KS Bank Releases Third Quarter Results

Smithfield —  KS Bancorp, Inc. (the “Company”) (OTCBB: KSBI), parent company of KS Bank, Inc. announced unaudited results for the third quarter of 2017. The Company reported net income of $782,000, or $0.60 per diluted share, for the three months ended September 30, 2017, up $245,000, or 45.6 %, compared to a net income of $537,000, or $0.41 per diluted share, for the three months ended September 30, 2016. For the nine months ended September 30, 2017, net income available to common shareholders totaled $2.0 million, or $1.57 per diluted share, up $554,000 or 37.0 %, compared to net income of $1.5 million, or $1.14 per diluted share, for the period ended September 30, 2016.

Commenting on the third quarter 2017 results, Mr. Keen, President and CEO of the Company and the Bank, stated, “These results represent another successful quarter for the Company, as we continue to implement management’s plan to maximize shareholder value by increasing income producing assets, while controlling expenses. On behalf of the Board of Directors and our management team, I would like to thank our customers and the local communities for their continued support as we look forward to continuing to serve them as their independent community bank of choice.”

Net interest income for the three months ended September 30, 2017 was $3.0 million, compared to $2.8 million for the same period in 2016. Noninterest income for the three months ended September 30, 2017 was $702,000, compared to $689,000 for the same period ended September 30, 2016. Noninterest expense was $2.8 million for the three months ended September 30, 2017, compared to $2.7 million for the three months ended September 30, 2016.

For the nine months ended September 30, 2017, net interest income was $9.0 million, compared to $8.4 million for the nine months ended September 30, 2016. Noninterest income was unchanged at $2.0 million for the nine months ended September 30, 2016 and 2017. Noninterest expenses increased slightly to $8.2 million for the nine months ended September 30, 2017, compared to $8.1 million for the nine months ended September 30, 2016.

The Company’s unaudited consolidated total assets were $369.9 million at September 30, 2017, up $10.5 million, or 2.9%, compared to $359.4 million at December 31, 2016. Net loan balances were $283.4 million at September 30, 2017, up $17.4 million, or 6.5%, compared to $266.0 million at December 31, 2016.

The Company’s investment securities totaled $60.6 million at September 30, 2017, compared to $66.2 million at December 31, 2016. Total deposits were $294.9 million at September 30, 2017, up $9.2 million, or 3.2%, compared to $285.7 million at December 31, 2016. Total stockholders’ equity was $26.6 million at September 30, 2017 up $2.2 million or 9.2%, compared to $24.4 million at December 31, 2016.

Nonperforming assets, which includes nonaccrual loans and foreclosed real estate, have continued to decline and as of September 30, 2017 represented less than 0.50% of the Company’s total assets. Nonperforming assets consist of $130,000 in foreclosed real estate and $567,000 in nonaccrual loans. The allowance for loan losses at September 30, 2017 totaled $3.9 million, or 1.35% of all outstanding loans.

Separately, Mr. Keen noted that the Board of Directors of the Company has withdrawn its plan to pursue a Subchapter S reorganization and will instead continue to operate as a C corporation.

KS Bank continues to be well-capitalized according to regulatory standards with total risk-based capital of 14.23%, tier 1 risk-based capital of 12.98%, common equity tier 1 risk-based capital of 12.98%, and a tier 1 leverage ratio of 9.84% at September 30, 2017. The minimum levels to be considered well-capitalized for each of these ratios are 10.0%, 8.0%, 6.5%, and 5.0%, 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. 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.