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                     FIRST KEYSTONE ANNOUNCES
                       RECORD 2011 EARNINGS

Berwick, Pennsylvania - JANUARY 30, 2012 - First Keystone
Corporation (OTC BB: FKYS), parent company of First Keystone
Community Bank, reported record net income of $9,907,000 or $1.82
per share for the year ending December 31, 2011, as compared to
$8,961,000 or $1.65 per share in 2010.  For the fourth quarter
ending December 31, 2011, net income was $2,191,000 as compared
to $1,971,000 for the same period in 2010, an increase of 11.2%.

Earnings for 2011 continue to be impacted by an improving net
margin.  Net interest income before the provision for loan losses
was $27.62 million in 2011 versus $25.41 million in 2010, an 8.7%
increase.  Interest on loans and investments declined slightly,
while interest on deposits and borrowed funds declined by more
than $3.3 million, or 26.2%.

The bank made a $1.90 million addition to its loan loss reserve,
down from $2.58 million last year, a 26.2% reduction.  Management
believes that, at its current level, 1.43% of loans, the loan
loss reserve is adequate to meet future problems in the loan
portfolio.

Non interest income fell 10.6%, or $527,000 after adjusting for
the recovery on loss due to defalcation, which was recorded in
2011.  A slowdown in residential mortgage refinancing led to a
55.4% decline in gains on sale of loans.  Service charges and
fees also declined.  On the non interest expense side, salaries
and wages rose due to staff additions and rising health insurance
costs, while FDIC insurance premiums fell overall.  In total, non
interest expense rose by only 2.42%.

As of December 31, 2011, assets increased to $818,546,000, a 2.8%
increase.  Deposits fell slightly to $624,349,000, or 0.4%.
Loans, net of unearned income, amounted to $415,995,000, a 1.6%
increase, as of December 31, 2011.

First Keystone Community Bank, an independently owned community
bank since 1864, presently operates 16 full service offices in
Columbia (5), Luzerne (6), Montour (1), and Monroe (4) Counties
providing banking and trust services.

Inquiries regarding the purchase of the company'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., 800.883.8383; and Stifel Nicolaus &
Co. Inc., 800.223.6807.



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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
Matthew P. Prosseda at 570.752.3671.



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