KS Bancorp, Inc. (the “Company”) (OTCBB: KSBI), parent company
of KS Bank, Inc. (the “Bank”), announced unaudited net income
available to common shareholders of $255,000, or $.19 per diluted
shared, for the three months ended June 30, 2011, compared to a net
income available to common shareholders of $282,000, or $.22 per
diluted share, for the three months ended June 30, 2010. For the
six months ended June 30, 2011, the Company reported net income
available to common shareholders of $420,000, or $.32 per diluted
share, compared to $457,000, or $.35 per diluted share, for the six
months ended June 30, 2010.
For the six months ended June 30, 2011, net interest income
declined $194,000 to $5.2 million compared to $5.4 million earned
during the six months ended June 30, 2010. The decrease in net
interest income is primarily attributable to the decrease in loan
volume. Non-interest income was $695,000 for the six months ended
June 30, 2011, compared to $874,000 for the six months ended June
30, 2010. For the six months ended June 30, 2011, noninterest
expenses decreased $230,000, or 4.4%, to $5.0 million at June 30,
2011, compared to $5.2 million for the six months ended June 30,
2010.
The Company’s unaudited consolidated total assets decreased $8.7
million to $326.9 million at June 30, 2011, compared to $335.6
million at December 31, 2010. Net loan balances decreased $11.4
million from $215.3 million at December 31, 2010, to $203.9 million
at June 30, 2011. The Company’s investment securities increased
$2.0 million to $89.4 million at June 30, 2011, compared to $87.4
million at December 31, 2010. Total deposits have decreased $6.6
million to $244.9 million at June 30, 2011, compared to $251.5
million at December 31, 2010. During the six months ending June 30,
2011, savings accounts, demand accounts and money market accounts
had a combined increase of $7.5 million, while certificates of
deposit decreased $14.1 million. Total borrowings decreased $4.1
million from $60.1 million at December 31, 2010, to $56.0 million
at June 30, 2011. Total stockholders’ equity increased $1.6 million
from $22.1 million at December 31, 2010, to $23.7 million at June
30, 2011.
Nonperforming assets, which includes nonaccrual loans and other
real estate owned (OREO), have increased $3.2 million from $15.6
million at December 31, 2010 to $18.8 million at June 30, 2011. The
nonperforming assets consist of $10.9 million in other real estate
owned and $7.9 million in nonaccrual loans. For the six months
ended June 30, 2011, the Company recorded a $547,000 expense to the
provision for loan losses compared to $678,000 for the six months
ended June 30, 2010. Net charge offs for the first six months of
2011 were $326,000, compared to net charge offs of $407,000 for the
six months ended June 30, 2010. The allowance for loan losses at
June 30, 2011 totaled $4.3 million, or 2.05% 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 2011. The
continued suspension of the quarterly dividend is to further the
Company’s efforts to preserve capital. 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 15.95%, tier 1 risk
based capital of 14.29%, and a leverage ratio of 8.90% at June 30,
2011. The minimum levels to be considered well capitalized for each
of these ratios are 10%, 6%, and 5%, respectively.
Commenting on the second quarter 2011 results, Harold Keen,
President and CEO, stated, “Banks across the nation, including
banks in our local market, continue to experience weak loan demand
and declining real estate values. Our state and the local economies
continue to be stressed, and we are not immune from the effects. In
addition, delinquent loans continue to be a challenge. Our
continuous goal at KS Bank is to focus on our core values of
remaining locally committed, developing relationships that are
mutually beneficial, providing opportunities for employee growth,
while remaining profitable. KS Bank reports a profit through the
second quarter of 2011, and according to regulatory standards,
continues to be well capitalized.”
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. 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, 2011 December 31,
(unaudited) 2010* (Dollars in
thousands)
ASSETS Cash and due from banks:
Interest-earning $ 2,031 $ 1,861 Noninterest-earning 1,244 1,428
Time Deposit 100 100 Investment securities available for sale, at
fair value 89,471 87,375 Federal Home Loan Bank stock, at cost
2,856 2,978 Presold mortgages in process of settlement - 129
Loans 208,119 219,363 Less Allowance for loan losses
(4,263 ) (4,041
) Net loans 203,856 215,322 Accrued interest
receivable 1,363 1,663 Foreclosed assets, net 10,916 7,889 Property
and equipment, net 8,976 9,151 Other assets
6,060 7,703
Total assets
$ 326,873
$ 335,599 LIABILITIES
AND STOCKHOLDERS' EQUITY Liabilities Deposits $ 244,943
$ 251,531 Short-term borrowings 12,813 11,886 Long-term borrowings
43,248 48,248 Accrued interest payable 272 316 Accounts payable and
accrued expenses
1,870
1,487 Total liabilities
303,146 313,468
Stockholder's Equity: Non-cumulative perpetual preferred
stock (Series A), no par value 4,000 shares authorized, issued and
outstanding 3,843 3,822 Non-cumulative perpetual preferred stock
(Series B), no par value 200 shares authorized, issued and
outstanding 223 226
Common stock, no par value, authorized
20,000,000 shares;
1,309,501 shares issued and outstanding in 2011 and 2010 1,607
1,607 Retained earnings, substantially restricted 18,125 17,704
Accumulated other comprehensive loss
(71
) (1,228 )
Total stockholders' equity
23,727
22,131 Total liabilities and
stockholders' equity
$ 326,873
$ 335,599 * 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,
2011
2010
2011
2010
( In thousands, except per share data)
Interest and dividend
income: Loans $ 3,050 $ 3,568 $ 6,199 $ 7,075
Investment securities
Taxable 359 406 686 826 Tax-exempt 392 469 836 961 Dividends 6 3 12
5 Interest-bearing deposits
1
1 2
2 Total interest and dividend income
3,808 4,447
7,735 8,869
Interest expense: Deposits 731 1,138 1,518 2,369 Borrowings
500 542
1,009 1,098
Total interest expense
1,231
1,680 2,527
3,467 Net interest income 2,577 2,767
5,208 5,402 Provision for loan losses
367 404
547 678 Net
interest income after provision for loan losses
2,210 2,363
4,661 4,724
Noninterest income: Service charges on deposit accounts 290
346 587 645 Fees from presold mortgages 26 63 46 101 Gain (Loss) on
sale of investments 26 (5 ) (19 ) - Other income
45 69
81 128 Total
noninterest income
387
473 695
874 Noninterest expenses:
Compensation and benefits 1,414 1,441 2,884 2,933 Occupancy and
equipment 75 256 328 524 Data processing & outside service fees
370 218 581 434 Advertising 20 11 38 23 Net foreclosed real estate
23 171 130 235 Other
480
542 1,030
1,072 Total noninterest expenses
2,382 2,639
4,991 5,221
Income before income taxes 215 197 365 377 Income tax
benefit
(104 )
(148 ) (183
) (206 ) Net
income
319 345
548 583
Dividends on preferred stock (55 ) (54 ) (109 ) (109
) Accretion of discount on preferred stock, net
(9 ) (9
) (19 )
(17 ) Income available to common
stockholders
$ 255 $
282 $ 420
$ 457 Basic and Diluted
earnings per share
$ 0.19
$ 0.22 $
0.32 $ 0.35
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