Kish Bancorp, Inc. :KISB-US: Earnings Analysis: 2016 By the Numbers : February 2, 2017

Kish Bancorp, Inc. reports financial results for the year ended December 31, 2016.

Highlights

  • Net interest income margins widened from 74.45% to 74.63% compared to the same period last year.
  • Net loan assets changed 9.69% compared to same period last year and 9.69% from previous period, total deposits changed 3.56% compared to same period last year and 3.56% from previous period.
  • Earnings grew despite decline in operating margins and pre-tax margins compared to same period last year.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2016 2015 2014 2013 2012
Relevant Numbers (Annual)
Revenues 27.96 26.41 25.12 24.11 23.8
Revenue Growth (YOY) N/A N/A N/A N/A N/A
Earnings 4.62 4.49 4.36 4.22 3.63
Earnings Growth (YOY) 2.73 3.11 3.36 16.17 -0.04
Net Margin 16.51 17.02 17.35 17.49 15.25
EPS N/A 3.69 3.6 3.51 3.05
Return on Equity 8.8 8.98 9.74 9.7 8.09
Return on Assets 0.65 0.66 0.67 0.71 0.65

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Earnings Growth Analysis

The company’s earnings growth was influenced by the year-on-year improvement in net interest income margins from 74.45% to 74.63%. However, the company’s loan loss provisions have prevented it from fully capitalizing on these net interest income margin improvements. KISB-US‘s net interest income after provisions margin showed no improvement. Loan loss provisions as a percentage of net interest income were 2.54% this period, and 1.20% a year ago.

Net Interest Income Margin History
Loan Loss Provisions Margin History

Net Loans and Total Deposits

A financial institution’s core operations represented by Net Interest Income and Net Interest Income after Provisions are dependent on both the growth and quality of its deposits as well as the growth and quality of its loans. A firm could boost its interest income in the short-term by just increasing its loan assets with less concern about their quality – but this would eventually lead to greater loan loss provisions. Similarly a drive to increase deposits could result in higher interest expenses and eventually effect the firm’s equity. It is thus important to understand net interest income performance in context to loan loss provisions, loan assets and deposits.

Loan Assets Growth Rate History (HY YOY)
Total Deposits Growth Rate History (HY YOY)

The firm’s improvement in net interest income margins was influenced by the relative increase in the level of net loan assets. In addition, total deposits as a percentage of equity went from 10.58% to 10.49%. On an absolute basis, net loan assets changed 9.69% compared to the same period last year and 9.69% from the previous period, while total deposits changed 3.56% compared to the same period last year and 3.56% from the previous period.

Margins

Despite a decline in operating’s margins as well as a decline in pretax margins, the company’s earnings rose.

EBIT Margin History
PreTax Margin History

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Company Profile

Kish Bancorp, Inc. is a bank holding company, which engages in the provision of banking services through the Kish Bank. The bank provides retail and business banking, wealth management and trust, property and casualty insurance, and travel services. Its business lines include: Kish Bank, Kish Insurance, Kish Financial Solutions, and Kish Travel. The company was founded on August 29, 1986 and is headquartered in Belleville, PA.

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