Kish Bank Investor Presentation March 2020 Forward-Looking - - PowerPoint PPT Presentation

Kish Bank Investor Presentation

— March 2020 —

Forward-Looking Statements

This presentation and information supplemental hereto contain, and during the course of oral and written presentations connected herewith management may make, projections and estimates with respect to future events or future financial performance, as well as other “forward-looking statements” (as that term is defined in the Securities Act of 1933) relating to Kish Bancorp, Inc. (referred to herein as “forward-looking statements”). Investors are cautioned not to place undue reliance on any forward-looking statements and are entitled and urged to conduct their own due diligence with respect to all matters relating to this offering and therefore are cautioned that they are responsible for verifying the likelihood that any forward- looking statements are or will remain correct or accurate in the future. The forward-looking statements are also subject to the specific factors set forth in this presentation under the heading “Risk Factors.” In addition, the forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are either beyond the control of Kish Bancorp, Inc. and its management or not reasonably capable of predicting at this time. In addition, the forward-looking statements are subject to assumptions with respect to future business strategies and decisions of Kish Bancorp, Inc. that are subject to change. Should any of the risks, uncertainties or other factors referred to in this presentation or

• therwise by management of Kish Bancorp, Inc. materialize, or should underlying assumptions prove incorrect, Kish Bancorp,

Inc.’s actual results may differ materially from the anticipated results expressed or implied in these forward-looking statements. Kish Bancorp, Inc. and its management and agents disclaim, and do not assume, any obligation to update the information provided in this or any related presentation to correct any forward-looking statements, whether because of future events or developments or otherwise.

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Kish Bancorp Snapshot

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Financial data as of December 31, 2019

Who We Are

• A fully diversified financial services company
• Deep roots dating to 1900
• Board and management ownership
• Recognized as the leading community bank in the region
• Driven by a differentiated client experience
• Dominant market share
• Rapidly growing with significant potential in Centre County
• Quality is a hallmark

Financial Profile

$918 million in total assets $680 million in net loans $710 million in deposits $64 million in stockholders’ equity Market capitalization of $78 million 11.56% ROAE

Executive Leadership

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William P. Hayes Chairman & Chief Executive Officer

• 43 years with Kish
• Past Chair of PA

Bankers Association

• Has grown Kish from

$28 million to $918 million in assets in time as CEO

Robert S. McMinn, Esq. Executive Vice President, General Counsel

• 17 years with Kish
• Extensive background

in law and executive management

Mark J. Cvrkel Executive Vice President, Chief Financial Officer

• 4 years with Kish
• Extensive executive

experience at banks with assets in excess

• f $1 billion
• Member of the PA

Bankers Association 40-Year Club

Peter D. Collins Executive Vice President, Chief Credit Officer

• 6 years with Kish
• 38 years in banking

industry

• Extensive

management experience at banks ranging from $3 billion to $100 billion in assets

Richard A. Sarfert Executive Vice President, Chief Lending Officer

• 4 years with Kish
• 30+ years in the

financial services industry focused on commercial lending

Suzanne M. White Senior Vice President, Human Resources & Development Director

• 13 years with Kish
• Member of the PA

Bankers Association Professional Development Committee

Gregory T. Hayes President & Chief Operating Officer

• 14 years with Kish
• Member of PA

Bankers Association Board of Directors

• Member of Summit

Technology Group Board of Directors

• Drives technological

innovation at Kish

Strong Board

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The Board of Directors of Kish Bancorp, Inc. Front row: Kathleen Rhine, Bill Hayes, Greg Hayes, and Fran

• Vaughn. Back row: Eric Barron, Bill Lake, George Woskob, Paul Howes, Bill Dancy, Jim Lakso, Paul Silvis, and

Spyros Degleris. Not pictured: Ed Friedman.

Mifflin

• 9 locations
• Ranked #1 with 43.66% of deposit market share

Huntingdon

• 3 locations
• Ranked #3 with 21.58% of deposit market share

Centre

• 4 locations
• Ranked #6 with 6.21% of deposit market share
• Ranked #1 among community banks

Markets

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Data as of June 30, 2019 Source: FDIC

County Market Share Rank Deposits in Market ($000) Market Share (%) Total Market ($000)

Mifflin, PA 1 347,172 43.66% 795,209 Huntingdon, PA 3 133,987 21.58% 620,935 Centre, PA 6 218,799 6.21% 3,462,130

Deposit Market Share

• A fully diversified financial services company

with a comprehensive suite of services to meet all business and personal needs

• Fee and non-interest income of 24.9% of net
• perating income
• Active acquirer of non-bank businesses

More Than Just a Bank

• Banking

– Full-service retail and commercial banking – Mortgage banking

• Wealth Management

– Financial planning and investment advisory – Fiduciary, trust and estate management

• Insurance

– Property and casualty insurance

• Benefits Consulting

– Employee healthcare and benefits consulting services

• Travel

– Custom individual and group travel

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Why Invest in Kish Bancorp?

History of Strong Growth, Performance, and Innovation

• A market leader in Central Pennsylvania with rapidly expanding market share
• Average annual return on equity of 9.51% since 1990
• Earnings growth in last two years of 16.2% and 45.0% respectively
• First PA bank with insurance and travel companies

Excellent Growth Potential

• Major presence and rapidly growing in Centre County
• #1 among community banks in Centre County market
• Centre County market share grown by over $100 million since 2014 (4.53% of market share to 6.21%)1
• Kish’s state-of-the-art Expect More Store opened in 2016 – vision of the “bank of the future”

Sophisticated and Distinctive Alternative to Other Providers

• A focus on small businesses, professionals, high net worth segments, non-profit organizations
• Emphasis on highly customized service, prompt decision making, and client access to local executive team
• Innovative, diversified approach to fulfilling clients’ financial needs through trust, wealth solutions, travel,

insurance, and employee benefits consulting

Focused on the Future: Technology and Innovation

• Continuous investment in technology to enhance delivery of services and advance Kish’s ability to compete

in a digital environment

• Construction of Kish Innovation Center to be completed in 2020—designed to support Kish’s long-term

sustainability through an enhanced capacity for training, collaboration, and innovation

• Transformation of network, IT infrastructure, and core banking partner to take place in 2020

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1 Data as of December 31, 2019

• President Greg Hayes featured in ABA Journal

in January 2020

• Major commitment to next-generation banking
• Migrating multiple systems to cloud-based

solutions

– Including hardware infrastructure, productivity software, core platform, phone system

• Refreshing cyber and information security

program

• Core processing transformation

Innovative Technology

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Branch of the Future

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Kish Innovation

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Kish Innovation

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Kish Innovation Center

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Core Philosophy

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“We believe that we can make the lives of those around us—our employees, our clients, and our communities—better.”

Fostering Community Well-Being

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• Benefit from market disruption

– Acquisitions – Branch closings

• Strengthen the franchise

– Geographic expansion – New digital delivery channels – Evolving risk management – Focus on Centre Region

• Grow fee income based revenue

– Expansion through strategic acquisitions – Focus on diversified revenue sources – Cross-sales to key segments – Mortgage Banking

Strategic Focus

• Innovative/disruptive strategies

– Differentiated business model – Focus on technology and digital delivery – Customer needs oriented – Streamlined branch model

• Build a more powerful team

– Digitally enabled – Focused on client acquisition/fulfillment – Expanding management depth

• Community leadership

– Visible and engaged

• Sustainability

– Strong financial performance and investor returns – Prudential capital management

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Shareholder Focus

• Strong organic revenue growth and scalable infrastructure leading to double digit growth

in EPS and return on shareholder equity

• Net income of $7.0 million in 2019 compared to $4.4 million in 2014

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• Earnings per share $2.80 in 2019 compared to $1.82 in 2014

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• Market Valuation of 125.3% of TBV in 2019 compared to 99.7% in 2014

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• Consistent dividend expansion with a current yield of ~3.6%
• Share price of $30.75 in 2019 increased 59% compared to $19.33 in 2014

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1 For comparability, per share data for 2014 has been adjusted to reflect the 2-for-1 stock split in 2018.

Investment Opportunity

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• KISB common stock

– 2019 reflected modest decline in share price despite 16% increase in EPS – Intermediate and long term positive outlook – Dominant community bank in the region – Attractive valuation – Subordinate debt issuance to support stock repurchase – Dividend yield

Sustained Growth Over Time

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Total Assets ($ in millions)

$557 $560 $558 $630 $660 $697 $725 $811 $851 $918 $500 $550 $600 $650 $700 $750 $800 $850 $900 $950 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Total Gross Loans ($ in millions)

$374 $371 $358 $387 $420 $452 $496 $576 $637 $690 $300 $350 $400 $450 $500 $550 $600 $650 $700 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Total Deposits ($ in millions)

$446 $455 $460 $494 $494 $509 $543 $562 $654 $682 $710 $350 $400 $450 $500 $550 $600 $650 $700 $750 2010 2011 2012 2013 2013 2014 2015 2016 2017 2018 2019

Asset Quality

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Loan Delinquency (% of total loans) Net Charge-Offs / Average Loans Reserves / Gross Loans

1.61% 2.11% 1.31% 1.26% 0.94% 0.22% 0.06% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 2013 2014 2015 2016 2017 2018 2019 KISB Peers¹ 0.01% 0.05% 0.11% 0.06% 0.17% 0.00%

• 0.07%
• 0.10%
• 0.05%

0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 2013 2014 2015 2016 2017 2018 2019 KISB Peers¹ 1.53% 1.43% 1.27% 1.22% 0.99% 1.04% 1.09% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80% 2013 2014 2015 2016 2017 2018 2019 KISB Peers¹

Capital Summary

• Prudential capital management based on high quality balance sheet
• Well-capitalized under all FDIC guidelines

– Retained earnings provide support for continued organic growth

• Total Risk Based Capital: 11.86% versus 10% FDIC guidance
• Tier 1 Capital: 9.54% versus 8% FDIC guidance
• Common Equity Tier 1 Capital: 8.72% versus 6.5% FDIC guidance
• Leverage Ratio: 7.64% compared to 5% FDIC levels
• Retained earnings: $64,304,000

– Versus $49,584,000 in 2014

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Financial data as of December 31, 2019

Profitability

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Net Income ($ in thousands) Net Interest Income ($ in thousands) Net Interest Margin

4,217 4,359 4,494 4,617 4,140 6,030 7,007 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2013 2014 2015 2016 2017 2018 2019 17,537 18,630 19,661 20,868 23,101 25,757 27,538 5,000 10,000 15,000 20,000 25,000 30,000 2013 2014 2015 2016 2017 2018 2019 3.26% 3.27% 3.29% 3.31% 3.35% 3.41% 3.40% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 2013 2014 2015 2016 2017 2018 2019

• Bank and Non-Bank Business Revenues

– Diversified sources of revenue – Wealth management

• 2019 revenue of $1.6 million up 8.34% over 2018

– Kish Insurance recurring revenue

• 2019 revenue of $1.2 million up 8.70%1 over 2018

– Kish Travel

• 2019 revenue of $371 thousand up 19.31% over

2018

– Kish Benefits Consulting

• 2019 revenue of $585 thousand up 23.48% over

2018

– Mortgage Banking

• 2019 non-interest income of $1.2 million up 36.5%
• ver 2018

Non-Interest Income

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1 Excludes contingency income

6,460 6,492 6,748 7,096 6,423 7,440 8,502 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 2013 2014 2015 2016 2017 2018 2019

Non-Interest Income ($ in thousands)

9.70% 9.54% 8.89% 8.54% 7.45% 10.71% 11.56% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 2013 2014 2015 2016 2017 2018 2019 KISB Peers¹

Return on Equity

107.71% 99.70% 107.70% 111.00% 136.20% 143.60% 125.30% 0% 50% 100% 150% 200% 250% 2013 2014 2015 2016 2017 2018 2019 KISB Peers¹

Price/Tangible Book

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1 Includes public banks in PA with assets between $500 million and $1 billion.

Source: SNL Financial

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Kish Bancorp poised for growth and appreciation