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Kish Bancorp Inc. announces second quarter financial results

STATE COLLEGE — William P. Hayes, chairman and CEO of Kish Bancorp Inc., has announced unaudited financial results for the six-month period ending June 30. Highlights for the first half of 2021 include:

¯ Strong net income expansion (a 44.4% increase over earnings for June 30, 2020)

¯ New customer acquisition driving balance sheet growth (total assets were up 10.5% from 2020)

¯ Sustained expansion in residential mortgage lending market share (revenue from the sale of mortgage loans increased 66.9% over 2020)

¯ Strong capital formation (up 12.9% from the prior year) combined with excellent return on shareholders’ equity (15.55% compared to 11.83% in 2020), augmented by a successful $20 million subordinated debt issuance

¯ Healthy credit quality metrics validating the sufficiency of the loan loss reserve

¯ Successful expansion into new contiguous markets and northeastern Ohio

¯ Continuing financial benefits of investments in operating technology (data processing expense was down 32.5% from 2020)

In announcing the period’s results, Hayes remarked, “While the financial performance during this period of uncertainty has been strong, we are particularly pleased that in this time of great economic distress, the Kish team has been successful at pivoting our resources to focus on the needs of our clients and communities while simultaneously strengthening our balance sheet to respond to any uncertainty that may lie ahead. Because of our focus on what matters, we are confident that this time period will prove to be foundational to Kish Bancorp’s success for the years ahead.”

Kish Bancorp’s total assets ended the period at $1.159 billion, an increase of 10.58% compared to total assets of $1.048 billion a year ago. Total loans outstanding grew year over year by $71.3 million, or 9.08%, to $856.8 million. A total of $35 million in loans was originated to local businesses in 2021 as part of the third round of the Paycheck Protection Program (PPP), which was offset by the forgiveness of $38.2 million of 2020 PPP loans during the first half of 2021.

“The strongest contributor to loan growth in the first half of the year was our northeastern Ohio lending team, who produced over $50 million in outstanding loans,” said Hayes, noting Kish Bank’s continued successful expansion into the state.

Total deposits grew by $109 million to $928.8 million, a 13.29% increase from $819.8 million a year ago, with a continued notable expansion in core deposits created by new customer acquisition and the liquidity generated by continued government stimulus programs. Investment securities grew to $177.5 million, a $38.9 million increase over last year’s balance. Borrowings increased marginally to $137.1 million, compared to $136 million a year ago.

Net income for the six-month period was $5.22 million — an increase of $1.60 million, or 44.42%, compared to $3.61 million for the same period in 2020. This increase reflects expansion in both net interest income, up 13.86% over last year, and noninterest income, which increased 35.18% overall.

“The expansion in net interest income benefitted from the continued decline in interest expense on deposits,” said Hayes, continuing, “The sharp increase in noninterest income is attributable first to the increase in gains on the sale of mortgage loans of $1.367 million in 2021 versus $0.819 million the prior year, and second, to the addition of insurance agency revenue due to the acquisition of the Sausman Insurance Agency. Net income was also positively impacted by market value increases in the equity portfolio and the decline in contribution to the loan loss reserve as overall credit quality metrics remain at excellent levels.”

Noninterest expense increased year over year by $1.6 million, or 11.05%, to $16.4 million, in part reflecting higher salaries and employee benefits associated with additions to the Kish team, as well as occupancy expense related to the opening of the new Kish Innovation Center. Data processing expense decreased 33.52% to $882 thousand, down from $1.3 million the previous year. These lower costs resulted from Kish Bank’s core conversion, completed during the second quarter of 2020. All other expense categories remained well controlled.

The Board of Directors declared a quarterly dividend in the amount of $0.29 per share, payable July 30, 2021, to shareholders of record as of July 15, 2021. This is an increase of $0.02 per share from the prior year.

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