Kish Bancorp, Inc. · OTC:KISB
Kish Bancorp — Shareholder Meeting (May 2016)
67 slides from Kish Bancorp's shareholder meeting presentation, May 17, 2016
Slide 1: This is Kish: 2016 Annual Shareholder Meeting
THIS IS CAAISH 2016 ANNUAL SHAREHOLDER MEETING
Slide 2: This is Home
This is Home
Slide 3: Slide 3
Slide 4: Welcome and Call to Order
Welcome and Call to Order
Slide 5: Mission
Mission With an unwavering focus on fulfilling client needs, we will achieve superior, long-term shareholder returns.
Slide 6: Introduction of Board
Introduction of Board • Phyllis L. Palm • James J. Lakso • Spyros A. Degleris
Slide 7: 2015 in Review
2015 in Review
Slide 8: This is Home
This is Home • Deeply rooted in central Pennsylvania for more than 115 years • Focused on regional development: – Financial services to small businesses – Helping agricultural community – Serving financial needs of municipalities – Catering to trust, investment and insurance needs – Ensuring safety
Slide 9: 2015 Highlights
2015 Highlights • Client focus • Continued balance sheet growth • Building & aligning the team • Market share expansion • Affiliate performance • Strong financial results • Shareholder performance
Slide 10: 2015 Financial Highlights
2015 Financial Highlights
Slide 11: Net Income ($ in thousands)
Net Income ($ in thousands) $5,000 $4,494 $4,500 $4,359 $4,217 $3,934 $3,938 $4,000 $3,848 $3,556 $3,631 $3,630 $3,500 $3,213 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Calculation: Net Interest Income – Provision for Loan Losses + Noninterest Income
Slide 12: Net Interest Income ($ in thousands)
Net Interest Income ($ in thousands) $25,000 $19,661 $20,000 $18,630 $17,243 $17,537 $16,988 $16,816 $15,525 $15,000 $14,138 $11,830 $12,107 $10,000 $5,000 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Definition: The amount of money the Bank receives from interest on assets minus the amount
Slide 13: Noninterest Income ($ in thousands)
Noninterest Income ($ in thousands) $8,000 Deposit Svc Fees Mortgage Origination Fees Insurance KFS Sec Gains Travel $6,979 $7,000 $6,748 $6,460 $6,492 $6,240 $5,923 $6,000 $5,305 $5,000 $3,798 $4,000 $3,000 $2,000 $1,000 $0 2008 2009 2010 2011 2012 2013 2014 2015
Slide 14: Total Revenue ($ in thousands)
Total Revenue ($ in thousands) $30,000 Net Int Inc Bank Svc Fees Insurance Sec Gains KFS Travel $26,410 $25,053 $25,000 $23,795 $23,997 $23,288 $23,166 $20,830 $20,000 $17,936 $15,000 $10,000 $5,000 $0 2008 2009 2010 2011 2012 2013 2014 2015
Slide 15: Noninterest Expense ($ in thousands)
Noninterest Expense ($ in thousands) $25,000 $21,049 $20,355 $19,915 $19,692 $20,000 $19,290 $17,520 $14,900 $15,000 $12,819 $11,357 $11,542 $10,000 $5,000 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Definition: Operating expenses of the Bank not directly associated with the payment of inte
Slide 16: Noninterest Expense/Average Assets (%)
Noninterest Expense/ Average Assets (%) 4.50% KISB PA Peers¹ National Peers¹ 4.00% 3.74% 3.50% 3.44% 3.08% 3.27% 3.09% 3.04% 3.00% 2.86% 2.92% 2.79% 2.72% 2.75% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ¹ Includes Bank Operating Companies in PA and Na
Slide 17: Total Assets ($ in thousands)
Total Assets ($ in thousands) $800 $697 $700 $660 $630 $600 $557 $560 $558 $528 $500 $476 $454 $413 $400 $300 $200 $100 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Definition: Everything that Kish owns that has a monetary value. Examples: Cash, buildings and equipment, loans, and investment
Slide 18: Total Net Loans & Deposits
Total Net Loans & Deposits ($ in thousands) $600 $543 $509 $494 $500 Total Net Loans Total Deposits $455 $460 $446 $445 $408 $414 $400 $381 $368 $367 $362 $353 $351 $332 $333 $319 $306 $300 $288 $200 $100 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total Net Loans Total Deposits Definition:
Slide 19: Balance Sheet Trends ($ in millions)
Balance Sheet Trends ($ in millions) $800 Assets Deposits Loans $697 $700 $660 $630 $600 $557 $560 $558 $543 $527 $509 $494 $500 $476 $454 $455 $460 $446 $412 $413 $408 $451 $400 $353 $420 $319 $332 $387 $301 $373 $374 $369 $358 $300 $337 $309 $291 $270 $200 $100 $0 2005 2006 2007 2008 2009 2010 201
Slide 20: Asset Quality
Asset Quality
Slide 21: Nonperforming Assets/Total Assets
Nonperforming Assets/ Total Assets KISB PA Peers¹ National Peers¹ 4.00% 3.50% 3.00% 2.50% 2.00% 1.73% 1.67% 1.46% 1.50% 1.34% 1.11% 1.12% 1.00% 0.71% 0.80% 0.55% 0.50% 0.43% 0.00% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ¹ Includes Bank Operating Companies in PA and Nationally with $500mm t
Slide 22: Reserves/Gross Loans
Reserves/Gross Loans KISB PA Peers¹ National Peers¹ 2.25% 2.00% 1.92% 1.90% 1.75% 1.67% 1.53% 1.50% 1.44% 1.43% 1.27% 1.25% 1.02% 0.97% 0.98% 1.00% 0.75% 0.50% 0.25% 0.00% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ¹ Includes Bank Operating Companies in PA and Nationally with $500mm to $1B in
Slide 23: Net Charge-Offs/Average Loans
Net Charge-Offs/Average Loans 1.50% KISB PA Peers¹ National Peers¹ 1.25% 1.00% 0.75% 0.50% 0.35% 0.25% 0.12% 0.07% 0.11% 0.03% 0.05% 0.05% 0.00% 0.01% 0.00% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ¹ Includes Bank Operating Companies in PA and Nationally with $500mm to $1B in Assets Source:
Slide 24: Loans 30-89 Days Past Due
Loans 30-89 Days Past Due KISB Peers¹ 2.00% 1.75% 1.50% 1.25% 1.13% 1.00% 0.75% 0.52% 0.50% 0.52% 0.50% 0.34% 0.28% 0.25% 0.17% 0.19% 0.07% 0.05% 0.00% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ¹ Includes all public banks with assets between $300mm to $1B Source: FFIEC Uniform Bank Performan
Slide 25: Capital Management
Capital Management
Slide 26: Consolidated Capital Ratios
Consolidated Capital Ratios Leverage Ratio 12.00% KISB Well Capitalized¹ 10.00% 8.6% 8.4% 8.3% 8.0% 8.0% 7.9% 8.00% 7.7% 7.6% 7.4% 7.2% 6.00% 4.00% 2.00% 0.00% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ¹ FDIC minimum to be considered “Well Capitalized”
Slide 27: Capital Management at Kish
Capital Management at Kish • Steady and sustainable growth while maintaining dividend payouts • Maintenance of strong capital ratios required under regulations • Capital raise despite economic headwinds – Kish Bank raised common stock in 2011, reaffirming the focus of HC as a source of strength to t
Slide 28: Market Share
Market Share
Slide 29: Market Presence: Mifflin County
Market Presence Mifflin County - #1 Ranking 45.0% 40.0% 35.0% 30.0% Kish Bank Juniata Valley Bank 25.0% FNB 20.0% Mifflin County Savings Bank Northwest Savings Bank 15.0% Citizens Bank 10.0% 5.0% 0.0% 2009 2010 2011 2012 2013 2014 2015 Source: www.snl.com, Data as of 12/31/2015
Slide 30: Market Presence: Huntingdon County
Market Presence Huntingdon County - #3 Ranking 40.0% 35.0% 30.0% Community State Bank of 25.0% Orbisonia FNB 20.0% Kish Bank 15.0% Clearfield Bank & Trust 10.0% Northwest Savings Bank PNC Bank 5.0% 0.0% 2009 2010 2011 2012 2013 2014 2015 Source: www.snl.com, Data as of 12/31/2015
Slide 31: Market Presence: Centre County
Market Presence Centre County - #8 Ranking 25.0% PNC FNB 20.0% Branch Banking and Trust Co. (BB&T) Citizens Bank 15.0% M&T Northwest Savings Bank 10.0% Jersey Shore Bank Kish Bank 5.0% Fulton Bank CNB Bank 0.0% Santander Bank 2009 2010 2011 2012 2013 2014 2015 Source: www.snl.com, Data as of 12/31/2
Slide 32: Mergers, Acquisitions, and Branch Closings
Mergers, Acquisitions, and Branch Closings
Slide 33: Community Alignment
Community Alignment
Slide 34: Volunteer Team
VOLUNTEER TEAM “s ; a Ya ‘a =e)
Slide 35: Power of Pink
Power of Pink
Slide 36: Teach Children to Save
Teach Children to Save
Slide 37: Family Fun Day
Family Fun Day pL
Slide 38: Celebrating Community
Celebrating Community
Slide 39: Building the Team
Building the Team
Slide 40: Additions to the Management Team
Additions to the Management Team • Art J. Dangel – Sr. VP, Director of Trust Services and Private Banking • Thomas Minichiello – VP, Regional Market Manager • Terry Horner – VP, Business Development Officer • Tammy Larimer – Bellefonte Branch Manager • Brad Huyck – AVP, Information Technology Manage
Slide 41: Senior Management Promotions & Alignment
Senior Management Promotions & Alignment • Suzanne White – Sr. VP, Human Resources and Organizational Development • Carol Herrmann – Sr. VP, Administration and Communications, CEO of Kish Travel • Gregory Hayes – EVP, Retail Banking and Client Solutions
Slide 42: Standout Performers
Standout Performers • Cheryl Shope • Wade Keiffer • Kayelene Sunderland • Kristie McKnight • Sandy Berardis • Daryl Hartzler • Megan Diemert and Gina Perrin • Lauren Pringle
Slide 43: 2015 MVP
2015 MVP Jackson McDonald
Slide 44: Shareholder Performance
Shareholder Performance
Slide 45: Return on Average Equity
Return on Average Equity 20.0% KISB PA Peers¹ National Peers¹ 18.0% 16.0% 14.0% 13.0% 13.3% 12.8% 12.0% 10.3% 9.7% 9.8% 9.7% 9.5% 10.0% 8.9% 8.6% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ¹ Includes Bank Operating Companies in PA and Nationally with $500mm to $
Slide 46: Dividend Yield on Common Stock
Dividend Yield on Common Stock 7.00% KISB PA Peers¹ National Peers¹ 5.89% 6.00% 5.59% 5.31% 4.95% 5.00% 4.70% 4.24% 4.75% 4.24% 4.00% 4.00% 3.34% 3.00% 2.81% 2.00% 1.00% 0.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ¹ Includes Bank Operating Companies in PA and Nationally with $500mm
Slide 47: Stock Performance
Stock Performance Year-End 2009 – 2015 $45.00 $45.00 $43.00 $40.00 $38.65 $35.00 $34.50 $34.13 $32.75 $30.50 $30.00 $29.00 $25.00 2009 2010 2011 2012 2013 2014 2015 current
Slide 48: Capital Mix
Capital Mix Common Stock & Surplus Retained Earnings 55,000,000 50,000,000 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 - 2008 2009 2010 2011 2012 2013 2014 2015
Slide 49: Kish Bancorp Stock – Annual Total Return Analysis
Kish Bancorp Stock – Annual Total Return Analysis 20.00% YoY Change in MV (%) 15.00% Dividend Yield (%) 10.00% Total Return (%) 5.00% 0.00% -5.00% 2011 2012 2013 2014 2015
Slide 50: Investing in Kish Bancorp
Investing in Kish Bancorp • Attractive, diversified business model – Strong, sustained net interest margin and income – Fee revenue from banking & non-banking units • Participate in long-term growth dynamics in central PA • Conservative balance sheet – Low-risk, high quality loan accounts and invest
Slide 51: Financial Summary
Financial Summary • Continued growth in assets • Record net income • Diversified revenue mix and strong business unit performance • Improved efficiencies and reduced operating expenses • Improved risk profile • Client-focused business model
Slide 52: National Recognition
National Recognition • Ranked in American Banker magazine’s list of Top 200 Community Banks in the United States • Ten consecutive years • Blue Ribbon Bank Commendation of Excellence indicating that we have “met exceptionally high standards” • Bauer 5 Star Rating
Slide 53: Strategic Opportunities
Strategic Opportunities
Slide 54: Building for the Future
Building for the Future
Slide 55: Mission
Mission With an unwavering focus on fulfilling client needs, we will achieve superior, long-term shareholder returns.
Slide 56: Key Tactics of Our Strategic Plan
Key Tactics of Our Strategic Plan • Frame the experience with Hospitality • Develop staff across all services creating a more inclusive Kish Experience • Elevate client relationship management • Engage with clients through technology • Engineer products that reward and build profitable relationships
Slide 57: Affirmation of Our Focus
Affirmation of Our Focus • Penn State’s Smeal College of Business • Four Schreyer's honors students • Sapphire APEX Program – Applied Professional Experience Program • The result of their analysis of Kish and the industries in which we do business
Slide 58: The Team's Conclusion
The Team’s Conclusion “Although Kish identifies with varying industries including Banking, Travel, Insurance, and Wealth Management, the company’s core values as a whole align with institutions that foster customer relationships and focus on delivering client value. As such, we are classifying Kish
Slide 59: Clear Focus Leads to the Future
Clear Focus Leads to the Future • How do we continue to differentiate? • Is a “Branch of the Future” really the Future? • When does relationship suffer at the expense of efficiency? • A Client Centric model leads to a very different future!
Slide 60: Slide 60
Slide 61: The Future is Now, The Expect More Store is Here
The Future is Now, The Expect More Store is Here
Slide 62: Evolution and Expansion
Evolution and Expansion • Execution of our Strategic Plan tactics • Development of “scalability” across the platform • Evolution of technology and our new delivery model • Transformation of our financial centers • Development of a rural service model for our entire market
Slide 63: Summary
Summary
Slide 64: Strategic Focus
Strategic Focus • Growth – Evolve delivery channels – Expand the bank franchise in designated growth markets – Pursue opportunities for non-bank business expansion – Achieve market share objectives • Leverage the technology platform • Maintain a strong balance sheet – Focus on asset quality metrics
Slide 65: Strategic Focus, cont'd.
Strategic Focus, cont’d. • Stay close to our customers and communities • Position the company to pursue strategic opportunities – Target bank and non-bank acquisitions in attractive markets • Promote the brand – Tell the Kish story • Manage risk profile – Maintain strong enterprise-wide risk managem
Slide 66: Congratulations Directors!
Congratulations Directors!
Slide 67: Slide 67