For Further Information Contact:

                             J. Gerald Bazewicz
                             President and
                             Chief Executive Officer
                             (570) 752-3671



                           Exhibit 99.1


                          PRESS RELEASE


              FIRST KEYSTONE CORPORATION ANNOUNCES
                      THIRD QUARTER DIVIDEND


Berwick, Pennsylvania - August 28, 2006 - First Keystone
Corporation (OTC BB: FKYS), parent company of The First National
Bank of Berwick, declared a $.22 per share quarterly cash
dividend to shareholders of record as of September 12, 2006,
payable September 30, 2006.  This represents a 10.0% increase in
the third quarter dividend over the $.20 per share paid in
September 2005.

Total cash dividends for the first three quarters of 2006 amounts
to $.66 per share as compared to $.60 for the first three
quarters of 2005, an increase of 10.0%.

The First National Bank of Berwick now operates 10 full service
offices in Columbia (5), Luzerne (4), and Montour (1) 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; Legg Mason Wood Walker, Inc., 800-888-6673; Janney
Montgomery Scott, Inc., 800-526-6397; Ferris, Baker, Watts, Inc.,
800-638-7411; Ryan, Beck and Company, 800-223-8969; and Boenning
& Scattergood, Inc., 800-883-8383.

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 The First National Bank of Berwick or its
parent company, First Keystone Corporation, please contact J.
Gerald Bazewicz at 570-752-3671, extension 172.




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