KS Bancorp, Inc. (the �Company�) (OTCBB:KSBI), parent company of KS
Bank, Inc., reports today financial results for the fourth quarter
and year to date periods of 2007. The Company ended the year with
an 11.0% increase in total assets and $1,966,000 in net income. For
the fourth quarter of 2007 consolidated earnings were $645,000, or
$.49 per diluted share, compared to earnings of $557,000, or $.43
per diluted share to for the same period in 2006. Consolidated
earnings increased 15.8% in the fourth quarter compared to the
three month period ended December 31, 2006. For the year ended
December 31, 2007, the Company reported net income of $1,966,000 or
$1.50 per diluted share compared to $2,189,000 or $1.67 per diluted
share at December 31, 2006. The decrease in earnings is primarily
due to sale of securities at a loss during the second quarter. As
previously reported, during the month of April 2007, the Company
sold approximately $18.0 million of available-for-sale investment
securities with a net realized pre-tax loss. The securities chosen
to be sold were those with the least attractive yield, cash flow,
and interest rate risk characteristics. Subsequent to these
security sales, the Company purchased approximately $18.0 million
of new securities with an overall yield 118 basis points higher
than that of the securities that were sold. Excluding the losses we
recorded to restructure our investment portfolio, consolidated
earnings for the year would have otherwise totaled $2,267,000 or
$1.73 per diluted share (a non-GAAP measure). During 2007, the
Company continued its growth in consolidated total assets, which
increased $31.6 million during the twelve months ended December 31,
2007. Assets totaled $318.3 million at December 31, 2007 as
compared to $286.7 million at December 31, 2006. This growth in the
Company�s total assets resulted primarily from an increase of $25.4
million in net loans to $239.8 million at December 31, 2007 from
$214.4 million December 31, 2006. In addition to loan growth,
investment securities increased $2.5 million. Total stockholders�
equity increased 7.9%, to $18.7 million at December 31, 2007 from
$17.3 million at December 31, 2006. Funding for asset growth was
primarily provided by increases in demand deposits. Demand deposits
at December 31, 2007 were $69.4 million compared to $62.1 million
at December 31, 2006, an increase of 11.8%. Total deposits
increased to $233.5 million at December 31, 2007 representing a
$19.8 million, or 9.2%, increase from $213.7 million at December
31, 2006. Commenting on 2007 results, Harold Keen, President and
CEO, stated, �This year has proven to be a solid year for KS
Bancorp. Developing lasting banking relationships is the goal of
the company. This goal has resulted in growth for both deposits and
loans. We are proud of the work that our employees have
accomplished, and we are thankful for the support of our customers.
We are looking forward to continuing our growth in 2008. The
Company also formally announced and held its ground breaking
ceremonies for its ninth full service office to be located in Four
Oaks, North Carolina on December 14, 2007. The Company expects the
office to be operational in June 2008. President Harold Keen
commented, �We have many valued customers in the Four Oaks area
that we wish to better serve with the addition of this new office
as well as forging new relationships with potential customers in
the Southern end of Johnston County.� 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 January 25, 2008, with payment to be made on February 4,
2008. KS Bancorp, Inc. is a Smithfield, North Carolina based single
bank holding company. KS Bank, Inc., (the �Bank�) a state-chartered
savings bank, is KS Bancorp�s sole subsidiary. The Bank is a full
service community bank offering a broad range of banking products
and services through its operation of eight full service branches
located in Kenly, Selma, Clayton, Garner, Wendell, 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. KS Bancorp, Inc. and Subsidiary
Consolidated Statements of Financial Condition � � � � ��December
31, 2007 December 31, 2006/a (unaudited) � � (Dollars in thousands)
ASSETS � Cash and due from banks: Interest-earning $ 6,298 $ 2,925
Noninterest-earning 1,482 3,180 Time Deposit 100 100 Investment
securities: Available for sale 53,624 51,112 Federal Home Loan Bank
stock, at cost 2,914 2,494 Presold mortgages in process of
settlement 476 1,313 � Loans 242,535 216,822 Less Allowance for
loan losses � (2,702 ) � (2,449 ) Net loans 239,833 214,373 �
Accrued interest receivable 1,952 1,626 Foreclosed assets, net 123
560 Property and equipment, net 8,958 7,188 Other assets � 2,509 �
� 1,859 � � Total assets $ 318,269 � $ 286,730 � � LIABILITIES AND
STOCKHOLDERS' EQUITY � Liabilities Deposits $ 233,480 $ 213,672
Short-term borrowings 10,596 16,352 Long-term borrowings 54,048
38,048 Accrued interest payable 639 530 Accounts payable and
accrued expenses � 821 � � 817 � � Total liabilities � 299,584 � �
269,419 � � Stockholder's 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 shares issued and outstanding in 2007 and 2006 1,607
1,607 Retained earnings, substantially restricted 17,135 15,850
Accumulated other comprehensive loss � (57 ) � (146 ) � Total
stockholders' equity � 18,685 � � 17,311 � � Total liabilities and
stockholders' equity $ 318,269 � $ 286,730 � � /a: Derived from
audited financial statements KS Bancop, Inc and Subsidiary
Consolidated Statements of Income (Unaudited) � � � � � Three
Months Ended Twelve Months Ended December 31, December 31, � 2007 �
� 2006 � � 2007 � � 2006 (In thousands, except per share data) �
Interest and dividend income: Loans $ 4,799 $ 4,427 $ 18,844 $
16,492 Investment securities Taxable 300 270 1,122 996 Tax-exempt
305 255 1,240 967 Dividends 46 37 168 143 Interest-bearing deposits
� 33 � � 34 � � 138 � � 164 Total interest and dividend income �
5,483 � � 5,023 � � 21,512 � � 18,762 � Interest expense: Deposits
2,245 2,015 8,750 7,219 Borrowings � 755 � � 645 � � 2,890 � �
2,148 Total interest expense � 3,000 � � 2,660 � � 11,640 � � 9,367
� Net interest income 2,483 2,363 9,872 9,395 � Provision for loan
losses � 20 � � 121 � � 253 � � 571 � Net interest income after
provision for loan losses � 2,463 � � 2,242 � � 9,619 � � 8,824 �
Noninterest income: Service charges on deposit accounts 361 318
1,306 1,223 Fees from presold mortgages 123 119 417 384 Other
income � 53 � � 36 � � 222 � � 213 Total noninterest income � 537 �
� 473 � � 1,945 � � 1,820 � Noninterest expenses: Compensation and
benefits 1,301 1,200 5,235 4,689 Occupancy and Equipment 234 199
933 808 Data processing & outside service fees 205 197 792 756
Advertising 49 61 235 202 Net Foreclosed real estate (27 ) (5 ) (24
) 23 Gain (loss) on sale of Investments (2 ) - 500 11 Other � 329 �
� 295 � � 1,261 � � 1,122 Total noninterest expenses � 2,089 � �
1,947 � � 8,932 � � 7,611 � Income before income taxes 911 768
2,632 3,033 � Income tax expense � 266 � � 211 � � 666 � � 844 �
Net income $ 645 � $ 557 � $ 1,966 � $ 2,189 � Basic and Diluted
earnings per �share $ 0.49 � $ 0.43 � $ 1.50 � $ 1.67 � Dividends
per common share $ 0.13 � $ 0.13 � $ 0.52 � $ 0.52
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