John E. Arndt
About John E. Arndt
John E. Arndt (age 63) is Vice Chairman of First Keystone Corporation and First Keystone Community Bank, serving in that executive officer role since 2017, and has been a director since 1995; he is an insurance broker and the owner of Arndt Insurance Agency in Berwick, PA, with 42 years of insurance experience and 35 years managing his agency . Company performance indicators over the last three years show TSR declining from 88.45 to 68.05 and net income falling from $14.0 million to a loss of $13.2 million, underscoring execution risk in the current cycle . Revenues rose from $5.33 million to $6.70 million over FY 2022–FY 2024, while no EBITDA figures are available via filings* [GetFinancials].
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First Keystone Corporation / First Keystone Community Bank | Vice Chairman of the Board (executive officer) | 2017–present | Governance leadership; bank committee oversight (Trust Chair; HR/ALCO/Executive/Building/IT member) |
| First Keystone Corporation / First Keystone Community Bank | Director | 1995–present | Long-tenured director with regional business expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Arndt Insurance Agency (Berwick, PA) | Owner; Insurance Broker | c. 1983–present (42 years field experience; 35 years managing agency) | Deep risk management/insurance expertise relevant to bank lending and customer markets |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Director Fees Earned or Paid in Cash ($) | 53,400 | 51,300 | 50,700 |
| Vice Chairman Annual Stipend ($) | 3,500 | 3,500 | 3,500 |
| Board Meeting Fee per Additional Meeting ($) | 1,000 | 1,000 | 1,000 |
| Committee Meeting Fee per Meeting ($) | 400 | 400 | 400 |
Notes:
- The Bank’s directors received an annual retainer paid monthly as part of the $44,000 director compensation program for 2023 and 2024; corporate board meetings met concurrently with the Bank’s board and had no additional corporate director compensation .
Performance Compensation
- The company does not grant equity awards (options, RSUs/PSUs) to executive officers; therefore, there are no equity-based performance or vesting schedules for Arndt .
- The full Board acts as the Compensation Committee; in 2024 no external compensation consultant set pay, though the Board referenced L.R. Webber Associates’ 2024 Salary/Benefits survey for PA financial institutions .
- No disclosed executive bonus targets/metrics for Arndt; director pay is fixed/attendance-based rather than performance-linked .
Equity Ownership & Alignment
| Ownership Detail | Amount |
|---|---|
| Total Beneficial Ownership (shares) | 119,162 (includes 115,601 individual; 2,026 spouse; 1,535 as custodian for children) |
| Ownership as % of Shares Outstanding | 1.92% (out of 6,218,781 shares outstanding) |
| Vested vs Unvested Shares | Not applicable; no issuer equity awards |
| Pledging/Hedging | Company insider trading policy does not prohibit pledging or hedging by executive officers and directors (potential alignment red flag) |
| Ownership Guidelines | No disclosed director/executive ownership guidelines |
- Related party transactions: none material; routine loans to directors and officers are on market terms; aggregate group loans outstanding ~12.78% of total equity capital, all current .
Employment Terms
- Executive status: Principal officer (Vice Chairman) since 2017 .
- Contract: No employment agreement, severance, or change-in-control terms disclosed for Arndt (CEO Jack W. Jones’ employment agreement detailed separately) .
- Non-compete/consulting: Not disclosed for Arndt.
Board Governance
- Board service history: Director since 1995; Vice Chairman since 2017; nominated for re-election to Class B, term to expire 2028 .
- Independence: The board identifies independent directors; Arndt is not listed among independent members, reflecting his dual role as executive officer and director .
- Board leadership: Roles of CEO and Chairman are separated; Chairman is Robert A. Bull (since 2017) .
- Committees (corporate): Audit Committee includes only independent directors; Arndt is not a member .
- Committees (Bank): Arndt serves as Trust Committee Chair and member of ALCO, Human Resources, Executive, Building, and IT committees (HR sets non-executive pay; entire Board acts as Compensation Committee for executives) .
- Attendance: Board held 19 meetings in 2024; each director attended at least 75% of combined Board/committee meetings; all directors attended the 2024 annual meeting .
- Family relationships: Whitney B. Holloway (Class B director nominee) is daughter of Chairman Robert A. Bull (governance disclosure) .
Performance Snapshot
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| TSR (Value of $100 Investment) | 88.45 | 74.35 | 68.05 |
| Net Income ($ thousands) | 14,024 | 5,560 | (13,203) |
| Revenues ($ USD) | 5,331,000 [GetFinancials] | 6,156,000* [GetFinancials] | 6,697,000 [GetFinancials] |
- Values retrieved from S&P Global.
Risk Indicators & Red Flags
- Anti-pledging/hedging policy permissive: allows pledging/hedging by insiders, which can create forced-selling risk during stress and weaken alignment .
- Performance pressure: TSR and net income declined materially from 2022 to 2024, increasing execution risk and potential compensation scrutiny .
- Governance concentration: Vice Chairman dual role and non-independence, combined with HR committee influence at the Bank, concentrates governance power; though CEO/Chair roles are separated, monitoring independence remains important .
Compensation Committee Analysis
- Composition: No formal compensation committee; entire Board oversees compensation .
- Process: CEO input considered for other NEOs; CEO not present for her own compensation discussions (historical reference); Board reviewed survey benchmarks; no consultant retained in 2024 .
- Equity policy: No equity awards granted; no timing policies needed .
- Pay vs performance: Compensation actually paid largely flat for PEO and modestly up for other NEOs while TSR and net income declined, suggesting limited direct pay-for-performance sensitivity historically .
Investment Implications
- Alignment: Arndt’s 1.92% stake provides meaningful skin-in-the-game, but the company’s permissive pledging/hedging stance is a governance risk that may increase potential insider selling pressure in downturns .
- Incentives: With no equity grants or performance-linked director pay, Arndt’s incentives are primarily governance and cash-based; investors should monitor any future moves to introduce equity or performance metrics for executives/directors to strengthen alignment .
- Execution risk: The deterioration in TSR and net income alongside rising revenues points to margin/credit/expense issues; as Trust Chair and HR/ALCO committee member, Arndt influences risk, capital allocation, and talent costs—areas to watch for stabilization and value creation .
- Governance: Dual-role non-independence and family ties on the board require robust oversight mechanisms; the separated CEO/Chair model helps, but continued attention to committee independence and compensation rigor is warranted .