Kish Bancorp : Second Quarter 2022 Financial Report

Toour

Shareholders.

We are pleasedto releasefinancial results (unaudited) for the quarter ending June 30, 2022. Highlights for the first six months are as follows:

• Consistently strong core earnings offsetting a decline of $1.6 million in non-recurring PPP loan fees and almost $700 thousand in mortgage loan originations fees compared to the first half of 2021
• Total deposit growth of 7.8% that combined with sustained loan growth of 9.9% to drive a significant expansion in net interest income
• Strong internal capital formation supported by healthy retained earnings, up 9.3% from the prior year, while maintaining excellent return on shareholders' equity of 13.4%
• Healthy credit quality metrics that have remained positive throughout the pandemic
• Continued expansion into contiguous Pennsylvania counties
• Sustained production by the northeastern Ohio lending group
• Well-controllednoninterest expense that remained level year over year

BALANCE SHEET

The Corporation's total assets ended the period at $1.219 billion, an increase of $59.7 million, or 5.15%, compared to total assets of $1.159 billion as of June 30, 2021. Total loans outstanding grew year over year by $84.6 million to $941.4 million, or 9.87%, despite the final forgiveness of nearly $41 million in PPP loans since June 30, 2021. Investment securities increased to $183.1 million, a $5.6 million increase over the securities balance a year earlier, as this category of earning assets became more attractive due to rising interest rates. Total deposits grew by $72.6 million to $1.001 billion, an increase of 7.82% from $928.8 million a year ago, with

a continued notable expansion in core deposits created by new customer acquisition.

NET INCOME

Net income for the six months ended June 30, 2022, was $5.36 million, an increase of $146 thousand, or 2.79%, compared to $5.22 million for the same period in 2021. When non-recurring PPP loan fees are eliminated, where these fees were recorded, net interest income showed an increase of 7.2% year over year. A reduction of $500 thousand in the loan loss provision reflected continued strong loan quality and also contributed to favorable results for the first half of 2022. Finally, the expansion in net interest income also benefitted from the increase in interest rates and the ability to manage our cost of funds.

Noninterest income for the first six months of 2022 decreased 3.95% overall, compared to the same period last year, which is mainly attributable to a decline in gains on the sale of residential mortgage loans of $692 thousand, as higher mortgage rates slowed demand. This decrease was offset in large part due to strong results by several key nonbanking units, with year-over-year increases in Wealth Management revenue of $310 thousand and Insurance commissions of $186 thousand.

Year over year, noninterest expense increased by $239 thousand, or 1.46%, to $16.68 million as of June 30, 2022, compared to $16.44 million the prior year. In part, the increase reflects higher occupancy expense related to the opening of the new Kish Innovation Center and higher data processing fees associated with a strong expansion in new customer numbers. All other expense categories were well controlled when compared to the prior year.

DIVIDEND

On July 1, the Board of Directors declared a quarterly dividend in the amount of $0.32 per share, payable July 29, 2022, to shareholders of record as of July 15, 2022. Return on shareholders' equity continued to be strong at 13.35%. As always, your ownership stake in Kish Bancorp is greatlyappreciated.

Sincerely,

William P. Hayes

Chairman and CEO

CONSOLIDATED BALANCE SHEET

(Unaudited; in thousands)

	June 30, 2022		June 30, 2021
ASSETS
Cash and due from banks	$	10,440	$	10,173
Interest-bearing deposits with		18,606			50,910
other institutions
Cash and cash equivalents		29,046			61,083
Certificates of deposit in other		245			245
financial institutions
Investment securities available		170,697			164,272
for sale
Equity securities		2,602			2,431
Investment securities held to		9,766			10,750
maturity
Loans held for sale		2,065			3,869
Loans		941,360			856,778
Less allowance for loan losses		10,681			10,276
Net Loans		930,679			846,502
Premises and equipment		26,966			25,228
Goodwill		3,561			3,561
Regulatory stock		5,893			6,245
Bank-owned life insurance		24,088			16,439
Accrued interest and other assets		13,423			18,703
TOTAL ASSETS	$	1,219,031	$	1,159,328
LIABILITIES
Noninterest-bearing deposits	$	184,037	$	169,037
Interest-bearing deposits		817,432			759,799
Total Deposits		1,001,469			928,836
Short-term borrowings		67,094			67,661
Other borrowings		66,783			69,450
Accrued interest and other		13,875			19,238
liabilities
TOTAL LIABILITIES		1,149,221			1,085,185
STOCKHOLDERS' EQUITY
Common stock, $0.50 par value;
8,000,000 shares authorized,		1,349			1,349
2,697,500 shares issued
Additional paid-in capital		3,920			3,944
Retained earnings		80,111			73,291
Accumulated other		(12,016)			(1,036)
comprehensive income
Treasury stock, at cost (64,776		(3,554)			(3,405)
and 70,882 shares)
TOTAL STOCKHOLDERS' EQUITY		69,810			74,143
TOTAL LIABILITIES AND	$		$
STOCKHOLDERS' EQUITY	1,219,031	1,159,328

CONSOLIDATED STATEMENT OF INCOME

(Unaudited; in thousands)
		Six Months Ended
	June 30, 2022	June 30, 2021
INTEREST AND DIVIDEND
INCOME
Interest and fees on loans:
Taxable	$	17,357	$	17,681
Exempt from federal income tax		546		655
Investment securities:
Taxable		1,778		1,540
Exempt from federal income tax		118		151
Interest-bearing deposits with		80		49
other institutions
Other dividend income		239		314
TOTAL INTEREST AND DIVIDEND
INCOME		20,118			20,390
INTEREST EXPENSE
Deposits		1,233			1,614
Short-term borrowings		18			24
Other borrowings		1,582			1,637
TOTAL INTEREST EXPENSE		2,833			3,275
NET INTEREST INCOME		17,285			17,115
Provision for loan losses		0			500
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES		17,285			16,615
NONINTEREST INCOME
Service fees on deposit accounts		1,015			856
Investment securities gains, net		18			11
Equity securities gains, net		(91)			299
Gain on sale of loans, net		675			1,367
Earnings on Bank-owned life		380			301
insurance
Insurance commissions		1,503			1,317
Travel agency commissions		91			33
Wealth management		1,287			977
Benefits consulting		328			318
Other		489			450
TOTAL NONINTEREST INCOME		5,695			5,929
NONINTEREST EXPENSE
Salaries and employee benefits		10,124			10,160
Occupancy and equipment		2,230			1,907
Data processing		1,201			882
Professional fees		376			257
Advertising		267			250
Federal deposit insurance		378			300
Other		2,100			2,681
TOTAL NONINTEREST EXPENSE		16,676			16,437
INCOME BEFORE INCOME TAXES		6,304			6,107
Income taxes		943			892
NET INCOME	$	5,361		$	5,215

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited; in thousands, except for per share data)

		Six Months Ended
	June 30, 2022	June 30, 2021
Net Income	$	5,361	$	5,215
Total Assets	$	1,219,031	$	1,159,328
Loans Outstanding	$	941,360	$	856,778
Total Deposits	$	1,001,469	$	928,836
ROA (annual)		0.88%		0.93%
ROE (annual)		13.35%		15.55%
Earnings per Share	$	2.04	$	1.99
Dividends per Share	$	0.64	$	0.56

MARKET MAKERS

BOENNING & SCATTERGOOD, INC.

Contact: Eugene Bodo 1-800-883-1212

4 Tower Bridge, 200 Barr Harbor Drive, Suite 300 West Conshohocken, PA 19428-2979

JANNEY MONTGOMERY SCOTT, LLC

Contact: Anthony Bello 1-800-526-6397

1475 Peachtree Street NE, Suite 800 Atlanta, GA 30309

RAYMOND JAMES AND ASSOCIATES, INC.

Contact: Anthony LanFranca 312-655-2961

222 South Riverside Plaza, 7th Floor Chicago, IL 60606

Kish Bancorp, Inc. stock is traded on the OTCQX market under the stock ticker symbol: KISB. For more information, please visit ir.kishbancorp.com.

4255 EAST MAIN STREET, BELLEVILLE, PA 17004

1-800-981-5474| MYKISH.COM

PeoplePowered by.

2022 SECOND QUARTER FINANCIAL REPORT