KS Bancorp, Inc. (KSBI) Announces Third Quarter 2020 Financial Results and Cash Dividend

Friday, 23. October 2020 18:52

SMITHFIELD, N.C., Oct. 23, 2020 (GLOBE NEWSWIRE) -- KS Bancorp, Inc. (the “Company”) (OTCBB: KSBI), parent company of KS Bank, Inc. (the “Bank”), announced unaudited results for the third quarter of 2020.

The Company reported net income of $1,145,000 or $1.03 per diluted share, an increase of 17.3% for the three months ended September 30, 2020, compared to net income of $976,000 or $0.88 per diluted share, for the three months ended September 30, 2019. For the nine months ended September 30, 2020, the Company reported net income of $3.0 million, or $2.74 per diluted share compared to $2.7 million, or $2.44 per diluted share for the nine months ended September 30, 2019.

Net interest income for the three months ended September 30, 2020, was $3.8 million as compared to $3.3 million for the comparable period in 2019. Noninterest income for the three months ended September 30, 2020 was $745,000, compared to $810,000 for the comparable period ended September 30, 2019. Noninterest expense was $3.0 million for the three months ended September 30, 2020, as compared $2.9 million in the comparable period in 2019. The Company recorded a provision for loan losses of $45,000 during the third quarter 2020.

For the nine months ended September 30, 2020, net interest income was $10.9 million, compared to $9.7 million for the nine months ended September 30, 2019. Noninterest income was $2.1 million for the nine months ended September 30, 2020, compared to $2.4 million for the nine months ended September 30, 2019. Noninterest expense was $9.0 million for the nine months ended September 30, 2020, compared to $8.7 million for the nine months ended September 30, 2019.

The Company’s unaudited consolidated total assets increased $74.6 million, to $478.3 million at September 30, 2020, compared to $403.7 million at December 31, 2019. Net loan balances increased by $53.9 million, or 17.5%, to $361.8 million at September 30, 2020, compared to $307.9 million at December 31, 2019. The increase in loans was primarily due to market demand and the Bank provided $29.3 million of payroll protection plan loans (PPP) in the second quarter, 2020.   The Company’s investment securities totaled $63.7 million at September 30, 2020, compared to $67.1 million at December 31, 2019. Total deposits increased $67.4 million to $394.3 million at September 30, 2020, compared to $326.9 million at December 31, 2019. For the nine months ended September 30, 2020, there was a $65.8 million increase in core deposits and a $2.4 million increase in brokered funding. Total stockholders’ equity increased $3.9 million or 14.41% from $26.8 million at December 31, 2019 to $30.7 million at September 30, 2020, as a result of accumulated other comprehensive gains and increase in net income.
        
Nonperforming assets consisted of $1.2 million nonaccrual loans at September 30, 2020, representing less than 0.50% of the Company’s total assets. The Company had no foreclosed real estate owned at September 30, 2020. The allowance for loan losses at September 30, 2020 totaled $4.3 million, or 1.16% of total loans, including the PPP loans originated. Excluding the PPP from the total loans, the allowance for loan losses at September 30, 2020 was 1.26% of loans.

Commenting on the third quarter results, Harold Keen, President and CEO of the Company and the Bank, stated, “With all the stress and uncertainty experienced during the third quarter of 2020 for each of us personally and as a Company, the financial results bring some reassurance that KS Bancorp’s growth and returns remain on track for a sound year.  Our team members have excelled at providing quality service to individuals and businesses challenged by COVID-19, while balancing all the changes we have experienced at home, especially those with young school aged children.  We continue to focus on our customers and safety during these unsettled times.” 

In addition, the Company announced today that its Board of Directors has declared a quarterly dividend of $0.10 per share for stockholders of record as of October 30, 2020, with payment to be made on November 9, 2020.  

KS Bank continues to be well-capitalized according to regulatory standards with total risk-based capital of 14.55%, tier 1 risk- based capital of 13.30%, common equity tier 1 risk- based capital of 13.30%, and a tier 1 leverage ratio of 8.89% at September 30, 2020. The minimum levels to be considered well capitalized for each of these ratios are 10.0%, 8.0%, 6.5%, and 5.0%, respectively.

KS Bancorp, Inc. is a Smithfield, North Carolina-based single bank holding company. KS Bank, Inc., a state-chartered savings bank, is KS Bancorp’s sole subsidiary. The Bank is a full service community bank serving the citizens of eastern North Carolina since 1924. The Bank offers a broad range of personal and business banking products and services, mortgage products and trust services. There are nine full service branches located in Kenly, Selma, Clayton, Garner, Goldsboro, Wilson, Wendell, Smithfield, and Four Oaks, North Carolina. In addition, KS Trust Services has a presence in Waynesville and Wilmington, NC. For more information, visit www.ksbankinc.com.

This release contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Company. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of management of the Company and on the information available to management at the time that these disclosures were prepared. These statements can be identified by the use of words like “expect,” “anticipate,” “estimate” and “believe,” variations of these words and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. The Company undertakes no obligation to update any forward-looking statements. 

Contact: Harold T. KeenRegina J Smith
President and Chief Executive OfficerChief Financial Officer
(919) 938-3101(919) 938-3101


 
KS Bancorp, Inc. and Subsidiary
Consolidated Statements of Financial Condition
    
    
  September 30, 2020 December 31,
  (unaudited) 2019*
         
  (Dollars in thousands)
 ASSETS       
         
 Cash and due from banks:       
 Interest-earning$2,728  $3,306 
 Noninterest-earning 32,877   9,317 
 Time Deposit 100   100 
 Investment securities available for sale, at fair value 63,712   67,150 
 Federal Home Loan Bank stock, at cost 1,851   1,763 
 Presold mortgage in process of settlement 359   - 
 Loans 366,006   311,911 
 Less allowance for loan losses (4,252)  (4,057)
   Net loans 361,754   307,854 
    
 Accrued interest receivable 2,086   1,145 
 Property and equipment, net 8,706   8,032 
 Other assets 4,169   4,990 
    
     Total assets$ 478,342  $ 403,657 
    
 LIABILITIES AND STOCKHOLDERS' EQUITY  
    
 Liabilities  
   Deposits$394,314  $326,918 
   Long-term borrowings 48,248   46,248 
   Accrued interest payable 251   396 
   Accrued expenses and other liabilities 4,837   3,268 
    
     Total liabilities 447,650   376,830 
    
 Stockholder's Equity:  
    Common stock, no par value, authorized 20,000,000 shares;  
 1,107,776 shares issued and outstanding at September 30, 2020 and 1,107,776 shares issued and outstanding at December 31, 2019 1,359   1,359 
    Retained earnings, substantially restricted 27,998   25,291 
    Accumulated other comprehensive income 1,335   177 
    
     Total stockholders' equity 30,692   26,827 
    
     Total liabilities and stockholders' equity$ 478,342  $ 403,657 
    
 * Derived from audited financial statements  
    


KS Bancorp, Inc and Subsidiary
Consolidated Statements of Income (Unaudited)
        
        
  Three Months Ended Nine Months Ended
  September 30, September 30,
   2020  2019  2020  2019
         
  (In thousands, except per share data) 
Interest and dividend income:      
 Loans$4,280  $4,024  $12,658  $11,863 
 Investment securities      
 Taxable 269   334   899   1,053 
 Tax-exempt 57   34   138   88 
 Dividends 21   24   66   75 
 Interest-bearing deposits 4   36   18   145 
   Total interest and dividend income 4,631   4,452   13,779   13,224 
                 
Interest expense:      
 Deposits 521   766   1,858   2,293 
 Borrowings 314   399   1,026   1,272 
   Total interest expense 835   1,165   2,884   3,565 
                 
   Net interest income 3,796   3,287   10,895   9,659 
        
Provision for loan losses 45   -   160   25 
                
   Net interest income after      
     provision for loan losses 3,751   3,287   10,735   9,634 
                 
Noninterest income:      
 Service charges on deposit accounts 352   402   1,020   1,107 
 Fees from presold mortgages 51   67   85   160 
 Gain on Sale of Investments 4   -   4    
 Other income 338   341   1,025   1,104 
   Total noninterest income 745   810   2,134   2,371 
                 
Noninterest expenses:      
 Compensation and benefits 1,838   1,789   5,433   5,279 
 Occupancy and equipment 347   338   1,084   964 
 Data processing & outside service fees 246   217   700   665 
 Advertising 17   39   60   113 
 Other 587   473   1,722   1,545 
   Total noninterest expenses 3,035   2,856   8,999   8,566 
                 
   Income before income taxes 1,461   1,241   3,870   3,439 
        
Income tax 316   265   832   736 
                
   Net income$ 1,145  $ 976  $ 3,038  $ 2,703 
                 
 Basic and Diluted earnings per share$ 1.03  $ 0.88  $ 2.74  $ 2.44 

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