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

Rhea-AI Summary

KS Bancorp, Inc. (OTCBB: KSBI) reported strong second quarter results for 2022, achieving a net income of $1.8 million, or $1.62 per diluted share, up from $1.5 million in Q2 2021. The firm's net interest income rose to $4.8 million, while noninterest income slightly increased to $722,000. Total assets decreased by $16.5 million to $554.7 million, primarily due to FHLB borrowings repayment. KS Bank increased loans by $22.4 million, and total deposits grew by $20 million. A quarterly dividend of $0.20 per share was announced, marking a 25% increase.

Positive

• Net income rose to $1.8 million, a $276,000 increase year-over-year.
• Net interest income increased to $4.8 million, reflecting solid growth in interest income.
• Total deposits increased by $20 million to $507.4 million.
• A quarterly dividend of $0.20 per share declared, a 25% increase from the previous quarter.

Negative

• Total assets decreased by $16.5 million, primarily due to repayment of FHLB borrowings.
• Total stockholders' equity decreased by $4.7 million to $31.9 million.

SMITHFIELD, N.C., July 22, 2022 (GLOBE NEWSWIRE) -- KS Bancorp, Inc. (the “Company”) (OTCBB: KSBI), parent company of KS Bank, Inc. (the “Bank”), announced unaudited results for the second quarter of 2022.

The Company reported net income of $1,795,000 or $1.62 per diluted share, for the three months ended June 30, 2022, compared to net income of $1,519,000 or $1.37 per diluted share, for the three months ended June 30, 2021. Comparing the second quarter 2022 to the second quarter of 2021, there was an increase in net income of $276,000. In the second quarter of 2021 there was $319,000 income from the Payroll Protection Plan (PPP) loans recognized.

Net interest income before the provision for loan losses for the three months ended June 30, 2022 was $4.8 million compared to $4.4 million at June 30, 2021. Noninterest income for the three months ended June 30, 2022 was $722,000, compared to $708,000 for the comparable period ended June 30, 2021. In the second quarter of 2022, there was a gain of $12,000 realized for prepayment of $8 million of Federal Home Loan Bank (FHLB) borrowings. Noninterest expense was $3.2 million for the three months ended June 30, 2022, as compared $3.1 million in the comparable period in 2021. The Company did not record any provision for loan losses during the second quarter 2022, compared to $123,000 in the second quarter of 2021.

For the six months ended June 30, 2022, net interest income before the provision for loan losses was $9.0 million, compared to $8.6 million for the six months ended June 30, 2021. The increase is primarily attributable to an increase in interest income from investments and a decrease in interest expense from the repayment of FHLB borrowings. Non-interest income was $1.5 million for the six month period ending June 30, 2022 compared to $1.4 million for the same period ended June 30, 2021. For the six months ended June 30, 2022, non-interest expenses was $6.5 million, compared to $6.0 million for the same period ending June 30, 2021.

The Company’s unaudited consolidated total assets decreased $16.5 million, to $554.7 million at June 30, 2022, compared to $571.2 million at December 31, 2021. The decrease in assets is primarily attributable to the repayment of $32 million in FHLB borrowings. Net loan balances increased by $22.4 million, to $368.0 million at June 30, 2022, compared to $345.6 million at December 31, 2021. The Company’s investment securities totaled $104.0 million at June 30, 2022, compared to $88.3 million at December 31, 2021. Total deposits increased $20.0 million to $507.4 million at June 30, 2022, compared to $487.4 million at December 31, 2021. For the six months ended June 30, 2022, there was a $19.9 million increase in core deposits and a $1.5 million decrease in brokered funding. Long-term borrowings decreased $31 million to $11 million at June 30, 2022 compared to $42 million at December 31, 2021. Total stockholders’ equity decreased $4.7 million to $31.9 million at June 30, 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 $7.6 million in the second quarter of 2022, which is partially offset by an increase in retained earnings of $2.8 million.
        
Nonperforming assets consisted of $878,000 nonaccrual loans at June 30, 2022, representing less than 0.20% of the Company’s total assets. There was no foreclosed real estate owned at June 30, 2022. The allowance for loan losses at June 30, 2022 totaled $5.0 million, or 1.35% of total loans.

Commenting on the second quarter results, Harold Keen, President and CEO of the Company, stated, “During the second quarter, the Bank continued solid growth in both deposits and loans outstanding. Our emphasis on community banking relationships and service has resulted in significant growth. During the quarter, KS Bank opened a loan production office in Dunn, NC. The I-95 corridor in Johnston County and Harnett County is experiencing above average growth and we believe KS Bank can be supportive of that growth in the Dunn/Harnett County area.” 

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 July 29, 2022 with payment to be made on August 8, 2022. The $0.20 per share dividend represents a 25% increase of the previous quarter’s dividend of $0.16 per share.

KS Bank continues to be well-capitalized according to regulatory standards with total risk-based capital of 13.77%, tier 1 risk-based capital of 12.52%, common equity tier 1 risk-based capital of 12.52%, and a tier 1 leverage ratio of 8.78% at June 30, 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.         

KS Bancorp, Inc. and Subsidiary
Consolidated Statements of Financial Condition
		June 30, 2022				December 31,
		(unaudited)				2021*
		(Dollars in thousands)
	ASSETS
	Cash and due from banks:
	Interest-earning	$	55,566			$	111,762
	Noninterest-earning		3,025				2,626
	Time Deposit		5,100				5,100
	Investment securities available for sale, at fair value		104,018				88,320
	Federal Home Loan Bank stock, at cost		299				1,443
	Loans		373,076				350,667
	Less allowance for loan losses		(5,030	)			(5,023	)
	Net loans		368,046				345,644
	Accrued interest receivable		1,637				1,543
	Foreclosed assets, net		-				621
	Property and equipment, net		9,173				8,928
	Other assets		7,835				5,238
	Total assets	$	554,699			$	571,225
	LIABILITIES AND STOCKHOLDERS' EQUITY
	Liabilities
	Deposits	$	507,362			$	487,437
	Short-term borrowings	$	-			$	1,000
	Long-term borrowings		11,248				42,248
	Accrued interest payable		45				216
	Accrued expenses and other liabilities		4,165				3,679
	Total liabilities		522,820				534,580
	Stockholder's Equity:
	Common stock, no par value, authorized 20,000,000 shares;
	1,107,776 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		1,359				1,359
	Retained earnings, substantially restricted		37,500				34,694
	Accumulated other comprehensive loss		(6,980	)			592
	Total stockholders' equity		31,879				36,645
	Total liabilities and stockholders' equity	$	554,699			$	571,225
	* Derived from audited financial statements

KS Bancorp, Inc and Subsidiary
Consolidated Statements of Income (Unaudited)
		Three Months Ended						Six Months Ended
			June 30,						June 30,
			2022			2021			2022			2021
		(In thousands, except per share data)
Interest and dividend income:
	Loans	$	4,327		$	4,560		$	8,457		$	8,947
	Investment securities
	Taxable		445			251			767			514
	Tax-exempt		188			138			362			238
	Dividends		(16	)		18			5			39
	Interest-bearing deposits		133			15			177			21
	Total interest and dividend income		5,077			4,982		$	9,768			9,759
Interest expense:
	Deposits		211			264			430			550
	Borrowings		86			296			324			595
	Total interest expense		297			560			754			1,145
	Net interest income		4,780			4,422			9,014			8,614
Provision for loan losses			-			123			-			246
	Net interest income after
	provision for loan losses		4,780			4,299			9,014			8,368
Noninterest income:
	Service charges on deposit accounts		315			279			608			562
	Fees from presold mortgages		8			17			12			49
	Other income		399			412			904			772
	Total noninterest income		722			708			1,524			1,383
Noninterest expenses:
	Compensation and benefits		2,066			1,878			4,109			3,699
	Occupancy and equipment		545			364			1,029			728
	Data processing & outside service fees		203			232			408			461
	Advertising		32			15			50			26
	Foreclosed real estate and repossessions, net		(230	)					(230	)
	Other		613			581			1,179			1,052
	Total noninterest expenses		3,229			3,070			6,545			5,966
	Income before income taxes		2,273			1,937			3,993			3,785
Income tax			478			418			831			807
	Net income	$	1,795		$	1,519		$	3,162		$	2,978
	Basic and Diluted earnings per share	$	1.62		$	1.37		$	2.85		$	2.69

 

FAQ

What were KS Bancorp's earnings for Q2 2022?

KS Bancorp reported net income of $1.8 million, or $1.62 per diluted share, for Q2 2022.

How much did KS Bancorp's total assets change as of June 30, 2022?

Total assets decreased by $16.5 million to $554.7 million.

What is the dividend declared by KS Bancorp for Q2 2022?

KS Bancorp declared a quarterly dividend of $0.20 per share, a 25% increase from the previous quarter.

How did KS Bancorp's noninterest income perform in Q2 2022?

Noninterest income rose to $722,000 for Q2 2022.

What was the change in loan balances for KS Bancorp by June 30, 2022?

Net loan balances increased by $22.4 million to $368.0 million.