KSBI KS Bancorp Inc (PK)

KS Bancorp, Inc. (OTCBB: KSBI), parent company of KS Bank, Inc., reports today financial results for the quarter ended September 30, 2005. Consolidated earnings increased $135,000 or 46.9% for the third quarter of 2005. Earnings for the third quarter were $423,000, or $.32 per diluted share, compared to earnings of $288,000, or $0.20 per diluted share, for the same period in 2004. Year to date net income has increased 43.6% from $861,000 at September 30, 2004 to $1,236,000 at September 30, 2005. Net interest income for the quarter ended September 30, 2005 totaled $2.2 million, an increase of $342,000 or 18.5% over the $1.8 million for the quarter ended September 30, 2004. This increase is primarily due to loan growth and growth in investment securities. The investment portfolio grew 17.4% and the loan portfolio grew 14.2% as compared to the same quarter of 2004. The Company has continued its growth in consolidated total assets, which increased $22.5 million or 9.5% during the nine months ended September 30, 2005 from $236.9 million at December 31, 2004 to $259.4 million at September 30, 2005. This growth in the Company's total assets resulted primarily from an increase of $17.6 million in net loans from $178.9 to $196.5 at December 31, 2004 and September 30, 2005, respectively. In addition, investments increased $2.7 million. Funding for this growth was provided primarily from increases in customer deposits. Total deposits increased to $192.5 million at September 30, 2005. This represents a $23.2 million or 13.7 % increase from December 31, 2004. Total stockholders' equity decreased $3.4 million from $18.9 million at December 31, 2004 to $15.5 million at September 30, 2005. The decrease is the result of the repurchase of common shares pursuant to the Company's recapitalization, as well as a separate repurchase of a block of shares that became available to the Company. A total of 172,555 shares were repurchased at a total cost of $3.8 million. Such repurchases were funded through the issuance of $5.2 million in Junior Subordinated Debentures on June 27, 2005. As of September 30, 2005, KS Bancorp had 1,309,501 common shares issued and outstanding. Commenting on the third quarter 2005 results, Harold Keen, President and CEO, stated, "I am delighted with the increase in overall profits, as well as the strong growth in both loans and deposits. The bank is on target with its yearly projections. The entire KS Bank team continues to build solid customer relationships that will allow us to grow the value of KS Bancorp." In addition to the earnings report issued today, KS Bancorp, Inc. announced the payment of a quarterly cash dividend of $0.13 per share for stockholders of record on October 24, 2005, with payment to be made on November 3, 2005. 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 emphasizes being a full service community bank offering traditional banking products and services through its operation of seven full service branches located in Kenly, Selma, Clayton, Garner, Goldsboro, Wilson, and Smithfield, North Carolina. 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. -0- *T KS Bancorp, Inc. and Subsidiary Consolidated Statements of Financial Condition Sept. 30, Dec. 31, 2005 2004(a) (Unaudited) ----------- ---------- (In thousands) ASSETS Cash and due from banks: Interest-earning $ 6228 $ 5,530 Noninterest-earning 1,108 1,038 Time Deposit 100 100 Investment securities: Available for sale 42,029 39,358 Federal Home Loan Bank stock, at cost 2,467 2,558 Presold mortgages in process of settlement 470 138 Loans 198,377 180,293 Less Allowance for loan losses (1,907) (1,419) -------- -------- Net loans 196,470 178,874 Accrued interest receivable 1,273 1,114 Foreclosed assets, net 881 545 Property and equipment, net 7,361 6,859 Other assets 994 745 -------- -------- TOTAL ASSETS $259,381 $236,859 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits $192,455 $169,264 Securities sold under agreements to repurchase 703 114 Advances from Federal Home Loan Bank 44,300 47,900 Junior subordinate debt 5,155 - Accrued interest payable 377 314 Accounts payable and accrued expenses 866 347 -------- -------- TOTAL LIABILITIES 243,856 217,939 -------- -------- Stockholders' Equity: Preferred stock, no par value, 5,000,000 shares authorized; no shares issued and outstanding - - Common stock, no par value, authorized 20,000,000 shares; 1,309,501 and 1,197,029 shares issued and outstanding in 2005 and 2004, respectively 1,607 5,420 Retained earnings, substantially restricted 14,061 13,638 Accumulated other comprehensive loss (143) (138) -------- -------- TOTAL STOCKHOLDERS' EQUITY 15,525 18,920 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $259,351 $236,859 ======== ======== (a) Derived from audited financial statements KS Bancorp, Inc. and Subsidiary Consolidated Statements of Operations (Unaudited) Three Months Ended Nine Months Ended Sept. 30, Sept. 30, -------------------------------------- 2005 2004 2005 2004 ------- ------- ------- ------- (In thousands, except per share data) INTEREST INCOME Loans $3,480 $2,617 $ 9,755 $7,738 Investment securities: Taxable 193 195 580 654 Tax-exempt 230 136 650 305 Dividends 24 18 79 52 Interest-earning deposits 45 12 109 36 ------- ------- ------- ------- TOTAL INTEREST INCOME 3,972 2,978 11,173 8,785 ------- ------- ------- ------- INTEREST EXPENSE Deposits 1,371 780 3,551 2,231 Borrowings 411 350 1,201 985 ------- ------- ------- ------- TOTAL INTEREST EXPENSE 1,782 1,130 4,752 3,216 ------- ------- ------- ------- NET INTEREST INCOME 2,190 1,848 6,421 5,569 PROVISION FOR LOAN LOSSES 220 104 585 254 ------- ------- ------- ------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,970 1,744 5,836 5,315 ------- ------- ------- ------- NON-INTEREST INCOME Service charges on deposit accounts 281 240 751 684 Fees from presold mortgages 62 18 150 85 Loss on sale of investments - 1 - 3 Other income 16 20 68 59 ------- ------- ------- ------- TOTAL NON-INTEREST INCOME 357 279 969 831 NON-INTEREST EXPENSE Compensation and benefits 1,102 948 3,203 2,872 Occupancy and equipment 196 196 573 590 Data processing and outside service fees 171 147 504 446 Advertising 37 22 95 103 Net foreclosed real estate 2 93 41 113 Other 260 248 715 717 ------- ------- ------- ------- TOTAL NON-INTEREST EXPENSE 1,768 1,654 5,131 4,841 ------- ------- ------- ------- INCOME BEFORE INCOME TAXES 561 369 1,674 1,305 INCOME TAXES 138 81 438 444 ------- ------- ------- ------- NET INCOME $ 423 $ 288 $ 1,236 $ 861 ======= ======= ======= ======= NET INCOME PER COMMON SHARE Basic $ 0.32 $ 0.20 $ 0.89 $ 0.61 ======= ======= ======= ======= Diluted $ 0.32 $ 0.20 $ 0.89 $ 0.61 ======= ======= ======= ======= DIVIDENDS PER COMMON SHARE $ 0.13 $ 0.13 $ 0.39 $ 0.40 ======= ======= ======= ======= *T