KS Bancorp, Inc. (KSBI) Announces Third Quarter 2016 Financial Results

SMITHFIELD, N.C., Oct. 25, 2016 -- KS Bancorp, Inc. (the “Company”) (OTCBB:KSBI), parent company of KS Bank, Inc. (the “Bank”), announced unaudited net income of $537,000, or $.41 per diluted share, for the three months ended September 30, 2016, compared to a net income of $350,000, or $.26 per diluted share, for the three months ended September 30, 2015.

For the nine months ended September 30, 2016, net income totaled $1.5 million, a $500,000 increase, or 50% from $999,000 for the same period ended September 30, 2015. Net income per common share increased from $.76 at September 30, 2015 to $1.14 at September 30, 2016.

Net interest income for the three months ended September 30, 2016 was $2.8 million, compared to $2.6 million for the same period in 2015. Non-interest income for the three months ended September 30, 2016 was $689,000, compared to $538,000 for the same period ended September 30, 2015.  The increase in noninterest income is primarily the result of income from the Trust Services Division, which was added in July, 2015. There was a slight increase in noninterest expense for the three months ended September 30, 2016. Noninterest expense was $2.7 million for the three months ended September 30, 2016, as compared to $2.6 million for the same period ended September 30, 2015.

For the nine months ended September 30, 2016, net interest income was $8.4 million compared to $7.8 million for the nine months ended September 30, 2015. Noninterest income increase 39% or $575,000 from $1.5 million for the nine months ended September 30, 2015 to $2.0 million for the same period ended September 30, 2016.  For the nine months ended September 30, 2016, noninterest expense was $8.1 million, as compared to $7.8 million for the same period ended September 30, 2015.

The Company’s unaudited consolidated total assets increased $14.9 million to $352.3 million at September 30, 2016, compared to $337.4 million at December 31, 2015. Net loan balances increased $11.6 million with a balance of $259.2 million at September 30, 2016, compared to $247.6 million at December 31, 2015. The Company’s investment securities totaled $66.5 million at September 30, 2016, compared to $67.6 million at September 30, 2015 which reflects a $1.1 million decrease. Total deposits have increased 7.7% or $19.8 million to $277.3 million at September 30, 2016, compared to $257.5 million at December 31, 2015. Total stockholders’ equity increased $2.1 million from $22.9 million at December 31, 2015 to $25.0 million at September 30, 2016.

Nonperforming assets, which includes nonaccrual loans and other real estate owned (OREO), represent less than 1.0% of the total assets. The nonperforming assets consist of $301,000 in OREO and $2.1 million in nonaccrual loans. For the nine months ended September 30, 2016, $5,000 was expensed to the provision for loan losses. During the third quarter 2016, there were loan recoveries totaling $135,000, which effectively increased the allowance for loan losses as a result of repayments of loans which were charged off in prior years. The allowance for loan losses at September 30, 2016 totaled $3.7 million, or 1.40% of all outstanding loans.

KS Bank continues to be well-capitalized according to regulatory standards with total risk based capital of 14.20%, tier 1 risk- based capital of 12.95%, common equity tier 1 risked based capital of 12.95%, and a tier 1 leverage ratio of 9.62% at September 30, 2016. The minimum levels to be considered well capitalized for each of these ratios are 10.0%, 8.0%, 6.5%, and 5.0%, respectively.

Commenting on the third quarter results, Harold T. Keen, President/CEO stated, “We are very pleased with the third quarter and year-to-date results. The increased profitability and steady growth shown over the past several quarters are indicative of both the bank and the communities served.”  

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. The Bank offers a broad range of personal and business banking products and services, mortgage products and wealth management advisory services. 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. In addition, KS Wealth Management has an office in Asheboro, NC and maintains a presence in Waynesville and Wilmington, 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. 

Contact: Harold T. Keen		
President and Chief Executive Officer
(919) 938-3101	 			

Regina J Smith
Chief Financial Officer
(919) 938-3101