KS Bancorp, Inc. (KSBI) Announces Fourth Quarter 2022 Financial Results and Cash Dividend

Rhea-AI Summary

KS Bancorp, Inc. (OTCBB: KSBI) reported strong fourth-quarter results for 2022, with net income reaching $2.3 million or $2.11 per diluted share, a 63.6% increase from the previous year. For the full year, net income rose 24.0% to $7.6 million, with diluted earnings of $6.82 per share. Net interest income before loan losses was $5.9 million for Q4, up from $4.4 million in Q4 2021. Total assets decreased by $23.7 million to $547.5 million, while net loan balances increased by 19.7%. The company declared a quarterly dividend of $0.20 per share for January 2023.

Positive

• Net income increased 63.6% year-over-year in Q4 2022.
• Full year net income rose 24.0% to $7.6 million.
• Net interest income before loan losses rose to $20.4 million for the year.
• Net loan balances grew by 19.7% to $413.7 million.

Negative

• Total assets decreased by $23.7 million to $547.5 million.
• Total deposits fell by $5.9 million to $481.5 million.
• Total stockholders' equity decreased by $3.3 million to $33.3 million.

SMITHFIELD, N.C., Jan. 27, 2023 (GLOBE NEWSWIRE) -- KS Bancorp, Inc. (the “Company”) (OTCBB: KSBI), parent company of KS Bank, Inc. (the “Bank”), announced unaudited results for the fourth quarter of 2022.

The Company reported net income of $2.3 million or $2.11 per diluted share, for the three months ended December 31, 2022, an increase of 63.6% compared to net income of $1.4 million or $1.29 per diluted share, for the three months ended December 31, 2021. For the twelve months ended December 31, 2022, the Company reported an increase in net income of 24.0%. Net income was $7.6 million, or $6.82 per diluted share compared to $6.1 million, or $5.50 per diluted share for the twelve months ended December 31, 2021. For the twelve months ending December 31, 2021, it included non-recurring Payroll Protection Program (PPP) fee income which totaled $981,000.

Net interest income before the provision for loan losses for the three months ended December 31, 2022 was $5.9 million compared to $4.4 million at December 31, 2021. The Company did not record any provision for loan losses during the fourth quarter 2022. Noninterest income for the three months ended December 31, 2022 was $782,000, compared to $735,000 for the comparable period ended December 31, 2021. Noninterest expense was $3.7 million for the three months ended December 31, 2022, compared to $3.3 million in the comparable period in 2021.

For the twelve months ended December 31, 2022, net interest income before the provision for loan losses was $20.4 million, compared to $17.7 million for the twelve months ended December 31, 2021. Noninterest income was $3.0 million for the twelve month period ending December 31, 2022 compared to $2.9 million for the same period ended December 31, 2021. For the twelve months ended December 31, 2022, non-interest expenses was $13.9 million, compared to $12.5 million for the same period ending December 31, 2021.

The Company’s unaudited consolidated total assets decreased $23.7 million, to $547.5 million at December 31, 2022, compared to $571.2 million at December 31, 2021. Net loan balances increased by $68.1 million, a 19.7% increase, to $413.7 million at December 31, 2022, compared to $345.6 million at December 31, 2021. The Company’s investment securities totaled $99.9 million at December 31, 2022, compared to $88.3 million at December 31, 2021. Total deposits decreased $5.9 million to $481.5 million at December 31, 2022, compared to $487.4 million at December 31, 2021. For the twelve months ended December 31, 2022, the decrease in deposits is primarily attributed to $5.7 million decrease in Certificates of Deposit greater than $250,000 including a $3.9 million decrease in brokered deposits. Long-term borrowings decreased $31.0 million to $11.2 million at December 31, 2022 compared to $42.2 million at December 31, 2021. This decrease is attributable to the repayment of $32.0 million in Federal Home Loan Bank borrowings. There was an increase in short term borrowing of $16.0 million, from $1.0 million at December 31, 2021 to $17.0 million at December 31, 2022. The increase in borrowings is the result of increased loan production in the fourth quarter 2022. Total stockholders’ equity decreased $3.3 million to $33.3 million at December 31, 2022, from $36.6 million at December 31, 2021. The decrease in stockholders equity is primarily attributable to the change in accumulated other comprehensive income of $10.1 million for year-end 2022, which is partially offset by an increase in retained earnings of $6.8 million.

Nonperforming assets consisted of $859,000 nonaccrual loans at December 31, 2022, representing less than 0.25% of the Company’s total assets. All nonaccrual loans are current except for one loan in the amount of $52,000. There was no foreclosed real estate owned at December 31, 2022. The allowance for loan losses at December 31, 2022 totaled $5.1 million, or 1.21% of total loans.

Commenting on the fourth quarter results, Harold Keen, President and CEO of the Company, stated, “During the fourth quarter of 2022, KS Bank continued its solid growth in loans and the conversion of top prospects into deposit relationships. Net income exceeded projections both for the fourth quarter and the year of 2022. KS Bank is primarily based in growing markets that will allow the Bank to continue to build its balance sheet and our brand of community banking. Looking ahead, we know 2023 will prove to be more challenging due to the current interest rate environment; however, we believe that the Bank will continue to generate positive growth results.”

In addition, the Company announced today that its Board of Directors has declared a quarterly dividend of $0.20 per share for stockholders of record as of January 30, 2023 with payment to be made on February 9, 2023. 

KS Bank continues to be well capitalized according to regulatory standards with total risk-based capital of 12.84%, tier 1 risk-based capital of 11.73%, common equity tier 1 risk-based capital of 11.73%, and a tier 1 leverage ratio of 9.62% at December 31, 2022. 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. There is a loan production office in Dunn, NC which opened in April, 2022. 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
	December 31, 2022				December 31,
	(unaudited)				2021*
	(Dollars in thousands)
ASSETS
Cash and due from banks:
Interest-earning	$	4,558			$	111,762
Noninterest-earning		3,162				2,626
Time Deposit		5,100				5,100
Investment securities available for sale, at fair value		99,937				88,320
Federal Home Loan Bank stock, at cost		1,021				1,443
Loans		418,809				350,667
Less allowance for loan losses		(5,068	)			(5,023	)
Net loans		413,741				345,644
Accrued interest receivable		2,093				1,543
Foreclosed assets, net		-				621
Property and equipment, net		9,347				8,928
Other assets		8,561				5,238
Total assets	$	547,520			$	571,225
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits	$	481,565			$	487,437
Short-term borrowings	$	17,028			$	1,000
Long-term borrowings		11,248				42,248
Accrued interest payable		118				216
Accrued expenses and other liabilities		4,277				3,679
Total liabilities		514,236				534,580
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 December 31, 2022 and December 31, 2021, respectively		1,359				1,359
Retained earnings, substantially restricted		41,453				34,694
Accumulated other comprehensive income (loss)		(9,528	)			592
Total stockholders' equity		33,284				36,645
Total liabilities and stockholders' equity	$	547,520			$	571,225
* Derived from audited financial statements

KS Bancorp, Inc and Subsidiary
Consolidated Statements of Income (Unaudited)
	Three Months Ended								Twelve Months Ended
	31-Dec								Dec 31,
		2022				2021				2022				2021
	(In thousands, except per share data)
Interest and dividend income:
Loans	$	5,481			$	4,342			$	18,802			$	18,033
Investment securities
Taxable		476				298				1,709				1,084
Tax-exempt		206				156				773				549
Dividends		14				6				22				55
Interest-bearing deposits		269				36				747				84
Total interest and dividend income		6,446				4,838			$	22,053				19,805
Interest expense:
Deposits		398				224				1,051				1,023
Borrowings		155				250				599				1,121
Total interest expense		553				474				1,650				2,144
Net interest income		5,893				4,364				20,403				17,661
Provision for loan losses		-				-				-				369
Net interest income after provision for loan losses		5,893				4,364				20,403				17,292
Noninterest income:
Service charges on deposit accounts		323				302				1,259				1,145
Fees from presold mortgages		4				2				21				56
Other income		455				431				1,766				1,675
Total noninterest income		782				735				3,046				2,876
Noninterest expenses:
Compensation and benefits		2,252				2,040				8,603				7,675
Occupancy and equipment		584				464				2,159				1,710
Data processing & outside service fees		208				207				826				786
Advertising		49				23				137				71
Foreclosed real estate and repossessions, net		-				-				(230	)			-
Other		614				572				2,381				2,214
Total noninterest expenses		3,707				3,306				13,876				12,456
Income before income taxes		2,968				1,793				9,573				7,712
Income tax		635				362				2,016				1,618
Net income	$	2,333			$	1,431			$	7,557			$	6,094
Basic and Diluted earnings per share	$	2.11			$	1.29			$	6.82			$	5.50

FAQ

What were KS Bancorp's Q4 2022 earnings results?

KS Bancorp reported Q4 2022 net income of $2.3 million, or $2.11 per diluted share, a 63.6% increase from the previous year.

How much did KS Bancorp's total assets change in 2022?

Total assets decreased by $23.7 million to $547.5 million as of December 31, 2022.

What was KS Bancorp's net loan balance at the end of 2022?

Net loan balances increased by 19.7% to $413.7 million at December 31, 2022.

What dividend did KS Bancorp declare for Q1 2023?

KS Bancorp declared a quarterly dividend of $0.20 per share for stockholders of record as of January 30, 2023.

What is the outlook for KS Bancorp in 2023?

KS Bancorp expects challenges in 2023 due to the current interest rate environment but aims for continued positive growth.