UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest reported): January 8, 2010
FIRST KEYSTONE CORPORATION
____________________________________
(Exact name of registrant as specified in its Charter)
PENNSYLVANIA 2-88927 23-2249083
__________________ __________ _____________
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.
of incorporation)
111 West Front Street, Berwick, Pennsylvania 18603
____________________________________________ ________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (570) 752-3671
Check the appropriate box below if the Form 8K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction
A.2. below):
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
CURRENT REPORT ON FORM 8-K
ITEM 8.01 OTHER EVENTS.
On January 8, 2010, First Keystone Corporation, the parent
company of First Keystone National Bank, announced that it has
uncovered through an internal investigation a defalcation with a
maximum exposure of approximately $850,000. This amount is based
on the results of management's preliminary investigation. The
corporation determined the defalcation was a result of
unauthorized activities of an employee (non officer) of the bank,
who has been terminated. Although the investigation is ongoing,
there does not appear to be any losses which include the
involvement of any other employee. The corporation believes that
the defalcation does not include any customer accounts unrelated
to the employee. The appropriate governmental authorities have
been notified and the bank is cooperating fully with respect to
the authorities' investigation.
The corporation maintains insurance coverage for this type of
risk with a deductible of $50,000. Management expects that this
claim will constitute a covered loss and as such the total
estimated loss should not exceed $50,000 on a pre tax or $33,000
net of income taxes.
Management is vigorously evaluating the impact of this incident
on its current controls and procedures and will implement any
changes necessary to address the issues raised by this isolated
event. Further, through management's investigation, sufficient
evidence has been uncovered to conclude that the soundness and
financial condition of First Keystone Corporation will not be
affected by this event.
The press release is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
(b) Pro Forma Financial Information
(c) Shell Company Transactions.
(d) Exhibits
Exhibit Number Description
______________ ___________
99.1 Press Release dated January 8, 2010.
Signatures
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this Current Report on
Form 8K to be signed on its behalf by the undersigned, thereunto
duly authorized.
FIRST KEYSTONE CORPORATION
(Registrant)
By: /s/ J. Gerald Bazewicz
J. Gerald Bazewicz
President and Chief Executive Officer
Dated: January 8, 2010
EXHIBIT INDEX
Exhibit Number Description
______________ ___________
99.1 Press Release dated January 8, 2010.