KS Bancorp, Inc. (the “Company”) (OTCBB: KSBI), parent company
of KS Bank, Inc. (the “Bank”), announced second quarter financial
results for the 2010 fiscal year.
The Company reported unaudited net income of $583,000, or $.45
per diluted share, before adjusting for the effect of preferred
stock dividends and accretion of discount on preferred stock for
the six months ended June 30, 2010, compared to a net income of
$282,000, or $.21 per diluted share, for the same period in 2009.
After adjusting for $126,000 in dividends and accretion of discount
on preferred stock, the net income available to common stockholders
for the current period was $457,000, or $0.35 per diluted share.
Additionally, the Company also announced that its Board of
Directors voted not to declare a dividend on its common stock for
the second quarter of 2010.
For the six months ended June 30, 2010, net interest income
increased 23.0% to $5.4 million compared to $4.4 million for the
period ended June 30, 2009. The increase is primarily the result of
the increase in net interest margin from 2.91% in the second
quarter of 2009, compared to 3.38% in the second quarter of 2010.
Non-interest income decreased from $1.1 million for the six month
period ending June 30, 2009 to $874,000 for the same period ended
June 30, 2010. The decrease is primarily the result of a decrease
in fees from presold mortgages; as well as a recognized gain in
2009 of $104,000 on sale of investments. For the six months ended
June 30, 2010, non-interest expenses increased $342,000 to $5.2
million, compared to $4.9 million for the same period ending June
30, 2009. The increase in noninterest expenses is primarily
attributable to the ongoing expenses on foreclosed properties.
The Company’s unaudited consolidated total assets decreased $5.2
million to $343.6 million as of June 30, 2010, as compared to
$348.8 million at December 31, 2009. Net loan balances have
decreased $2.7 million from $227.1 million at December 31, 2009,
compared to $224.4 million at June 30, 2010. The Company’s
investment securities decreased $8.0 million during the second
quarter 2010 from $87.2 million at December 31, 2009 to $79.2
million at June 30, 2010. Total deposits increased $2.3 million to
$261.5 million at June 30, 2010, compared to $259.2 at December 31,
2009. This increase represents a $10.5 million increase in NOW,
savings and money market accounts, while decreasing time deposits
by $8.2 million. Total borrowings reduced 13.5% from $65.7 million
at December 31, 2009 to $56.8 million. Total stockholders’ equity
increased 4.70% from $22.4 million at December 31, 2009, to $23.4
million at June 30, 2010. The increase in stockholders’ equity is
the result of $583,000 in net income and a $577,000 increase in
accumulated other comprehensive income.
Nonperforming assets, which includes nonaccrual loans and
foreclosed assets, have decreased $1.3 million from $15.3 million
at December 31, 2009 to $14.0 million at June 30, 2010. The
nonperforming assets consist of $9.5 million in foreclosure assets
and $4.5 million in nonaccrual loans. For the six months ended June
30, 2010, the Company recorded $678,000 expense to the provision
for loan losses compared to $544,000 for the six months ended June
30, 2009. Net charge offs for the year are $407,000. The allowance
for loan losses at June 30, 2010 totaled $4.2 million, or 1.84% of
all outstanding loans.
Commenting on the second quarter 2010 results, Harold Keen,
President and CEO, stated,
“I am pleased to report an improvement in net income for the
second quarter of 2010 compared to the second quarter 2009.
Maintaining existing relationships, developing new relationships
and reducing other real estate owned portfolio while maintaining
more than adequate levels of capital and liquidity are our primary
focuses. These efforts will strengthen our financial position as
the economy continues to recover. KS Bank continues to be
well-capitalized according to regulatory standards with total risk
based capital of 14.65%, tier 1 risk- based capital of 13.39% and a
leverage ratio of 8.95%. The minimum levels for each of these
ratios are 10%, 6%, and 5% 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 and offers a variety of financial products and services
including a securities brokerage service through an affiliation
with a registered broker/dealer. There are nine full service
branches located in Kenly, Selma, Clayton, Garner, Goldsboro,
Wilson, Wendell, Smithfield, and Four Oaks, North Carolina. 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, 2010
December 31,
(unaudited) 2009*
(Dollars in thousands)
ASSETS Cash and due from
banks: Interest-earning $ 8,069 $ 3,017 Noninterest-earning 1,311
1,325 Time Deposit 100 100 Investment securities available for
sale, at fair value 79,190 87,272 Federal Home Loan Bank stock, at
cost 3,334 3,019 Presold mortgages in process of settlement 793 -
Loans 228,614 231,089 Less Allowance for loan losses
(4,214 ) (3,942
) Net loans 224,400 227,147 Accrued interest
receivable 1,697 1,825 Foreclosed assets, net 9,584 9,427 Property
and equipment, net 9,230 9,237 Other assets
5,893 6,459
Total assets
$ 343,601
$ 348,828 LIABILITIES
AND STOCKHOLDERS' EQUITY Liabilities Deposits $ 261,504
$ 259,169 Short-term borrowings 5,556 11,658 Long-term borrowings
51,248 54,048 Accrued interest payable 376 448 Accounts payable and
accrued expenses
1,515
1,154 Total liabilities
320,199 326,477
Stockholder's Equity:
Non-cumulative perpetual preferred
stock (Series A), no par value
4,000 shares authorized, issued
and outstanding
$ 3,800 $ 3,780
Non-cumulative perpetual preferred
stock (Series B), no par value
200 shares authorized, issued and
outstanding
229 232
Common stock, no par value,
authorized 20,000,000 shares;
1,309,501 shares issued and
outstanding in 2010 and 2009
1,607 1,607 Retained earnings, substantially restricted 17,222
16,765 Accumulated other comprehensive income (loss)
544 (33 )
Total stockholders' equity
23,402
22,351 Total liabilities and
stockholders' equity
$ 343,601
$ 348,828 * 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,
2010 2009
2010 2009 ( In thousands, except per
share data)
Interest and dividend income: Loans $ 3,568 $
3,564 $ 7,075 $ 7,345 Investment securties Taxable 406 281 826 578
Tax-exempt 469 363 961 721 Dividends 3 - 5 - Interest-bearing
deposits
1 2
2 2 Total
interest and dividend income
4,447
4,210 8,869
8,646 Interest expense:
Deposits 1,138 1,443 2,369 3,080 Borrowings
542
575 1,098
1,176 Total interest expense
1,680 2,018
3,467 4,256
Net interest income 2,767 2,192 5,402 4,390 Provision
for loan losses
404
114 678
544 Net interest income after provision
for loan losses
2,363
2,078 4,724
3,846 Noninterest income: Service
charges on deposit accounts 346 329 645 642 Fees from presold
mortgages 63 153 101 287 Gain (Loss) on sale of investments (5 ) -
- 104 Other income
69
50 128
101 Total noninterest income
473 532
874 1,134
Noninterest expenses: Compensation and benefits 1,441 1,422
2,933 2,833 Occupancy and equipment 256 257 524 309 Data processing
& outside service fees 218 209 434 626 Advertising 11 16 23 31
Net foreclosed real estate 171 (21 ) 235 6 Other
542 616
1,072 1,074 Total
noninterest expenses
2,639
2,499 5,221
4,879 Income before income taxes 197 111
377 101 Income tax benefit
(148
) (71 )
(206 ) (181
) Net income
345
182 583
282 Dividends on preferred stock
(54 ) - (109 ) - Accretion of discount on preferred stock, net
(9 ) -
(17 ) -
Income available to common stockholders
$
282 $ 182
$ 457 $
282 Basic and Diluted earnings (loss)
per share
$ 0.22 $
0.14 $ 0.35
$ 0.21
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