KSBI KS Bancorp Inc (PK)

KS Bancorp, Inc. (OTCBB: KSBI), parent company of KS Bank, Inc., reports today financial results for the third quarter of 2006. Improved earnings trends continued in the third quarter of 2006, when compared to the same period of 2005. Consolidated earnings increased 38.8% to $587,000, or $0.45 per diluted share for the quarter ended September 30, 2006, compared to earnings of $423,000, or $0.32 per diluted share, for the same period in 2005. For the nine months ended September 30, 2006, net income totaled $1,631,000, an increase of $395,000, or 32.0% over the $1,236,000 for the same period ended September 30, 2005. The increase in net income is attributable to a 9.5% increase in net interest income, as well as a 39.0% increase in non-interest income. For the nine months ended September 30, 2006, net income per common share was $1.25, a 40.5% increase from $0.89 for the same period of 2005. The Company�s consolidated total assets increased $26.6 million during the nine months ended September 30, 2006 from $261.4 million at December 31, 2005 to $288.0 million at September 30, 2006. This growth in the Company�s total assets resulted primarily from an increase of $20.8 million in net loans from $193.4 million at December 31, 2005 to $214.2 September 30, 2006. Funding for this growth was provided primarily from increases in demand deposits which grew 31.9% from December 31, 2005 to September 30, 2006. Total deposits increased to $217.5 million at September 30, 2006 representing a $22.7 million, or 11.6%, increase from December 31, 2005. Total stockholders� equity increased 8.07% from $15.6 million at December 31, 2005 to $16.9 million at September 30, 2006. The increase in primarily due to the increase in earnings less dividends paid. During September 2006, KS Bancorp, Inc. issued $3.1 million of Trust Preferred Securities through its newly formed subsidiary, KS Statutory Trust II. The net proceeds increased the regulatory capital of KS Bank and will provide for continuous growth of the bank. Under the terms of the transaction, the Trust Preferred Securities have a maturity of 30 years and are redeemable after five years. The securities require quarterly interest payments at a variable rate equal to the three-month LIBOR plus 1.70%. In addition to the earnings report issued today, KS Bancorp, Inc. announced the payment of a quarterly cash dividend of $0.13 per share for stockholders of record on October 23, 2006, with payment to be made on November 3, 2006. 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 offering a broad range of banking products and services through its operation of seven full service branches located in Kenly, Selma, Clayton, Garner, Goldsboro, Wilson, and Smithfield, North Carolina. 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 SubsidiaryConsolidated Statements of Financial Condition � � September 30, 2006(Unaudited) December 31,2005/a (Dollars in thousands) ASSETS Cash and due from banks: Interest-earning $ 10,112� $ 8,436� Noninterest-earning 1,189� 1,333� Time Deposit 100� 100� Investment securities: Available for sale 47,279� 43,904� Federal Home Loan Bank stock, at cost 2,404� 2,512� Presold mortgages in process of settlement 1,681� 885� � Loans 216,589� 195,461� Less Allowance for loan losses (2,393) (2,085) Net loans 214,196� 193,376� � Accrued interest receivable 1,501� 1,354� Foreclosed assets, net 468� 568� Property and equipment, net 7,185� 7,381� Other assets 1,886� 1,589� � TOTAL ASSETS $ 288,001� $ 261,438� LIABILITIES AND STOCKHOLDERS' EQUITY � Liabilities: Deposits $ 217,454� $ 194,778� Short-term borrowings 14,010� 5,010� Long-term borrowings 38,048� 44,955� Accrued interest payable 509� 466� Accounts payable and accrued expenses 1,107� 616� � TOTAL LIABILITIES 271,128� 245,825� � Stockholders' Equity: Preferred stock, no par value, 5,000,000 shares authorized;no shares issued and outstanding -� -� Common stock, no par value, authorized 20,000,000 shares; 1,309,501 shares issued and outstanding in 2006 and2005 � 1,607� 1,607� Retained earnings, substantially restricted 15,463� 14,342� Accumulated other comprehensive loss (197) (336) � TOTAL STOCKHOLDERS' EQUITY 16,873� 15,613� � TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY $ 288,001� $ 261,438� � /a:�Derived from audited financial statements KS Bancorp, Inc. and SubsidiaryConsolidated Statements of Operations (Unaudited) � � Three Months Ended Nine Months Ended September 30, September 30, 2006� 2005� 2006� 2005� (In thousands, except per share data) � INTEREST INCOME Loans $ 4,332� $ 3,480� $ 12,065� $ 9,755� Investment securities: Taxable 242� 193� 726� 580� Tax-exempt 239� 230� 712� 650� Dividends 37� 24� 106� 79� Interest-earning deposits 49� 45� 130� 109� � TOTAL INTEREST INCOME 4,899� 3,972� 13,739� 11,173� � INTEREST EXPENSE Deposits 1,931� 1,371� 5,204� 3,351� Borrowings 534� 411� 1,503� 1,201� � TOTAL INTEREST EXPENSE 2,465� 1,782� 6,707� 4,752� � NET INTEREST INCOME 2,434� 2,190� 7,032� 6,421� � PROVISION FOR LOAN LOSSES 150� 220� 450� 585� � NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 2,284� 1,970� 6,582� 5,836� � NON-INTEREST INCOME Service charges on deposit accounts 318� 281� 905� 751� Fees from presold mortgages 104� 62� 265� 150� Other income 83� 16� 177� 68� TOTAL NON-INTEREST INCOME 505� 359� 1,347� 969� � NON-INTEREST EXPENSE Compensation and benefits 1,163� 1,102� 3,489� 3,203� Occupancy and equipment 210� 196� 609� 573� Data processing and outside service fees 190� 171� 559� 504� Advertising 60� 37� 141� 95� Net foreclosed real estate 5� 2� 28� 41� Gain (loss) on sale of investments 8� -� 11� -� Other 308� 260� 828� 715� � TOTAL NON-INTEREST EXPENSE 1,944� 1,768� 5,665� 5,131� � INCOME BEFORE INCOME TAXES 845� 561� 2,264� 1,674� � INCOME TAXES 258� 138� 633� 438� � NET INCOME $ 587� $ 423� $ 1,631� $ 1,236� � NET INCOME PER COMMON SHARE Basic $ .45� $ .32� $ 1.25� $ .89� Diluted $ .45� $ .32� $ 1.25� $ .89� � DIVIDENDS PER COMMON SHARE $ .13� $ .13� $ .39� $ .39� KS Bancorp, Inc. (OTCBB: KSBI), parent company of KS Bank, Inc., reports today financial results for the third quarter of 2006. Improved earnings trends continued in the third quarter of 2006, when compared to the same period of 2005. Consolidated earnings increased 38.8% to $587,000, or $0.45 per diluted share for the quarter ended September 30, 2006, compared to earnings of $423,000, or $0.32 per diluted share, for the same period in 2005. For the nine months ended September 30, 2006, net income totaled $1,631,000, an increase of $395,000, or 32.0% over the $1,236,000 for the same period ended September 30, 2005. The increase in net income is attributable to a 9.5% increase in net interest income, as well as a 39.0% increase in non-interest income. For the nine months ended September 30, 2006, net income per common share was $1.25, a 40.5% increase from $0.89 for the same period of 2005. The Company's consolidated total assets increased $26.6 million during the nine months ended September 30, 2006 from $261.4 million at December 31, 2005 to $288.0 million at September 30, 2006. This growth in the Company's total assets resulted primarily from an increase of $20.8 million in net loans from $193.4 million at December 31, 2005 to $214.2 September 30, 2006. Funding for this growth was provided primarily from increases in demand deposits which grew 31.9% from December 31, 2005 to September 30, 2006. Total deposits increased to $217.5 million at September 30, 2006 representing a $22.7 million, or 11.6%, increase from December 31, 2005. Total stockholders' equity increased 8.07% from $15.6 million at December 31, 2005 to $16.9 million at September 30, 2006. The increase in primarily due to the increase in earnings less dividends paid. During September 2006, KS Bancorp, Inc. issued $3.1 million of Trust Preferred Securities through its newly formed subsidiary, KS Statutory Trust II. The net proceeds increased the regulatory capital of KS Bank and will provide for continuous growth of the bank. Under the terms of the transaction, the Trust Preferred Securities have a maturity of 30 years and are redeemable after five years. The securities require quarterly interest payments at a variable rate equal to the three-month LIBOR plus 1.70%. In addition to the earnings report issued today, KS Bancorp, Inc. announced the payment of a quarterly cash dividend of $0.13 per share for stockholders of record on October 23, 2006, with payment to be made on November 3, 2006. 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 offering a broad range of banking products and services through its operation of seven full service branches located in Kenly, Selma, Clayton, Garner, Goldsboro, Wilson, and Smithfield, North Carolina. 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. -0- *T KS Bancorp, Inc. and Subsidiary Consolidated Statements of Financial Condition September 30, December 31, 2006 2005/a (Unaudited) (Dollars in thousands) ASSETS Cash and due from banks: Interest-earning $ 10,112 $ 8,436 Noninterest-earning 1,189 1,333 Time Deposit 100 100 Investment securities: Available for sale 47,279 43,904 Federal Home Loan Bank stock, at cost 2,404 2,512 Presold mortgages in process of settlement 1,681 885 Loans 216,589 195,461 Less Allowance for loan losses (2,393) (2,085) Net loans 214,196 193,376 Accrued interest receivable 1,501 1,354 Foreclosed assets, net 468 568 Property and equipment, net 7,185 7,381 Other assets 1,886 1,589 TOTAL ASSETS $288,001 $ 261,438 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits $217,454 $ 194,778 Short-term borrowings 14,010 5,010 Long-term borrowings 38,048 44,955 Accrued interest payable 509 466 Accounts payable and accrued expenses 1,107 616 TOTAL LIABILITIES 271,128 245,825 Stockholders' Equity: Preferred stock, no par value, 5,000,000 shares authorized; no shares issued and outstanding - - Common stock, no par value, authorized 20,000,000 shares; 1,309,501 shares issued and outstanding in 2006 and 2005 1,607 1,607 Retained earnings, substantially restricted 15,463 14,342 Accumulated other comprehensive loss (197) (336) TOTAL STOCKHOLDERS' EQUITY 16,873 15,613 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $288,001 $ 261,438 /a: Derived from audited financial statements *T -0- *T KS Bancorp, Inc. and Subsidiary Consolidated Statements of Operations (Unaudited) Three Months Nine Months Ended Ended September 30, September 30, 2006 2005 2006 2005 (In thousands, except per share data) INTEREST INCOME Loans $4,332 $3,480 $ 12,065 $ 9,755 Investment securities: Taxable 242 193 726 580 Tax-exempt 239 230 712 650 Dividends 37 24 106 79 Interest-earning deposits 49 45 130 109 TOTAL INTEREST INCOME 4,899 3,972 13,739 11,173 INTEREST EXPENSE Deposits 1,931 1,371 5,204 3,351 Borrowings 534 411 1,503 1,201 TOTAL INTEREST EXPENSE 2,465 1,782 6,707 4,752 NET INTEREST INCOME 2,434 2,190 7,032 6,421 PROVISION FOR LOAN LOSSES 150 220 450 585 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 2,284 1,970 6,582 5,836 NON-INTEREST INCOME Service charges on deposit accounts 318 281 905 751 Fees from presold mortgages 104 62 265 150 Other income 83 16 177 68 TOTAL NON-INTEREST INCOME 505 359 1,347 969 NON-INTEREST EXPENSE Compensation and benefits 1,163 1,102 3,489 3,203 Occupancy and equipment 210 196 609 573 Data processing and outside service fees 190 171 559 504 Advertising 60 37 141 95 Net foreclosed real estate 5 2 28 41 Gain (loss) on sale of investments 8 - 11 - Other 308 260 828 715 TOTAL NON-INTEREST EXPENSE 1,944 1,768 5,665 5,131 INCOME BEFORE INCOME TAXES 845 561 2,264 1,674 INCOME TAXES 258 138 633 438 NET INCOME $ 587 $ 423 $ 1,631 $ 1,236 NET INCOME PER COMMON SHARE Basic $ .45 $ .32 $ 1.25 $ .89 Diluted $ .45 $ .32 $ 1.25 $ .89 DIVIDENDS PER COMMON SHARE $ .13 $ .13 $ .39 $ .39 *T