Monitor the Company's next quarterly filing for use of proceeds — specifically whether the existing $25.0 million 4.375% subordinated notes are redeemed as indicated. The refinancing extends debt maturity from 2030 to 2036 at a higher coupon (7.50% vs 4.375%), increasing annual interest cost by roughly $0.78 million, but strengthens Tier 2 capital. Watch for any regulatory developments affecting Tier 2 capital treatment.
Price Chart
Executive Summary
First Keystone Corporation issued $32.5 million in 7.50% fixed-to-floating rate subordinated notes due 2036 in a private placement. Net proceeds will be used for general corporate purposes, including the potential redemption of its existing $25.0 million 4.375% subordinated notes. The new notes are structured to qualify as Tier 2 regulatory capital at the holding company level.
Key Financial Metrics
Key Facts
- Issued $32,500,000 aggregate principal amount of 7.50% fixed-to-floating rate subordinated notes due September 30, 2036
- Interest at 7.50% fixed for first 5 years, then Three-Month Term SOFR plus 277 basis points floating
- Notes are unsecured, subordinated obligations ranking junior to senior indebtedness
- Net proceeds to be used for general corporate purposes, including possible redemption of existing $25.0 million 4.375% notes due 2030
- Notes intended to qualify as Tier 2 capital under Federal Reserve guidelines
- Cannot be redeemed before September 30, 2031 except upon a Tier 2 Capital Event, Tax Event, or Investment Company Event
- Pro forma debt/equity ratio of 22.2% and pro forma interest coverage of 9.5x at 6.75% coupon (presentation estimate)
- Pro forma total risk-based capital ratio improves to 17.73% from 17.30% at the holding company level
Financial Impact
$32.5 million subordinated debt issuance; annual interest cost of approximately $2.44 million at 7.50% fixed rate; pro forma debt/equity of 22.2%
Risk Factors
- Higher interest expense from 7.50% coupon vs 4.375% on existing notes increases fixed charges
- Pro forma double leverage ratio of 117.7% indicates reliance on Bank dividends to service holding company debt
- Subordinated structure means noteholders rank behind all senior creditors and depositors
- Limited acceleration rights — only bankruptcy/insolvency events allow acceleration; payment defaults only allow suit for overdue amounts
Investment Themes
Documents Analyzed
This report is based on 4 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0000737875-26-000035 |
| Document: fkys-ex10d1.htm | 0000737875-26-000035 |
| Document: fkys-ex99d2.htm | 0000737875-26-000035 |
| Document: fkys-20260930x8k.htm | 0000737875-26-000035 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 1, 2026 26d ago | 8-K | $19.23 | awaiting T+60 | — | $19.10 (−0.68%) |
Aug 3, 2026 12w ago | 8-K | $18.96 $18.86 | ▼ −0.53% | ▼ −2.31% | $19.10 (+0.74%) |
May 28, 2026 21w ago | 8-K | $18.00 $19.00 | ▲ +5.56% | ▲ +4.37% | $19.10 (+6.11%) |
May 28, 2026 21w ago | Insider Cluster | $17.99 $18.96 | ▲ +5.39% | ▲ +3.66% | $19.10 (+6.17%) |
May 26, 2026 22w ago | 8-K | $17.85 $18.95 | ▲ +6.16% | ▲ +3.44% | $19.10 (+7.00%) |
May 1, 2026 25w ago | 8-K | $19.00 $18.49 | ▼ −2.68% | ▼ −5.75% | $19.10 (+0.53%) |
Mar 4, 2026 33w ago | 8-K | $19.63 $17.99 | ▼ −8.35% | ▼ −18.44% | $19.10 (−2.70%) |
US Market Status
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