KS Bancorp, Inc. (KSBI) Announces Second Quarter 2013 Financial Results

KS Bancorp, Inc. (KSBI) Announces Second Quarter 2013 Financial Results

SMITHFIELD, N.C.--(BUSINESS WIRE)-- KS Bancorp, Inc. (the "Company") (OTCBB: KSBI), parent company of KS Bank, Inc. (the "Bank"), announced unaudited net income available to common shareholders of $200,000, or $.15 per diluted share, for the three months ended June 30, 2013, compared to a net income available to common shareholders of $86,000, or $.07 per diluted share, for the three months ended June 30, 2012. For the six months ended June 30, 2013, the Company reported net income available to common shareholders of $325,000, or $.25 per diluted share, compared to $314,000, or $.24 per diluted share, for the six months ended June 30, 2012.

For the three months ended June 30, 2013, net interest income was $2.4 million, compared to $2.5 million for the three months ended June 30, 2012. Non-interest income for the period ended June 30, 2013 was $548,000, compared to $720,000 for the same period ended June 30, 2012. In the second quarter 2013, the Company did not realize any gains in the sale of securities, compared to a $244,000 gain recognized in the linked quarter in 2012. Non-interest expenses decreased $500,000 from $3.0 million for the three months ended June 30, 2012, compared to $2.5 million for the three months ended June 30, 2013.


For the six months ended June 30, 2013, net interest income was $4.8 million, compared to $4.9 million for the six months ended June 30, 2012. Non-interest income was $1.2 million for the six months ended June 30, 2012 and June 30, 2013. Non-interest expenses decreased $373,000 to $5.2 million for the six months ended June 30, 2013, compared to $5.6 million at June 30, 2012. The decrease in expenses is primarily due to the decrease costs associated with foreclosed real estate.

In the second quarter of 2013, the Company's unaudited consolidated total assets decreased $4.0 million to $310.9 million at June 30, 2013, compared to $314.9 million at December 31, 2012. Net loan balances decreased $6.3 million with a balance of $190.6 million at June 30, 2013, compared to $196.9 million at December 31, 2012. The Company's investment securities increased $2.7 million to $85.0 million at June 30, 2013, compared to $82.3 million at December 31, 2012. Total deposits have decreased $2.2 million to $241.8 million at June 30, 2013, compared to $244.0 at December 31, 2012. Total stockholders' equity at June 30, 2013 was $24.6 million, compared to $25.3 million at December 31, 2012.

Nonperforming assets, which includes nonaccrual loans and other real estate owned (OREO) decreased $2.6 million to $9.5 million at June 30, 2013 from $12.1 million at December 31, 2012. The nonperforming assets consist of $4.2 million in OREO and $5.3 million in nonaccrual loans. For the six months ended June 30, 2013, the Company recorded an $180,000 expense to the provision for loan losses compared to $200,000 for the six months ended June 30, 2012. The allowance for loan losses at June 30, 2013 totaled $3.4 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 2013. The Company's profitability, capital levels and asset quality are factors that were 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 17.20%, tier 1 risk- based capital of 15.94%, and a leverage ratio of 9.82% at June 30, 2013. The minimum levels to be considered well capitalized for each of these ratios are 10%, 6%, and 5%, respectively.

Commenting on the second quarter 2013 results, Harold Keen, President and CEO, stated, "Our year to date profits exceed the year to date profits a year ago. Our capital ratio continues to increase and the Bank remains well capitalized. The Company has made great progress this year in its continued efforts to reduce its inventory of nonperforming assets. I am proud of our employees and the commitment they have to the Bank, as we all continue to work together to serve the communities in our market area with focus on strengthening our core banking relationships with our brand of community banking."

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 loan office 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 2013December 31,
(unaudited)2012*
 
(Dollars in thousands)
ASSETS
 
Cash and due from banks:
Interest-earning$12,021$9,474
Noninterest-earning1,6072,075
Time Deposit100100
Investment securities available for sale, at fair value85,04382,356
Federal Home Loan Bank stock, at cost1,9532,149
Presold mortgages in process of settlement590518
 
Loans194,046200,280
Less allowance for loan losses (3,428) (3,424)
Net loans190,618196,856
 
Accrued interest receivable1,0901,113
Foreclosed real estate and repossessions, net4,1586,637
Property and equipment, net8,4258,579
Other assets 5,363  5,082 
 
Total assets$310,968 $314,939 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Liabilities
Deposits$241,756$243,996
Short-term borrowings7082,156
Long-term borrowings41,24841,248
Accrued interest payable335233
Accrued expenses and other liabilities 2,331  1,984 
 
Total liabilities 286,378  289,617 
 
Stockholder's Equity:
Cumulative perpetual preferred stock (Series A), no par value
4,000 shares authorized, issued and outstanding$3,939$3,914
Cumulative perpetual preferred stock (Series B), no par value
200 shares authorized, issued and outstanding209213
Common stock, no par value, authorized 20,000,000 shares;
1,309,501 shares issued and outstanding in 2013 and 20121,6071,607
Retained earnings, substantially restricted18,71518,390
Accumulated other comprehensive income 120  1,198 
 
Total stockholders' equity 24,590  25,322 
 
Total liabilities and stockholders' equity$310,968 $314,939 
 
* Derived from audited financial statements
KS Bancorp, Inc and Subsidiary
Consolidated Statements of Income (Unaudited)
        
 
Three Months EndedSix Months Ended
June 30,June 30,

2013

2012

2013

2012

(In thousands, except per share data)

Interest and dividend income:
Loans$2,658$2,859$5,376$5,722
Investment securities
Taxable328357667731
Tax-exempt127229257510
Dividends12101418
Interest-bearing deposits 2  2  5  3 
Total interest and dividend income 3,127  3,457  6,319  6,984 
 
Interest expense:
Deposits3715567771,154
Borrowings 364  425  777  881 
Total interest expense 735  981  1,554  2,035 
 
Net interest income2,3922,4764,7654,949
 
Provision for loan losses 95  50  180  200 
 
Net interest income after
provision for loan losses 2,297  2,426  4,585  4,749 
 
Noninterest income:
Service charges on deposit accounts318274607548
Fees from presold mortgages174164332232
Gain on sale of investments-244139425
Other income 56  38  110  78 
Total noninterest income 548  720  1,188  1,283 
 
Noninterest expenses:
Compensation and benefits1,4581,4482,9852,941
Occupancy and equipment259241513492
Data processing & outside service fees207207410408
Advertising781622
Net foreclosed real estate96586296683
Other 505  549  1,029  1,076 
Total noninterest expenses 2,532  3,039  5,249  5,622 
 
Income before income taxes313107524410
 
Income tax (benefit) 48  (44) 69  (33)
 
Net income 265  151  455  443 
 
Dividends on preferred stock Read Full Story

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