KS Bancorp, Inc. (KSBI) Announces Third Quarter 2024 Financial Results and Cash Dividend

KS Bancorp, Inc.

Fri, Oct 25, 2024, 8:35 AM 7 min read

Net interest income before the provision for credit losses for the three months ended September 30, 2024 was $5.5 million, compared to $5.0 million at September 30, 2023. Non-interest income for the three months ended September 30, 2024, was $881,000, compared to $812,000 for the comparable period ended September 30, 2023. Non-interest expense was $4.2 million for the three months ended September 30, 2024, compared to $3.8 million in the comparable period in 2023.

For the nine months ending September 30, 2024, there was a 5.1% increase in the net interest income before the provision for credit losses. On September 30, 2024, it was $16.0 million, compared to $15.3 million for the nine months ending September 30, 2023. Non-interest income was $2.6 million for the nine months ending September 30, 2024, compared to $2.4 million for the same period ended September 30, 2023. The increase is primarily attributable to the continued growth of the Wealth and Trust Services. For the nine months ended September 30, 2024, non-interest expenses were $12.3 million, compared to $11.4 million for the same period ending September 30, 2023.

The Company's unaudited consolidated total assets increased 11.9% or $72.9 million to $686.5 million on September 30, 2024, compared to $613.6 million on December 31, 2023. Net loan balances increased 9.5% or $45.0 million to $517.9 million on September 30, 2024, compared to $472.9 million on December 31, 2023. The Company's investment securities totaled $101.2 million on September 30, 2024, compared to $98.0 million on December 31, 2023. Total deposits increased 14.3% or $78.2 million to $623.2 million on September 30, 2024, compared to $545.0 million on December 31, 2023. The increase in deposits included a $71.7 million increase or 14.3% in core deposits. For the nine months ended September 30, 2024, short-term borrowings decreased $12.0 million. Total stockholders' equity increased $6.1 million to $46.6 million on September 30, 2024, from $40.5 million on December 31, 2023. The increase in stockholder's equity is primarily attributable to the change in accumulated other comprehensive income of $2.4 million and the increase in retained earnings of $3.7 million.

On September 30, 2024, nonperforming assets consisted of nonaccrual loans of $603,000, representing less than 0.10% of the Company's total assets. No foreclosed real estate was owned on September 30, 2024. The allowance for credit losses on September 30, 2024, totaled $4.2 million, or 0.81% of total loans.

Commenting on the third quarter results, Earl W. Worley, Jr., President and CEO of the Company, stated, "We're proud of the strong growth KS Bank has achieved during the third quarter and throughout the first nine months of 2024. Year-to-date, our total assets have grown by 11.9% to $686.5 million, and loan balances have increased by 9.5%, or $45 million, since the start of the year. Additionally, deposits have risen by 14.3%, with core deposits contributing significantly to this growth. This consistent performance across the year reflects the trust our customers place in us, and positions us well to continue supporting the communities we serve through these changing economic conditions."

Worley continued, "As we approach the end of 2024, our focus is on carefully managing the impact of potential interest rate changes. While we are encouraged by our strong year-to-date performance, we recognize that the Federal Reserve's next moves will influence our margins and lending environment. Our goal is to remain agile, ensuring we continue to deliver value to our shareholders while navigating the challenges ahead."

In addition, the Company announced today that its Board of Directors has declared a quarterly dividend of $0.26 per share for stockholders of record as of November 4, with payment to be made on November 14, 2024.

KS Bank continues to be well capitalized according to regulatory standards, with a Community Bank Leverage Ratio of 9.28% on September 30, 2024, compared to 9.67% on December 31, 2023.

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 that has served the citizens of eastern North Carolina since 1924. The Bank offers a broad range of personal and business banking products and services, as well as mortgage and trust services. Ten full-service branches are located in Kenly, Selma, Clayton, Garner, Goldsboro, Wilson, Wendell, Smithfield, Four Oaks, and Dunn, 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

	September 30, 2024 (unaudited)			December 31, 2023*

ASSETS

Cash and due from banks:
Interest-earning	$	37,396		$	15,962
Noninterest-earning		5,547			2,983
Time Deposit		513			500
Investment securities available for sale, at fair value		101,154			98,047
Federal Home Loan Bank stock, at cost		469			978
Loans		522,140			476,679
Less allowance for loan losses		(4,212	)		(3,766	)
Net loans		517,928			472,913

Accrued interest receivable		2,566			2,389
Property and equipment, net		13,118			11,050
Other assets		7,812			8,774

Total assets	$	686,503		$	613,596

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Deposits	$	623,226		$	545,038
Short-term borrowings	$	-		$	12,000
Long-term borrowings		11,248			11,248
Accrued interest payable		317			432
Accrued expenses and other liabilities		5,132			4,401

Total liabilities		639,923			573,119

Stockholder's Equity:
Preferred stock, no par value, 500,000 shares authorized; none issued and outstanding
Common stock, no par value, 3,500,000 shares authorized; 1,107,776 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		1,359			1,359
Retained earnings, substantially restricted		51,310			47,659
Accumulated other comprehensive Income (loss)		(6,089	)		(8,541	)

Total stockholders' equity		46,580			40,477

Total liabilities and stockholders' equity	$	686,503		$	613,596

* Derived from audited financial statements

KS Bancorp, Inc. and Subsidiary
Consolidated Statements of Income (Unaudited)

	Three Months Ended				Nine Months Ended
	30-Sep				30-Sep
	2024		2023		2024		2023
	(In thousands, except per share data)
Interest and dividend income:
Loans	$	8,283	$	6,615	$	23,520	$	18,653
Investment securities
Taxable		561		484		1,574		1445
Tax-exempt		185		203		589		612
Dividends		6		5		18		15
Interest-bearing deposits		325		271		722		814
Total interest and dividend income		9,360		7,578	$	26,423		21,539

Interest expense:
Deposits		3,690		2,395		9,628		5,713
Borrowings		185		187		750		565
Total interest expense		3,875		2,582		10,378		6,278

Net interest income		5,485		4,996		16,045		15,261

Provision for loan losses		171		180		454		290

Net interest income after provision for loan losses		5,314		4,816		15,591		14,971

Noninterest income:
Service charges on deposit accounts		340		330		974		985
Fees from trust services		372		312		1,023		894
Other income		169		170		576		500
Total noninterest income		881		812		2,573		2,379

Noninterest expenses:
Compensation and benefits		2,532		2,374		7,547		7,096
Occupancy and equipment		631		553		1,784		1,591
Data processing & outside service fees		253		220		732		633
Advertising		62		63		172		178
Other		706		622		2,060		1,899
Total noninterest expenses		4,184		3,832		12,295		11,397

Income before income taxes		2,011		1,796		5,869		5,953

Income tax		550		365		1,365		1,244

Net income	$	1,461	$	1,431	$	4,504	$	4,709

Basic and Diluted earnings per share	$	1.32	$	1.29	$	4.07	$	4.25