Mission To achieve sustained success through an unwavering focus on - - PowerPoint PPT Presentation

Mission

To achieve sustained success through an unwavering focus on fulfilling our clients’ financial needs.

Director Introductions

2018 in Review

2018 Highlights

• Consolidated competitive gains
• Continued market disruption served us

well

• Sustained client acquisition focus
• Expanded market share in all counties
• Regulatory Relief (Dodd Frank Rollback)
• New and refurbished “Expect More”

branches

• Team development and realignment

2018 Highlights

• Affiliate performance
• 2 for 1 stock split in October
• Uplist to the OTCQ Exchange
• Design, engineering and site development for

the Innovation and Technology Center

• Completed evaluation of the Core

Modernization Project

• Elevated community reinvestment and

community alignment

• Record earnings and shareholder performance

2018 Financial Highlights

Total Assets ($ in millions)

$660 $697 $725 $811 $851 $400 $450 $500 $550 $600 $650 $700 $750 $800 $850 $900 2014 2015 2016 2017 2018

Gross Loans ($ in millions)

$420 $451 $495 $575 $637 $250 $300 $350 $400 $450 $500 $550 $600 $650 $700 2014 2015 2016 2017 2018

Total Deposits ($ in millions)

$509 $543 $562 $654 $682 $450 $470 $490 $510 $530 $550 $570 $590 $610 $630 $650 $670 $690 2014 2015 2016 2017 2018

Loans/Deposits

¹ Includes all public banks with assets between $300mm to $1B Source: FFIEC Uniform Bank Performance Report

81.41% 82.09% 86.95% 87.05% 92.11% 70.00% 75.00% 80.00% 85.00% 90.00% 95.00% 100.00% 2014 2015 2016 2017 2018

KISB PA Peers¹

Market Share of Bank Deposits

Source: SNL Financial

Mifflin County

2018 2017 Kish Bank 44.23% 42.05% Juniata Valley Bank 22.50% 23.54% First National Bank

• f PA

13.95% 13.29% Mifflin County SB 11.36% 12.60% Citizens Bank 3.99% 4.34% Northwest Bank 3.97% 4.18% 5-Year Deposit Compound Annual Growth Rate (CAGR) 2018 Kish Bank 4.94% Mifflin County Market 2.58% Deposits Inside of the Market ($000) 2018 Kish Bank $351,192 Mifflin County Market $793,972

Market Share of Bank Deposits

Source: SNL Financial

Huntingdon County

2018 2017 Community State Bank of Orbisonia 31.29% 31.61% First National Bank

• f PA

22.00% 23.79% Kish Bank 19.22% 18.23% Riverview Bank 13.18% 11.92% Northwest Bank 3.82% 3.79% Juniata Valley Bank 3.17% 3.11% Farmers & Merchants Trust 2.64% 2.63% Huntingdon SB 2.38% 2.58% 5-Year Deposit Compound Annual Growth Rate (CAGR) 2018 Kish Bank 5.74% Huntingdon County Market 1.36% Deposits Inside of the Market ($000) 2018 Kish Bank $118,082 Huntingdon County Market $614,428

Market Share of Bank Deposits

Source: SNL Financial

Centre County

2018 2017 PNC Bank 23.57% 23.74% First National Bank

• f PA

19.55% 17.02% BB&T 10.24% 11.87% Citizens Bank of PA 8.69% 9.11% M&T Trust Co. 7.48% 7.64% Kish Bank 5.90% 5.47% Northwest SB 5.71% 5.53% Jersey Shore State Bank 5.02% 5.30% 5-Year Deposit Compound Annual Growth Rate (CAGR) 2018 Kish Bank 13.66% Centre County Market 5.00% Deposits Inside of the Market ($000) 2018 Kish Bank $204,386 Centre County Market $3,426,130

Income Highlights

2018 2017 Net Interest Income 25,757,080 $ 23,101,275 $ Provision for loan losses 955,000 600,000 Noninterest Income 7,439,640 6,423,346 Securities Gains (178,194) 101,117 Noninterest Expense 25,571,473 23,884,340 Income before income taxes 6,670,247 5,141,399 Income Taxes 640,564 1,001,629 Net Income 6,029,683 $ 4,139,770 $ Earnings Per Share (Diluted) 2.37 $ 1.67 $ ROA 0.72% 0.54% ROE 10.71% 7.45% Efficiency Ratio 75.40% 78.99%

• Strong growth in net

interest income; increased by 11.5% or $2.7 million

• Noninterest Income

increase by 14.0%, or $914 Thousand, driven by Non Bank Entities Strong Performance and addition

• f KBC
• Noninterest Expense

increased by 6.8%, driven by costs associated with staffing, processing and FDIC Insurance

• Net income increased by

45.63%

Net Income ($ in thousands)

$4,359 $4,494 $4,617 $4,140 $6,029 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000 $6,500 2014 2015 2016 2017 2018

Net Interest Income and Margin

($ in thousands)

$18,630 $19,661 $20,868 $23,101 $25,757 3.00% 3.20% 3.40% 3.60% 3.80% 4.00% $17,000 $18,000 $19,000 $20,000 $21,000 $22,000 $23,000 $24,000 $25,000 $26,000 2014 2015 2016 2017 2018

Net Interest Income ($000s) Net Interest Margin

Noninterest Income ($ in thousands)

$6,492 $6,748 $7,096 $6,423 $7,440 $5,000 $5,500 $6,000 $6,500 $7,000 $7,500 2014 2015 2016 2017 2018

Noninterest Expense ($ in thousands)

$25,571 $19,692 $21,049 $22,179 $23,884 $8,000 $13,000 $18,000 $23,000 $28,000 2014 2015 2016 2017 2018

Salaries Occupancy Data Processing All Other

Return on Average Assets

0.67% 0.66% 0.65% 0.54% 0.72% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 2014 2015 2016 2017 2018

Net Charge-Offs/Avg. Loans

¹ Includes Bank Operating Companies in PA with $500mm to $1B in Assets Source: SNL Financial

0.01% 0.05% 0.11% 0.05% 0.17%

• 0.04%
• 0.10%
• 0.05%

0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 2013 2014 2015 2016 2017 2018

KISB PA Peers¹

Nonaccrual Loans/Loans

¹ Includes Bank Operating Companies in PA with $500mm to $1B in Assets Source: SNL Financial

1.53% 1.60% 1.27% 1.14% 0.81% 0.22% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 2013 2014 2015 2016 2017 2018

KISB PA Peers¹

Loans 30-89 Days Past Due

¹ Includes all public banks with assets between $300mm to $1B Source: FFIEC Uniform Bank Performance Report

0.07% 0.52% 0.05% 0.12% 0.13% 0.09% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% 2013 2014 2015 2016 2017 2018

KISB Peers¹

Return on Average Equity

9.54% 8.89% 8.54% 7.45% 10.71% 4.00% 6.00% 8.00% 10.00% 12.00% 2014 2015 2016 2017 2018

Stock Performance (EOY)

$17 $19 $22 $23 $29 $32 $12 $17 $22 $27 $32 2013 2014 2015 2016 2017 2018

All stock prices reflect 2 for 1 stock split that occurred in October 2018 ¹ Stock price as of 4/28/2019

Dividend Yield on Common Stock

¹ Includes Bank Operating Companies in PA and Nationally with $500mm to $1B in Assets Source: SNL Financial

4.24% 4.00% 3.74% 3.17% 3.21% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 2014 2015 2016 2017 2018

KISB PA Peers¹ National Peers¹

Building the Team

Senior Management Promotions

• Kim Bubb – SVP, Director of Digital

Technology Innovation

• Terra Decker – SVP, Risk Officer
• Kim Dove – SVP, Operations Director
• Debra Weikel – SVP, Retail Credit Officer
• Chrissy Bagrosky – AVP, Private Client

Relationship Manager/CEO, Kish Travel

2019 to 2021 Strategic Plan

But first, a look back

PSU Smeal APEX Program

“Kish’s core values align with institutions that foster customer relationships and focus

• n delivering client value.”

The Expect More Store

Mission

To achieve sustained success through an unwavering focus on fulfilling our clients’ financial needs.

Twin Rails Strategy

“People don’t buy what you do, they buy WHY you do it.”

—Simon Sinek

We believe that we can make the lives

• f those around us, our employees, our

clients, and our communities, better.

Confidential

Digital Technology Innovation

Employees

More reliable, faster network Ability to serve customer holistically State-of-the-art, collaborative working environment Enhanced communication capabilities Improved training and development process

Customers

Relevant online and mobile experiences Simplified product choices Safe and convenient ways to do business Better understanding of financial picture Seamless and consistent experiences Enhanced access to all Kish business lines

A Vision for Kish 2020

• Redesign of our IT Infrastructure
• Overhaul of Information Security Program
• Modernization of Core Banking Solution
• Quality Employee Experience

Kish Innovation Center

IT Infrastructure & Connectivity

The Speeds to Create the REAL Kish Experience Hybrid Cloud & Virtual Desktop Solution Core System for the Future Team Member Efficiency

Information Security Program

• We can effectively and

efficiently control access

• We build and maintain

hardened systems

• We protect our data at rest and

in transit

• We select and use resilient

vendors

• We consistently and proactively

monitor 3rd party performance

• We give employees the

knowledge and tools to keep Kish Bank secure

• We build processes that

encourage safe behaviors

• We can identify new threats

and proactively implement controls/response

• We can quickly detect when

something goes wrong

TECHNOLOGY PEOPLE EVENTS 3rd PARTIES Kish Bank Information Security

Core Innovation Project

Company culture Quick response Contractual structure & pricing Input in strategic direction Agile approach Products and services Network infrastructure capabilities Executive engagement Responsiveness

The Employee Experience

Meet Mica

Kish Innovation Center

Technology Investment

• Annualized depreciation expense from

technology investment

– Information Technology and Security

$ 75,000

– Core Innovation Project $ 65,000 – Kish Innovation Center $ 550,000

Technology Investment

• Core Innovation Project

– 10 year flat contract negotiation – Includes growth and new products

• Net Savings over 10 years based on

current expense…

$11,725,000

Expect More

INNOVATION

Report of the Judges

Congratulations, Directors!