EXHIBIT 99
                                             


            DEFINITIVE PROXY STATEMENT, NOTICE OF ANNUAL MEETING AND
                      FORM OF PROXY FOR THE ANNUAL MEETING
                   OF SHAREHOLDERS TO BE HELD APRIL 16, 1996


                                       28

<PAGE>


<LOGO>                                           First Keystone Corporation
                                                                           
                                                      111 West Front Street
                                               Berwick, Pennsylvania  18603




                                 March 22, 1996






DEAR SHAREHOLDER:

     It is my pleasure to invite you to attend the 1996 Annual Meeting of
Shareholders of First Keystone Corporation to be held on Tuesday, April 16,
1996 at 9:00 a.m., prevailing time.  The Annual Meeting this year will be
held at the main office of The First National Bank of Berwick, 111 West
Front Street, Berwick, Pennsylvania 18603.

     The Notice of the Annual Meeting and the Proxy Statement on the
following pages address the formal business of the meeting.  The formal
business schedule includes:  the election of three (3) Class C Directors
and the ratification of the selection of the independent auditors for 1996. 
At the meeting, members of the Corporation's management will review the
Corporation's operations during the past year and be available to respond
to questions.

     We strongly encourage you to vote your shares, whether or not you plan
to attend the meeting.  It is very important that you sign, date and return
the accompanying Proxy as soon as possible, in the postage prepaid
envelope.  If you do attend the meeting and wish to vote in person, you
must give written notice thereof to the Secretary of the Corporation so
that your Proxy will be superseded by any ballot that you submit at the
meeting.

                                     Sincerely,


                                    /s/ J. Gerald Bazewicz
                                    J. Gerald Bazewicz
                                    President

<PAGE>


<BLANK PAGE>

<PAGE>


                           FIRST KEYSTONE CORPORATION
                        ________________________________

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                          TO BE HELD ON APRIL 16, 1996
                        ________________________________


TO THE SHAREHOLDERS OF FIRST KEYSTONE CORPORATION:

     Notice is hereby given that the Annual Meeting of Shareholders of
FIRST KEYSTONE CORPORATION (the "Corporation") will be held at 9:00 a.m.,
prevailing time, on Tuesday, April 16, 1996 at the main office of The First
National Bank of Berwick, 111 West Front Street, Berwick, Pennsylvania
18603, for the following purposes:

     1.   To elect three (3) Class C Directors to serve for a three-year
term and until their successors are elected and qualified;

     2.   To ratify the selection of J. H. Williams & Co. as the
independent auditors for the Corporation for the year ending December 31,
1996; and

     3.   To transact such other business as may properly come before the
Annual Meeting and any adjournment or postponement thereof.

     In accordance with the By-laws of the Corporation and action of the
Board of Directors, only those shareholders of record at the close of
business on March 5, 1996 will be entitled to notice of and to vote at the
Annual Meeting and any adjournment or postponement thereof.

     A copy of the Corporation's Annual Report for the fiscal year ended
December 31, 1995 is being mailed with this Notice.  Copies of the
Corporation's Annual Report for the 1994 fiscal year may be obtained at no
cost by contacting J. Gerald Bazewicz, President, 111 West Front Street,
Berwick, Pennsylvania 18603, telephone:  (717) 752-3671.

     You are urged to mark, sign, date and promptly return your Proxy in
the enclosed envelope so that your shares may be voted in accordance with
your wishes and in order that the presence of a quorum may be assured.  The
prompt return of your signed Proxy, regardless of the number of shares you
hold, will aid the Corporation in reducing the expense of additional proxy
solicitation.  The giving of such Proxy does not affect your right to vote
in person if you attend the meeting and give written notice to the
Secretary of the Corporation.

                               By Order of the Board of Directors,


                              /s/ J. Gerald Bazewicz
                              J. Gerald Bazewicz, President



March 22, 1996

<PAGE>


<BLANK PAGE>

<PAGE>


             PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
           OF FIRST KEYSTONE CORPORATION TO BE HELD ON APRIL 16, 1996


                                    GENERAL

Introduction, Date, Time and Place of Annual Meeting
                                                    

     This Proxy Statement is being furnished in connection with the
solicitation by the Board of Directors of FIRST KEYSTONE CORPORATION (the
"Corporation"), a Pennsylvania business corporation, of proxies to be voted
at the Annual Meeting of Shareholders of the Corporation to be held on
Tuesday, April 16, 1996, at 9:00 a.m., prevailing time, at the main office
of The First National Bank of Berwick, 111 West Front Street, Berwick,
Pennsylvania 18603, and at any adjournment or postponement of the Annual
Meeting.

     The principal executive office of the Corporation is located at The
First National Bank of Berwick (the "Bank"), 111 West Front Street,
Berwick, Pennsylvania 18603.  The telephone number for the Corporation is
(717) 752-3671.  All inquiries should be directed to J. Gerald Bazewicz,
President of the Corporation.  The Bank is a wholly-owned subsidiary of the
Corporation.

Solicitation and Voting of Proxies
                                  

     This Proxy Statement and the enclosed form of proxy (the "Proxy") are
first being sent to shareholders of the Corporation on or about March 22,
1996.

     Shares represented by proxies on the accompanying Proxy, if properly
signed and returned, will be voted in accordance with the specifications
made thereon by the shareholders.  Any Proxy not specifying to the contrary
will be voted FOR the election of the nominees for Class C Director named
below and FOR the ratification of the selection of J. H. Williams & Co. as
the independent auditors for the Corporation for the year ending December
31, 1996.  Execution and return of the enclosed Proxy will not affect a
shareholder's right to attend the Annual Meeting and vote in person, after
giving written notice to the Secretary of the Corporation.  The cost of
preparing, assembling, printing, mailing and soliciting proxies, and any
additional material which the Corporation may furnish shareholders in
connection with the Annual Meeting, will be borne by the Corporation.  In
addition to the use of the mails, certain directors, officers and employees
of the Corporation and the Bank may solicit proxies personally, by
telephone, telegraph and telecopier.  Arrangements will be made with
brokerage houses and other custodians, nominees and fiduciaries to forward
proxy solicitation material to the beneficial owners of stock held of
record by these persons, and, upon request therefor, the Corporation will
reimburse them for their reasonable forwarding expenses. 

Revocability of Proxy
                     

     A shareholder who returns a Proxy may revoke the Proxy at any time
before it is voted only:  (1) by giving written notice of revocation to
John L. Coates, Secretary of First Keystone Corporation, at 111 West Front
Street, Berwick, Pennsylvania 18603;  (2) by executing a later-dated proxy
and giving written notice thereof to the Secretary of the Corporation; or 
(3) by voting in person after giving written notice to the Secretary of the
Corporation.

Voting Securities, Record Date and Quorum
                                         

     At the close of business on March 5, 1996, the Corporation had
outstanding 889,147 shares of common stock, par value $2.00 per share, the
only issued and outstanding class of stock (the "Common Stock").  The
Corporation has 500,000 shares of preferred stock, par value $10.00 per
share, authorized.  As of March 5, 1996, none of the shares of preferred
stock were issued.


Proxy Statement                                                        
Page 1

<PAGE>


     Only holders of Common Stock of record at the close of business on
March 5, 1996 will be entitled to notice of and to vote at the Annual
Meeting.  Cumulative voting rights do not exist with respect to the
election of directors.  On all matters to come before the Annual Meeting,
each share of Common Stock is entitled to one vote.

     Under Pennsylvania law and the By-laws of the Corporation, the
presence of a quorum is required for each matter to be acted upon at the
Annual Meeting.  Pursuant to Article 3, Section 3.1, of the By-laws of the
Corporation, the presence, in person or by proxy, of shareholders entitled
to cast at least a majority of the votes which all shareholders are
entitled to cast shall constitute a quorum for the transaction of business
at the Annual Meeting.  Votes withheld and abstentions will be counted in
determining the presence of a quorum for the particular matter.  Broker
non-votes will not be counted in determining the presence of a quorum for
the particular matter as to which the broker withheld authority.

     Assuming the presence of a quorum, the three nominees for director
receiving the highest number of votes cast by shareholders entitled to vote
for the election of directors shall be elected.  Votes withheld from a
nominee and broker non-votes will not be cast for such nominee.

     Assuming the presence of a quorum, the affirmative vote of a majority
of all votes cast by shareholders on such matter is required for the
ratification of the selection of independent auditors.  Abstentions and
broker non-votes are not votes cast and therefore do not count either for
or against such ratification.  Abstentions and broker non-votes, however,
have the practical effect of reducing the number of affirmative votes
required to achieve a majority for each matter by reducing the total number
of shares voted from which the majority is calculated.

             PRINCIPAL BENEFICIAL OWNERS OF THE CORPORATION'S STOCK

Principal Owners
                

     The following table sets forth, as of March 5, 1996, the name and
address of each person who owns of record or who is known by the Board of
Directors to be the beneficial owner of more than five percent (5%) of the
Corporation's outstanding Common Stock, the number of shares beneficially
owned by such person and the percentage of the Corporation's outstanding
Common Stock so owned.

<TABLE>
<CAPTION>

                                                           Percent of
                                                           Outstanding
Name and Address                     Shares               Common Stock
                                  Beneficially            Beneficially
                                   Owned <F1>                 Owned
                                                                       
<S>                                  <C>                      <C>
Robert J. Wise                       63,314 <F2>              7.12%
115 West Third Street
Berwick, PA  18603

Berbank                              86,019 <F3>              9.67%
First National Bank of
Berwick Trust Department

Robert E. Bull                       64,732 <F4>              7.28%
323 West Fourth Street
Nescopeck, PA  18635
                    
<FN>
<F1>
See definition of "Beneficially Owned" under Footnote 2 to the following
table relating to beneficial ownership by officers, directors and nominees.


Page 2                                                      Proxy Statement

<PAGE>


<F2>
See Footnote 13 to the following table as to the shares of Common Stock
held beneficially by Mr. Wise.
<F3>
Nominee registration for the Common Stock held by the Trust Department of
the Bank on behalf of various trusts, estates and other accounts for which
the Bank acts as fiduciary with sole voting and dispositive power over
73,584 shares of Common Stock and as fiduciary with shared voting and
dispositive power over 12,435 shares of Common Stock.  The Trust Department
intends to cast all shares under its voting power FOR the election of the
nominees for director named below and FOR the ratification of J. H.
Williams & Co. as the independent auditors of the Corporation.
<F4>
See Footnote 9 to the following table as to the shares of Common Stock held
beneficially by Mr. Bull.

</FN>
</TABLE>


Beneficial Ownership by Officers, Directors and Nominees
                                                        

     The following table sets forth as of March 5, 1996, the amount and
percentage of the Common Stock beneficially owned by each director, each
nominee and all officers, directors and nominees of the Corporation as a
group.

<TABLE>
<CAPTION>

Name of Individual                    Amount and Nature of         Percent
or Identity of Group                       Beneficial                of
                                      Ownership <F1><F2>F3>         Class
                                                                     <7>
                                                                          
<S>                                       <C>                        <C>
John Arndt <F5>                               629                     --
J. Gerald Bazewicz <F5>                     3,101  <F8>               --
Budd L. Beyer <F4>                         11,495                    1.29%
Robert E. Bull <F5>                        64,732  <F>9              7.28%
John L. Coates <F6>                         2,129 <F10>               --
Dudley P. Cooley <F6>                       1,210                     --
Frederick E. Crispin, Jr. <F4>              7,260 <F11>               --
Stanley E. Oberrender <F6>                  1,452                     --
F. Stuart Straub <F5>                      14,023 <F12>              1.58%
Robert J. Wise <F4>                        63,314 <F13>              7.12%

All Officers, Directors and               170,250                   19.15%
Nominees as a Group
(10 Directors, 4 Officers -
11 Persons in Total)
                       
<FN>
<F1>
Does not include Common Stock held in fiduciary accounts under the control
of the Bank's Trust Department.
<F2>
The securities "beneficially owned" by an individual are determined in
accordance with the definitions of "beneficial ownership" set forth in the
General Rules and Regulations of the Securities and Exchange Commission and
may include securities owned by or for the individual's spouse and minor
children and any other relative who has the same home, as well as
securities to which the individual has or shares voting or investment power
or has the right to acquire beneficial ownership within 60 days after March
5, 1996.  Beneficial ownership may be disclaimed as to certain of the
securities.
<F3>
Information furnished by the directors and the Corporation.
<F4>
A Current Class A Director whose term expires in 1997.
<F5>
A Current Class B Director whose term expires in 1998.


Proxy Statement                                                      Page 3

<PAGE>


<F6>
Nominee for Class C Director whose term expires in 1999 and a Current Class
C Director whose term expires in 1996.
<F7>
Less than one percent (1%) unless otherwise indicated.
<F8>
Includes 2,075 shares of Common Stock held individually by Mr. Bazewicz,
590 shares of Common Stock held jointly with his spouse, 116 shares of
Common Stock held individually by his spouse, 220 shares of Common Stock
held jointly with his children and 100 shares of Common Stock held as
Custodian for the benefit of his children.
<F9>
Includes 2,995 shares of Common Stock held individually by Mr. Bull, 43,380
shares held jointly with his spouse, 3,025 shares of Common Stock held by
Bull, Bull & Knecht, a law firm of which Mr. Bull is a partner, and 15,332
shares of Common Stock held individually by his spouse.
<F10>
Includes 1,645 shares of Common Stock held individually by Mr. Coates and
484 shares of Common Stock held jointly with his spouse.
<F11>
Includes 4,840 shares of Common Stock held individually by Mr. Crispin and
2,420 shares of Common Stock held individually by his spouse.
<F12>
Includes 2,420 shares of Common Stock held individually by Mr. Straub,
11,240 shares of Common Stock held jointly with his spouse, and 363 shares
of Common Stock held jointly by his spouse and son.
<F13>
Includes 57,325 shares of Common Stock held individually by Mr. Wise and
5,989 shares of Common Stock held jointly with his spouse.

</FN>
</TABLE>


                             ELECTION OF DIRECTORS

     The By-laws of the Corporation provide that the Corporation's business
shall be managed by its Board of Directors.  Section 10.2 of the By-laws
provides that the number of directors that shall constitute the whole Board
of Directors shall not be less than seven nor more than twenty-five and
that the Board of Directors shall be classified into three classes, each
class to be elected for a term of three years.  Within the foregoing
limits, the Board of Directors may, from time to time, fix the number of
directors and their respective classifications.  No person shall serve as a
director after he or she has attained the age of seventy (70) years, with
the exception of Messrs. Beyer, Bull, Crispin, Straub, and Wise.  Pursuant
to Section 11.1 of the By-laws, vacancies on the Board of Directors,
including vacancies resulting from an increase in the number of directors,
shall be filled by a majority of the remaining members of the Board of
Directors, though less than a quorum, and each person so appointed shall be
a director until the expiration of the term of office of the class of
directors to which he or she was appointed.  

     In accordance with Section 10.3 of the By-laws, at the 1996 Annual
Meeting of Shareholders, three (3) Class C Directors shall be elected to
serve for a three-year term and until their successors are elected and
qualified.  Therefore, the By-laws provide for a classified Board of
Directors with staggered three-year terms of office.

     Unless otherwise instructed, the Proxyholders will vote the Proxies
received by them for the election of the three nominees named below.  If
any nominee should become unavailable for any reason, Proxies will be voted
in favor of a substitute nominee as the Board of Directors of the
Corporation shall determine.  The Board of Directors has no reason to
believe that the nominees named will be unable to serve, if elected.  Any
vacancy occurring on the Board of Directors of the Corporation for any
reason may be filled by a majority of the directors then in office until
the expiration of the term of the vacancy.


Page 4                                                      Proxy Statement

<PAGE>


     There is no cumulative voting for the election of directors.  Each
share of Common Stock is entitled to cast only one vote for each nominee. 
For example, if a shareholder owns ten shares of Common Stock, he or she
may cast up to ten votes for each of the three directors in the class to be
elected.


          INFORMATION AS TO NOMINEES, DIRECTORS AND EXECUTIVE OFFICERS

     The following table contains certain information with respect to the
executive officers, nominees for Class C Director whose term expires in
1999 and the Current Class C Directors whose term expires in 1996, and the
Class A Directors and Class B Directors whose terms expire in 1997 and
1998, respectively:

<TABLE>
<CAPTION>


                    Principal Occupation       Director
Name and                  Age as of       for Past Five Years          Since
Current                   March 5,           and Position          Corporation/
Committees                  1996         Held with Corporation         Bank
                                                                           

                                   NOMINEES FOR
                                 CLASS C DIRECTOR
                            WHOSE TERM EXPIRES IN 1999
                                        AND
                             CURRENT CLASS C DIRECTORS
                            WHOSE TERM EXPIRES IN 1996
                                                      

<S>                          <C>       <C>                            <C>
John L. Coates               59        President, Tri-County         1987/1987
Committees 3,6,7                       Hardware, Inc. (Retail
                             hardware stores);
                             Secretary of the 
                             Corporation and the Bank

Dudley P. Cooley             57        Personal Financial            1987/1987
Committees 3,4,6                       Consultant;
                             Former Controller, Wise
                             Foods, Borden, Inc.
                             (Snack food processor)

Stanley E. Oberrender        54        Owner, Suntex (Dry            1987/1987
Committees 3,4,6,7,8                   cleaning);
                             Former President, Bercon
                             Packaging, Inc. (Plastic
                             container manufacturing)

<CAPTION>

                                 CLASS A DIRECTORS
                            WHOSE TERM EXPIRES IN 1997

<S>                          <C>       <C>                            <C>
Budd L. Beyer                68        Investor; Former               1983/1976
Committees 1,2,4,7                     President Sunshine
                             Textiles Service, Inc.
                             (Dry Cleaning, Laundry 
                             and Linen Rental)

Frederick E.                 64        Financial Consultant,          1983/1964
Crispin, Jr.                           F.E. Crispin & Associates
Committees 1,3,4,5,6,7

Robert J. Wise               66        Retired, former investor       1983/1967
Committees 1,2,4,5,8


Proxy Statement                                                         Page 5

<PAGE>

<CAPTION>
                                 CLASS B DIRECTORS
                            WHOSE TERM EXPIRES IN 1998

<S>                          <C>       <C>                            <C>
John  Arndt                  34        Owner of Arndt                 1995/1995
Committees 1,2,3,5,8                   Insurance Agency
                             (General insurance 
                             and real estate agent)

J. Gerald Bazewicz           47        President of the               1986/1986
Committees 1,2,3,4,                    Corporation and the Bank
5,7,8

Robert E. Bull               73        Attorney, Bull, Bull           1983/1956
Committees 1,3,4,5,                    & Knecht;
6,7,8,                                 Chairman of the 
                             Corporation and the Bank

F. Stuart Straub             74        Retired, former President      1983/1968
Committees 2,3,5,8                     of Corporation and the
                                       Bank
                    
   Committee 1 - Executive Committee  This committee exercises the authority
of the Board of Directors in the management of the business of the Bank between
the dates of regular meetings of the Board of Directors.  This committee met
one (1) time in 1995.

   Committee 2 - Trust Committee  This committee ensures that all trust
activities of the Bank are performed in a manner that is consistent with the
legal instrument governing the account, prudent trust administration practices,
and approved trust policy.  This committee met twelve (12) times in 1995.

   Committee 3 - Asset/Liability Committee  This committee reviews
asset/liability committee reports and provides support and discretion in
managing the Bank's net interest income, liquidity, and gap positions.  This
committee met six (6) times in 1995.

   Committee 4 - Marketing Committee  This committee is to provide guidance
to management in formulating marketing and sales plans and programs and to
assist in evaluating the performance of the Bank relative to plans.  This
committee met seven (7) times in 1995.

   Committee 5 - Loan Administration Committee  This committee monitors loan
review and compliance activities.  Also, the committee ensures that loans are
made and administered in accordance with the Loan Policy.  This committee met
five (5) times in 1995.

   Committee 6 - Audit Committee  This committee recommends the appointment 
of the independent certified public accountant to examine the affairs of the
Bank.  Also, the committee reviews findings of the auditor and ensures an
independent, effective audit function.  This committee met two (2) times in
1995.

   Committee 7 - Human Resources Committee  This committee helps ensure that
a sound human resources management system is developed and maintained.  This
committee also acts as the Compensation Committee for the Bank and related
Corporation officers.  This committee met one (1) time in 1995.

   Committee 8 - Building Committee  This committee makes recommendations to
the Board relating to the Bank's physical assets, including both current and
proposed physical assets.  This committee met one (1) time in 1995.

</TABLE>


     The aforementioned committees are committees of the Bank and not the
Corporation.


Page 6                                                      Proxy Statement

<PAGE>


     During 1995, the Bank's Board of Directors held twenty-six (26)
meetings and the Corporation's Board of Directors held five (5) meetings. 
Each of the Directors attended at least 75% of the combined total number of
meetings of the Corporation's and the Bank's Board of Directors and the
committees of which he is a member.

     The Board of Directors of the Corporation has at present no standing
committees.  The Corporation does not have a nominating committee.  A
shareholder who desires to propose an individual for consideration by the
Board of Directors as a nominee for director should submit a proposal in
writing to the Secretary of the Corporation in accordance with Section 10.1
of the Corporation's By-laws.  Any shareholder who intends to nominate any
candidate for election to the Board of Directors must notify the Secretary
of the Corporation in writing not less than forty-five (45) days prior to
the date of any meeting of shareholders called for the election of
directors.


                      COMPLIANCE WITH SECTION 16(a) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

     Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Corporation's officers and directors, and persons who own more
than ten percent (10%) of the registered class of the Corporation's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (SEC).  Officers, directors and greater
than ten percent (10%) shareholders are required by SEC regulation to
furnish the Corporation with copies of all Section 16(a) forms they file.  

     Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no Forms 5
were required for those persons, the Corporation believes that during the
period January 1, 1995 through December 31, 1995, its officers and
directors were in compliance with all filing requirements applicable to
them.  


                             EXECUTIVE COMPENSATION

     Shown below is information concerning the annual compensation for
services in all capacities to the Corporation and the Bank for the fiscal
years ended December 31, 1995, 1994 and 1993 of those persons who were (i)
the Chief Executive Officer during 1995, and (ii) the other four most
highly compensated executive officers of the Corporation and the Bank to
the extent such persons' total annual salary and bonus exceeded $100,000 at
December 31, 1995.


Proxy Statement                                                      Page 7

<PAGE>


<TABLE>
                           SUMMARY COMPENSATION TABLE

<CAPTION>

                                      Annual Compensation
                                                         

     (a)                 (b)         (c)            (d)            (e)
                                                                  Other
                                                                 Annual
   Name and                                                      Compen-
   Principal                       Salary          Bonus         sation
   Position             Year      ($) <F1>          ($)            ($)
                                                                      
<S>                     <C>        <C>            <C>              <C>
J. Gerald Bazewicz      1995       108,100        15,862           0
President and Chief     1994       101,600        18,369           0
Executive Officer       1993        95,400        18,305           0
of the Corporation
and the Bank


<CAPTION>

                              Long-Term Compensation
                                                    
                              Awards               Payouts
                                                          
                           (f)          (g)          (h)          (i)

                       Restricted                              All Other
   Name and               Stock      Options/       LTIP        Compen-
   Principal            Award(s)       SARs        Payouts      sation
   Position                ($)          (#)          ($)          ($)
                                                               <F2><F3>
                                                                      
<S>                        <C>           <C>          <C>       <C>
J. Gerald Bazewicz         0             0            0         17,938
President and Chief        0             0            0         16,240
Executive Officer          0             0            0         14,715
of the Corporation
and the Bank
                    
<FN>
<F1>
Amounts shown consist of base salary and fees for attendance at Board of
Directors meetings of $8,100 in 1995, $8,100 in 1994, and $8,400 in 1993.
<F2>
Contributions to the Bank's 401(k) Plan on behalf of Mr. Bazewicz of
$17,274 for 1995, $15,563 for 1994 and $14,081 for 1993.
<F3>
Includes Life Insurance Premiums amounting to $664 for 1995, $677 for 1994
and $634 for 1993. Group term life insurance is provided to all regular
full-time employees after completion of their probationary period.

</FN>
</TABLE>


Retirement Plan
               

     The Corporation does not have a retirement or pension plan.  The Bank
maintains a 401(K) Plan which has a combined tax qualified savings feature
and profit sharing feature (the "Plan").  The Plan provides benefits to all
employees who have completed at least one year of service and are at least
21 years of age.  Under the Plan, the Bank will match employee
contributions to a savings plan not to exceed 3% of their compensation
comprised of salary and bonus for the year.  In addition, the Bank can make
a discretionary contribution to a profit sharing plan not to exceed 15% of
total compensation comprised of salary and bonus for the year in which the
employee attains the age of 21 and has completed one year of service. 
Contributions made by the Bank to the Plan are allocated to participants in
the same portions that each participant's compensation bears to the
aggregate compensation of all participants.  Each participant in the Plan
is one hundred (100%) vested at all times.  Benefits are payable under the
Plan upon termination of employment, disability, death, or retirement. 
Contributions reflected as expense under this Plan in 1995 and 1994 were:

<TABLE>
<CAPTION>

                                                     1995             1994
                                                                          
<S>                                                <C>              <C>
Matching contribution to savings plan              $ 46,306         $ 41,564

Contribution to profit sharing plan                 195,291          169,347
                                                                            
   Total Expense                                   $241,597         $210,911
                                                                            

</TABLE>


     Of the $241,597 total expenses during 1995, $40,331 was credited among
the individual accounts of the most highly compensated executive officers
of the Bank.  Of the $40,331, Mr. Bazewicz was credited with $17,274 and
has been a member of the Plan for ten years.


Page 8                                                      Proxy Statement

<PAGE>


Compensation of Directors
                         

     During 1995, the Corporation's Board of Directors received Three
Hundred Dollars ($300.00) for each Director's attendance at the Annual
Meeting.  Other Corporation Board meetings met concurrently with the Bank's
Board and there was no additional compensation.  The Bank's Directors
received Three Hundred Dollars ($300.00) for each Directors' meeting
attended, non-employee Directors received One Hundred Fifty Dollars
($150.00) for each committee meeting attended, and all Directors received a
bonus of Seven Hundred Dollars ($700.00).  In addition, Chairman Bull
received an annual stipend of One Thousand Dollars ($1,000.00) and former
Secretary Arndt received an annual stipend of Seven Hundred Fifty Dollars
($750.00).  In the aggregate, the Board of Directors received $111,650.00
for all Board of Directors' meetings and committee meetings attended in
1995, including all fees, bonuses, and stipends paid to all Directors in
1995.


                              CERTAIN TRANSACTIONS

     Other than described below, there have been no material transactions
between the Corporation and the Bank, nor any material transactions
proposed, with any director or executive officer of the Corporation and the
Bank, or any associate of the foregoing persons.  The Corporation and the
Bank have had and intend to continue to have banking and financial
transactions in the ordinary course of business with directors and officers
of the Corporation and the Bank and their associates on comparable terms
and with similar interest rates as those prevailing from time to time for
other customers of the Corporation and the Bank.

     Total loans outstanding from the Corporation and the Bank at
December 31, 1995, to the Corporation's and the Bank's officers and
directors as a group and members of their immediate families and companies
in which they had an ownership interest of 10% or more was $3,090,030 or
approximately 12.2% of the total equity capital of the Bank.  Loans to such
persons were made in the ordinary course of business, were made on
substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other
persons, and did not involve more than the normal risk of collectibility or
present other unfavorable features.  The largest aggregate amount of
indebtedness outstanding at any time during fiscal year 1995 to officers
and directors of the Corporation and the Bank as a group was $4,140,050. 
The aggregate amount of indebtedness outstanding as of the latest
practicable date, January 26, 1996, to the above described group was
$3,044,041.

<TABLE>
<CAPTION>

                                                                 Largest
                                                                Aggregate
                                                                Amount of
                                       Nature of              Indebtedness
        Name                         Relationship                in 1995
                                                                        
<S>                                <C>                         <C>
John L. Coates                     Nominee and                 $2,226,968
                                   Current Director                      


Stanley E. Oberrender              Nominee and                 $1,230,175
                                   Current Director


<CAPTION>

                               Nature of           Amount           Amount
                             Indebtedness        Outstanding      Outstanding
      Name                    /Collateral        at 12/31/95      at 1/26/96
                                                                            
<S>                          <C>                 <C>              <C>
John L. Coates               Secured by          $1,952,390       $1,938,298
                             mortgages,
                             inventory and
                             equipment

Stanley E. Oberrender        Secured by          $  520,025       $  517,519
                             mortgages,
                             inventory and
                             equipment

</TABLE>


Proxy Statement                                                      Page 9

<PAGE>


     The loans to Messrs. Coates and Oberrender are considered material
transactions because of the percentage of the total these loans represent. 
Loans to Messrs. Coates and Oberrender were made in the ordinary course of
business, were made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with other persons, and did not involve more that the normal
risk of collectibility or present other unfavorable features.  All loans
are current and being paid as agreed.


                     PRINCIPAL OFFICERS OF THE CORPORATION

     The following table sets forth selected information about the
principal officers of the Corporation, each of whom is elected by the Board
of Directors and each of whom holds office at the discretion of the Board
of Directors:

<TABLE>
<CAPTION>

                                        Number            Age
                             Bank      of Shares         as of
    Held                   Employee  Beneficially      March 5,
 Name and Position           Since       Since           Owned          1996
                                                                            
<S>                          <C>         <C>            <C>              <C>
Robert E. Bull               1983        <F1>           64,732           73
Chairman of the Board

J. Gerald Bazewicz           1987        1973            3,101           47
President

John L. Coates               1995        <F1>            2,129           59
Secretary

David R. Saracino            1983        1972              905 <F2>      51
Treasurer 
                   
<FN>
<F1>
Messrs. Bull and Coates are not employees of the Bank. 
<F2>
Includes 663 shares of Common Stock held individually by Mr. Saracino and 242
shares of Common Stock held jointly with his spouse.

</FN>
</TABLE>


                         PRINCIPAL OFFICERS OF THE BANK

     The following table sets forth selected information about the
principal officers of the Bank, each of whom is elected by the Board of
Directors and each of whom holds office at the discretion of the Board of
Directors:


Page 10                                                        Proxy
Statement

<PAGE>


<TABLE>
<CAPTION>


 Office and Position                    Held
 Namewith the Bank                      Since
                                             
<S>                           <C>                                   <C>
Robert E. Bull                Chairman of the Board                 1983

J. Gerald Bazewicz            President and CEO                     1987

John L. Coates                Secretary                             1995

David R. Saracino             Vice President,                       1983
      Cashier and
      Assistant Secretary

Leslie W. Bodle               Vice President and                    1985
      Trust Officer

Sally A. Rishkofski           Assistant Vice President              1982



<CAPTION>
  Bank                         Number of         Age as of
 Employee                    Shares Bene-        March 5,
   Name                          Since        ficially Owned          1996
                                                                          
<S> <C>                          <C>              <C>
Robert E. Bull                   <F1>             64,732               73

J. Gerald Bazewicz               1973              3,101               47

John L. Coates                   <F1>              2,129               59

David R. Saracino                1972                905               51

Leslie W. Bodle                  1985                797               48

Sally A. Rishkofski              1964                 74               56
                   
<FN>
<F1>
Messrs. Bull and Coates are not employees of the Bank.

</FN>
</TABLE>



                      RATIFICATION OF INDEPENDENT AUDITORS

     Unless instructed to the contrary, it is intended that votes will be
cast pursuant to the proxies for the ratification of the selection of J. H.
Williams & Co. as the Corporation's independent auditors for its 1996
fiscal year.  The Corporation has been advised by J. H. Williams & Co. that
none of its members has any financial interest in the Corporation. 
Ratification of J. H. Williams & Co. will require the affirmative vote of a
majority of the shares of Common Stock represented in person or by proxy at
the Annual Meeting.  J. H. Williams & Co. served as the Corporation's
independent auditors for the 1995 fiscal year, assisted the Corporation and
the Bank with preparation of their federal and state tax returns, and
provided assistance in connection with regulatory matters, charging the
Bank for such services at its customary hourly billing rates.  These non-
audit services were approved by the Corporation's and the Bank's Board of
Directors after due consideration of the effect of the performance thereof
on the independence of the auditors and after the conclusion by the
Corporation's and the Bank's Board of Directors that there was no effect on
the independence of the auditors.  

     In the event that the shareholders do not ratify the selection of J.
H. Williams & Co. as the Corporation's independent auditors for the 1996
fiscal year, another accounting firm may be chosen to provide independent
audit services for the 1996 fiscal year.  The Board of Directors recommends
that the shareholders vote FOR the ratification of the selection of J. H.
Williams & Co. as the independent auditors for the Corporation for the year
ending December 31, 1996.


                                 ANNUAL REPORT

     A copy of the Corporation's Annual Report for its fiscal year ended
December 31, 1995 is enclosed with this Proxy Statement.  A representative
of J. H. Williams & Co., the accounting firm which examined the financial
statements in the Annual Report, will attend the meeting.  The
representative will have the opportunity to make a statement, if he desires
to do so, and will be available to respond to any appropriate questions
concerning the Annual Report presented by shareholders at the Annual
Meeting.


Proxy Statement                                                     Page 11

<PAGE>


                             SHAREHOLDER PROPOSALS

     Any shareholder who, in accordance with and subject to the provisions
of the proxy rules of the Securities and Exchange Commission, wishes to
submit a proposal for inclusion in the Corporation's Proxy Statement for
its 1997 Annual Meeting of Shareholders must deliver such proposal in
writing to the President of First Keystone Corporation at its principal
executive offices, 111 West Front Street, Berwick, President 18603, not
later than Monday, November 25, 1996.


                                 OTHER MATTERS

     The Board of Directors does not know of any matters to be presented
for consideration other than the matters described in the accompanying
Notice of Annual Meeting of Shareholders, but if any matters are properly
presented, it is the intention of the persons named in the accompanying
Proxy to vote on such matters in accordance with their best judgment.


                             ADDITIONAL INFORMATION

     UPON WRITTEN REQUEST OF ANY SHAREHOLDER, A COPY OF THE CORPORATION'S
REPORT ON FORM 10-K FOR ITS FISCAL YEAR ENDED DECEMBER 31, 1995, INCLUDING
THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, REQUIRED TO BE FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 13a-1 UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, MAY BE OBTAINED, WITHOUT
CHARGE, FROM DAVID R. SARACINO, TREASURER, FIRST KEYSTONE CORPORATION, 111
WEST FRONT STREET, BERWICK, PENNSYLVANIA 18603.


Page 12                                                     Proxy Statement


<PAGE>


                           FIRST KEYSTONE CORPORATION

                                     PROXY

          ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 16, 1996 
          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

     The undersigned hereby constitutes and appoints Paul Klinger and
William Selden, Jr. and each or any of them, proxies of the undersigned,
with full power of substitution, to vote all of the shares of First
Keystone Corporation (the "Corporation") that the undersigned may be
entitled to vote at the Annual Meeting of Shareholders of the Corporation
to be held at the main office of The First National Bank of Berwick, 111
West Front Street, Berwick, Pennsylvania 18603 on Tuesday, April 16, 1996
at 9:00 a.m., prevailing time, and at any adjournment or postponement
thereof as follows:

1.   ELECTION OF CLASS C DIRECTORS TO SERVE FOR A THREE-YEAR TERM

   John L. Coates           Dudley P. Cooley           Stanley E. Oberrender

   [ ]  FOR all nominees listed above       [ ]  WITHHOLD AUTHORITY to 
        (except as marked to the                 vote for all nominees
       contrary below)                         listed above

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, 
            WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)

    ________________________________________________________________________


2.   PROPOSAL TO RATIFY THE SELECTION OF J. H. WILLIAMS & CO. AS THE
     INDEPENDENT AUDITORS FOR THE CORPORATION FOR THE YEAR ENDING 
     DECEMBER 31, 1996.

       [ ] FOR                  [ ] AGAINST                  [ ] ABSTAIN

     The Board of Directors recommends a vote FOR this proposal.


3.   In their discretion, the proxies are authorized to vote upon such
     other business as may properly come before the meeting and any
     adjournment or postponement thereof.

THIS PROXY, WHEN PROPERLY SIGNED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER.  IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL NOMINEES LISTED ABOVE AND FOR PROPOSAL 2.


                                      Dated:                      , 1996

                                                                          

                                                                          
Number of Shares Held of
Record on March 5, 1996:                                                  
                                      Signature(s)               (Seal)


THIS PROXY MUST BE DATED, SIGNED BY THE SHAREHOLDER AND RETURNED PROMPTLY
TO THE CORPORATION IN THE ENCLOSED ENVELOPE.  WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE.  IF
MORE THAN ONE TRUSTEE, ALL SHOULD SIGN.  IF STOCK IS HELD JOINTLY, EACH
OWNER SHOULD SIGN.