Core Viewpoint - First Keystone Corporation reported significant financial improvements for the year ended December 31, 2025, including increased interest income and net income, primarily driven by growth in commercial real estate loans and a prior goodwill impairment charge in 2024 [1][4]. Financial Performance - Interest income increased by $5,777,000 or 8.1% compared to 2024, mainly due to growth in commercial real estate loans [1]. - Total interest expense rose by $405,000 or 1.0%, with a notable increase of $2,225,000 in deposit-related expenses, offset by a decrease in short- and long-term borrowings [1]. - Non-interest income increased by $626,000 or 9.3%, with net securities gains improving to $224,000 from $105,000 in 2024 [2]. - Non-interest expense decreased by $16,670,000 or 33.0%, largely due to a goodwill impairment charge of $19,133,000 recognized in 2024 [3]. - Net income for 2025 was $6,152,000, with earnings per share at $0.99, reflecting an increase of $19,355,000 compared to 2024 [4]. Asset and Equity Growth - Total assets increased to $1,530,977,000, a rise of $102,394,000 or 7.2% from 2024 [5]. - Deposits grew by $91,557,000 or 8.8%, with a significant increase in retail CDs by $135,733,000 [6]. - Stockholders' equity rose by $6,278,000 or 5.9%, primarily due to improvements in accumulated other comprehensive loss [6].

Core Insights - Most Americans significantly underestimate their retirement savings needs and overestimate their preparedness, with data indicating that adopting a specific habit can lead to more than double the savings compared to those who do not practice it [1][17]. Savings Account Comparison - Navy Federal Credit Union offers a standard savings account with an APY of 0.25%, which is substantially lower than online banks that provide rates over 15 times higher, resulting in potential losses of hundreds to thousands of dollars in interest annually for savers [2][5]. - Credit unions like Navy Federal prioritize lending benefits over deposit rates, meaning that members holding emergency funds or short-term cash reserves miss out on significant interest by not utilizing high-yield savings accounts or CD ladders [4][6]. Lending vs. Saving - Navy Federal's competitive advantage lies in its lending products, offering better rates on loans and mortgages compared to traditional banks, which benefits borrowers but leaves savers with minimal returns on deposits [6][9]. - The current rate environment, with the Federal Reserve's benchmark rate at 3.75% and the 10-year Treasury yield at 4.23%, highlights the attractiveness of brokered CDs and online savings accounts that provide higher yields [7]. Inflation Impact - The Consumer Price Index has risen, indicating that purchasing power is eroding for those with savings accounts yielding only 0.25%, emphasizing the importance of seeking higher returns to maintain real wealth [8]. Recommendations for Members - Members with loans through Navy Federal should maintain their membership for the favorable lending rates, but it is advisable to open a separate high-yield savings account at an online bank for emergency funds and short-term cash reserves [14][16]. - For larger sums of cash, such as $80,000 waiting for a home purchase, utilizing a brokered CD ladder can yield significantly more interest compared to leaving funds in a Navy Federal savings account [12]. Savings Trends - The personal savings rate in the U.S. has decreased from 6.2% in early 2024 to 4% by the end of 2025, indicating that Americans are saving less even as incomes rise, making it crucial to maximize returns on saved funds [13].

Financial Data and Key Metrics Changes - For Q3 2025, the company reported net income of $8.9 million or $0.45 per diluted share, an increase from $6.9 million or $0.35 per share in Q3 2024, representing a 29% year-over-year growth [2][8] - Return on average assets increased to 1.27% from 1.11% a year ago, while return on average equity improved to 15.74% from 13.38% [3][8] - The efficiency ratio strengthened to 52.28%, reflecting disciplined expense management [3][10] - Net interest margin expanded to 3.14% compared to 3.03% in the same quarter last year [3][10] - Total assets reached $2.8 billion, marking a 10.5% year-over-year growth [3][4] Business Line Data and Key Metrics Changes - Net interest income before provision for credit losses was $21.3 million, up $3.2 million or 17.5% from the prior year [3][13] - Loans held for investment grew to $2.1 billion, an increase of more than $199 million or 10.3% from $1.9 billion a year ago [4][10] - Non-performing loans declined to 0.06% of total loans, down from 0.14% last year, indicating strong credit quality [4][19] Market Data and Key Metrics Changes - Total deposits ended the quarter at $2.5 billion, marking a robust 15.5% year-over-year increase [3][4] - Average deposits increased to $166 million or nearly 29% compared to the prior quarter and are up $380 million or 18% year over year [10][11] Company Strategy and Development Direction - The company focuses on relationship-based growth and has added new production personnel to support growth plans in diversified deposit-focused business verticals [4][10] - The management highlighted the strength of Florida's economy as a key driver of success, with real GDP growth tracking around 2.4% in 2025 [25][26] - The company aims to leverage opportunities in the association banking vertical, with plans to potentially double the book of business in the next 18 months [39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining momentum into 2026, citing solid business fundamentals and a vibrant market [54] - The company anticipates improvements in net interest margin as excess cash is put to work in loan volume and securities portfolio [14][45] - Management noted that the current economic environment aligns well with the company's strategy, particularly in serving middle market businesses and real estate development [26] Other Important Information - The company completed a $40 million subordinated debt issuance, primarily used for share repurchase, which underscores confidence in the intrinsic value of its stock [5][8] - Tangible book value per share grew to $11.55, reflecting the impact of the share repurchase [5][10] Q&A Session Summary Question: Can you quantify the yacht payoffs in the quarter? - The yacht payoffs were a little over $10 million and occurred in August, impacting loan yields and margin [29] Question: Is the loan production in September a sign of sustained momentum? - Management believes it is a sign of sustained loan momentum, with a strong pipeline for Q4 [31] Question: How is competition impacting loan pricing? - The market is very competitive, and pricing is based on relationships rather than transactions [32] Question: What is the outlook for the margin in Q4? - A margin of 3.27% is expected for Q4, with further rate cuts anticipated [37][44] Question: What are the expectations for non-interest income? - Non-interest income is expected to remain stable, with activity in wire fees and swap fees anticipated to continue [38] Question: What growth opportunities exist in the association banking business? - The company is bullish on the association banking vertical, with significant growth potential identified [39]

Core Insights - Brokered CDs offer higher interest rates and longer maturity periods compared to traditional CDs, but they come with increased complexity and risk [1][3][10] Group 1: Understanding Brokered CDs - Brokered CDs are purchased through brokerage firms, which buy them from banks and offer them to investors [2] - They provide a fixed interest rate for a set period, similar to traditional CDs, but can be sold before maturity without penalties [3][10] Group 2: Benefits and Risks - The main advantage of brokered CDs is the potential for higher interest rates, with current offerings reaching up to 4% [5][10] - However, they are riskier due to the possibility of unlicensed brokers and the complexity of fees, which can diminish overall returns [3][10] Group 3: Interest Calculation - Brokered CDs earn simple interest, meaning interest is calculated only on the original deposit, unlike traditional CDs that earn compound interest [5][6] - For example, a $20,000 investment in a five-year CD at 4% APY would yield $4,420 with compound interest, compared to just $4,000 with simple interest [7] Group 4: Purchasing Brokered CDs - Brokered CDs can be purchased through SEC-registered brokerage firms or independent salespeople, with a recommendation to vet brokers for reliability [8][9] - It is crucial to confirm the FDIC insurance status of the issuing bank and understand the terms of the investment, including fees and whether the account is callable [12][13] Group 5: Alternatives to Brokered CDs - Traditional CDs may offer better value due to features like compound interest and potentially similar rates, with the best rates reaching up to 4% APY [12] - Investors seeking higher returns may need to consider stocks or other investment vehicles if they want to exceed the rates offered by traditional CDs [12]