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) $900 $851 $850 $811 $800 $750 $725 $697 $700 $660 $650 $600 $550 $500 $450 $400 2014 2015 2016 2017 2018
Gross Loans ($ in millions) $700 $637 $650 $600 $575 $550 $495 $500 $451 $450 $420 $400 $350 $300 $250 2014 2015 2016 2017 2018
Total Deposits ($ in millions) $682 $690 $670 $654 $650 $630 $610 $590 $562 $570 $543 $550 $530 $509 $510 $490 $470 $450 2014 2015 2016 2017 2018
Loans/Deposits 100.00% KISB PA Peers¹ 95.00% 92.11% 90.00% 87.05% 86.95% 85.00% 82.09% 81.41% 80.00% 75.00% 70.00% 2014 2015 2016 2017 2018 ¹ Includes all public banks with assets between $300mm to $1B Source: FFIEC Uniform Bank Performance Report
Market Share of Bank Deposits Mifflin County 5-Year Deposit Compound Annual Growth Rate (CAGR) 2018 2017 2018 Kish Bank 44.23% 42.05% Kish Bank 4.94% Juniata Valley Bank 22.50% 23.54% Mifflin County Market 2.58% First National Bank 13.95% 13.29% of PA Mifflin County SB 11.36% 12.60% Deposits Inside of the Market ($000) Citizens Bank 3.99% 4.34% 2018 Northwest Bank 3.97% 4.18% Kish Bank $351,192 Mifflin County Market $793,972 Source: SNL Financial
Market Share of Bank Deposits Huntingdon County 5-Year Deposit Compound Annual Growth Rate (CAGR) 2018 2017 2018 Community State 31.29% 31.61% Bank of Orbisonia Kish Bank 5.74% First National Bank Huntingdon County Market 1.36% 22.00% 23.79% of PA Kish Bank 19.22% 18.23% Deposits Inside of the Market Riverview Bank 13.18% 11.92% ($000) Northwest Bank 3.82% 3.79% 2018 Juniata Valley Bank 3.17% 3.11% Kish Bank $118,082 Farmers & 2.64% 2.63% Merchants Trust Huntingdon County Market $614,428 Huntingdon SB 2.38% 2.58% Source: SNL Financial
Market Share of Bank Deposits 5-Year Deposit Compound Annual Centre County Growth Rate (CAGR) 2018 2017 2018 PNC Bank 23.57% 23.74% Kish Bank 13.66% First National Bank 19.55% 17.02% Centre County Market 5.00% of PA BB&T 10.24% 11.87% Citizens Bank of PA 8.69% 9.11% Deposits Inside of the Market ($000) M&T Trust Co. 7.48% 7.64% 2018 Kish Bank 5.90% 5.47% Kish Bank $204,386 Northwest SB 5.71% 5.53% Jersey Shore State Centre County Market $3,426,130 5.02% 5.30% Bank Source: SNL Financial
Income Highlights • 2018 2017 Strong growth in net Net Interest Income $ 25,757,080 $ 23,101,275 interest income; increased by 11.5% or $2.7 million Provision for loan losses 955,000 600,000 Noninterest Income 7,439,640 6,423,346 • Noninterest Income Securities Gains (178,194) 101,117 increase by 14.0%, or $914 Noninterest Expense 25,571,473 23,884,340 Thousand, driven by Non Income before income taxes 6,670,247 5,141,399 Bank Entities Strong Income Taxes 640,564 1,001,629 Performance and addition of KBC Net Income $ 6,029,683 $ 4,139,770 • Noninterest Expense Earnings Per Share (Diluted) $ 2.37 $ 1.67 increased by 6.8%, driven by costs associated with staffing, processing and ROA 0.72% 0.54% FDIC Insurance • Net income increased by ROE 10.71% 7.45% 45.63% Efficiency Ratio 75.40% 78.99%
Net Income ($ in thousands) $6,500 $6,029 $6,000 $5,500 $5,000 $4,617 $4,494 $4,500 $4,359 $4,140 $4,000 $3,500 $3,000 2014 2015 2016 2017 2018
Net Interest Income and Margin ($ in thousands) $25,757 $26,000 4.00% Net Interest Income ($000s) Net Interest Margin $25,000 3.80% $24,000 $23,101 $23,000 3.60% $22,000 $20,868 $21,000 3.40% $20,000 $19,661 $19,000 $18,630 3.20% $18,000 $17,000 3.00% 2014 2015 2016 2017 2018
Noninterest Income ($ in thousands) $7,440 $7,500 $7,096 $7,000 $6,748 $6,492 $6,423 $6,500 $6,000 $5,500 $5,000 2014 2015 2016 2017 2018
Noninterest Expense ($ in thousands) Salaries Occupancy Data Processing All Other $28,000 $25,571 $23,884 $22,179 $23,000 $21,049 $19,692 $18,000 $13,000 $8,000 2014 2015 2016 2017 2018
Return on Average Assets 0.80% 0.72% 0.67% 0.70% 0.66% 0.65% 0.60% 0.54% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% 2014 2015 2016 2017 2018
Net Charge-Offs/Avg. Loans 0.30% KISB PA Peers¹ 0.25% 0.20% 0.17% 0.15% 0.11% 0.10% 0.05% 0.05% 0.05% 0.01% 0.00% 2013 2014 2015 2016 2017 2018 -0.05% -0.04% -0.10% ¹ Includes Bank Operating Companies in PA with $500mm to $1B in Assets Source: SNL Financial
Nonaccrual Loans/Loans KISB PA Peers¹ 3.00% 2.50% 2.00% 1.53% 1.60% 1.50% 1.27% 1.14% 1.00% 0.81% 0.50% 0.22% 0.00% 2013 2014 2015 2016 2017 2018 ¹ Includes Bank Operating Companies in PA with $500mm to $1B in Assets Source: SNL Financial
Loans 30-89 Days Past Due KISB Peers¹ 1.00% 0.90% 0.80% 0.70% 0.60% 0.52% 0.50% 0.40% 0.30% 0.20% 0.13% 0.12% 0.09% 0.07% 0.10% 0.05% 0.00% 2013 2014 2015 2016 2017 2018 ¹ Includes all public banks with assets between $300mm to $1B Source: FFIEC Uniform Bank Performance Report
Return on Average Equity 12.00% 10.71% 10.00% 9.54% 8.89% 8.54% 8.00% 7.45% 6.00% 4.00% 2014 2015 2016 2017 2018
Stock Performance (EOY) $32 $32 $29 $27 $23 $22 $22 $19 $17 $17 $12 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 7.00% KISB PA Peers¹ National Peers¹ 6.00% 5.00% 4.24% 4.00% 4.00% 3.74% 3.17% 3.21% 3.00% 2.00% 1.00% 2014 2015 2016 2017 2018 ¹ Includes Bank Operating Companies in PA and Nationally with $500mm to $1B in Assets Source: SNL Financial
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 on 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 of those around us, our employees, our clients, and our communities, better .
Confidential
Digital Technology Innovation Employees Customers More reliable, faster network Relevant online and mobile experiences Ability to serve customer holistically Simplified product choices State-of-the-art, collaborative working Safe and convenient ways to do business environment Better understanding of financial picture Enhanced communication capabilities Seamless and consistent experiences Improved training and development Enhanced access to all Kish business lines process
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 Hybrid Cloud & Virtual Desktop Solution Core System for the Future The Speeds to Create the REAL Kish Experience Team Member Efficiency
Information Security Program TECHNOLOGY PEOPLE • We can effectively and • We give employees the efficiently control access knowledge and tools to keep • We build and maintain Kish Bank secure hardened systems • We build processes that • We protect our data at rest and encourage safe behaviors in transit Kish Bank Information Security • We can identify new threats • We select and use resilient and proactively implement vendors controls/response • We consistently and proactively • We can quickly detect when monitor 3 rd party performance something goes wrong EVENTS 3 rd PARTIES
Core Innovation Project
Company culture Quick Responsiveness response Contractual Executive structure & engagement pricing Input in Network strategic infrastructure direction capabilities Products Agile and approach services
The Employee Experience Meet Mica
Kish Innovation Center
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