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 $101,000, or $.08 per diluted share, for the three months ended March 31, 2014, compared to a net income available to common shareholders of $125,000, or $.10 per diluted share, for the three months ended March 31, 2013.

For the three months ended March 31, 2014 and March 31, 2013 net interest income was $2.4 million. Non-interest income for the period ended March 31, 2014 was $472,000, compared to $640,000 for the same period ended March 31, 2013. The decrease is primarily attributable to the $113,000 decrease in fees from presold mortgages during the three months ended March 31, 2014. Non-interest expenses remain at $2.7 million for the three months ended March 31, 2014 and March 31, 2013.

In the first quarter of 2014, the Company’s unaudited consolidated total assets increased $734,000 to $306.1 million at March 31, 2014, compared to $305.4 million at December 31, 2013. Net loan balances increased $4.5 million with a balance of $198.1 million at March 31, 2014 compared, to $193.6 million at December 31, 2013. The Company’s investment securities decreased $3.7 million to $80.6 million at March 31, 2014, compared to $84.3 million at December 31, 2013. Total deposits have increased $5.4 million to $235.4 million at March 31, 2014, compared to $230.0 at December 31, 2013. Total stockholders’ equity increased $382,000 from $24.3 million at December 31, 2013, to $24.7 million at March 31, 2014.

Nonperforming assets, which includes nonaccrual loans and OREO, increased $207,000 from $7.7 million at December 31, 2013 to $7.9 million at March 31, 2014. The nonperforming assets consist of $3.2 million in OREO and $4.7 million in nonaccrual loans. For the three months ended March 31, 2014, there was no expense to the provision for loan losses compared to $85,000 for the three months ended March 31, 2013. The allowance for loan losses at March 31, 2014 totaled $3.4 million, or 1.68% 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 2014. 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 17.46%, tier 1 risk- based capital of 16.20%, and a leverage ratio of 10.55% at March 31, 2014. 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, 2014 December 31, (unaudited) 2013*   (Dollars in thousands) ASSETS   Cash and due from banks: Interest-earning $ 5,280 $ 5,737 Noninterest-earning 1,381 1,441 Time Deposit 100 100 Investment securities available for sale, at fair value 80,589 84,292 Federal Home Loan Bank stock, at cost 1,782 1,953 Presold mortgages in process of settlement 310 -   Loans 201,577 197,032 Less allowance for loan losses   (3,390 )   (3,390 ) Net loans 198,187 193,642   Accrued interest receivable 1,039 1,032 Foreclosed real estate and repossessions, net 3,192 2,948 Property and equipment, net 8,407 8,468 Other assets   5,862     5,782     Total assets $ 306,129   $ 305,395     LIABILITIES AND STOCKHOLDERS' EQUITY   Liabilities Deposits $ 235,483 $ 230,083 Short-term borrowings 2,033 7,214 Long-term borrowings 41,248 41,248 Accrued interest payable 325 329 Accrued expenses and other liabilities   2,320     2,183     Total liabilities   281,409     281,057     Stockholder's Equity: Cumulative perpetual preferred stock (Series A), no par value 4,000 shares authorized, issued and outstanding $ 3,978 $ 3,964 Cumulative perpetual preferred stock (Series B), no par value 200 shares authorized, issued and outstanding 203 205 Common stock, no par value, authorized 20,000,000 shares; 1,309,501 shares issued and outstanding 1,607 1,607 Retained earnings, substantially restricted 19,279 19,178 Accumulated other comprehensive income (loss)   (347 )   (616 )   Total stockholders' equity   24,720     24,338     Total liabilities and stockholders' equity $ 306,129   $ 305,395     * Derived from audited financial statements KS Bancorp, Inc and Subsidiary Consolidated Statements of Income (Unaudited)       Three Months Ended March 31,

2014

2013

( In thousands, except per share data) Interest and dividend income: Loans, including fees $ 2,572 $ 2,718 Investment securities Taxable 322 339 Tax-exempt 127 130 Dividends 12 2 Interest-bearing deposits   1     3   Total interest and dividend income   3,034     3,192     Interest expense: Deposits 294 406 Borrowings   353     413   Total interest expense   647     819     Net interest income 2,387 2,373   Provision for loan losses   -     85     Net interest income after provision for loan losses   2,387     2,288     Noninterest income: Service charges on deposit accounts 301 289 Fees from presold mortgages 45 158 Gain on sale of investments 31 139 Other income   95     54   Total noninterest income   472     640     Noninterest expenses: Compensation and benefits 1,513 1,527 Occupancy and equipment 262 254 Data processing & outside service fees 228 203 Advertising 19 9 Foreclosed real estate and repossessions, net 103 200 Other   535     524   Total noninterest expenses   2,660     2,717     Income before income taxes 199 211   Income tax expense   32     21     Net income   167     190     Preferred stock dividends (55 ) (55 ) Accretion of discount, net   (11 )   (10 ) Income available to common stockholders $ 101   $ 125     Basic and Diluted earnings per share $ 0.08   $ 0.10  

KS Bancorp, Inc.Harold T. KeenPresident and Chief Executive Officer919-938-3101orRegina J. Smith, Chief Financial Officer919-938-3101