Attached files
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EX-32.1 - FIRST KEYSTONE CORP | v205790_ex32-1.htm |
EX-32.2 - FIRST KEYSTONE CORP | v205790_ex32-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K/A
Amendment
No. 2
x ANNUAL
REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
fiscal year ended December 31,
2009
or
¨ TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
transition period from __________ to __________
Commission
file Number: 2-88927
FIRST KEYSTONE
CORPORATION
(Exact
name of registrant as specified in its Charter)
Pennsylvania
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23-2249083
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(State
or other jurisdiction of incorporation or
organization)
|
(I.R.S.
Employer Identification Number)
|
111
West Front Street Berwick, Pennsylvania
|
18603
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant's
telephone number, including area code: (570) 752-3671
Securities
registered pursuant to Section 12(b) of the Act: None
Securities
registered pursuant to Section 12(g) of the Act: Common Stock, par value $2.00 per
share
Indicate
by check mark if the registrant is a well-known seasoned issuer as defined in
Rule 405 of the Securities Act.
Yes ¨ No
x
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act.
Yes ¨ No
x
Indicate
by check mark whether the Registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes x No
¨
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes ¨ No
¨
Indicate
by check mark if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-K contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
x
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer,” and “small
reporting company” in Rule 12b-2 of the Exchange
Act. Large
accelerated filer ¨ Accelerated
filer x Non-accelerated
filer ¨ Smaller
reporting company ¨
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).
Yes ¨ No
x
The
aggregate market value of the registrant’s outstanding voting common stock held
by non-affiliates on June 30, 2009 determined by using a per share closing price
on that date of $16.15 as quoted on the Over the Counter Bulletin Board, was
$79,988,721.
At March
8, 2010, there were 5,440,196 shares of Common Stock, $2.00 par value,
outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
Portions
of the Registrant's 2010 definitive Proxy Statement are incorporated by
reference in Part III of this Report.
EXPLANATORY
NOTE
We are
filing this Amendment No. 2 to the Annual Report on Form 10-K for the fiscal
year ended December 31, 2009 (the “Annual Report”), which was
filed with the Securities and Exchange Commission on March 15, 2010 as amended
on May 20, 2010, to amend and restate Part II, Item 9A, “Controls and
Procedures,” to correct the disclosure previously provided in the Annual
Report. As required by Rule 12b-15 promulgated under the Exchange Act
of 1934, as amended (the “Exchange Act”), new
certifications by our Chief Executive Officer and Chief Financial Officer are
being filed as Exhibits 32.1 and 32.2 of this Amendment No. 2.
This
Amendment No. 2 does not change, amend or alter any other section of the Annual
Report not otherwise discussed herein and continues to speak as of the date of
the Annual Report. Accordingly, this Amendment No. 2 should be read
in conjunction with our other filings made with the Securities and Exchange
Commission subsequent to the filing of the Annual Report.
Part
II
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 Securities Exchange Act of 1934 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
effective. The Corporation believes that a control system, no matter
how well designed and operated, cannot provide absolute assurance that the
objectives of the control system are met, and no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within a Corporation have been detected.
During
the fourth quarter of 2009, management uncovered a defalcation in the pre-tax
amount of $850,000. The Corporation determined the defalcation was the result of
unauthorized activities by an employee of the Bank who was immediately
terminated. The Corporation expects insurance to cover the defalcation amount
less a $50,000 deductible.
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. 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.
The
Corporation’s internal control over financial reporting are supported by written
policies that pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect transactions and dispositions of assets; provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America, and that receipt and
expenditures of the Corporation are being made only in accordance with
authorization of the Corporation’s management and Board of Directors; and
provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Corporation’s assets that
could have a material effect on the consolidated financial
statements.
All
internal control systems, no matter how well designed, have inherent
limitations. Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
The
management of First Keystone Corporation assessed the effectiveness of the
Corporation’s internal control over financial reporting as of December 31,
2009. In making this assessment, we used the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control — Integrated
Framework. Based on our assessment we believe that, as of
December 31, 2009, the Corporation’s internal control over financial reporting
is effective based on those criteria.
First
Keystone Corporation’s independent registered public accounting firm that
audited the consolidated financial statements has issued an audit report on our
assessment of, and the effective operation of, the Corporation’s internal
control over financial reporting as of December 31, 2009. This report
appears on page 73.
Changes
in Internal Controls
In
response to the defalcation discussed above, the Audit Committee and the Board
of Directors has approved and management has implemented certain changes to the
Corporation’s internal control over financial reporting which include: broadened
segregation and rotation of duties; intensified management oversight and
analysis of general ledger accounts; expanded documentation and approval
procedures for certain general ledger entries; and instituted an online,
real-time core banking system. In addition, management has instituted a program
to require periodic testing of these changes. The Corporation made no other
changes in its internal controls or in other factors that has materially
affected, or is reasonably likely to materially affect these controls subsequent
to the date of the evaluation of the controls by the Chief Executive and Chief
Financial Officers.
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.
Report
of Independent Registered Public Accounting Firm
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33
|
|||
Consolidated
Balance Sheets
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34
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|||
Consolidated
Statements of Income
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35
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|||
Consolidated
Statements of Stockholders’ Equity
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36
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|||
Consolidated
Statements of Cash Flows
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37
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|||
Notes
to Consolidated Financial Statements
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38
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Report
of Independent Registered Public Accounting Firm
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73
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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.
3. Exhibits
Exhibits
required by Item 601 of Regulation S-K:
Exhibit Number Referred to
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Item 601 of Regulation S-K
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Description of Exhibit
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3i
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Articles
of Incorporation, as amended (Incorporated by reference to Exhibit 3(i) to
the Registrant's Report on Form 10-Q for the quarter ended March 31,
2006).
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3ii
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By-Laws,
as amended (Incorporated by reference to Exhibit 3(ii) to the Registrant's
Report on Form 8-K dated February 25, 2009).
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10.1
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Supplemental
Employee Retirement Plan (Incorporated by reference to Exhibit 10 to
Registrant's Report on Form 10-Q for the quarter ended September 31,
2005).
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10.2
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Management
Incentive Compensation Plan. (2)
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10.3
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Profit
Sharing Plan (Incorporated by reference to Exhibit 10 to Registrant's
Report on Form 10-Q for the quarter ended September 30,
2006).
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10.4
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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).
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10.5
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Employment
Agreement between First Keystone Corporation, First Keystone National Bank
and John G. Gerlach dated May 10, 2007 (Incorporated by reference to Annex
B to the Proxy Statement/Prospectus on the Registrant’s Registration
Statement on Form S-4, as amended (No. 333-145658)).
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10.6
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Consulting
Agreement between Keystone Corporation, First Keystone National Bank and
John G. Gerlach dated May 10, 2007 (Incorporated by reference to Annex C
to the Proxy Statement/Prospectus on the Registrant’s Registration
Statement on Form S-4, as amended (No. 333-145658)).
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10.7
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Form
of Non-Competition and Non-Solicitation Agreement by and between First
Keystone Corporation and the Pocono Community Bank directors (Incorporated
by reference to Annex F to the Proxy Statement/Prospectus on the
Registrant’s Registration Statement on Form S-4, as amended (No.
333-145658)).
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14
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Code
of Ethics (Incorporated by reference to Exhibit 14 to Registrant’s Report
on Form 8-K dated January 9, 2007).
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21
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List
of Subsidiaries of the Corporation.
(1)
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23
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Consent
of Independent Auditors. (1)
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31.1
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Rule
13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
(1)
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31.2
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Rule
13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
(1)
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32.1
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Section
1350 Certification of Chief Executive Officer. (3)
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32.2
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Section
1350 Certification of Chief Financial Officer.
(3)
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(1)
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Incorporated
by reference to the corresponding exhibit to the original
filing.
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(2)
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Incorporated
by reference to the corresponding exhibit to Amendment No. 1 to the
original filing.
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(3)
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Filed
herewith.
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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
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/s/ Matthew P. Prosseda
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Matthew
P. Prosseda
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Chief
Executive Officer
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Date:
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December 16,
2010
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