. This translates to earnings per share of $0.31, up from $0.17 in the prior year. The growth in profitability was primarily driven by a rise in interest income, which reached $19.24 million, a 5.7% increase from $18.21 million in the first quarter of 2025. The increase in interest income was attributed to higher interest and fees on loans, which amounted to $14.13 million, compared to $13.77 million a year earlier.

The company's total assets decreased slightly to $1.52 billion as of March 31, 2026, down from $1.53 billion at the end of 2025. This decline was accompanied by a reduction in total loans, which fell to $931.62 million from $946.66 million, primarily due to a decrease in real estate loans. The real estate loan portfolio decreased by $14.43 million, while the agricultural loan segment saw a modest increase. Total deposits also decreased by $6.15 million to $1.13 billion, driven by a decline in interest-bearing deposits, particularly brokered certificates of deposit.

In terms of operational metrics, the company reported a recovery in the provision for credit losses, with a recovery of $390,000 in the first quarter of 2026, compared to a provision of $751,000 in the same quarter of 2025. The allowance for credit losses stood at $9.04 million, down from $9.41 million at the end of 2025. Non-performing assets totaled $16.89 million, a slight decrease from $16.92 million at the end of the previous year, with non-accrual loans remaining stable.

Strategically, First Keystone Corporation continues to focus on maintaining a diversified loan portfolio while managing credit risk effectively. The company has implemented measures to enhance its problem loan governance and review processes, particularly in light of the current economic environment characterized by rising inflation and geopolitical tensions. Looking ahead, management remains cautious but optimistic about navigating the challenges posed by market conditions, with a commitment to maintaining adequate liquidity and capital levels. The company is well-capitalized, meeting all regulatory requirements under Basel III, with a total stockholders' equity of $114.18 million as of March 31, 2026.