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

SMITHFIELD, N.C., April 24, 2020 (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 2020.

The Company reported net income of $922,000, or $0.83 per diluted share, an increase of 12% for the three months ended March 31, 2020, compared to net income of $820,000 or.$0.74 per diluted share, for the three months ended March 31, 2019.

Net interest income for the three months ended  March 31, 2020, was $3.5 million as as compared to $3.1 million for the comparable period in 2019. The increase was primarily due  to improvement in net interest margin.  Noninterest income for the three months ended March 31, 2020 was $708,000, compared to $701,000 for the comparable period ended March 31, 2019. Noninterest expense was $3.0 million for the three months ended March 31, 2020, as compared $2.8 million in the comparable period in 2019. The company recorded a provision for loan losses of $45,000 during the first quarter 2020.

The Company’s unaudited consolidated total assets increased $22.5 million, to $426.2 million at March 31, 2020, compared to $403.7 million at December 31, 2019. Net loan balances increased by $24.5 million, or 8.0%, to $332.4 million at March 31, 2020, compared to $307.9 million at December 31, 2019. The increase in loans was primarily due to market demand and the addition of a new key lender in the fourth quarter of 2019.  The Company’s investment securities totaled $65.9 million at March 31, 2020, compared to $67.1 million at December 31, 2019.  Total deposits increased $18.9 million, to $345.8 million at March 31, 2020, compared to $326.9 million at December 31, 2019. For the three months ended March 31, 2020, there was a $14.2 million increase in core deposits and a $7.2 million increase in brokered funding. Total stockholders’ equity increased $1.5 million or 5.7% from $26.8 million at December 31, 2019 to $28.3 million at March 31, 2020, as a result of accumulated other comprehensive gains and increase in net income.
                        
Nonperforming assets consisted of $1.2 million nonaccrual loans at March 31, 2020, representing less than .50% of the Company’s total assets. The Company had no foreclosed real estate owned at March 31, 2020. The allowance for loan losses at March  31, 2020 totaled $4.1 million, or 1.22% of  loans. 

Commenting on the first quarter results, Harold Keen, President and CEO of the Company and the Bank, stated, “The first quarter of 2020  was one of the best quarters on record for the Company in terms of loan and deposit growth. The Bank’s market area continues to have strong demand for new housing and commercial business growth.  Our Team has done an excellent job of capturing new clients in both loans and deposits.    COVID-19 has brought about rapid change for many of our customers; however, our team has expeditiously responded to assist them.  The Bank is participating in  the  Payroll Protection Program (PPP) and many of our clients have been able to take advantage of the PPP program. We are hopeful that as the COVID-19 crisis peaks that our local, state, and national economies can rebound quickly.”

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 May 1, 2020, with payment to be made on May 11, 2020. 

KS Bank continues to be well-capitalized according to regulatory standards with total risk-based capital of 13.10%, tier 1 risk- based capital of 11.89%, common equity tier 1 risk- based capital of 11.89%, and a tier 1 leverage ratio of 9.69% at March 31, 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 an office in Asheboro, NC and maintains 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.            

KS Bancorp, Inc. and Subsidiary
Consolidated Statements of Financial Condition
		March 31, 2020				December 31,
		(unaudited)				2019*
		(Dollars in thousands)
	ASSETS
	Cash and due from banks:
	Interest-earning	$	3,031			$	3,306
	Noninterest-earning		8,969				9,317
	Time Deposit		100				100
	Investment securities available for sale, at fair value		65,856				67,150
	Federal Home Loan Bank stock, at cost		1,851				1,763
	Loans		336,505				311,911
	Less allowance for loan losses		(4,102	)			(4,057	)
	Net loans		332,403				307,854
	Accrued interest receivable		1,358				1,145
	Property and equipment, net		8,087				8,032
	Other assets		4,557				4,990
	Total assets	$	426,212			$	403,657
	LIABILITIES AND STOCKHOLDERS' EQUITY
	Liabilities
	Deposits	$	345,816			$	326,918
	Long-term borrowings		48,248				46,248
	Accrued interest payable		351				396
	Accrued expenses and other liabilities		3,445				3,268
	Total liabilities		397,860				376,830
	Stockholder's Equity:
	Common stock, no par value, authorized 20,000,000 shares;
	1,107,776 shares issued and outstanding at March 31, 2019 and 1,107,776 shares issued and outstanding at December 31, 2018		1,359				1,359
	Retained earnings, substantially restricted		26,103				25,291
	Accumulated other comprehensive loss		890				177
	Total stockholders' equity		28,352				26,827
	Total liabilities and stockholders' equity	$	426,212			$	403,657
	*  Derived from audited financial statements

	KS Bancorp, Inc and Subsidiary
	Consolidated Statements of Income (Unaudited)
			Three Months Ended
			March
			2020			2019
			(In thousands, except per share data)
	Interest and dividend income:
		Loans	$	4,170		$	3,861
		Investment securities
		Taxable		331			366
		Tax-exempt		40			22
		Dividends		24			27
		Interest-bearing deposits		11			73
		Total interest and dividend income		4,576			4,349
	Interest expense:
		Deposits		702			764
		Borrowings		391			449
		Total interest expense		1,093			1,213
		Net interest income		3,483			3,136
	Provision for loan losses			45			-
		Net interest income after
		provision for loan losses		3,438			3,136
	Noninterest income:
		Service charges on deposit accounts		352			335
		Fees from presold mortgages		3			52
		Other income		353			314
		Total noninterest income		708			701
	Noninterest expenses:
		Compensation and benefits		1,810			1,704
		Occupancy and equipment		363			309
		Data processing & outside service fees		231			223
		Advertising		29			39
		Other		538			523
		Total noninterest expenses		2,971			2,798
		Income before income taxes		1,175			1,039
	Income tax			253			219
		Net income	$	922		$	820
		Basic and Diluted earnings per share	$	0.83		$	0.74

Contact:
Harold T. Keen
President and Chief Executive Officer
[phone]

Regina J Smith
Chief Financial Officer
[phone]