Welcome and Call to Order Agenda for the Annual Meeting Call to - PowerPoint PPT Presentation

Welcome and Call to Order

Agenda for the Annual Meeting • Call to Order • Introductions • Close Nominations and Shareholders’ Vote • Remarks – 2017 Highlights and Outlook • Report of the Judges • Adjournment and Refreshments

Remembrance William E. Brindel June 23, 1919–November 22, 2017

Director Introductions

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

2017 in Review

2017 Highlights • Market disruption • BMG joins Kish • Client acquisition • Loan & deposit growth • Aligning the team • Market share expansion • Affiliate performance • Record earnings • Shareholder performance

2017 Financial Highlights

Total Assets ($ in millions) $850 $811 $800 $750 $725 $697 $700 $660 $650 $630 $600 $550 $500 $450 $400 $350 2013 2014 2015 2016 2017

Gross Loans ($ in millions) $600 $575 $550 $495 $500 $451 $450 $420 $400 $387 $350 $300 $250 2013 2014 2015 2016 2017

Total Deposits ($ in millions) $660 $654 $640 $620 $600 $580 $562 $560 $543 $540 $520 $509 $494 $500 $480 $460 $440 2013 2014 2015 2016 2017

Market Share of Bank Deposits Mifflin County 5-Year Deposit Compound Annual Growth Rate (CAGR) 2017 2016 2017 Kish Bank 42.05% 42.11% Kish Bank 3.57% Juniata Valley Bank 23.54% 22.85% Mifflin County Market 1.37% First National Bank 13.29% 13.41% of PA Mifflin County SB 12.60% 12.91% Citizens Bank 4.34% 4.31% Northwest Bank 4.18% 4.41% Source: SNL Financial

Market Share of Bank Deposits Huntingdon County 5-Year Deposit Compound Annual Growth Rate (CAGR) 2017 2016 2017 Community State 31.61% 32.60% Bank of Orbisonia Kish Bank 3.69% First National Bank Huntingdon County Market 1.06% 23.79% 23.23% of PA Kish Bank 18.23% 17.56% Riverview Bank 11.92% 12.00% Northwest Bank 3.79% 3.90% Juniata Valley Bank 3.11% 3.28% Farmers & 2.63% 2.68% Merchants Trust Huntingdon SB 2.58% 2.25% Source: SNL Financial

Market Share of Bank Deposits 5-Year Deposit Compound Annual Centre County Growth Rate (CAGR) 2017 2016 2017 PNC Bank 23.74% 22.56% Kish Bank 12.39% First National Bank 17.02% 17.58% Centre County Market 5.61% of PA BB&T 11.87% 13.33% Citizens Bank of PA 9.11% 9.21% M&T Trust Co. 7.64% 7.83% Northwest SB 5.53% 5.66% Kish Bank 5.47% 4.65% Jersey Shore State 5.30% 4.81% Bank Source: SNL Financial

Loan Mix ($ in thousands) Residentail RE Consumer and Others State & Political Agricultural Comm & Ind Comm RE - 50,000 100,000 150,000 200,000 250,000 2017 Gross Loans: $574,708,035 2017 vs. 2016 Loan Growth: 16.20%

Loans/Deposits 100.00% KISB PA Peers¹ 95.00% 90.00% 86.95% 87.05% 85.00% 82.09% 81.41% 80.00% 77.12% 75.00% 70.00% 2013 2014 2015 2016 2017 ¹ Includes all public banks with assets between $300mm to $1B Source: FFIEC Uniform Bank Performance Report

Income Highlights 2017 2016 Strong growth in net • Net Interest Income $ 23,101,275 $ 20,867,911 interest income; increased Provision for loan losses 600,000 530,000 by 10.7% or $2.2 million Noninterest Income 6,524,463 7,095,827 Timely EOY investment • Securities Gains 101,117 773,237 losses taken in response to Noninterest Expense 23,884,340 22,179,461 corporate tax change Income before income taxes 5,141,399 5,254,277 Increased staffing and data • Income Taxes 1,001,629 637,383 processing costs from Net Income $ 4,139,770 $ 4,616,894 higher customer volume drove noninterest expense Earnings Per Share (Diluted) $ 3.33 $ 3.77 increases Before year-end • adjustments, net income ROA 0.54% 0.65% increased by 9.65% Consistent performance ROE 7.45% 8.54% • ratios Efficiency Ratio 77.20% 77.18%

Net Income ($ in thousands) $5,060 $5,000 $4,617 $4,494 $4,500 $4,359 $4,217 $4,140 $4,000 $3,500 $3,000 2013 2014 2015 2016 2017 Before 2017 After Tax Tax Cut Cut

Net Interest Income and Margin ($ in thousands) $24,000 4.00% Net Interest Income ($000s) Net Interest Margin $23,101 $23,000 3.80% $22,000 $20,868 $21,000 3.60% $20,000 $19,661 3.40% $19,000 $18,630 $18,000 $17,537 3.20% $17,000 $16,000 3.00% 2013 2014 2015 2016 2017

Noninterest Income ($ in thousands) $7,500 $7,096 $7,000 $6,748 $6,524 $6,492 $6,459 $6,500 $6,000 $5,500 $5,000 2013 2014 2015 2016 2017

Noninterest Expense ($ in thousands) Salaries Occupancy Data Processing All Other $25,000 $23,884 $22,179 $21,049 $19,915 $19,692 $20,000 $15,000 $10,000 $5,000 2013 2014 2015 2016 2017

Return on Average Equity 12.00% 9.70% 10.00% 9.54% 8.89% 8.54% 8.20% 8.00% 7.45% 6.00% 4.00% 2013 2014 2015 2016 Before Tax Cut After Tax Cut 2017 2017

Return on Average Assets 0.80% 0.69% 0.65% 0.67% 0.70% 0.66% 0.59% 0.60% 0.54% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% 2013 2014 2015 2016 Before Tax After Tax Cut Cut 2017 2017

Net Charge-Offs/Avg. Loans 0.35% KISB PA Peers¹ 0.30% 0.25% 0.20% 0.15% 0.15% 0.12% 0.11% 0.10% 0.05% 0.05% 0.05% 0.01% 0.00% 2012 2013 2014 2015 2016 2017 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% 0.00% 2013 2014 2015 2016 2017 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% 0.07% 0.10% 0.05% 0.00% 2013 2014 2015 2016 2017 ¹ Includes all public banks with assets between $300mm to $1B Source: FFIEC Uniform Bank Performance Report

Stock Performance (EOY) $59 $60 $58 $55 $50 $46 $43 $45 $40 $39 $35 $35 $33 $30 $25 2012 2013 2014 2015 2016 2017 Current¹ ¹ Stock price as of 4/12/2018

Dividend Yield on Common Stock 7.00% KISB PA Peers¹ National Peers¹ 6.00% 5.00% 4.70% 4.24% 4.00% 3.74% 4.00% 3.17% 3.00% 2.00% 1.00% 2013 2014 2015 2016 2017 ¹ Includes Bank Operating Companies in PA and Nationally with $500mm to $1B in Assets Source: SNL Financial

Market Disruption • Continued mergers and acquisitions – BB&T – Community banks • Fintech

BMG Joins Kish December 2017

Building the Team

Senior Management Promotions Greg Hayes – President and COO • Ric Sarfert – EVP, Chief Lending Officer • Jim Shilling – EVP, Chief Business Services Officer • Tom Minichiello – SVP, Head of Retail Banking • Doug Baxter – SVP, Accounting & Controls Manager • Kim Bubb – VP, Client Solutions and Operations Director • Terra Decker – VP, Information Security and Compliance Risk • Director Amy Muchler – SVP, Educational Outreach and Service • Quality Manager Wendy Strohecker – VP, Bank Operations Manager • Bill Yaudes – VP, Business Development Officer •

Management Org. Chart

National Recognition • Ranked in American Banker magazine’s list of Top 200 Community Banks in the United States for 12 consecutive years • Bauer 5 Star Rating

Our long term focus… has been our focus.

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

Shifting Focus on the Client Then and now: What we know about our client How they want to engage and connect What is considered a transaction

Last Year • Digital natives and mobile banking revolution • Fintech disruption • Barriers to entry creating partnerships • Banks must offer digital services

This Year • Growth in blockchain & cryptocurrency • Amazon and banking - GAFA • Alibaba approach • Expanding use of artificial intelligence • Community bank opportunities to partner And then: • Facebook data breach

Trust Builds Relationships Client know us and there is always someone they can call. We are here and decisions affecting the client are made here.

Going Digital Establishing the partnership for the digital platform of the future. Utilizing data in every decision and recommendation that we make. Redesigning the technology infrastructure for the future.

It Is All About Our People Creation of the Private Client Group Transition of Tellers to Personal Bankers New alignment of leadership for Business Services

Maintaining Trust Managing cyber security threats Providing information and education Enhancing our fraud solutions

Living Up to Our Brand Measure the Kish Experience Tell our story through our clients Maintain our focus on our values Establish our WHY !

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

Why do we do it?

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

Confidential

Summary

Congratulations, Directors!