SMITHFIELD, N.C., July 22, 2022 (GLOBE NEWSWIRE) -- KS Bancorp, Inc. (the “Company”) (OTCBB: KSBI), parent company of KS Bank, Inc. (the “Bank”), announced unaudited results for the second quarter of 2022.
The Company reported net income of $1,795,000 or $1.62 per diluted share, for the three months ended June 30, 2022, compared to net income of $1,519,000 or $1.37 per diluted share, for the three months ended June 30, 2021. Comparing the second quarter 2022 to the second quarter of 2021, there was an increase in net income of $276,000. In the second quarter of 2021 there was $319,000 income from the Payroll Protection Plan (PPP) loans recognized.
Net interest income before the provision for loan losses for the three months ended June 30, 2022 was $4.8 million compared to $4.4 million at June 30, 2021. Noninterest income for the three months ended June 30, 2022 was $722,000, compared to $708,000 for the comparable period ended June 30, 2021. In the second quarter of 2022, there was a gain of $12,000 realized for prepayment of $8 million of Federal Home Loan Bank (FHLB) borrowings. Noninterest expense was $3.2 million for the three months ended June 30, 2022, as compared $3.1 million in the comparable period in 2021. The Company did not record any provision for loan losses during the second quarter 2022, compared to $123,000 in the second quarter of 2021.
For the six months ended June 30, 2022, net interest income before the provision for loan losses was $9.0 million, compared to $8.6 million for the six months ended June 30, 2021. The increase is primarily attributable to an increase in interest income from investments and a decrease in interest expense from the repayment of FHLB borrowings. Non-interest income was $1.5 million for the six month period ending June 30, 2022 compared to $1.4 million for the same period ended June 30, 2021. For the six months ended June 30, 2022, non-interest expenses was $6.5 million, compared to $6.0 million for the same period ending June 30, 2021.
The Company’s unaudited consolidated total assets decreased $16.5 million, to $554.7 million at June 30, 2022, compared to $571.2 million at December 31, 2021. The decrease in assets is primarily attributable to the repayment of $32 million in FHLB borrowings. Net loan balances increased by $22.4 million, to $368.0 million at June 30, 2022, compared to $345.6 million at December 31, 2021. The Company’s investment securities totaled $104.0 million at June 30, 2022, compared to $88.3 million at December 31, 2021. Total deposits increased $20.0 million to $507.4 million at June 30, 2022, compared to $487.4 million at December 31, 2021. For the six months ended June 30, 2022, there was a $19.9 million increase in core deposits and a $1.5 million decrease in brokered funding. Long-term borrowings decreased $31 million to $11 million at June 30, 2022 compared to $42 million at December 31, 2021. Total stockholders’ equity decreased $4.7 million to $31.9 million at June 30, 2022, from $36.6 million at December 31, 2021. The decrease in stockholders equity is primarily attributable to the change in accumulated other comprehensive income of $7.6 million in the second quarter of 2022, which is partially offset by an increase in retained earnings of $2.8 million.
Nonperforming assets consisted of $878,000 nonaccrual loans at June 30, 2022, representing less than 0.20% of the Company’s total assets. There was no foreclosed real estate owned at June 30, 2022. The allowance for loan losses at June 30, 2022 totaled $5.0 million, or 1.35% of total loans.
Commenting on the second quarter results, Harold Keen, President and CEO of the Company, stated, “During the second quarter, the Bank continued solid growth in both deposits and loans outstanding. Our emphasis on community banking relationships and service has resulted in significant growth. During the quarter, KS Bank opened a loan production office in Dunn, NC. The I-95 corridor in Johnston County and Harnett County is experiencing above average growth and we believe KS Bank can be supportive of that growth in the Dunn/Harnett County area.”
In addition, the Company announced today that its Board of Directors has declared a quarterly dividend of $0.20 per share for stockholders of record as of July 29, 2022 with payment to be made on August 8, 2022. The $0.20 per share dividend represents a 25% increase of the previous quarter’s dividend of $0.16 per share.
KS Bank continues to be well-capitalized according to regulatory standards with total risk-based capital of 13.77%, tier 1 risk-based capital of 12.52%, common equity tier 1 risk-based capital of 12.52%, and a tier 1 leverage ratio of 8.78% at June 30, 2022. The minimum levels to be considered well capitalized for each of these ratios are 10.0%, 8.0%, 6.5%, and 5.0%, 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. The Bank offers a broad range of personal and business banking products and services, mortgage products and trust services. There are nine full service branches located in Kenly, Selma, Clayton, Garner, Goldsboro, Wilson, Wendell, Smithfield, and Four Oaks, North Carolina. There is a loan production office in Dunn, NC which opened in April, 2022. 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, 2022 | December 31, | ||||||||
| (unaudited) | 2021* | ||||||||
| (Dollars in thousands) | |||||||||
| ASSETS | |||||||||
| Cash and due from banks: | |||||||||
| Interest-earning | $ | 55,566 | $ | 111,762 | |||||
| Noninterest-earning | 3,025 | 2,626 | |||||||
| Time Deposit | 5,100 | 5,100 | |||||||
| Investment securities available for sale, at fair value | 104,018 | 88,320 | |||||||
| Federal Home Loan Bank stock, at cost | 299 | 1,443 | |||||||
| Loans | 373,076 | 350,667 | |||||||
| Less allowance for loan losses | (5,030 | ) | (5,023 | ) | |||||
| Net loans | 368,046 | 345,644 | |||||||
| Accrued interest receivable | 1,637 | 1,543 | |||||||
| Foreclosed assets, net | - | 621 | |||||||
| Property and equipment, net | 9,173 | 8,928 | |||||||
| Other assets | 7,835 | 5,238 | |||||||
| Total assets | $ | 554,699 | $ | 571,225 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| Liabilities | |||||||||
| Deposits | $ | 507,362 | $ | 487,437 | |||||
| Short-term borrowings | $ | - | $ | 1,000 | |||||
| Long-term borrowings | 11,248 | 42,248 | |||||||
| Accrued interest payable | 45 | 216 | |||||||
| Accrued expenses and other liabilities | 4,165 | 3,679 | |||||||
| Total liabilities | 522,820 | 534,580 | |||||||
| Stockholder's Equity: | |||||||||
| Common stock, no par value, authorized 20,000,000 shares; | |||||||||
| 1,107,776 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively | 1,359 | 1,359 | |||||||
| Retained earnings, substantially restricted | 37,500 | 34,694 | |||||||
| Accumulated other comprehensive loss | (6,980 | ) | 592 | ||||||
| Total stockholders' equity | 31,879 | 36,645 | |||||||
| Total liabilities and stockholders' equity | $ | 554,699 | $ | 571,225 | |||||
| * 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, | ||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||
| (In thousands, except per share data) | |||||||||||||
| Interest and dividend income: | |||||||||||||
| Loans | $ | 4,327 | $ | 4,560 | $ | 8,457 | $ | 8,947 | |||||
| Investment securities | |||||||||||||
| Taxable | 445 | 251 | 767 | 514 | |||||||||
| Tax-exempt | 188 | 138 | 362 | 238 | |||||||||
| Dividends | (16 | ) | 18 | 5 | 39 | ||||||||
| Interest-bearing deposits | 133 | 15 | 177 | 21 | |||||||||
| Total interest and dividend income | 5,077 | 4,982 | $ | 9,768 | 9,759 | ||||||||
| Interest expense: | |||||||||||||
| Deposits | 211 | 264 | 430 | 550 | |||||||||
| Borrowings | 86 | 296 | 324 | 595 | |||||||||
| Total interest expense | 297 | 560 | 754 | 1,145 | |||||||||
| Net interest income | 4,780 | 4,422 | 9,014 | 8,614 | |||||||||
| Provision for loan losses | - | 123 | - | 246 | |||||||||
| Net interest income after | |||||||||||||
| provision for loan losses | 4,780 | 4,299 | 9,014 | 8,368 | |||||||||
| Noninterest income: | |||||||||||||
| Service charges on deposit accounts | 315 | 279 | 608 | 562 | |||||||||
| Fees from presold mortgages | 8 | 17 | 12 | 49 | |||||||||
| Other income | 399 | 412 | 904 | 772 | |||||||||
| Total noninterest income | 722 | 708 | 1,524 | 1,383 | |||||||||
| Noninterest expenses: | |||||||||||||
| Compensation and benefits | 2,066 | 1,878 | 4,109 | 3,699 | |||||||||
| Occupancy and equipment | 545 | 364 | 1,029 | 728 | |||||||||
| Data processing & outside service fees | 203 | 232 | 408 | 461 | |||||||||
| Advertising | 32 | 15 | 50 | 26 | |||||||||
| Foreclosed real estate and repossessions, net | (230 | ) | (230 | ) | |||||||||
| Other | 613 | 581 | 1,179 | 1,052 | |||||||||
| Total noninterest expenses | 3,229 | 3,070 | 6,545 | 5,966 | |||||||||
| Income before income taxes | 2,273 | 1,937 | 3,993 | 3,785 | |||||||||
| Income tax | 478 | 418 | 831 | 807 | |||||||||
| Net income | $ | 1,795 | $ | 1,519 | $ | 3,162 | $ | 2,978 | |||||
| Basic and Diluted earnings per share | $ | 1.62 | $ | 1.37 | $ | 2.85 | $ | 2.69 | |||||
