KS Bancorp, Inc. (the “Company”) (OTCBB: KSBI), parent company
of KS Bank, Inc. (the “Bank”), announced unaudited net income
available to common shareholders of $224,000, or $.17 per diluted
shared, for the three months ended September 30, 2010, compared to
a net loss of ($142,000), or ($.11) per diluted share, for the
three months ended September 30, 2009.
The Company reported net income of $871,000, or $.67 per diluted
share, before adjusting for the effect of preferred stock dividends
and accretion of discount on preferred stock for the nine months
ended September 30, 2010, compared to a net income of $168,000, or
$.13 per diluted share, for the same period in 2009. After
adjusting for $190,000 and $28,000 in dividends and accretion of
discount on preferred stock for the two respective periods, net
income available to common stockholders was $681,000, or $0.52 per
diluted share at September 30, 2010, compared to $140,000 or $.11
per diluted share at September 30, 2009.
For the nine months ended September 30, 2010, net interest
income increased 19.0% to $7.9 million, compared to $6.7 million
for the period ended September 30, 2009. The increase is primarily
the result of the increase in net interest margin from 2.93% for
the nine months ended September 30, 2009, compared to 3.31% for the
same period of 2010. Non-interest income increased $600,000 from
$1.6 million for the nine month period ending September 30, 2009,
to $2.2 million for the same period ended September 30, 2010. The
increase is primarily the result of a $830,000 gain on sale of
investments during the nine months ending September 30, 2010
compared a $104,000 gain in the same period 2010. For the nine
months ended September 30, 2010, non-interest expenses increased
$814,000 to $8.3 million, compared to $7.5 million for the same
period ending September 30, 2009. The increase in noninterest
expenses is primarily attributable to the ongoing expenses of other
real estate owned.
The Company’s unaudited consolidated total assets decreased $7.9
million to $340.9 million as of September 30, 2010, as compared to
$348.8 million at December 31, 2009. Net loan balances decreased
$5.8 million from $227.1 million at December 31, 2009, compared to
$221.3 million at September 30, 2010. The Company’s investment
securities decreased $1.4 million from $87.2 million at December
31, 2009 to $85.8 million at September 30, 2010. Total deposits
decreased $1.0 million to $258.2 million at September 30, 2010,
compared to $259.2 at December 31, 2009. Even though total deposits
decreased, there is an increase of $14.5 million, or 19.3%, in
checking, savings and money market accounts for the nine months
ended September 30, 2010. Time deposits decreased $15.5 million, or
8.40%, from $184.3 million at December 31, 2009 to $168.8 million
at September 30, 2010. Total borrowings decreased $8.9 million, or
13.6%, from $65.7 million at December 31, 2009 to $56.8 million at
September 30, 2010. Total stockholders’ equity increased 7.0% from
$22.4 million at December 31, 2009 to $23.9 million at September
30, 2010. The increase in stockholders’ equity is the result of
$681,000 in net income and an $857,000 increase in accumulated
other comprehensive income.
Nonperforming assets, which includes nonaccrual loans and other
real estate owned (OREO), have decreased $1.5 million from $15.3
million at December 31, 2009 to $13.8 million at September 30,
2010. The nonperforming assets consist of $9.1 million in other
real estate owned and $4.7 million in nonaccrual loans. For the
nine months ended September 30, 2010, the Company recorded a $1.3
million expense to the provision for loan losses compared to $1.1
million for the nine months ended September 30, 2009. Net charge
offs for the 2010 fiscal year are $1.2 million. The allowance for
loan losses at September 30, 2010 totaled $4.1 million, or 1.80% of
all outstanding loans. In this current economy, we continue to
monitor collateral values in OREO. The result of the OREO
evaluation in the third quarter 2010 was a $524,000 expense to the
other real estate owned expense.
The Company also announced today that its Board of Directors
voted not to declare a dividend for the third quarter of 2010. The
continued suspension of the quarterly dividend is to further the
Company’s efforts to preserve capital during this continuing
economic downturn. The Board of Directors will continue to monitor
business conditions, the Company’s profitability and capital
levels, as well as asset quality in considering whether to resume
cash dividend payments. KS Bank continues to be well-capitalized
according to regulatory standards with total risk based capital of
15.31%, tier 1 risk- based capital of 14.05% and a leverage ratio
of 9.01%. The minimum levels for each of these ratios are 10%, 6%,
and 5%, respectively.
Commenting on the third quarter 2010 results, Harold Keen,
President and CEO, stated, “The current economic pressures on the
real estate markets continues to impact property values and credit
quality; as a result, we continue to adjust our provision for loan
losses accordingly. The entire KS Bank team continues to work with
customers who are experiencing challenges due to the current
economic conditions. In addition, we are staying the course and
actively seeking new customer relationships that are mutually
profitable to the Bank and our customers. The Board of Directors
and management remain focused on implementing strategies to improve
our overall credit quality, preserving capital and building our
core deposits both now and for future years.”
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
September 30, 2010 December 31,
(unaudited)
2009* (Dollars in thousands)
ASSETS
Cash and due from banks: Interest-earning $ 2,382 $ 3,017
Noninterest-earning 1,517 1,325 Time Deposit 100 100 Investment
securities available for sale, at fair value 85,802 87,272 Federal
Home Loan Bank stock, at cost 3,095 3,019 Presold mortgages in
process of settlement 851 - Loans 225,394 231,089 Less
Allowance for loan losses
(4,050 )
(3,942 ) Net loans 221,344 227,147
Accrued interest receivable 1,727 1,825 Foreclosed assets,
net 9,135 9,427 Property and equipment, net 9,221 9,237 Other
assets
5,734 6,459
Total assets
$ 340,908
$ 348,828
LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities
Deposits $ 258,150 $ 259,169 Short-term borrowings 5,551 11,658
Long-term borrowings 51,248 54,048 Accrued interest payable 348 448
Accounts payable and accrued expenses
1,695
1,154 Total liabilities
316,992 326,477
Stockholder's Equity: Non-cumulative perpetual
preferred stock (Series A), no par value 4,000 shares authorized,
issued and outstanding $ 3,811 $ 3,780 Non-cumulative perpetual
preferred stock (Series B), no par value 200 shares authorized,
issued and outstanding 228 232 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 17,446 16,765 Accumulated other
comprehensive income (loss)
824
(33 ) Total stockholders' equity
23,916 22,351
Total liabilities and stockholders' equity
$
340,908 $ 348,828
* 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,
2010 2009
2010 2009
(In thousands, except per share data)
Interest and dividend income: Loans $ 3,398 $ 3,486 $ 10,473
$ 10,831
Investment securities
Taxable 333 315 1,159 893 Tax-exempt 456 405 1,417 1,126 Dividends
4 5 9 5 Interest-bearing deposits
3
3 5
5 Total interest and dividend income
4,194 4,214
13,063 12,860
Interest expense: Deposits 1,106 1,339 3,475 4,419
Borrowings
543 584
1,641 1,760
Total interest expense
1,649
1,923 5,116
6,179 Net interest income 2,545
2,291 7,947 6,681 Provision for loan losses
616 539
1,294 1,083
Net interest income after provision for loan losses
1,929 1,752
6,653 5,598
Noninterest income: Service charges on deposit accounts 344
338 989 980 Fees from presold mortgages 87 86 188 373 Gain (Loss)
on sale of investments 830 - 830 104 Other income
55 45
183 146 Total
noninterest income
1,316
469 2,190
1,603 Noninterest expenses:
Compensation and benefits 1,367 1,381 4,300 4,214 Occupancy and
equipment 263 261 787 779 Data processing & outside service
fees 203 209 637 626 Advertising 14 23 37 54 Net foreclosed real
estate 660 14 895 20 Other
548
695 1,620
1,769 Total noninterest expenses
3,055 2,583
8,276 7,462
Income before income taxes 190 (362 ) 567 (261 ) Income tax
benefit
(98 )
(248 ) (304
) (429 ) Net
income
288 (114
) 871
168 Dividends on preferred stock (55 )
(24 ) (164 ) (24 ) Accretion of discount on preferred stock, net
(9 ) (4
) (26 )
(4 ) Income available to common
stockholders
$ 224 $
(142 ) $ 681
$ 140 Basic and
Diluted earnings (loss) per share
$ 0.17
$ (0.11 )
$ 0.52 $
0.11
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