KS Bancorp, Inc. (KSBI) Announces First Quarter 2023 Financial Results and Cash Dividend

SMITHFIELD, N.C., April 27, 2023 (GLOBE NEWSWIRE) -- KS Bancorp, Inc. (the “Company”) (OTCBB: KSBI), parent company of KS Bank, Inc. (the “Bank”), announced unaudited results for the first quarter of 2023.

The Company reported net income of $1.7 million or $1.55 per diluted share, for the three months ended March 31, 2023, an increase of 26.0% compared to net income of $1.4 million or $1.23 per diluted share, for the three months ended March 31, 2022.

Net interest income before the provision for loan losses for the three months ended March 31, 2023 was $5.2 million compared to $4.2 million at March 31, 2022. The Company did not record any provision for loan losses during the first quarter 2023. The Bank adopted ASU 2016-13 “Measurement of Credit Losses on Financial Instruments” referred to as the CECL model. The Day 1 adoption of CECL decreased the provison for loan losses by $1.1 million. Noninterest income for the three months ended March 31, 2023 was $738,000, compared to $802,000 for the comparable period ended March 31, 2022. Noninterest expense was $3.8 million for the three months ended March 31, 2023, compared to $3.3 million in the comparable period in 2022.

The Company’s unaudited consolidated total assets increased $35.2 million, to $581.5 million at March 31, 2023, compared to $546.3 million at December 31, 2022. Net loan balances increased by $14.6 million to $428.3 million at March 31, 2023, compared to $413.7 million at December 31, 2022. The Company’s investment securities totaled $101.1 million at March 31, 2023, compared to $98.6 million at December 31, 2022. For the three months ended March 31, 2023, short-term borrowings decreased $17.0 million. Total stockholders’ equity increased $5.2 million to $37.5 million at March 31, 2023, from $32.2 million at December 31, 2022. The increase in stockholders equity is primarily attributable to $2.5 million increase in retained earnings as a result of net income plus $1.0 million added to retained earnings resulting from the CECL adoption. In addition, the accumulated other comprehensive income decreased $2.7 million for three months ended March 31, 2023 and compared to December 31,2022.

Nonperforming assets consisted of $849,000 nonaccrual loans at March 31, 2023, representing less than 0.20% of the Company’s total assets. There was no foreclosed real estate owned at March 31, 2023. The allowance for loan losses at March 31, 2023 totaled $3.4 million, or 0.80% of total loans.

Commenting on the first quarter results, Harold Keen, President and CEO of the Company, stated, “The Banks loan demand is solid and we continue to increase in our deposit and loan base across our footprint. The continued rated increases by the Federal Reserve has certainly produced some compression in our net interest margin and forced the cost to borrowers to increase.  In light of the interest rate headwinds, the Bank saw year over year positive earnings growth for the quarter. We believe the markets we serve are well positioned for continued growth.”  

Commenting on national events during the first quarter, Keen stated, “During the first quarter of this year on a national level, there has been some unsettledness in the financial markets and with some large banking institutions.  Unlike the banks making national headlines, KS Bank’s capital, liquidity, and earnings remain strong and in compliance with our primary regulator’s guidelines. KS Bank’s loan portfolio is well diversified with businesses of different sizes across various industries in the five-county footprint we serve. ”  

In addition, the Company announced today that its Board of Directors has declared a quarterly  dividend of $0.25 per share for stockholders of record as of May 1, 2023 with payment to be made on May 11, 2023.  The $0.25 per share dividend represents a 25% increase of the previous quarter’s dividend of $0.20 per share.

KS Bank continues to be well capitalized according to regulatory standards with a Community Bank Leverage Ratio of 9.66%, compared to 9.44% at December 31, 2022.

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. There is a loan production office in Dunn, NC which opened in April, 2022. Additionally, the Bank has received regulatory approval to build a full service branch in Dunn, NC to be completed by the first quarter of 2024. 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. Keen                                               
President and Chief Executive Officer 
(919) 938-3101

Regina J Smith
Chief Financial Officer
(919) 938-3101

KS Bancorp, Inc. and Subsidiary
Consolidated Statements of Financial Condition
		March 31, 2023				December 31,
		(unaudited)				2022*
		(Dollars in thousands)
	ASSETS
	Cash and due from banks:
	Interest-earning	$	23,790			$	4,558
	Noninterest-earning		3,003				3,162
	Time Deposit		5,100				5,100
	Investment securities available for sale, at fair value		101,131				98,576
	Federal Home Loan Bank stock, at cost		287				1,021
	Loans		431,752				418,809
	Less allowance for loan losses		(3,437	)			(5,069	)
	Net loans		428,315				413,740
	Accrued interest receivable		2,121				2,093
	Foreclosed assets, net		-				-
	Property and equipment, net		9,815				9,347
	Other assets		7,940				8,753
	Total assets	$	581,502			$	546,350
	LIABILITIES AND STOCKHOLDERS' EQUITY
	Liabilities
	Deposits	$	527,608			$	481,565
	Short-term borrowings	$	-			$	17,028
	Long-term borrowings		11,248				11,248
	Accrued interest payable		275				117
	Accrued expenses and other liabilities		4,915				4,156
	Total liabilities		544,046				514,114
	Stockholder's Equity:
	Preferred stock, no par value, 500,000 shares authorized; none issued and outstanding
	Common stock, no par value, 3,500,000 shares authorized; 1,107,776 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		1,359				1,359
	Retained earnings, substantially restricted		44,000				41,453
	Accumulated other comprehensive (loss)		(7,903	)			(10,576	)
	Total stockholders' equity		37,456				32,236
	Total liabilities and stockholders' equity	$	581,502			$	546,350
	*  Derived from audited financial statements

 

KS Bancorp, Inc and Subsidiary
Consolidated Statements of Income (Unaudited)
		Three Months Ended
		31-Mar
		2023			2022
		(In thousands, except per share data)
Interest and dividend income:
	Loans	$	5,864		$	4,130
	Investment securities
	Taxable		482			322
	Tax-exempt		205			174
	Dividends		7			21
	Interest-bearing deposits		217			44
	Total interest and dividend income		6,775			4,691
Interest expense:
	Deposits		1,374			219
	Borrowings		203			238
	Total interest expense		1,577			457
	Net interest income		5,198			4,234
Provision for loan losses			-			-
	Net interest income after provision for loan losses		5,198			4,234
Noninterest income:
	Service charges on deposit accounts		310			293
	Fees from presold mortgages		3			4
	Other income		425			505
	Total noninterest income		738			802
Noninterest expenses:
	Compensation and benefits		2,364			2,043
	Occupancy and equipment		534			484
	Data processing & outside service fees		205			205
	Advertising		48			18
	Foreclosed real estate and repossessions, net		-			-
	Other		606			566
	Total noninterest expenses		3,757			3,316
	Income before income taxes		2,179			1,720
Income tax			460			353
	Net income	$	1,719		$	1,367
	Basic and Diluted earnings per share	$	1.55		$	1.23