KSBI KS Bancorp Inc (PK)

KS Bancorp, Inc. (the �Company�) (OTCBB: KSBI), parent company of KS Bank, Inc., today announced first quarter financial results for the fiscal year 2007. The Company ended the first quarter of its 2007 fiscal year with a 11.60% growth in total assets over the same period in 2006. In addition, total assets increase 5.70% since December 31, 2006. Consolidated earnings for the first quarter of 2007 were $430,000, or $0.33 per diluted share, compared to earnings of $472,000, or $0.36 per diluted share, for the same period in 2006. The decrease in earnings is primarily attributed to increased interest expense on interest bearing deposits and borrowings. The Company continues to experience strong loan demand. Competition for deposits and the use of wholesale funding continues to compress net interest margins. Net interest income for the first quarter of 2007 was $2.3 million, up a modest 5.50% over the $2.2 million reported for the same period in 2006. Total revenue, defined as interest income and non-interest income, for the first quarter in 2007 was $5.6 million, an increase of 20.3 % above the $4.6 million reported for the same quarter in 2006. The Company�s consolidated total assets increased $16.5 million, or 5.70%, to $303.2 million during the three months ended March 31, 2007, as compared to $286.7 million at December 31, 2006. This growth resulted primarily from increases in net loans from $214.3 million at December 31, 2006, to $222.5 million at March 31, 2007. In addition, the Company�s volume of pre-sold mortgages increased by $1.6 million compared to December 31, 2006. Total assets at March 31, 2006, were $271.7 million, and total assets were $303.2 million, at March 31, 2007, representing a 11.60% increase for the time period. Funding for the growth in total assets was provided from a 6.5%, or $13.9 million, increase in total deposits. Total deposits were $227.6 million at March 31, 2007 compared to $213.6 million at December 31, 2006. Demand deposits increased 13.40% to $70.3 million at March 31, 2007 compared to $62.0 million at December 31, 2006. Total deposits at March 31, 2006 were $203.7 million. Commenting on the first quarter 2007 results, Harold Keen, President and CEO, stated, �While pressure on our net interest margin is increasing, we continue to grow our demand deposit base at a steady pace. Over time, this will lessen our sensitivity to market rate pressures. Overall, we believe that 2007 will be a good year for our Company.� In addition to the earnings report issued today, KS Bancorp, Inc. announced the payment of a quarterly cash dividend of $0.13 per share for stockholders of record on April 20, 2007, with payment to be made on May 2, 2007. 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 offering traditional banking products and services through its operation of seven full service branches located in Kenly, Selma, Clayton, Garner, Goldsboro, Wilson, and Smithfield, North Carolina. 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 SubsidiaryConsolidated Statements of Financial Condition � March 31, 2007 (Unaudited) Dec. 31, �2006/a � �(Dollars in Thousands) ASSETS Cash and due from banks: Interest-earning $8,414� $2,925� Noninterest-earning 3,848� 3,180� Time Deposit 100� 100� Investment securities: Available for sale 33,895� 51,112� Trading Securities 17,210� -� Federal Home Loan Bank stock, at cost 2,577� 2,494� Presold mortgages in process of settlement 2,969� 1,313� � Loans 225,123� 216,822� Less Allowance for loan losses (2,586) (2,449) Net loans 222,537� 214,373� � Accrued interest receivable 1,666� 1,626� Foreclosed assets, net 737� 560� Property and equipment, net 7,290� 7,188� Other assets 1,927� 1,859� � TOTAL ASSETS $303,170� $286,730� � LIABILITIES AND STOCKHOLDERS' EQUITY � Liabilities: Deposits $227,610� $213,672� Short-term borrowings 6,612� 16,352� Long-term borrowings 50,048� 38,048� Accrued interest payable 517� 530� Accounts payable and accrued expenses 787� 817� � TOTAL LIABILITIES 285,574� 269,419� � Stockholders' Equity: Preferred stock, no par value, 5,000,000 ���shares authorized; no shares issued and ���outstanding -� -� Common stock, no par value, authorized ���20,000,000 shares; 1,309,501 and ���1,197,029 shares issued and outstanding ���in 2007 and 2006, respectively � 1,607� 1,607� Retained earnings, substantially restricted 15,808� 15,850� Accumulated other comprehensive income (loss) 181� (146) � TOTAL STOCKHOLDERS' EQUITY 17,596� 17,311� � TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $303,170� $286,730� � � /a:�Derived from audited financial statements � � � � KS Bancorp, Inc. and Subsidiary Consolidated Statements of Operations (Unaudited) � Three Months Ended March 31, 2007� 2006� (In thousands, except per share data) � INTEREST INCOME Loans $ 4,481� $ 3,683� Investment securities: Taxable 268� 242� Tax-exempt 285� 233� Dividends 38� 29� Interest-bearing deposits 32� 45� � TOTAL INTEREST INCOME 5,104� 4,232� � INTEREST EXPENSE Deposits 2,107� 1,553� Borrowings 653� 459� � TOTAL INTEREST EXPENSE 2,760� 2,012� � NET INTEREST INCOME 2,344� 2,220� � PROVISION FOR LOAN LOSSES 133� 150� � NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 2,211� 2,070� � NON-INTEREST INCOME Service charges on deposit accounts 289� 282� Fees from presold mortgages 88� 70� Gain on Trading Securities 57� -� Other income 43� 55� � TOTAL NON-INTEREST INCOME 477� 407� � NON-INTEREST EXPENSE Compensation and benefits 1,317� 1,162� Occupancy and equipment 233� 201� Data processing and outside service fees 200� 181� Advertising 52� 29� Foreclosed real estate, net 19� 7� Loss on sale of investments 21� 7� Other 277� 253� � TOTAL NON-INTEREST EXPENSE 2,119� 1,840� � INCOME BEFORE INCOME TAXES 569� 637� � INCOME TAXES 139� 165� � NET INCOME $ 430� $ 472� � BASIC AND DILUTED NET INCOME PER COMMON SHARE $ 0.33� $ 0.36� � DIVIDENDS PER COMMON SHARE $ 0.13� $ 0.13�