Exhibit 10.16

                            AGREEMENT

     AGREEMENT, dated this 1st day of December 2004, between
First Keystone Bank (the "Savings Bank"), a federally chartered
savings bank, and Carol Walsh (the "Executive").


                           WITNESSETH:

     WHEREAS, the Executive is presently an officer of First
Keystone Financial, Inc. (the "Corporation") and the Savings Bank
(together, the "Employers");

     WHEREAS, the Employers desire to be ensured of the
Executive's continued active participation in the business of the
Employers;

     WHEREAS, the Employers currently have an agreement with the
Executive dated May 26, 1999, which is being amended and
superseded by this Agreement to reflect certain mutually agreed
upon revisions, and in accordance with the provisions of Section
310 of the Thrift Activities Handbook ("Handbook") of the Office
of Thrift Supervision ("OTS"), the Corporation and the Savings
Bank desire to enter into separate agreements with the Executive
relating to her employment by each of the Employers; and

     WHEREAS, in order to induce the Executive to remain in the
employ of the Employers and in consideration of the Executive's
agreeing to remain in the employ of the Employers, the parties
desire to specify the severance benefits which shall be due the
Executive by the Savings Bank in the event that her employment
with the Savings Bank is terminated under specified
circumstances.

     NOW THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereby agree as
follows:

     1.   Definitions.  The following words and terms shall have
the meanings set forth below for the purposes of this Agreement:

     (a)  Annual Compensation.  The Executive's "Annual
Compensation" for purposes of this Agreement shall be deemed to
mean the highest level of base salary paid to the Executive by
the Employers or any subsidiary thereof during any of the three
calendar years ending during the calendar year in which the Date
of Termination occurs.

     (b)  Cause.  Termination of the Executive's employment for
"Cause" shall mean termination because of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final cease-and-
desist order.
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     (c)  Change in Control of the Corporation.  The term "Change
in Control of the Corporation" shall mean the occurrence of any
of the following events:

          (i) approval by the stockholders of the Corporation of
     a transaction that would result and does result in the
     reorganization, merger or consolidation of the Corporation,
     with one or more other persons, other than a transaction
     following which:

               (A) at least 51% of the equity ownership interests
     of the entity resulting from such transaction are
     beneficially owned (within the meaning of Rule 13d-3
     promulgated under the Securities Exchange Act of 1934, as
     amended ("Exchange Act")) in substantially the same relative
     proportions by persons who, immediately prior to such
     transaction, beneficially owned (within the meaning of Rule
     13d-3 promulgated under the Exchange Act) at least 51% of
     the outstanding equity ownership interests in the
     Corporation; and

               (B) at least 51% of the securities entitled to
     vote generally in the election of directors of the entity
     resulting from such transaction are beneficially owned
     (within the meaning of Rule 13d-3 promulgated under the
     Exchange Act) in substantially the same relative proportions
     by persons who, immediately prior to such transaction,
     beneficially owned (within the meaning of Rule 13d-3
     promulgated under the Exchange Act) at least 51% of the
     securities entitled to vote generally in the election of
     directors of the Corporation;

          (ii) the acquisition of all or substantially all of the
     assets of the Corporation or beneficial ownership (within
     the meaning of Rule 13d-3 promulgated under the Exchange
     Act) of 20% or more of the outstanding securities of the
     Corporation entitled to vote generally in the election of
     directors by any person or by any persons acting in concert,
     or approval by the stockholders of the Corporation of any
     transaction which would result in such an acquisition;

          (iii) a complete liquidation or dissolution of the
     Corporation or the Savings Bank, or approval by the
     stockholders of the Corporation of a plan for such
     liquidation or dissolution;

          (iv) the occurrence of any event if, immediately
     following such event, members of the Corporation Board of
     Directors who belong to any of the following groups do not
     aggregate at least a majority of the Corporation Board of
     Directors:

               (A) individuals who were members of the
     Corporation Board of Directors on the Effective Date of this
     Agreement; or

               (B) individuals who first became members of the
     Corporation Board of Directors after the Effective Date of
     this Agreement either:

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                    (1) upon election to serve as a member of the
     Corporation Board of Directors by the affirmative vote of
     two-thirds of the members of such Board, or of a nominating
     committee thereof, in office at the time of such first
     election; or

                    (2) upon election by the stockholders of the
     Corporation Board of Directors to serve as a member of the
     Corporation Board of Directors, but only if nominated for
     election by the affirmative vote of two-thirds of the
     members of such Board, or of a nominating committee thereof,
     in office at the time of such first nomination;

     provided that such individual's election or nomination did
     not result from an actual or threatened election contest or
     other actual or threatened solicitation of proxies or
     consents other than by or on behalf of the Corporation Board
     of Directors; or

          (v) any event which would be described in Section
     1(c)(i), (ii), (iii) or (iv) if the term "Savings Bank" were
     substituted for the term "Corporation" therein and the term
     "Bank Board of Directors" were substituted for the term
     "Corporation Board of Directors" therein.

In no event, however, shall a Change in Control of the
Corporation be deemed to have occurred as a result of any
acquisition of securities or assets of the Corporation, the
Savings Bank, or a subsidiary of either of them, by the
Corporation, the Savings Bank, or any subsidiary of either of
them, or by any employee benefit plan maintained by any of them.
For purposes of this Section 1(d), the term "person" shall
include the meaning assigned to it under Sections 13(d)(3) or
14(d)(2) of the Exchange Act.

     (d)  Code.  Code shall mean the Internal Revenue Code of
1986, as amended.

     (e)  Date of Termination.  "Date of Termination" shall mean
(i) if the Executive's employment is terminated for Cause or for
Disability, the date specified in the Notice of Termination, and
(ii) if the Executive's employment is terminated for any other
reason, the date on which a Notice of Termination is given or as
specified in such Notice.

     (f)  Disability.  Termination by the Savings Bank of the
Executive's employment based on "Disability" shall mean
termination because of any physical or mental impairment which
qualifies the Executive for disability benefits under the
applicable long-term disability plan maintained by the Employers
or any subsidiary or, if no such plan applies, which would
qualify the Executive for disability benefits under the Federal
Social Security System.

     (g)  Good Reason.  Termination by the Executive of the
Executive's employment for "Good Reason" shall mean termination
by the Executive based on:

     (i)  Without the Executive's express written consent, the
     assignment by the Employers to the Executive of any duties
     which are materially inconsistent with the Executive's
     positions, duties, responsibilities and status with the
     Employers immediately prior to a Change in Control of the
     Corporation, or a material change in the Executive's
     reporting
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     responsibilities, titles or offices as an employee and as in
     effect immediately prior to such a Change in Control, or any
     removal of the Executive from or any failure to re-elect the
     Executive to any of such responsibilities, titles or offices,
     except in connection with the termination of the Executive's
     employment for Cause, Disability or Retirement or as a result
     of the Executive's death or by the Executive other than for
     Good Reason;

     (ii) Without the Executive's express written consent, a
     reduction by the Employers in the Executive's base salary as
     in effect on the date of the Change in Control of the
     Corporation or as the same may be increased from time to
     time thereafter or a reduction in the package of fringe
     benefits provided to the Executive;

     (iii)Any purported termination of the Executive's
     employment for Cause, Disability of Retirement which is not
     effected pursuant to a Notice of Termination satisfying the
     requirements of paragraph (i) below; or

     (iv) The failure by the Savings Bank to obtain the
     assumption of and agreement to perform this Agreement by any
     successor as contemplated in Section 6 hereof.

     (h)  IRS.  IRS shall mean the Internal Revenue Service.

     (i)  Notice of Termination.  Any purported termination of
the Executive's employment by the Savings Bank for Cause,
Disability or Retirement or by the Executive for Good Reason
shall be communicated by written "Notice of Termination" to the
other party hereto.  For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under
the provision so indicated, (iii) specifies a Date of
Termination, which shall be not less than thirty (30) nor more
than ninety (90) days after such Notice of Termination is given,
except in the case of the Savings Bank's termination of
Executive's employment for Cause, and (iv) is given in the manner
specified in Section 7 hereof.

     (j)  Retirement.  Termination by the Savings Bank of the
Executive's employment based on "Retirement" shall mean voluntary
termination by the Executive in accordance with the Employers'
retirement policies, including early retirement, generally
applicable to their salaried employees.

     2.   Benefits Upon Termination.  If the Executive's
employment by the Savings Bank shall be terminated subsequent to
a Change in Control of the Corporation by (i) the Savings Bank
other than for Cause, Retirement, or as a result of the
Executive's death, or (ii) the Executive for Good Reason, then
the Employers shall, subject to the provisions of Section 3
hereof, if applicable:

     (a)  pay to the Executive, in twenty-four (24) equal monthly
installments beginning with the first business day of the month
following the Date of Termination, a cash amount equal to two (2)
times the Executive's Annual Compensation; and

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     (b)  maintain and provide for a period ending at the earlier
of (i) two (2) years after the Date of Termination or (ii) the
date of the Executive's full-time employment by another employer
(provided that the Executive is entitled under the terms of such
employment to benefits substantially similar to those described
in this subparagraph (b)), at no cost to the Executive, the
Executive's continued participation in all group insurance, life
insurance, health and accident, disability and other employee
benefit plans, programs and arrangements in which the Executive
was entitled to participate immediately prior to the Date of
Termination (other than retirement plans or stock compensation
plans of the Employers), provided that in the event that the
Executive's participation in any plan, program or arrangement as
provided in this subparagraph (b) is barred, or during such
period any such plan, program or arrangement is discontinued or
the benefits thereunder are materially reduced, the Employers
arrange to provide the Executive with benefits substantially
similar to those which the Executive was entitled to receive
under such plans, programs and arrangements immediately prior to
the Date of Termination.

     3.   Limitation of Benefits under Certain Circumstances.  If
the payments and benefits pursuant to Section 2 hereof, either
alone or together with other payments and benefits which
Executive has the right to receive from the Savings Bank would
constitute a "parachute payment" under Section 28OG of the Code,
the payments and benefits payable by the Savings Bank pursuant to
Section 2 hereof shall be reduced, in the manner determined by
the Executive, by the amount, if any, which is the minimum
necessary to result in no portion of the payments and benefits
under Section 2 being non-deductible to the Savings Bank pursuant
to Section 28OG of the Code and subject to the excise tax imposed
under Section 4999 of the Code.  The parties hereto agree that
the payments and benefits payable pursuant to this Agreement to
the Executive upon termination shall be limited to three times
the Executive's Average Annual Compensation in accordance with
the provisions of Section 310 of the Handbook.  The determination
of any reduction in the payments and benefits to be made pursuant
to Section 2 shall be based upon the opinion of independent tax
counsel selected by the Savings Bank's independent public
accountants and paid for by the Savings Bank.  Such counsel shall
be reasonably acceptable to the Savings Bank and the Executive;
shall promptly prepare the foregoing opinion, but in no event
later than thirty (30) days from the Date of Termination; and may
use such actuaries as such counsel deems necessary or advisable
for the purpose.  In the event that the Savings Bank and/or the
Executive do not agree with the opinion of such counsel, (i) the
Savings Bank shall pay to the Executive the maximum amount of
payments and benefits pursuant to Section 2, as selected by the
Executive, which such opinion indicates that there is a high
probability do not result in any of such payments and benefits
being non-deductible to the Savings Bank and subject to the
imposition of the excise tax imposed under Section 4999 of the
Code and (ii) the Savings Bank may request, and Executive shall
have the right to demand that the Savings Bank requests, a ruling
from the IRS as to whether the disputed payments and benefits
pursuant to Section 2 hereof have such consequences.  Any such
request for a ruling from the IRS shall be promptly prepared and
filed by the Savings Bank, but in no event later than thirty (30)
days from the date of the opinion of counsel referred to above,
and shall be subject to Executive's approval prior to filing,
which shall not be unreasonably withheld.  The Savings Bank and
Executive agree to be bound by any ruling received from the IRS
and to make appropriate payments to each other to reflect any
such rulings, together with interest at the applicable federal
rate provided for in Section 7872(f)(2) of the Code.  Nothing
contained herein shall result in a reduction of any payments or
benefits to which the Executive may be entitled

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upon termination of employment other than pursuant to Section 2
hereof, or a reduction in the payments and benefits specified in
Section 2 below zero.

     4.    Mitigation; Exclusivity of Benefits.

     (a)  The Executive shall not be required to mitigate the
amount of any benefits hereunder by seeking other employment or
otherwise, nor shall the amount of any such benefits be reduced
by any compensation earned by the Executive as a result of
employment by another employer after the Date of Termination or
otherwise.

     (b)  The specific arrangements referred to herein are not
intended to exclude any other benefits which may be available to
the Executive upon a termination of employment with the Employers
pursuant to employee benefit plans of the Employers or otherwise.

     5.    Withholding.  All payments required to be made by the
Savings Bank hereunder to the Executive shall be subject to the
withholding of such amounts, if any, relating to tax and other
payroll deductions as the Savings Bank may reasonably determine
should be withheld pursuant to any applicable law or regulation.

     6.    Assignability. The Savings Bank may assign this
Agreement and its rights and obligations hereunder in whole, but
not in part, to any corporation, bank or other entity with or
into which the Savings Bank may hereafter merge or consolidate or
to which the Savings Bank may transfer all or substantially all
of its assets, if in any such case said corporation, bank or
other entity shall by operation of law or expressly in writing
assume all obligations of the Savings Bank hereunder as fully as
if it had been originally made a party hereto, but may not
otherwise assign this Agreement or its rights hereunder.  The
Executive may not assign or transfer this Agreement or any rights
or obligations hereunder.

     7.   Notice.  For the purposes of this Agreement, notices
and all other communications provided for in this Agreement shall
be in writing and shall be deemed to have been duly given when
delivered or mailed by certified or registered mail, return
receipt requested, postage prepaid, addressed to the respective
addresses set forth below:

     To the Savings Bank:     President
                              First Keystone Bank
                              22 West State Street
                              Media, Pennsylvania 19063

     To the Executive:        Carol Walsh
                              At the address last appearing on the personnel
                              records of the Savings Bank

     8.   Amendment; Waiver. No provisions of this Agreement may
be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by the
Executive and such officer or officers as may be specifically
designated by the Board of Directors of the Savings Bank to sign
on its behalf.  No waiver by any party hereto at

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any time of any breach by any other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or
subsequent time.

     9.   Governing Law.  The validity, interpretation,
construction and performance of this Agreement shall be governed
by the laws of the United States where applicable and otherwise
the substantive laws of the Commonwealth of Pennsylvania.

          10.  Nature of Employment and Obligations.

     (a)  Nothing contained herein shall be deemed to create
other than a terminable at will employment relationship between
the Savings Bank and the Executive, and the Savings Bank may
terminate the Executive's employment at any time, subject to
providing any payments specified herein in accordance with the
terms hereof.

     (b)  Nothing contained herein shall create or require the
Savings Bank to create a trust of any kind to fund any benefits
which may be payable hereunder, and to the extent that the
Executive acquires a right to receive benefits from the Savings
Bank hereunder, such right shall be no greater than the right of
any unsecured general creditor of the Savings Bank.

     11.  Term of Agreement. This Agreement shall terminate two
(2) years after the date first above written; provided that on or
prior to the first anniversary of the date first above written
and each anniversary thereafter, the Board of Directors of the
Savings Bank shall consider (with appropriate corporate
documentation thereof, and after taking into account all relevant
factors, including Executive's performance as an employee)
renewal of the term of this Agreement for an additional one (1)
year, and the term of this Agreement shall be so extended unless
the Board of Directors of the Savings Bank do not approve such
renewal and provide written notice to the Executive, or the
Executive gives written notice to the Savings Bank, thirty (30)
days prior to the date of any such anniversary, of such party's
or parties' election not to extend the term beyond its then
scheduled expiration date; and provided further that,
notwithstanding the foregoing to the contrary, this Agreement
shall be automatically extended for an additional one (1) year
upon a Change in Control of the Corporation.

     12.  Headings.  The section headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.

     13.  Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement, which
shall remain in full force and effect.

     14.  Counterparts.  This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the
same instrument.

     15.  Regulatory Prohibition.  Notwithstanding any other
provision of this Agreement to the contrary, the obligations of
the Savings Bank hereunder shall be suspended in the event

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that the FDIC prohibits or limits, by regulation or order, any
payment hereunder pursuant to Section 18(k) of the FDIA
(12 U.S.C. Section 1828(k)).

     16.  Regulatory Actions.  The following provisions shall be
applicable to the parties to the extent that they are required to
be included in agreements between a savings association and its
employees pursuant to Section 563.39(b) of the Regulations
Applicable to all Savings Associations, 12 C.F.R. Section 563.39(b),
or any successor thereto, and shall be controlling in the event of a
conflict with any other provision of this Agreement.

     (a)  If the Executive is suspended from office and/or
temporarily prohibited from participating in the conduct of the
Savings Bank's affairs pursuant to notice served under Section
8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance Act
("FDIA")(12 U.S.C. Sections 1818(e)(3) and 1818(g)(1)), the Savings
Bank's obligations under this Agreement shall be suspended as of
the date of service, unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Savings Bank may,
in its discretion: (i) pay Executive all or part of the
compensation withheld while its obligations under this Agreement
were suspended, and (ii) reinstate (in whole or in part) any of
its obligations which were suspended.

     (b)  If the Executive is removed from office and/or
permanently prohibited from participating in the conduct of the
Savings Bank's affairs by an order issued under Section 8(e)(4)
or Section 8(g)(1) of the FDIA (12 U.S.C. Sections 1818(e)(4) and
(g)(1)), all obligations of the Savings Bank under this Agreement
shall terminate as of the effective date of the order, but vested
rights of the Executive and the Savings Bank as of the date of
termination shall not be affected.

     (c)  If the Savings Bank is in default, as defined in
Section 3(x)(1) of the FDIA (12 U.S.C. Section 1813(x)(1)), all
obligations under this Agreement shall terminate as of the date
of default, but vested rights of the Executive and the Savings
Bank as of the date of termination shall not be affected.

     (d)  All obligations under this Agreement shall be
terminated pursuant to 12 C.F.R. Section 563.39(b)(5) (except to
the extent that it is determined that continuation of the Agreement
for the continued operation of the Savings Bank is necessary):
(i) by the Director of the OTS, or his/her designee, at the time
the Federal Deposit Insurance Corporation ("FDIC") enters into an
agreement to provide assistance to or on behalf of the Savings
Bank under the authority contained in Section 13(c) of the FDIA
(12 U.S.C. Section 1823(c)); or (ii) by the Director of the OTS,
or his/her designee, at the time the Director or his/her designee
approves a supervisory merger to resolve problems related to
operation of the Savings Bank or when the Savings Bank is
determined by the Director of the OTS to be in an unsafe or
unsound condition, but vested rights of the Executive and the
Savings Bank as of the date of termination shall not be affected.

     17.  Entire Agreement.  This Agreement embodies the entire
agreement between the Savings Bank and the Executive with respect
to the matters agreed to herein.  All prior agreements between
the Savings Bank and the Executive with respect to the matters
agreed to herein, including without limitation the Agreement
between the Savings Bank and the Executive dated May 26, 1999,
are hereby superseded and shall have no force or effect.
Notwithstanding


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the foregoing, nothing contained in this Agreement shall affect the
agreement of even date being entered into between the Corporation and
the Executive.

          IN WITNESS WHEREOF, this Agreement has been executed as
of the date first above written.


Attest:                            FIRST KEYSTONE BANK


/s/ Elizabeth M. Mulcahy             By: /s/ Donald S. Guthrie
---------------------------              -------------------------------
Elizabeth M. Mulcahy                     Donald S. Guthrie
                                         President


Attest:                            EXECUTIVE


/s/ Elizabeth M. Mulcahy             By: /s/ Carol Walsh
--------------------------               --------------------------------
Elizabeth M. Mulcahy                     Carol Walsh, Individually






















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