May 2, 2011
Dear Valued Shareholder:
By virtually any standard, Keystone Bank's financial performance during 2010 was enviable. Under a shroud of increasing regulatory issues and the erosion of loan portfolios at many banks leading to their acquisition, Keystone Bank has not only weathered the storm, but has prevailed despite the challenges. While we don't know what economic conditions may arise in 2011, we will continue to embrace the proven principles that have brought us this far. It's been a sound path.
In review of our Balance Sheet, you will first note the significant growth in Total Assets, up 12% from year-end 2009 to $185.2 million at December 31, 2010. While our trade areas show slight growth, we attribute this rise to winning market share...always an enviable dynamic. Total Deposits have risen more than $21 million to $165.5 million which reflects our customers' reluctance to invest in Wall Street and to the excellent menu of deposit accounts we offer. While a customer may discover Keystone Bank for one solution, we continually work to enhance the total banking relationship we share with them.
Our Income Statement is equally solid. During 2010, the increase in our deposit accounts translated to an upswing in service charges we receive. As we grow, we have added personnel which finds its way to higher collective personnel costs, but which helps us better serve our communities. Net Income for 2010 was $1.3 million, as compared to slightly more than $1 million a year earlier. We are confident that many of our peer banks would gladly swap performances.
Your management and staff remain committed to service, solutions and strength. Our fiscal integrity is not negotiable, and we open our doors each day with a resolute dedication to meeting the needs of each person who graces our doorway. We'll never lose sight of the fact the customers...friends and neighbors all...are the foundation of Keystone Bank.
Your active participation as a shareholder is appreciated, as are your questions, comments or concerns.
John F. Gittings and Gerald R. Smith, Jr.