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KS Bancorp, Inc. (KSBI) Announces Second Quarter 2010 Financial Results

^{Published on 2010-07-23 10:16:11 - Market Wire}
 

SMITHFIELD, N.C.--([ BUSINESS WIRE ])--KS Bancorp, Inc. (the aCompanya) (OTCBB: KSBI), parent company of KS Bank, Inc. (the aBanka), announced second quarter financial results for the 2010 fiscal year.

The Company reported unaudited net income of $583,000, or $.45 per diluted share, before adjusting for the effect of preferred stock dividends and accretion of discount on preferred stock for the six months ended June 30, 2010, compared to a net income of $282,000, or $.21 per diluted share, for the same period in 2009. After adjusting for $126,000 in dividends and accretion of discount on preferred stock, the net income available to common stockholders for the current period was $457,000, or $0.35 per diluted share. Additionally, the Company also announced that its Board of Directors voted not to declare a dividend on its common stock for the second quarter of 2010.

For the six months ended June 30, 2010, net interest income increased 23.0% to $5.4 million compared to $4.4 million for the period ended June 30, 2009. The increase is primarily the result of the increase in net interest margin from 2.91% in the second quarter of 2009, compared to 3.38% in the second quarter of 2010. Non-interest income decreased from $1.1 million for the six month period ending June 30, 2009 to $874,000 for the same period ended June 30, 2010. The decrease is primarily the result of a decrease in fees from presold mortgages; as well as a recognized gain in 2009 of $104,000 on sale of investments. For the six months ended June 30, 2010, non-interest expenses increased $342,000 to $5.2 million, compared to $4.9 million for the same period ending June 30, 2009. The increase in noninterest expenses is primarily attributable to the ongoing expenses on foreclosed properties.

The Companya™s unaudited consolidated total assets decreased $5.2 million to $343.6 million as of June 30, 2010, as compared to $348.8 million at December 31, 2009. Net loan balances have decreased $2.7 million from $227.1 million at December 31, 2009, compared to $224.4 million at June 30, 2010. The Companya™s investment securities decreased $8.0 million during the second quarter 2010 from $87.2 million at December 31, 2009 to $79.2 million at June 30, 2010. Total deposits increased $2.3 million to $261.5 million at June 30, 2010, compared to $259.2 at December 31, 2009. This increase represents a $10.5 million increase in NOW, savings and money market accounts, while decreasing time deposits by $8.2 million. Total borrowings reduced 13.5% from $65.7 million at December 31, 2009 to $56.8 million. Total stockholdersa™ equity increased 4.70% from $22.4 million at December 31, 2009, to $23.4 million at June 30, 2010. The increase in stockholdersa™ equity is the result of $583,000 in net income and a $577,000 increase in accumulated other comprehensive income.

Nonperforming assets, which includes nonaccrual loans and foreclosed assets, have decreased $1.3 million from $15.3 million at December 31, 2009 to $14.0 million at June 30, 2010. The nonperforming assets consist of $9.5 million in foreclosure assets and $4.5 million in nonaccrual loans. For the six months ended June 30, 2010, the Company recorded $678,000 expense to the provision for loan losses compared to $544,000 for the six months ended June 30, 2009. Net charge offs for the year are $407,000. The allowance for loan losses at June 30, 2010 totaled $4.2 million, or 1.84% of all outstanding loans.

Commenting on the second quarter 2010 results, Harold Keen, President and CEO, stated,

aI am pleased to report an improvement in net income for the second quarter of 2010 compared to the second quarter 2009. Maintaining existing relationships, developing new relationships and reducing other real estate owned portfolio while maintaining more than adequate levels of capital and liquidity are our primary focuses. These efforts will strengthen our financial position as the economy continues to recover. KS Bank continues to be well-capitalized according to regulatory standards with total risk based capital of 14.65%, tier 1 risk- based capital of 13.39% and a leverage ratio of 8.95%. The minimum levels for each of these ratios are 10%, 6%, and 5% respectively.a

KS Bancorp, Inc. is a Smithfield, North Carolina-based single bank holding company. KS Bank, Inc., a state-chartered savings bank, is KS Bancorpa™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 aexpect,a aanticipate,a aestimatea and abelieve,a 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.