2019 Journal of Community Bank Case Studies

Juniata College

FIRST PLACE:

and preferences. By executing the Vision for Kish 2020, developed by Mr. Greg Hayes, Kish is building for the future. Through the construction of the Kish Innovation Center, Mr. Bill Hayes explains Greg’s vision for this facility to “enhance the digital delivery of banking services in an environment that is much lower cost and less dependent on physical bricks and mortar”. As such, it will combine the banks traditional customer relationship approach with the needs of the younger generation of digital natives, whose lives revolve around technology, allowing it to maintain competitiveness in an ever-changing world. Kish management anticipates that the facility will also enhance the community by attracting other businesses to the area, leading to additional development and prosperity. Liquidity Liquidity is one of the most important factors in managing a community bank. Over the past five years, Kish has had to manage its liquidity position as it increased its loan portfolio. As the figure indicates, Kish has increased its loans to deposits ratio in each of the past 5 years, relative

to peers. In 2014, Kish’s loans/deposits ratio was 81.36%, rising to 92.11% in 2018. A similar trend is evident in Kish’s peer group, however, the increase for Kish is more pronounced. Mr. Baxter stated that loan growth has negatively impacted liquidity for all banks and has resulted in increased competition for deposits. Kish continues to manage its liquidity position during the period of economic expansion and loan growth and will focus on maintaining a stable loans to deposit ratio in the future. In conclusion, Kish’s financial performance over the last 5 years has been exceptional. This has been aided by an unwavering commitment to its core values and a strong economic environment resulting in a significant increase in its asset base. Kish’s current financial position, the diversification of its activities and its forward- thinking management team has helped to ensure the sustainability of the company going forward. Having analyzed Kish from a financial perspective, our attention now turns to the burden which regulatory compliance placed on it following Dodd-Frank. Regulatory Compliance and

Burden Assessment The Dodd-Frank Act The enactment of Dodd-Frank resulted in significant changes for Kish. While Mr. Bill Hayes

Net Loans & Leases to Deposit — Kish verus PG5

Kish

Peer Group 5

100%

80%

acknowledges that certain regulations were required to ensure consistency across lenders, the Act imposed additional burdens, both in terms of personnel requirements and more

60%

40%

Percentage

20%

0%

2014

2015

2016

2017

2018

Year

13