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

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SMITHFIELD, N.C., July 25, 2023 (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 2023.

The Company reported net income of $1.6 million or $1.41 per diluted share, for the three months ended June 30, 2023, compared to net income of $1.8 million or $1.62 per diluted share, for the three months ended June 30, 2022. Comparing the second quarter 2023 to the second quarter of 2022, there was a decrease in net income of $236,000, which is primarily attributable to the $230,000 gain on sale of foreclosed assets recorded in June, 2022.

Net interest income before the provision for credit losses for the three months ended June 30, 2023 was $5.1 million compared to $4.8 million at June 30, 2022. As a result of increased loan balances, the Company recorded a provision for credit losses during the second quarter 2023 in the amount of $110,000. Noninterest income for the three months ended June, 30 2023 was $829,000, compared to $952,000 for the comparable period ended June 30, 2022. Noninterest expense was $3.8 million for the three months ended June 30, 2023, compared to $3.5 million in the comparable period in 2022.

For the six months ended June 30, 2023, net interest income before the provision for credit losses was $10.2 million, compared to $9.0 million for the six months ended June 30, 2022 which was a 12.7% increase. Non-interest income was $1.6 million for the six month period ending June 30, 2023 compared to $1.8 million for the same period ended June 30, 2022. For the six months ended June 30, 2023, non-interest expenses was $7.6 million, compared to $6.8 million for the same period ending June 30, 2022. This is primarily attributable to increase in compensation and benefits.

The Company’s unaudited consolidated total assets increased $40.5 million, to $586.8 million at June 30, 2023, compared to $546.3 million at December 31, 2022. Net loan balances increased by $23.5 million to $437.2 million at June 30, 2023, compared to $413.7 million at December 31, 2022. The Company’s investment securities totaled $97.8 million at June 30, 2023, compared to $98.6 million at December 31, 2022. Total deposits increased $51.2 million to $532.8 million at June 30, 2023, compared to $481.6 million at December 31, 2022. The increase deposits included a $34.5 million increase in core deposits. For the six months ended June 30, 2023, short-term borrowings decreased $17.0 million. Total stockholders’ equity increased $5.6 million to $37.8 million at June 30, 2023, from $32.2 million at December 31, 2022. The increase in stockholders equity is primarily attributable to $3.3 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 $1.8 million for six months ended June 30, 2023, as compared to December 31, 2022.

Nonperforming assets consisted of $839,000 nonaccrual loans at June 30, 2023, representing less than 0.15% of the Company’s total assets. There was no foreclosed real estate owned at June 30, 2023. The allowance for credit losses at June 30, 2023 totaled $3.5 million, or 0.80% of total loans.

Commenting on the second quarter results, Earl W. Worley, Jr., President and CEO of the Company, “KS Bank continues to have solid loan demand as our outstanding loan balances have increased 5.6% for the first six months of 2023. In addition, in that same time period net deposits increased 10.6%. We are extremely appreciative of the new personal and business customers that have become our clients over the last six months. The demand for our brand of personal community banking continues to increase due to continued changes in the banking landscape that is affecting customer service in our region.”

Continuing, Worley stated, “As expected, we are experiencing some margin compression with interest rates continuing to rise. Excluding the one time gain of $230,000 on sale of real estate in June 2022 , year-over-year earnings through the second quarter are flat. Given the volatility of rates over the last six months, we are pleased with this result. Our team continues to make adjustments as warranted on both loan and deposit rates as the Federal Reserve continues its quest to tame inflation. The bank’s non-performing loans and past dues remain at historic lows. In spite of the interest rate headwinds, our market area continues to grow and provide opportunities for the bank’s continued growth.”

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 July 31, 2023 with payment to be made on August 10, 2023. 

KS Bank continues to be well capitalized according to regulatory standards with a Community Bank Leverage Ratio of 9.68%, 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.


  
KS Bancorp, Inc. and Subsidiary 
Consolidated Statements of Financial Condition 
      
      
  June 30, 2023 December 31, 
  (unaudited) 2022* 
      
  (Dollars in thousands) 
 ASSETS    
      
 Cash and due from banks:    
 Interest-earning$27,469  $4,558  
 Noninterest-earning 3,308   3,162  
 Time Deposit 100   5,100  
 Investment securities available for sale, at fair value 97,849   98,576  
 Federal Home Loan Bank stock, at cost 299   1,021  
 Loans 440,782   418,809  
 Less allowance for credit losses (3,530)  (5,069) 
 Net loans 437,252   413,740  
      
 Accrued interest receivable 2,039   2,093  
 Foreclosed assets, net -   -  
 Property and equipment, net 10,147   9,347  
 Other assets 8,371   8,753  
      
 Total assets$586,834  $546,350  
      
 LIABILITIES AND STOCKHOLDERS' EQUITY    
      
 Liabilities    
 Deposits$532,793  $481,565  
 Short-term borrowings$-  $17,028  
 Long-term borrowings 11,248   11,248  
 Accrued interest payable 297   117  
 Accrued expenses and other liabilities 4,663   4,156  
      
 Total liabilities 549,001   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 June 30, 2023 and December 31, 2022, respectively 1,359   1,359  
 Retained earnings, substantially restricted 45,282   41,453  
 Accumulated other comprehensive (loss) (8,808)  (10,576) 
      
 Total stockholders' equity 37,833   32,236  
      
 Total liabilities and stockholders' equity$586,834  $546,350  
      
 * 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, 
   2023  2022   2023  2022 
  (In thousands, except per share data)    
Interest and dividend income:      
 Loans$6,174 $4,327  $12,038 $8,457 
 Investment securities      
 Taxable 479  445   961  767 
 Tax-exempt 204  188   409  362 
 Dividends 3  (16)  10  5 
 Interest-bearing deposits 326  133   543  177 
 Total interest and dividend income 7,186  5,077  $13,961  9,768 
        
Interest expense:      
 Deposits 1,944  211   3,318  430 
 Borrowings 175  86   378  324 
 Total interest expense 2,119  297   3,696  754 
        
 Net interest income 5,067  4,780   10,265  9,014 
        
Provision for credit losses 110  -   110  - 
        
 Net interest income after      
 provision for credit losses 4,957  4,780   10,155  9,014 
        
Noninterest income:      
 Service charges on deposit accounts 345  315   655  608 
 Fees from presold mortgages 6  8   9  12 
 Other income 478  629   903  1,134 
 Total noninterest income 829  952   1,567  1,754 
        
Noninterest expenses:      
 Compensation and benefits 2,358  2,066   4,722  4,109 
 Occupancy and equipment 504  545   1,038  1,029 
 Data processing & outside service fees 208  203   413  408 
 Advertising 67  32   115  50 
 Other 671  613   1,277  1,179 
 Total noninterest expenses 3,808  3,459   7,565  6,775 
        
 Income before income taxes 1,978  2,273   4,157  3,993 
        
Income tax 419  478   879  831 
        
 Net income$1,559 $1,795  $3,278 $3,162 
        
 Basic and Diluted earnings per share$1.41 $1.62  $2.96 $2.85 
        


Contact: Earl W. Worley, Jr.  Regina J Smith
President and Chief Executive Officer  Chief Financial Officer
(919) 938-3101(919) 938-3101

KS BANCORP INC

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Banks - Regional
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Smithfield