KSBI KS Bancorp Inc (PK)

KS Bancorp, Inc. (the “Company”) (OTCBB: KSBI), parent company of KS Bank, Inc. (the “Bank”), announced unaudited net income available to common shareholders of $125,000, or $.10 per diluted share, for the three months ended March 31, 2013, compared to a net income available to common shareholders of $228,000, or $.17 per diluted share, for the three months ended March 31, 2012.

For the three months ended March 31, 2013, net interest income was $2.4 million, compared to $2.5 million for the three months ended March 31, 2012. Non-interest income for the period ended March 31, 2013 was $640,000, compared to $563,000 for the same period ended March 31, 2012. The increase is primarily attributable to the $90,000 increase in fees from presold mortgages during the three months ended March 31, 2013, compared to the comparative quarter in 2012. Non-interest expenses increased slightly from $2.6 million for the three months ended March 31, 2012, compared to $2.7 million for the three months ended March 31, 2013. In March 2013, the Bank recognized a one-time expense related to other real estate owned (OREO) of $117,000.

In the first quarter of 2013, the Company’s unaudited consolidated total assets decreased $1.3 million to $313.6 million at March 31, 2013, compared to $314.9 million at December 31, 2012. Net loan balances decreased $1.2 million with a balance of $195.7 million at March 31, 2013 compared to $196.9 million at December 31, 2012. The Company’s investment securities increased $4.2 million to $86.5 million at March 31, 2013, compared to $82.3 million at December 31, 2012. Total deposits have decreased $1.2 million to $242.8 million at March 31, 2013, compared to $244.0 at December 31, 2012. Total stockholders’ equity decreased $163,000 from $25.3 million at December 31, 2012, to $25.2 million at March 31, 2013.

Nonperforming assets, which includes nonaccrual loans and OREO, decreased $102,000 from $12.1 million at December 31, 2012 to $12.0 million at March 31, 2013. The nonperforming assets consist of $6.3 million in OREO and $5.7 million in nonaccrual loans. For the three months ended March 31, 2013, the Company recorded an $85,000 expense to the provision for loan losses compared to $150,000 for the three months ended March 31, 2012. Net charge offs for the first quarter of 2013 were $88,000, compared to net charge offs of $115,000 for the three months ended March 31, 2012. The allowance for loan losses at March 31, 2013 totaled $3.4 million, or 1.72% of all outstanding loans.

The Company also announced today that its Board of Directors voted not to declare a dividend for the first quarter of 2013. 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 16.37%, tier 1 risk- based capital of 15.12%, and a leverage ratio of 9.65% at March 31, 2013. The minimum levels to be considered well capitalized for each of these ratios are 10%, 6%, and 5%, 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 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         March 31, 2013 December 31, (unaudited) 2012*   (Dollars in thousands) ASSETS   Cash and due from banks: Interest-earning $ 5,989 $ 9,474 Noninterest-earning 1,422 2,075 Time Deposit 100 100 Investment securities available for sale, at fair value 86,543 82,356 Federal Home Loan Bank stock, at cost 1,930 2,149 Presold mortgages in process of settlement 830 518   Loans 199,117 200,280 Less allowance for loan losses   (3,421 )   (3,424 ) Net loans 195,696 196,856   Accrued interest receivable 1,100 1,113 Foreclosed real estate and repossessions, net 6,261 6,637 Property and equipment, net 8,514 8,579 Other assets   5,226     5,082     Total assets $ 313,611   $ 314,939     LIABILITIES AND STOCKHOLDERS' EQUITY   Liabilities Deposits $ 242,849 $ 243,996 Short-term borrowings 2,069 2,156 Long-term borrowings 41,248 41,248 Accrued interest payable 222 233 Accrued expenses and other liabilities   2,064     1,984     Total liabilities   288,452     289,617     Stockholder's Equity: Cumulative perpetual preferred stock (Series A), no par value 4,000 shares authorized, issued and outstanding $ 3,926 $ 3,914 Cumulative perpetual preferred stock (Series B), no par value 200 shares authorized, issued and outstanding 211 213 Common stock, no par value, authorized 20,000,000 shares; 1,309,501 shares issued and outstanding in 2013 and 2012 1,607 1,607 Retained earnings, substantially restricted 18,515 18,390 Accumulated other comprehensive income   900     1,198     Total stockholders' equity   25,159     25,322     Total liabilities and stockholders' equity $ 313,611   $ 314,939     * Derived from audited financial statements   KS Bancorp, Inc and Subsidiary Consolidated Statements of Income (Unaudited)     Three Months Ended March 31,

2013

2012

( In thousands, except per share data) Interest and dividend income: Loans $ 2,718 $ 2,863 Investment securities Taxable 339 374 Tax-exempt 130 281 Dividends 2 8 Interest-bearing deposits   3     1   Total interest and dividend income   3,192     3,527     Interest expense: Deposits 406 598 Borrowings   413     456   Total interest expense   819     1,054     Net interest income 2,373 2,473   Provision for loan losses   85     150     Net interest income after provision for loan losses   2,288     2,323     Noninterest income: Service charges on deposit accounts 289 274 Fees from presold mortgages 158 68 Gain on sale of investments 139 181 Other income   54     40   Total noninterest income   640     563     Noninterest expenses: Compensation and benefits 1,527 1,493 Occupancy and equipment 254 251 Data processing & outside service fees 203 201 Advertising 9 14 Net foreclosed real estate 200 97 Other   524     527   Total noninterest expenses   2,717     2,583     Income before income taxes 211 303   Income tax expense   21     11     Net income   190     292     Dividends on preferred stock (55 ) (55 ) Accretion of discount on preferred stock, net   (10 )   (9 ) Income available to common stockholders $ 125   $ 228     Basic and Diluted earnings per share $ 0.10   $ 0.17