this is
2015 ANNUAL REPORT
Contents
Chairman’s Letter to the shareholders
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Financial Highlights
Board Members and Directors
2–3
4–6
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c h a i r m a n ' s l e t t e r
to tHe sHAReHoLDeRs
on behalf of the entire Kish team, it is my pleasure to present this 2015 Annual Report to
the shareholders and community stakeholders of Kish Bancorp, Inc.
With a sustained focus on growth throughout 2015, and buoyed by a strong capital position
and asset quality, the Corporation achieved record earnings based on gains in loans and
deposits, coupled with revenues from mortgage lending, wealth management, insurance,
and travel. overall, financial highlights for 2015 are as follows:
• net income of $4.49 million, or $3.73 per share, rose 3.09% in 2015 compared to net
income of $4.36 million, or $3.63 per share, in 2014.
• Loans of $451 million at December 31, 2015, increased $31 million, or 7.41%,
compared to $420 million at December 31, 2014.
• total deposits of $543 million at December 31, 2015, increased $34 million, or 6.69%,
compared to $509 million at December 31, 2014.
• total assets reached a new high of $697 million at year end 2015.
• Book value per share of $41.78 per share as of December 31, 2015, increased 4.76%
over book value per share of $39.96 at December 31, 2014.
• Return on average shareholders’ equity was 8.89% for 2015, compared to 9.54% for
the prior year due to a $2.4 million increase in shareholders’ equity.
• the net interest margin was 3.29% for 2015, compared to 3.27% for the same period
last year.
While financial results sustained the Corporation’s upward momentum, the true measure
of performance is the success of the Kish team’s ability to meet the financial needs of
the region in an increasingly robust way. toward that end, the Corporation invested in
new technology this year designed to further strengthen the relationship management
process across all business lines. the marriage of new technologies to a sophisticated
set of product offerings, supported by a professional team dedicated to extraordinary
client service, continues to differentiate Kish in the marketplace. Kish’s business model
links employee satisfaction to customer loyalty. simply stated, growth and profitability are
closely tied to the value clients place on the services they receive and the loyalty they have
to the people and organization serving them. this approach, implemented intentionally at
Kish, demonstrates that the approach the team embraces is markedly different from the
wholesale approach that drives much of the financial services industry today.
tHIs Is HoMe, the theme of this year’s annual report, is the essential element of Kish's
business model. the theme was selected to illustrate Kish Bancorp’s commitment to the
central Pennsylvania region. the core of our business is focused on our local communities
and serving the individuals, families, and businesses in our region. It recognizes that home
is more than a place. Home is security, stability, and a safe haven in a challenging and
sometimes difficult world. Home is the firm ground from which the confidence to pursue
successful outcomes grows. Kish clients expect that sense of security, stability, confidence,
and trust that home brings. they can be confident that they will be welcomed, recognized,
and appreciated as individuals when they interact with us, whatever channel they choose.
the Corporation, in turn, acknowledges the responsibilities that come with the awareness
that our clients depend on us to deliver banking and financial solutions to them in a
responsive and customized way.
William P. Hayes
Chairman of the
Board, President
and Chief
executive officer
in helping to build pride in the region, but we recognize that Kish must be relentless in
its efforts to deliver banking and financial services that help to strengthen and sustain this
place we call Home. to that end, I am pleased to discuss the forward-looking commitments
we have made to serving this region and growing the Kish franchise.
As announced previously in 2015, Kish will soon open a new location in downtown state
College. this new "expect More store" will represent an evolution of how Kish will meet
the needs of the next generation of clients. the downtown state College location will
incorporate the changes in branch functionality with technological advances that apply not
only to community banking, but also to all the financial services Kish offers. As always, the
differentiator for Kish will be that such advancements will be supported by knowledgeable
and caring people who are mission critical to Kish’s client-focused and community-centric
business model.
none of Kish's goals would be achievable without the leadership and support of a strong
Board of Directors committed to the Corporation’s future. We gratefully acknowledge
the Board's leadership in guiding Kish's vision, while tending to the risks inherent in
the current banking and regulatory environment. to all of the Board members, who are
listed separately in this report, we express our gratitude. During 2015, we were pleased
to announce the addition of Paul silvis, Founder of silcotek Corporation and Restek
Corporation, to the Kish Bank and Kish Bancorp Boards. He joins a highly valued group
of board and regional board members who work tirelessly to grow the Kish franchise and
advance its mission.
As we conclude this report of another successful year of upward momentum at Kish
Bancorp, we want to express our sincere gratitude to you, our shareholders and community
stakeholders, for your belief in the value and worth that our Corporation brings to the
region. together, with the Kish team and the clients and communities we serve, we can
truly say that KIsH Is HoMe.
sincerely,
the people, businesses, and institutions of central Pennsylvania's communities are
fortunate to be characterized by a deep sense of pride in place, built over generations, that
distinguishes this region. All of us at Kish Bancorp are proud of the part Kish has played
William P. Hayes
Chairman of the Board, President and
Chief executive officer
2 Kish Bancorp, Inc.
2015 Annual Report 3
the Corporation’s business units is a priority at Kish. the
team’s ability to work together to make clients—and
prospective clients—feel welcomed and confident about
their engagement with the Corporation is a strategic
priority shared by all Kish associates. When clients can
count on Kish services that are consistently responsive to
their unique needs, then we are fulfilling our mission.
supporting that focus, the Corporation added hospitality
to its short list of top strategic priorities for 2016. Although
hospitality is already a hallmark at Kish, the intention is
to further sharpen this focal point of our business. the
team is expanding Kish’s service quality standards to
reach a 5 star service and hospitality level—one that will
be linked to the Kish brand, its marketing and branding
program, and even its hiring practices and processes. In
concert with this strategic objective, a number of steps
are being taken to enhance the client experience at Kish.
Areas are being created within existing spaces where
clients will be welcomed to visit, access high-speed Wi-Fi,
digest financial information, or simply enjoy a quiet cup
of coffee. Additionally, Kish will continue to extend its
facilities to regional nonprofits with whom the Corporation
is strategically aligned. this is yet another way that Kish
adds value to the community, underscores the importance
of community alignment, and provides clients and
community members with a welcoming experience where
they feel at Home. this is especially true where Kish can
emphasize the unique alignment with our communities.
to that end, in 2015, Kish kicked off a new tradition to
celebrate the spirit of volunteerism that permeates the
region. the first annual "Kish Celebrates Community"
event reached out to clients and communities and, in
the process, recognized those who work hard to make
communities in the region the special places they are.
several hundred clients and significant volunteer leaders
who devote countless hours to the betterment of our
central Pennsylvania communities participated in the
“Kish Celebrates Community” event at Penn state’s
Beaver stadium in the spring. Kish Ambassador Coquese
Washington, Head Coach for Women’s Basketball at Penn
state, and her friend and colleague, James Franklin, Head
Football Coach at Penn state, supported the celebration
with their presence and remarks. they recognized that
community alignment and engagement at Kish are not
simply core values, but are the means by which the
Corporation’s business model is differentiated in the
region. All who attended shared Kish’s commitment to
community. We were pleased to recognize Kish's internal
Community Impact Award winner, troy Frank, and to tell
the story of how Kish employees do their part to ensure
that the places where all of us live and work are good
and positive homes for us all. the message embodied
in the “Kish Celebrates Community” event has validated
the Corporation’s culture of volunteerism and strong
connection to the communities Kish serves. this new
tradition of celebrating Kish’s alignment with community
will be extended annually across the Corporation’s
Kish Bancorp is a values-driven financial services holding
company with a regional community bank at its core
that has been headquartered in the central Pennsylvania
region for more than a century. Kish has built its
reputation and success by making a positive difference
in the lives of its clients and communities. today, Kish is
more focused than ever on remaining a positive presence
in the region for generations to come. this commitment is
deeply rooted in the heritage and culture of the Company
and is driven by both a strong desire and capacity to serve
the needs of the people and the businesses, institutions,
and municipalities that thrive here.
Kish Bancorp's businesses are comprised of retail and
business banking, wealth management and trust, property
and casualty insurance, and travel services. these activities
comprise the services through which the Corporation
supports the full array of banking, financial, and travel
services needs in the region. they benefit the Corporation
by generating revenues that strengthen Kish’s ability to
reinvest in the Company's delivery channels and make a
difference for the communities and people in the region.
Kish Bank is at the core of the business model, offering
a full array of retail, mortgage, and business banking
services. the bank's trust unit delivers sophisticated
fiduciary and investment management services to higher
net worth clients. Kish Financial solutions provides
investment advisory and financial planning services, and
assists businesses with services ranging from succession
planning and profit-sharing plans to group insurance
solutions. Kish Insurance is a full-service, independent
insurance agency dedicated to providing high-quality
property and casualty insurance products supported
through superior client services. Kish travel, another
full-service, licensed business line in the Kish family of
companies, offers professional travel planning services for
individuals, groups, and businesses to locations virtually
anywhere in the world.
All Kish business units are dedicated to client fulfillment
through many stages of life. our objective is to do
business in a way that delivers an unparalleled client
experience. ensuring that all those who live and work
in the region feel at home when engaging with any of
4 Kish Bancorp, Inc.
2015 Annual Report 5
three-county market area, and the Kish team looks forward
to sharing its pride in this place we call Home.
Looking to the future, Kish recognizes that we are in an
environment where it is critical for regional community
banks and their affiliates to monitor the broad challenges
that face our industry. these challenges include changing
regulatory requirements, the difficulty of pursuing
economic expansion in a complex global economy,
changing cultural norms and shifting demographics,
the increasing speed of technological change, and the
competition to recruit and train the next wave of talent
required to lead the Corporation forward. All of this
occurs in the context of a fiercely competitive industry,
where the winners will be decided by a clarity of vision and
purpose that yields a distinct competitive advantage.
As Kish Bancorp continues its drive into the future, it does
so armed with the knowledge that the new generations
of clients will be pursuing the services we offer through
a variety of channels. We anticipate that each of these
channels will communicate clearly the "at Home" feelings
of security, stability, confidence, and trust that permeate
the Kish brand. the Corporation has moved carefully and
intentionally into a number of the delivery channels that
define current state-of-the-art thinking about how financial
services will be delivered in the future. In 2016, Kish will
open a new "branch of the future" on Allen street in
downtown state College. Planning for this new “expect
More store” provides exciting opportunities for Kish to
serve its clients and communities through a variety of
added channels and venues. the evolution of our model,
however, will not abandon what has made us unique to
the region’s communities and clients. Although times,
technologies, people, and businesses may change, the
need for financial solutions and the need to ensure strong
financial partnerships will be constant across generations
and cultures. For 116 years, Kish has been a partner in
building the quality of life here in central Pennsylvania
and is proud that we still call this wonderful place Home.
As the Kish team embraces the future for banking, wealth
management, insurance, and travel, it will be true to the
same values, service ethic, and engagement with the
community that have always made Kish feel like Home to
so many. our priorities will remain those of supporting
economic growth in the community; creating opportunity
for employees; building value for individuals, families, and
businesses; and generating attractive, sustained returns
for shareholders.
After all, there is no place we'd rather be.
financial highlights
five-year summary
For the Year
net Income
net Income Before taxes
total Dividends Declared
at Year end (in $000s)
total Assets
total Loans (net)
total Deposits
stockholders’ equity
Loan Loss Reserve
net Loan Losses (Recoveries)
ratio analYsis
Return on Average Assets*
Return on Average equity*
Dividend Declared/net Income
Loans/Deposits
Primary Capital/total Assets
total Capital/Risk Weighted Assets
Loan Loss Reserve/Loans
net Loan Losses to total Loans (net)
Per share data
Basic earnings
Fully Diluted earnings
Dividends Paid
equity (Book Value)
equity Plus Loan Loss Reserve
2015
2014
2013
2012
2011
$4,494,241
$4,358,608
$4,216,873
$3,629,794
$3,631,298
5,125,151
2,112,600
5,130,129
2,005,848
4,980,589
1,971,992
4,168,872
1,960,051
4,070,114
1,760,493
$696,895
$659,600
$630,132
$557,575
$560,069
445,425
542,629
51,281
5,752
492
0.66%
8.89%
47.01%
82.09%
8.18%
12.62%
1.27%
0.12%
$3.73
3.69
1.72
41.78
46.46
414,061
508,616
48,853
6,009
219
0.67%
9.54%
46.02%
81.41%
8.32%
13.07%
1.43%
0.05%
$3.63
3.60
1.64
39.96
44.87
381,261
494,374
40,681
5,928
34
0.69%
9.70%
46.76%
77.12%
7.40%
13.17%
1.53%
0.01%
$3.54
3.51
1.62
33.40
38.27
351,040
460,450
46,252
6,867
445
0.65%
8.61%
54.00%
76.24%
9.53%
14.05%
1.92%
0.12%
$3.05
3..05
1.62
38.10
43.76
362,163
454,660
43,517
7,043
3
0.65%
9.82%
48.48%
79.66%
9.03%
13.85%
1.91%
0.00%
$3.37
3.36
1.62
36.48
42.38
Average shares outstanding (#)
1,203,630
1,199,207
1,192,755
1,189,222
1,077,470
*Due to fluctuations in the mark to market valuation for investment securities, these are not included in the totals for average assets and average equity.
net Income (in millions)
earnings & Dividends (per share)
stock Valuation (per share)
6 Kish Bancorp, Inc.
2015 Annual Report 7
Board memBers and directors
Board oF directors oF kish BancorP, inc.
executiVe oFFicers
William P. hayes, chairman, President and chief executive officer
sangeeta kishore, senior executive Vice President, chief Financial
officer and senior risk officer
Peter d. collins, executive Vice President, chief credit officer
Gregory t. hayes, executive Vice President, head of retail Banking and
client solutions
robert s. McMinn, executive Vice President, General counsel
James l. shilling, Jr., executive Vice President, senior lending officer
senior oFFicers
robert l. crane, senior Vice President, Profitability director
amy M. Muchler, senior Vice President, deposit operations and support
services director
debra k. Weikel, senior Vice President, loan administration director
suzanne M. White, senior Vice President, human resources director
stanley n. ayers, Vice President, special assets Manager
douglas c. Baxter, Vice President, accounting and controls Manager
kathleen M. Boop, Vice President, Personal lines insurance Manager
kimberly a. Bubb, Vice President, services and systems Manager
larry e. Burger, Vice President, commercial relationship Manager
david a. coble, Vice President, Branch Manager
John P. cunningham, ii, Vice President, regional Market Manager
Wade e. curry, lutcF, Vice President, investment services
terra l. decker, Vice President, compliance and Bsa training director/
Bsa officer
ann k. Guss, Vice President, residential lender
allana l. hartung, Vice President, commercial relationship Manager
carol M. herrmann, Vice President, Marketing, administration, and
communications director/ceo, kish travel
Marsha k. kuhns, Vice President, Branch Manager
John Q. Massie, Vice President, commercial relationship Manager
thomas Minichiello, Vice President, regional Market Manager
denise F. Quinn, Vice President, commercial relationship Manager
Melissa k. royer, Vice President, client solutions technical advisor
cheryl e. shope, Vice President, residential lender
n. robert sunday, iii, Vice President, compliance officer
kayelene G. sunderland, Vice President, Wealth Management/trust
administrator
Jeffrey d. Wilson, Vice President/ceo, kish agency
William W. Yaudes, Vice President, regional Market Manager
William P. hayes, chairman
James J. lakso, Vice chairman
William l. dancy, secretary
spyros a. degleris, Member
edward a. Friedman, Member
Paul G. howes, Member
William s. lake, Member
Phyllis l. Palm, Member
Paul h. silvis, Member
Board oF directors oF kish Bank
William P. hayes, chairman
James J. lakso, Vice chairman
William l. dancy, secretary
spyros a. degleris, Member
edward a. Friedman, Member
Paul G. howes, Member
William s. lake, Member
Phyllis l. Palm, Member
Paul h. silvis, Member
centre countY reGional Board
spyros a. degleris, Member
adam r. Fernsler, Member
edward a. Friedman, Member
alan G. hawbaker, Member
Paul G. howes, Member
Michael J. krentzman, Member
Paul h. silvis, Member
Brandon M. Zlupko, Member
huntinGdon countY reGional Board
arthur J. decamp, Member
Wayne a. hearn, Member
stephen c. huston, Member
James J. lakso, Member
dominick F. Peruso, Jr., Member
Pamela F. Prosser, Member
Burgess a. smith, Member
delmont r. sunderland, Member
James a. troha, Member
Frances V. Vaughn, Member
MiFFlin countY reGional Board
Michael a. Buffington, Member
christina calkins-Mazur, Member
ronald M. cowan, Member
William l. dancy, Member
James W. Felmlee, Member
eric k. Fowler, Member
William s. lake, Member
harvard k. Mccardle, Member
alan J. Metzler, Member
Gary l. oden, Member
Phyllis l. Palm, Member
John Pannizzo, Member
8 Kish Bancorp, Inc.
4255 east Main street, Belleville, PA 17004 | 1-888-554-4748 | www.kishBank.com