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

SMITHFIELD, N.C., Oct. 23, 2020 (GLOBE NEWSWIRE) -- KS Bancorp, Inc. (the “Company”) (OTCBB: KSBI), parent company of KS Bank, Inc. (the “Bank”), announced unaudited results for the third quarter of 2020.

The Company reported net income of $1,145,000 or $1.03 per diluted share, an increase of 17.3% for the three months ended September 30, 2020, compared to net income of $976,000 or $0.88 per diluted share, for the three months ended September 30, 2019. For the nine months ended September 30, 2020, the Company reported net income of $3.0 million, or $2.74 per diluted share compared to $2.7 million, or $2.44 per diluted share for the nine months ended September 30, 2019.

Net interest income for the three months ended September 30, 2020, was $3.8 million as compared to $3.3 million for the comparable period in 2019. Noninterest income for the three months ended September 30, 2020 was $745,000, compared to $810,000 for the comparable period ended September 30, 2019. Noninterest expense was $3.0 million for the three months ended September 30, 2020, as compared $2.9 million in the comparable period in 2019. The Company recorded a provision for loan losses of $45,000 during the third quarter 2020.

For the nine months ended September 30, 2020, net interest income was $10.9 million, compared to $9.7 million for the nine months ended September 30, 2019. Noninterest income was $2.1 million for the nine months ended September 30, 2020, compared to $2.4 million for the nine months ended September 30, 2019. Noninterest expense was $9.0 million for the nine months ended September 30, 2020, compared to $8.7 million for the nine months ended September 30, 2019.

The Company’s unaudited consolidated total assets increased $74.6 million, to $478.3 million at September 30, 2020, compared to $403.7 million at December 31, 2019. Net loan balances increased by $53.9 million, or 17.5%, to $361.8 million at September 30, 2020, compared to $307.9 million at December 31, 2019. The increase in loans was primarily due to market demand and the Bank provided $29.3 million of payroll protection plan loans (PPP) in the second quarter, 2020.   The Company’s investment securities totaled $63.7 million at September 30, 2020, compared to $67.1 million at December 31, 2019. Total deposits increased $67.4 million to $394.3 million at September 30, 2020, compared to $326.9 million at December 31, 2019. For the nine months ended September 30, 2020, there was a $65.8 million increase in core deposits and a $2.4 million increase in brokered funding. Total stockholders’ equity increased $3.9 million or 14.41% from $26.8 million at December 31, 2019 to $30.7 million at September 30, 2020, as a result of accumulated other comprehensive gains and increase in net income.
        
Nonperforming assets consisted of $1.2 million nonaccrual loans at September 30, 2020, representing less than 0.50% of the Company’s total assets. The Company had no foreclosed real estate owned at September 30, 2020. The allowance for loan losses at September 30, 2020 totaled $4.3 million, or 1.16% of total loans, including the PPP loans originated. Excluding the PPP from the total loans, the allowance for loan losses at September 30, 2020 was 1.26% of loans.

Commenting on the third quarter results, Harold Keen, President and CEO of the Company and the Bank, stated, “With all the stress and uncertainty experienced during the third quarter of 2020 for each of us personally and as a Company, the financial results bring some reassurance that KS Bancorp’s growth and returns remain on track for a sound year.  Our team members have excelled at providing quality service to individuals and businesses challenged by COVID-19, while balancing all the changes we have experienced at home, especially those with young school aged children.  We continue to focus on our customers and safety during these unsettled times.” 

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 October 30, 2020, with payment to be made on November 9, 2020.  

KS Bank continues to be well-capitalized according to regulatory standards with total risk-based capital of 14.55%, tier 1 risk- based capital of 13.30%, common equity tier 1 risk- based capital of 13.30%, and a tier 1 leverage ratio of 8.89% at September 30, 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 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. 

Contact: Harold T. Keen	Regina J Smith
President and Chief Executive Officer	Chief Financial Officer
[phone]	[phone]

KS Bancorp, Inc. and Subsidiary
Consolidated Statements of Financial Condition
		September 30, 2020				December 31,
		(unaudited)				2019*
		(Dollars in thousands)
	ASSETS
	Cash and due from banks:
	Interest-earning	$	2,728			$	3,306
	Noninterest-earning		32,877				9,317
	Time Deposit		100				100
	Investment securities available for sale, at fair value		63,712				67,150
	Federal Home Loan Bank stock, at cost		1,851				1,763
	Presold mortgage in process of settlement		359				-
	Loans		366,006				311,911
	Less allowance for loan losses		(4,252	)			(4,057	)
	Net loans		361,754				307,854
	Accrued interest receivable		2,086				1,145
	Property and equipment, net		8,706				8,032
	Other assets		4,169				4,990
	Total assets	$	478,342			$	403,657
	LIABILITIES AND STOCKHOLDERS' EQUITY
	Liabilities
	Deposits	$	394,314			$	326,918
	Long-term borrowings		48,248				46,248
	Accrued interest payable		251				396
	Accrued expenses and other liabilities		4,837				3,268
	Total liabilities		447,650				376,830
	Stockholder's Equity:
	Common stock, no par value, authorized 20,000,000 shares;
	1,107,776 shares issued and outstanding at September 30, 2020 and 1,107,776 shares issued and outstanding at December 31, 2019		1,359				1,359
	Retained earnings, substantially restricted		27,998				25,291
	Accumulated other comprehensive income		1,335				177
	Total stockholders' equity		30,692				26,827
	Total liabilities and stockholders' equity	$	478,342			$	403,657
	* Derived from audited financial statements

KS Bancorp, Inc and Subsidiary
Consolidated Statements of Income (Unaudited)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2020				2019				2020				2019
		(In thousands, except per share data)
Interest and dividend income:
	Loans	$	4,280			$	4,024			$	12,658			$	11,863
	Investment securities
	Taxable		269				334				899				1,053
	Tax-exempt		57				34				138				88
	Dividends		21				24				66				75
	Interest-bearing deposits		4				36				18				145
	Total interest and dividend income		4,631				4,452				13,779				13,224
Interest expense:
	Deposits		521				766				1,858				2,293
	Borrowings		314				399				1,026				1,272
	Total interest expense		835				1,165				2,884				3,565
	Net interest income		3,796				3,287				10,895				9,659
Provision for loan losses			45				-				160				25
	Net interest income after
	provision for loan losses		3,751				3,287				10,735				9,634
Noninterest income:
	Service charges on deposit accounts		352				402				1,020				1,107
	Fees from presold mortgages		51				67				85				160
	Gain on Sale of Investments		4				-				4
	Other income		338				341				1,025				1,104
	Total noninterest income		745				810				2,134				2,371
Noninterest expenses:
	Compensation and benefits		1,838				1,789				5,433				5,279
	Occupancy and equipment		347				338				1,084				964
	Data processing & outside service fees		246				217				700				665
	Advertising		17				39				60				113
	Other		587				473				1,722				1,545
	Total noninterest expenses		3,035				2,856				8,999				8,566
	Income before income taxes		1,461				1,241				3,870				3,439
Income tax			316				265				832				736
	Net income	$	1,145			$	976			$	3,038			$	2,703
	Basic and Diluted earnings per share	$	1.03			$	0.88			$	2.74			$	2.44