The Hancock-Henderson Quill, Inc.
The 96th annual meeting of the Raritan State Bank was held on Saturday, March 12, 2016 at the St. Patrick's Community Center. Dinner was served to approximately 255 stockholders, directors, staff and guest by the Baptist Church of Raritan.
Arthur Kane, welcomed everyone to the meeting. He thanked the Baptist Church for preparing an excellent meal.
He then introduced the judges for the meeting - Melvin Bray, Darlene Pruett and Bill Allaman. Mr. Kane introduced two new fulltime employees, Amanda Jack, data processor at the Raritan office and Dawn Peters, teller at the Bushnell office. Mr. Kane also thanked the entire staff of Raritan State Bank and asked for them all to stand to be recognized. Mr. Kane explained that Joe McCleary was absent due to his weekend training to become a Deacon in the near future. Angela Pollock, CFO/Cashier, filled in for Joe McCleary.
Angela Pollock, CFO/Cashier presented the report of shares represented at the meeting. 7,328 shares were represented in person, by the owners or their legal representatives. 7,520 shares were represented by proxy. Total shares represented were 14,848 and she declared a quorum presented for the business meeting. The minutes of the 2015 meeting were read. Bill Simonson made a motion to approve with Steve Wisslead seconding the motion. Motion carried.
Angela Pollock, CFO/Cashier, presented the certified statement of the Report of Condition of the Bank on December 31, 2015. Total resources of the bank were $160,859,511.39. Total Loans equaled $124,336,6196.15 and deposits equaled $141,063,266.84. Undivided profits were $14,757,823.74 and total equity was $18,361,329.03. The bank stock was worth $885 a share and the net earnings were $1,684,379.60 as of December 31, 2015.
Arthur Kane, president of Raritan State Bancorp, presented the report of the Earnings. Total operating Income equaled $7,267,331.77 and total costs/expenses equaled $5,582,952.17 at year end 2015. He listed a few of the biggest expenses: FDIC Insurance $121,923, Advertising $99,552, Supplies $60,061, Postage $59,625, Telephone $28,520, Income Taxes $986, 010.23 and $211,560.00 maintenance contracts for equipment and software.
Robert B. Schleich, CEO reported his general comments to the stockholders of the year 2015. He thanked the Baptist church for the meal and also thanked the employees for their good customer service and the directors for their guidance.
He also thanked Mr. Greg McClintock, Raritan Baptist Church pastor, for the invocation before the meal.
Schleich started out with sharing his belief of RSB being a community bank.
"Today half of the 400 owners are present for this annual meeting, Of the 20,260 outstanding shares no one owns over 5% of those shares. If you add all the director's shares together they only own 14.3% of the stock and over 40% of the employees own shares in this bank. This is truly a community bank," he said.
Mr. Schleich said that 2015 was not the best year the bank has had but he was still proud of the bank's earnings even with the economic downturn. 2015 ROE was 9.97% which is the 3rd best year, 2014 was 2nd best year for ROE at 10.43% and the best year for RSB was 2013 at 11.51% ROE.
He explained that bank stock went from $800 in 2014 to $885 in 2015 an $85 value increase and when combined with $22 cash dividends paid the owners received at 13.3% return on investment.
Mr. Schleich discussed the increase of loans by 15.7% which increased our Loan to Deposit ratio to 88%.
"The board prefers this ratio to be around 72%. This is mainly due to our farm customers holding last years production in hopes of higher prices and continuing to borrow for 2016 expenses.
"When the farmers transport their grain to market the Loan to deposit ratio should decrease back to the level we are accustomed to," he said.
Mr. Schleich went on to reflect on the total deposits, total loans, and earnings of each branch.
"Next year's budget prediction is similar to this year's. The only change is $41,000 less earnings due to the agriculture economic cyclical downturn.
Mr. Schleich said that 47% of RSB's loan concentration is in the ag sector.
"The ag cycle looks to be difficult in the coming years but nothing like the 1980's. The bank will always have risk when loaning money out to our customers. We cannot take the risk out of the banking business but we will continue to manage the risk with a logical, common sense approach.
Jan VanArsdale, Chairman of Raritan State Bancorp, addressed the shareholders with his comments on the Holding Company.
He first presented Arthur Kane with a plaque for his 47 years of service to Raritan State Bank and Raritan State Bancorp. Art has served the bank in many positions from June 1, 1968 to March 12, 2016.
He thanked the Baptist church for a delicious meal, complimented the St Patrick's church on such a wonderful facelift to the Community Center, and for the stockholders for attending the annual meeting.
Mr. Van Arsdale discussed that mobile banking is soon to come to Raritan State Bank. He said he had received a "smart phone" for Christmas, which he doesn't get along with so well at this point.
It has a lot of nice features which he is still learning, so far he just likes the quality pictures he can take.
"Our younger generation, many who now live at a distance from the bank, are expecting this service from their bank and we plan on introducing Mobile Banking in the summer of 2016," he told shareholders.
Mr. Van Arsdale explained that RSB has just rolled out "real time" banking. This allows RSB customers to have access to their deposits instantly instead of at the end of the day after the bank updates their core system.
Remote capture will be offered alongside Mobile Banking which allows customer to take a picture of their deposit transaction instead of physically taking it to the bank.
Mr. Van Arsdale went on to say to shareholders and guests, "this is the technology that your bank needs to offer in order for us to stay vibrant in the banking environment for the foreseeable future.
The next item on the agenda was the election of Directors in which Henderson County State's Attorney Scott McClintock presided for Raritan State Bank.
He opened by announcing that the terms of three of the present directors have expired. The directors were Bill Simonson, Mike Neff and Arthur Kane. Bill and Mike are running for re-election and Art Kane is retiring due to the bank's age limitation.
John Kane nominated Marc Coursey and was seconded by Al Renken.
Gene Larkin nominated Bill Simonson and Mike Neff and it was seconded by Leroy Tappe. David Painter moved that nominations cease and a unanimous vote be cast for both directors. Leroy Tappe seconded the motion and the motion carried.
Jim Bigger moved that the shareholders vote to approve the actions of the Board of Directors during the past year and Connie Sue Torrance seconded the motion. Motion carried.
Leroy Tappe voted to close the business meeting with Greg Rankin seconding and the motion carried.
Arthur Kane wanted to thank his support group which consisted of all his fellow co-workers, his family and community over the past 47 years of service to Raritan State Bank. This was followed by a standing ovation.
David Painter made a motion to adjourn the annual meeting with Dan Kane seconding. Motion carried.
Many door prizes were then awarded.