SMITHFIELD, N.C., Oct. 24, 2014 (GLOBE NEWSWIRE) -- KS Bancorp, Inc. (the "Company") (OTCBB:KSBI), parent company of KS Bank, Inc. (the "Bank"), announced unaudited third quarter financial results for the 2014 fiscal year.
The Company reported net income available to common shareholders of $331,000, or $.25 per diluted share, for the three months ended September 30, 2014, compared to a net income available to common shareholders of $309,000, or $.24 per diluted share, for the three months ended September 30, 2013. For the nine months ended September 30, 2014, the Company reported net income available to common shareholders of $591,000, or $.45 per diluted share, compared to $634,000, or $.48 per diluted share, for the nine months ended September 30, 2013. For the three months ended September 30, 2014, net interest income was $2.5 million compared to $2.4 million for the three months ended September 30, 2013. Non-interest income for the three months ended September 30, 2014 was $506,000, compared to $525,000 for the same period ended September 30, 2013. The decrease is primarily attributable to the decrease in fees from presold mortgages. The Bank made the strategic decision to maintain the mortgages on the one to four family residential properties in lieu of selling the mortgage to the secondary market.
For the nine months ended September 30, 2014, net interest income after provision for loan losses was $7.4 million, compared to $6.9 million for the nine months ended September 30, 2013. Non-interest income was $1.4 million for the nine months ended September 30, 2014, compared to $1.7 million for the nine months ended September 30, 2013. The decrease in non-interest income is primarily attributable to a decrease in fees from presold mortgages. Non-interest expenses increased slightly to $7.8 million for the nine months ended September 30, 2014, compared to $7.6 million for the nine months ended September 30, 2013.
The Company's unaudited consolidated total assets increased $7.0 million to $312.4 million at September 30, 2014, compared to $305.4 million at December 31, 2013. Net loan balances increased $22.8 million with a balance of $216.4 million at September 30, 2014, compared to $193.6 million at December 31, 2013. Funding for the growth in the loan portfolio was provided by cash flows from the investment portfolio and an increase of core deposit accounts. The Company's investment securities decreased $12.1 million to $72.2 million at September 30, 2014, compared to $84.3 million at December 31, 2013. Total deposits have increased $9.2 million to $239.3 million at September 30, 2014, compared to $230.1 at December 31, 2013. For the nine months ended September 30, 2014, short-term borrowings decreased $1.5 million to $5.7 million compared to $7.2 million at December 31, 2013. Total stockholders' equity decreased $1.2 from $24.3 million at December 31, 2013, to $23.1 million at September 30, 2014. In the third quarter of 2014, the Company redeemed and retired $2.2 million in cumulative perpetual preferred stock.
Nonperforming assets, which includes nonaccrual loans and foreclosed real estate and repossessions, remain at $7.7 million at September 30, 2014. The nonperforming assets consist of $2.2 million in foreclosed real estate and repossessions, and $5.5 million in nonaccrual loans. For the nine months ended September 30, 2014, there was $59,000 expensed to the provision for loan losses compared to $221,000 for the nine months ended September 30, 2013. The allowance for loan losses at September 30, 2014 totaled $3.5 million, or 1.57% of all outstanding loans.
The Company also announced today that its Board of Directors voted not to declare a dividend for the third quarter of 2014. 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 15.14%, tier 1 risk- based capital of 13.89%, and a leverage ratio of 9.56% at September 30, 2014. The minimum levels to be considered well capitalized for each of these ratios are 10%, 6%, and 5%, respectively.
Commenting on the third quarter of 2014 results, Mr. Keen, President and CEO, stated, "We have been fortunate to experience increased loan demand in many of our markets. Since December 31, 2013, the Bank has been able to increase outstanding loans by $22.8 million, or 11.6%. In addition, we continue to grow our core deposit base and build long-term franchise value. We continue to celebrate our 90th year in business throughout our footprint and we are committed to these communities where we live, work and volunteer."
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 | ||
|
Sept 30 2014 (unaudited) |
December 31, 2013* |
|
| (Dollars in thousands) | ||
| ASSETS | ||
| Cash and due from banks: | ||
| Interest-earning | $ 2,799 | $ 5,737 |
| Noninterest-earning | 2,149 | 1,441 |
| Time Deposit | 100 | 100 |
| Investment securities available for sale, at fair value | 72,219 | 84,292 |
| Federal Home Loan Bank stock, at cost | 1,778 | 1,953 |
| Presold mortgages in process of settlement | -- | -- |
| Loans | 219,893 | 197,032 |
| Less allowance for loan losses | (3,454) | (3,390) |
| Net loans | 216,439 | 193,642 |
| Accrued interest receivable | 1,106 | 1,032 |
| Foreclosed real estate and repossessions, net | 2,221 | 2,948 |
| Property and equipment, net | 8,229 | 8,468 |
| Other assets | 5,332 | 5,782 |
| Total assets | $ 312,372 | $ 305,395 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Liabilities | ||
| Deposits | $ 239,292 | $ 230,083 |
| Short-term borrowings | 5,730 | 7,214 |
| Long-term borrowings | 41,248 | 41,248 |
| Accrued interest payable | 318 | 329 |
| Accrued expenses and other liabilities | 2,658 | 2,183 |
| Total liabilities | 289,246 | 281,057 |
| Stockholder's Equity: | ||
| Cumulative perpetual preferred stock (Series A), no par value | ||
| 1,800 shares authorized, issued and outstanding | $ 1,800 | $ 3,964 |
| Cumulative perpetual preferred stock (Series B), no par value | ||
| 200 shares authorized, issued and outstanding | 200 | 205 |
| Common stock, no par value, authorized 20,000,000 shares; | ||
| 1,309,501 shares issued and outstanding in 2014 and 2013 | 1,607 | 1,607 |
| Retained earnings, substantially restricted | 19,767 | 19,178 |
| Accumulated other comprehensive income | (248) | (616) |
| Total stockholders' equity | 23,126 | 24,338 |
| Total liabilities and stockholders' equity | $ 312,372 | $ 305,395 |
| * Derived from audited financial statements | ||
| KS Bancorp, Inc and Subsidiary | ||||
| Consolidated Statements of Income (Unaudited) | ||||
| Three Months Ended | Nine Months Ended | |||
| Sept 30, | Sept 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| ( In thousands, except per share data) | ||||
| Interest and dividend income: | ||||
| Loans | $ 2,772 | $ 2,637 | $ 7,997 | $ 8,013 |
| Investment securities | ||||
| Taxable | 319 | 323 | 954 | 990 |
| Tax-exempt | 110 | 128 | 351 | 385 |
| Dividends | 12 | 12 | 36 | 26 |
| Interest-bearing deposits | 1 | 2 | 2 | 7 |
| Total interest and dividend income | 3,214 | 3,102 | 9,340 | 9,421 |
| Interest expense: | ||||
| Deposits | 277 | 359 | 847 | 1,136 |
| Borrowings | 353 | 359 | 1,057 | 1,136 |
| Total interest expense | 630 | 718 | 1,904 | 2,272 |
| Net interest income | 2,584 | 2,384 | 7,436 | 7,149 |
| Provision for loan losses | 59 | 41 | 59 | 221 |
| Net interest income after | ||||
| provision for loan losses | 2,525 | 2,343 | 7,377 | 6,928 |
| Noninterest income: | ||||
| Service charges on deposit accounts | 328 | 330 | 941 | 937 |
| Fees from presold mortgages | 37 | 88 | 129 | 420 |
| Gain on sale of investments | 26 | -- | 66 | 139 |
| Other income | 115 | 107 | 310 | 217 |
| Total noninterest income | 506 | 525 | 1,446 | 1,713 |
| Noninterest expenses: | ||||
| Compensation and benefits | 1,456 | 1,367 | 4,486 | 4,352 |
| Occupancy and equipment | 162 | 262 | 504 | 775 |
| Data processing & outside service fees | 310 | 202 | 937 | 612 |
| Advertising | 17 | 16 | 50 | 32 |
| Net foreclosed real estate | 51 | 28 | 205 | 324 |
| Other | 487 | 507 | 1,578 | 1,536 |
| Total noninterest expenses | 2,483 | 2,382 | 7,760 | 7,631 |
| Income before income taxes | 548 | 486 | 1,063 | 1,010 |
| Income tax (benefit) | 134 | 111 | 259 | 180 |
| Net income | 414 | 375 | 804 | 830 |
| Dividends on preferred stock | (75) | (55) | (184) | (164) |
| Accretion of discount on preferred stock, net | (8) | (11) | (29) | (32) |
| Income available to common stockholders | $ 331 | $ 309 | $ 591 | $ 634 |
| Basic and Diluted earnings per share | $ 0.25 | $ 0.24 | $ 0.45 | $ 0.48 |