KS Bancorp, Inc. (the “Company”) (OTCBB: KSBI), parent company
of KS Bank, Inc. (the “Bank”), announced unaudited net income
available to common shareholders of $314,000, or $.24 per diluted
shared, for the six months ended June 30, 2012, compared to a net
income available to common shareholders of $420,000, or $.32 per
diluted share, for the six months ended June 30, 2011.
For the six months ended June 30, 2012, net interest income was
$4.9 million, compared to $5.2 million for the six months ended
June 30, 2011. Non-interest income increased to $1.3 for the period
ended June 30, 2012, compared to $695,000 for the same period ended
June 30, 2011. The increase in noninterest income is primarily
attributable to $444,000 gain on sale of investments and an
$186,000 increase in fees from presold mortgages during the six
months ended June 30, 2012. Non-interest expenses increased
$631,000 to $5.6 million for the six months ended June 30, 2012,
compared to $5.0 million at June 30, 2011. The increase in expenses
is primarily due to the costs associated with foreclosed real
estate.
The Company’s unaudited consolidated total assets decreased $7.5
million to $315.4 million at June 30, 2012, compared to $322.9
million at December 31, 2011. The decrease in the balance sheet is
primarily due to a reduction in Federal Home Bank borrowings and
brokered deposits. Total borrowings decreased $6.5 million from
$50.1 million at December 31, 2011, to $43.6 million at June 30,
2012. During the first six months of 2012, the Company repaid
borrowings from the Federal Home Loan Bank totaling $6.0 million.
Total deposits have deceased $2.0 million to $244.5 million at June
30, 2012, compared to $246.5 at December 31, 2011. The decrease in
deposits is a reflection of a $2.2 million decrease in brokered
deposits. Net loan balances remained constant with a balance of
$195.0 million at June 30, 2012 and at December 31, 2011. The
Company’s investment securities decreased $6.5 million to $84.8
million at June 30, 2012, compared to $91.3 million at December 31,
2011. Total stockholders’ equity increased $579,000 from $24.3
million at December 31, 2011, to $24.9 million at June 30,
2012.
Nonperforming assets, which includes nonaccrual loans and other
real estate owned (OREO), decreased $4.3 million from $19.9 million
at December 31, 2011, to $15.6 million at June 30, 2012. The
nonperforming assets consist of $8.4 million in OREO and $7.2
million in nonaccrual loans. For the six months ended June 30,
2012, the Company recorded a $200,000 expense to the provision for
loan losses compared to $547,000 for the six months ended June 30,
2011. Net charge offs for six months ended June 30, 2012 were
$170,000, compared to net charge offs of $326,000 for the six
months ended June 30, 2011. The allowance for loan losses at June
30, 2012 totaled $3.5 million, or 1.77% of all outstanding
loans.
The Company also announced today that its Board of Directors
voted not to declare a dividend for the second quarter of 2012. The
continued suspension of the quarterly dividend is to further the
Company’s efforts to preserve capital. The Company’s profitability,
capital levels and asset quality are factors that are considered in
determining whether to resume dividend payments.
KS Bank continues to be well-capitalized according to regulatory
standards with total risk based capital of 15.96%, tier 1 risk-
based capital of 14.70%, and a leverage ratio of 9.06% at June 30,
2012. The minimum levels to be considered well capitalized 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 plus a
mortgage servicing location in Greenville, 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
June 30, 2012 December 31,
(unaudited)
2011* (Dollars in thousands)
ASSETS
Cash and due from banks:
Interest-earning
$ 7,568 $ 1,182 Noninterest-earning 2,144 3,929 Time Deposit 100
100 Investment securities available for sale, at fair value 84,916
91,375 Federal Home Loan Bank stock, at cost 2,184 2,596 Presold
mortgages in process of settlement 170 809 Loans 198,153
198,847 Less Allowance for loan losses
(3,507
) (3,477 ) Net loans
194,646 195,370 Accrued interest receivable 1,109 1,316
Foreclosed assets, net 8,382 11,696 Property and equipment, net
8,777 8,825 Other assets
5,416
5,734 Total assets
$
315,412 $ 322,932
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities Deposits $ 244,530 $ 246,464 Short-term borrowings
2,383 6,933 Long-term borrowings 41,248 43,248 Accrued interest
payable 240 275 Accounts payable and accrued expenses
2,115 1,696
Total liabilities
290,516
298,616 Stockholder's Equity:
Cumulative perpetual preferred stock
(Series A), no par value
4,000 shares authorized, issued and outstanding $ 3,889 $ 3,866
Cumulative perpetual preferred stock (Series B), no par value 200
shares authorized, issued and outstanding 216 219 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 18,173 17,859 Accumulated other
comprehensive income
1,010
765 Total stockholders' equity
24,895 24,316
Total liabilities and stockholders' equity
$
315,411 $ 322,932
* 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,
2012 2011
2012 2011
(In thousands, except per share data)
Interest and dividend income: Loans $ 2,859 $ 3,050 $ 5,722
$ 6,199 Investment securities Taxable 357 359 731 686 Tax-exempt
229 392 510 836 Dividends 10 6 18 12 Interest-bearing deposits
2 1
3 2 Total interest
and dividend income
3,457
3,808 6,984
7,735 Interest expense: Deposits
556 731 1,154 1,518 Borrowings
425
500 881
1,009 Total interest expense
981 1,231
2,035 2,527
Net interest income 2,476 2,577 4,949 5,208 Provision for
loan losses
50 367
200 547
Net interest income after provision for loan losses
2,426 2,210
4,749 4,661
Noninterest income: Service charges on deposit
accounts 274 290 548 587 Fees from presold mortgages 164 26 232 46
Gain (Loss) on sale of investments 244 26 425 (19 ) Other income
38 45
78 81 Total
noninterest income
720
387 1,283
695 Noninterest expenses:
Compensation and benefits 1,448 1,414 2,941 2,884 Occupancy and
equipment 241 75 492 328 Data processing & outside service fees
207 370 408 581 Advertising 8 20 22 38 Net foreclosed real estate
586 23 683 130 Other
549
480 1,076
1,030 Total noninterest expenses
3,039 2,382
5,622 4,991
Income before income taxes 107 215 410 365 Income tax
(benefit)
(44 )
(104 ) (33
) (183 ) Net
income
151 319
443 548
Dividends on preferred stock (55 ) (55 ) (109 ) (109
) Accretion of discount on preferred stock, net
(10 ) (9
) (20 )
(19 ) Income available to common
stockholders
$ 86 $
255 $ 314
$ 420 Basic and Diluted
earnings per share
$ 0.07
$ 0.19 $
0.24 $ 0.32
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