FIRST KEYSTONE CORP

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 Exchange Act 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 not effective as of December 31, 2025.

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 (as defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934). 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, the application of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that compliance with the policies or procedures may deteriorate.

The Corporation’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that fairly and accurately reflect the transactions and dispositions of the assets of the Corporation in reasonable detail, provide reasonable assurance that the transactions are recorded in a manner to reflect preparation of the financial statements in accordance with regulatory reporting requirements and accounting principles generally accepted in the United States of America, provide reasonable assurance that all expenditures and receipts of the Corporation are made in accordance with appropriate authorization by management or the Board of Directors of the Corporation (as applicable), and provide reasonable assurance regarding prevention (or timely detection and correction) of any unauthorized use, acquisition, or disposition of the Corporation’s assets that could have a material effect on the Corporation’s financial statements.

The management of First Keystone Corporation, along with participation of the Chief Executive Officer and the Chief Financial Officer, assessed the effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2025. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the Internal Control — Integrated Framework (2013). Based on management’s assessment, the Corporation’s internal control over financial reporting was not effective as of December 31, 2025 due to the material weakness described below.

Management identified a material weakness in the Corporation’s internal control over financial reporting related to the operation of the control related to the identification, evaluation, and documentation of certain problem loans, including conclusions related to non-accrual status, individual loan evaluation, and charge-off determination. The control did not operate effectively as of December 31, 2025. While certain loans were appropriately identified and monitored as substandard, the Corporation’s control activities did not sufficiently identify, evaluate, and document indicators of collectability and need for individual evaluation on a timely basis. Management did not timely conclude upon and process (1) a required move to non-accrual status for a commercial real estate loan relationship, (2) the need for individual evaluation and a specific allocation of the allowance for credit losses related to the commercial real estate loan relationship, and (3) a charge-off on a fully drawn commercial and industrial line of credit for which the collateral was determined insufficient to support the balance of the loan and for which collection was no longer probable. As a

result of the ineffectiveness of the control, these matters were identified in the audit process and resulted in adjustments to the allowance for credit losses and related financial statement amounts. Accordingly, there is a reasonable possibility that a material misstatement to the Corporation’s annual or interim financial statements would not have been prevented or detected on a timely basis.

Management has initiated remediation measures to address the material weakness identified above. These actions include enhancements to the Corporation’s problem loan governance and review process. Henceforward, as part of the Corporation’s quarterly problem loan review process, management will consider all loans meeting the following criteria for possible classification as non-accrual status, need for individual loan evaluation, or possible charge-off: (1) any loans that are currently ninety days or more past due or without further payment remittance will be ninety days or more past due at quarter-end, (2) any loans that have been ninety days or more past due at any point during the current quarter, (3) any loans for which (during the current or prior fiscal year) the Corporation has advanced funds to pay delinquent real estate taxes, (4) any loans for which capitalized advances have caused the current principal balance to exceed the original loan balance or commitment, (5) any loans for which the Corporation has become aware of a reduction in cash flow of sufficient magnitude to make repayment collaterally-dependent, and (6) any loans for which repayment is contingent upon conversion (to cash) of receivables for which collectability is now in doubt.

Management believes that these actions, when fully implemented and operating for a sufficient period of time, will remediate the material weakness. As management continues to evaluate and work to improve its internal control over financial reporting, management may elect to take additional measures to address control deficiencies or may elect to modify the remediation plan as described above.

Changes in Internal Control over Financial Reporting

There were no changes in the Corporation’s internal control over financial reporting during the fiscal quarter ended December 31, 2025, that materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.