First Keystone Corporation Announces First Quarter Goodwill Impairment and Second Quarter Dividend

Rhea-AI Summary

First Keystone (FKYS), the parent company of First Keystone Community Bank, announced a non-cash goodwill impairment of approximately $19.1 million as of March 31, 2024, due to a decrease in its stock price. This impairment does not affect regulatory capital ratios, liquidity, or cash balances.

The company also declared a $0.28 per share quarterly cash dividend, payable on June 28, 2024, to shareholders of record as of June 13, 2024. The dividend amount is unchanged from the same quarter last year.

The impairment stems from the acquisition of Pocono Community Bank in 2007 and assets in Danville, Pennsylvania, in 2004. First Keystone plans to file its Q1 2024 Form 10-Q promptly.

Positive

• Quarterly cash dividend of $0.28 per share declared, payable June 28, 2024.
• Dividend amount unchanged from the same quarter last year, indicating stability.
• Goodwill impairment has no impact on regulatory capital ratios, liquidity, or cash balances.

Negative

• Non-cash goodwill impairment charge of approximately $19.1 million recorded.
• Impairment due to a decrease in the company's stock price during Q1 2024.

BERWICK, Pa.--(BUSINESS WIRE)-- First Keystone Corporation (the “Corporation”) (OTC PINK: FKYS), parent company of First Keystone Community Bank, announces a non-cash goodwill impairment as of March 31, 2024 and declared a $0.28 per share quarterly cash dividend to shareholders of record as of June 13, 2024, payable June 28, 2024.

The Corporation is required to do periodic testing of goodwill impairment at certain times and if certain events occur or circumstances change which are considered to be triggering events that would more likely than not reduce the fair value of its goodwill below the carrying value of the reporting unit, First Keystone Community Bank. The Corporation performed a quantitative impairment test as of March 31, 2024, due primarily to the decrease in the Corporation’s stock price during the first quarter of 2024 as a triggering event, and based on the results of the test, the Board of Directors determined on May 29, 2024, that the Corporation will record a first quarter non-cash goodwill impairment charge of approximately $19,133,000. The goodwill is related to the acquisition of the Pocono Community Bank in November 2007 and of certain fixed and operating assets acquired and deposit liabilities assumed of the branch of another financial institution in Danville, Pennsylvania, in January 2004. The goodwill impairment has no impact on regulatory capital ratios, liquidity and the Corporation's cash balances.

The Corporation filed its Form 10-K on March 29, 2024, and intends to file the Q1 2024 Form 10-Q as promptly as possible.

Cash dividends amounted to $0.28 per share for the second quarter of 2024, the same amount paid in the second quarter of 2023.

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), Monroe (4), and Northampton (1) 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., 800-679-5446.

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 Elaine A. Woodland at 570-752-3671.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240530816287/en/

Elaine A. Woodland 570-752-3671

Source: First Keystone Corporation

FAQ

What is the amount of the quarterly cash dividend declared by First Keystone in Q2 2024?

First Keystone declared a $0.28 per share quarterly cash dividend for Q2 2024.

When will the Q2 2024 dividend for FKYS be paid?

The Q2 2024 dividend will be paid on June 28, 2024.

What was the non-cash goodwill impairment charge recorded by FKYS in Q1 2024?

First Keystone recorded a non-cash goodwill impairment charge of approximately $19.1 million in Q1 2024.

Why did First Keystone record a goodwill impairment in Q1 2024?

The goodwill impairment was recorded due to a decrease in the company's stock price during Q1 2024, which triggered a quantitative impairment test.

Does the goodwill impairment affect FKYS's regulatory capital ratios or liquidity?

No, the goodwill impairment does not impact First Keystone 's regulatory capital ratios or liquidity.