Kish Bancorp, Inc. · OTC:KISB
Kish Bancorp — Shareholder Meeting (May 2017)
61 slides from Kish Bancorp's shareholder meeting presentation, May 16, 2017
Slide 1: 2017 Annual Shareholder Meeting
a 2017 Annual Shareholder Meeting EISH expect more SERRE
Slide 2: Welcome and Call to Order
Welcome and Call to Order
Slide 3: Agenda for the Annual Meeting
Agenda for the Annual Meeting • Call to Order • Introductions • Close Nominations and Shareholders’ Vote • Remarks – 2016 Highlights and Outlook • Report of the Judges • Special Presentation • Adjournment and Refreshments
Slide 4: 2017 Annual Shareholder Meeting
a 2017 Annual Shareholder Meeting EISH expect more SERRE
Slide 5: Introductions
Introductions • Directors • Senior management
Slide 6: Mission
Mission We will sustain an unwavering focus on fulfilling clients’ financial needs.
Slide 7: 2016 in Review
2016 in Review
Slide 8: 2016 Highlights
2016 Highlights • Client acquisition • Loan growth • Building & aligning the team • Market share expansion • Affiliate performance • Record earnings • Shareholder performance
Slide 9: 2016 Financial Highlights
2016 Financial Highlights
Slide 10: Total Assets ($ in millions)
Total Assets ($ in millions) $800 $750 $725 $697 $700 $660 $650 $630 $600 $558 $550 $500 $450 $400 $350 2012 2013 2014 2015 2016
Slide 11: Gross Loans ($ in millions)
Gross Loans ($ in millions) $550 $500 $495 $451 $450 $420 $400 $387 $358 $350 $300 $250 2012 2013 2014 2015 2016
Slide 12: Total Deposits ($ in millions)
Total Deposits ($ in millions) $600 $580 $562 $560 $543 $540 $520 $509 $500 $494 $480 $460 $460 $440 $420 $400 2012 2013 2014 2015 2016
Slide 13: Market Share of Bank Deposits
Market Share of Bank Deposits Mifflin County 5-Year Deposit Compound Annual Growth Rate (CAGR) 2016 2015 2016 Kish Bank 42.11% 41.69% Kish Bank 3.55% Juniata Valley Bank 22.85% 22.58% Mifflin County Market 1.29% First National Bank 13.41% 13.76% of PA Mifflin County SB 12.91% 12.60% Northwest Bank 4
Slide 14: Market Share of Bank Deposits
Market Share of Bank Deposits Huntingdon County 5-Year Deposit Compound Annual Growth Rate (CAGR) 2016 2015 2016 Community State 32.60% 33.05% Bank of Orbisonia Kish Bank 3.44% First National Bank 23.23% 20.65% Huntingdon County Market 1.30% of PA Kish Bank 17.56% 17.34% Riverview 12.00% 11.50% Nort
Slide 15: Market Share of Bank Deposits
Market Share of Bank Deposits Centre County 5-Year Deposit Compound Annual Growth Rate (CAGR) 2016 2015 2016 PNC Bank 22.56% 20.78% Kish Bank 10.41% First National Bank 17.58% 17.57% of PA Centre County Market 6.39% BB&T 13.33% 14.55% Citizens Bank of PA 9.21% 9.00% M&T Trust Co. 7.83% 8.21% Northwe
Slide 16: Loan Mix
Loan Mix Residentail RE Consumer and Others State & Political Agricultural Comm & Ind Comm RE - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 Thousands 2016 Gross Loans: $494,599,165 2016 vs. 2015 Loan Growth: 9.62%
Slide 17: Loans/Deposits
Loans/Deposits 100.00% KISB PA Peers¹ 95.00% 90.00% 86.95% 85.00% 82.09% 81.41% 80.00% 77.12% 76.24% 75.00% 70.00% 2012 2013 2014 2015 2016 ¹ Includes all public banks with assets between $300mm to $1B Source: FFIEC Uniform Bank Performance Report
Slide 18: Income Highlights
Income Highlights 2016 2015 • Strong growth in net Net Interest Income $ 20,867,911 $ 19,660,867 interest income; increased Provision for loan losses 530,000 235,000 by 6.1% or $1.2 million Noninterest Income 7,095,827 6,748,331 • Noninterest income Securities Gains 773,237 535,080 remains above pee
Slide 19: Net Income ($ in thousands)
Net Income ($ in thousands) $5,000 $4,617 $4,494 $4,500 $4,359 $4,217 $4,000 $3,630 $3,500 $3,000 2012 2013 2014 2015 2016
Slide 20: Net Interest Income and Margin
Net Interest Income and Margin ($ in thousands) $21,000 Net Interest Income ($000s) Net Interest Margin $20,868 4.00% $20,000 $19,661 3.80% $19,000 3.60% $18,630 $18,000 3.40% $17,537 $17,000 $16,816 3.20% $16,000 3.00% 2012 2013 2014 2015 2016
Slide 21: Noninterest Income ($ in thousands)
Noninterest Income ($ in thousands) $7,500 $7,096 $7,000 $6,913 $6,748 $6,459 $6,492 $6,500 $6,000 $5,500 $5,000 2012 2013 2014 2015 2016
Slide 22: Noninterest Expense ($ in thousands)
Noninterest Expense ($ in thousands) $25,000 Salaries Occupancy Data Processing All Other $22,179 $21,049 $19,290 $19,915 $19,692 $20,000 $15,000 $10,000 $5,000 2012 2013 2014 2015 2016
Slide 23: Return on Average Equity
Return on Average Equity 12.00% 10.00% 9.70% 9.54% 8.89% 8.61% 8.54% 8.00% 6.00% 4.00% 2012 2013 2014 2015 2016
Slide 24: Return on Average Assets
Return on Average Assets 1.00% 0.80% 0.69% 0.67% 0.66% 0.65% 0.65% 0.60% 0.40% 2012 2013 2014 2015 2016
Slide 25: Net Charge-Offs/Avg. Loans
Net Charge-Offs/Avg. Loans 0.35% KISB PA Peers¹ 0.30% 0.25% 0.20% 0.15% 0.12% 0.11% 0.10% 0.05% 0.05% 0.05% 0.01% 0.00% 2012 2013 2014 2015 2016 ¹ Includes Bank Operating Companies in PA with $500mm to $1B in Assets Source: SNL Financial
Slide 26: Nonaccrual Loans/Loans
Nonaccrual Loans/Loans KISB PA Peers¹ 3.00% 2.50% 1.98% 2.00% 1.60% 1.53% 1.50% 1.27% 1.14% 1.00% 0.50% 0.00% 2012 2013 2014 2015 2016 ¹ Includes Bank Operating Companies in PA with $500mm to $1B in Assets Source: SNL Financial
Slide 27: Loans 30-89 Days Past Due
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% 0.19% 0.20% 0.12% 0.10% 0.07% 0.05% 0.00% 2012 2013 2014 2015 2016 ¹ Includes all public banks with assets between $300mm to $1B Source: FFIEC Uniform Bank Performance Report
Slide 28: Stock Performance (EOY)
Stock Performance (EOY) $60 $55 $55 $50 $46 $45 $43 $39 $40 $35 $35 $33 $30 $29 $25 2011 2012 2013 2014 2015 2016 Current¹ ¹ Stock price as of 4/26/2017
Slide 29: Dividend Yield on Common Stock
Dividend Yield on Common Stock 7.00% KISB PA Peers¹ National Peers¹ 6.00% 4.95% 5.00% 4.70% 4.24% 4.00% 4.00% 3.74% 3.00% 2.00% 1.00% 2012 2013 2014 2015 2016 ¹ Includes Bank Operating Companies in PA and Nationally with $500mm to $1B in Assets Source: SNL Financial
Slide 30: Market Disruption
Market Disruption • Continued mergers and acquisitions – BB&T – Community banks
Slide 31: Community Alignment
Community Alignment
Slide 32: Slide 32
Slide 33: Slide 33
Slide 34: G2 Qs oo
83 G2 Qs oo
Slide 35: Building the Team
Building the Team
Slide 36: Additions to the Management Team
Additions to the Management Team • Mark Cvrkel – EVP, Chief Financial Officer • Richard Sarfert – EVP, Senior Lending Officer • Cindy Chase – VP, Loan Review Manager • Alta Corman-Wolf – VP, Residential Lender • Ginny McAdoo – VP, Lending Services Manager • Kevin Rimmey – AVP, Commercial Relationshi
Slide 37: Senior Management Promotions & Alignment
Senior Management Promotions & Alignment • Gregory Hayes – Sr. EVP, Chief Operating Officer • James Shilling – EVP, Chief Business Banking Officer • Jeff Hayes – VP, Financial Advisor • Kristie McKnight – VP, Commercial Relationship Manager • Peter Ort – VP, Branch Manager, Lewistown Electric Ave. •
Slide 38: 2016 MVP
2016 MVP Megan Diemert
Slide 39: National Recognition
National Recognition • Ranked in American Banker magazine’s list of Top 200 Community Banks in the United States for 11 consecutive years • Bauer 5 Star Rating • FHLB Pillars of the Community Award
Slide 40: Building for the Future
Building for the Future
Slide 41: Mission
Mission We will sustain an unwavering focus on fulfilling clients’ financial needs. But how?
Slide 42: Digital Natives
Digital Natives • A term used in 2001 to describe the outdated education methods not meeting the needs of the “modern student” • Apply this concept to banking and the financial needs of the modern client • How long can we use outdated methods? • What do modern clients want?
Slide 43: Millennials want digital solutions to manage their money
Millennials want digital solutions to manage their money and help them build their finances. say their mobile phone is always with them Three times more likely to open a new account with their phone vs. in person say that mobile has made tracking and spending their money better 67% Vs. 50% of millen
Slide 44: Compared with older generations, Millennials...
Compared with older generations, Millennials have had a rough start and are earning less... ... leading them to delay major life events. get married 70 % 9 3 % before the want to of millennial age of 32 get married renters plan to BUT. buy a home 74% want to have children They are working to build t
Slide 45: Banking: What Consumers Want
BANKING: WHAT CONSUMERS WANT HOW DO BANKS OFFER THE INSTANT AND MOBILE SERVICES CUSTOMERS WANT? BRANCHES STILL MATTER Branches allow banks to connect with customers. APPLE retail stores account for 11.7% of sales, but are still important because they: > PROMOTE the brand's image > PROVIDE live custo
Slide 46: Banks that offer digital services are better positioned
"> 71% would rather go to the dentist than listen to our money will be totally what banks are saying i i different in 5 years Banks that offer digital services are better positioned to engage Millennial customers. 009 Mobile Budgeting Mobile Payments tools banking Momesgomont If you reach Millennial
Slide 47: Enter the FinTech Disruption
Enter the FinTech Disruption • Financial Technology Companies • Now over 1300 FinTech companies • Why? Financial Service is the largest industry in the world.
Slide 48: FinTech Hurdles
FinTech Hurdles • Regulatory issues • Competition and noise • Banks have the customers So they evolved and partnered with banks! • Regulatory expertise • Brand value • Access to customers
Slide 49: Bank Investment in Technology
Bank Investment in Technology 4-phase approach recommended by the ABA • Establish a baseline • Close major gaps • Focus on the digital-centric customer • Drive transformational changes Why Banks Must Act
Slide 50: Community Bank's Revenues at Risk ($B, %)
Community Bank’s Revenues at Risk ($B, %)
Slide 51: How is Kish moving forward into the future?
How is Kish moving forward into the future of fulfilling the modern client’s financial needs?
Slide 52: Strategic Focus for 2017
Strategic Focus for 2017
Slide 53: Drive towards the future on the Twin Rails
Drive towards the future on the “Twin Rails” of relationship banking and digital delivery.
Slide 54: Seize opportunities presented by market disruption
Seize opportunities presented by market disruption.
Slide 55: Elevate our unwavering focus on the Kish brand promise
Elevate our unwavering focus by understanding and communicating our value and delivering on the Kish brand promise.
Slide 56: Elevate focus on client information and cyber security
Elevate our focus on the utilization of client information while managing the escalating threat of cyber security.
Slide 57: Build long term shareholder returns
Build long term shareholder returns with a focus on profitable growth.
Slide 58: Summary
Summary
Slide 59: Congratulations Directors!
Congratulations Directors!
Slide 60: Thank you Phyllis Palm for your service!
Thank you Phyllis Palm for your service!
Slide 61: 2017 Annual Shareholder Meeting
a 2017 Annual Shareholder Meeting EISH expect more SERRE