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KS Bancorp says it isn’t interested in sale to First Citizens

KS Bancorp, a small Johnston County-based community bank which is feeling takeover pressure from the Raleigh-based Holding family, says it wants to remain independent after an analysis of strategic options by advisers at the Raymond James investment bank.

[media-credit name=”First Citizens Bank” align=”alignright” width=”350″][/media-credit]

“After its thorough and extended considerations, our Board has determined the best interests of our shareholders will be served by KS Bancorp remaining an independent company. We look forward to continuing to serve our customers and local communities,” CEO Harold Keen said in a Nov. 17 statement.

On Aug. 21, the Holdings’ First Citizens Bancshares submitted a filing with the Federal Reserve System applying for the ability to acquire up to 80% of KS shares. The Holdings had previously offered $35 a share, or about $46 million; KS said it wasn’t interested in the bid, which was 50% higher than KS’ previous share price.

Hostile takeover bids are exceedingly rare among North Carolina banks, with transactions usually made public after private negotiations.

KS, which stands for Kenly Savings, has about $360 million in assets, while Raleigh-based First Citizens is the nation’s largest family-owned bank with $34 billion in assets.

In an interview, Keen said KS issued the statement to alert investors about its intention to remain independent. He noted that he has had a friendly relationship with members of the Holding family for more than 40 years. KS is based in Smithfield, the hometown of Frank Holding Sr., father of First Citizens’ CEO Frank Holding Jr.

First Citizens, Mount Olive-based Southern BancShares and Fuquay-Varina-based Fidelity Bank — all controlled by the Holdings — now own a combined 4.3% of KS, according to the Fed filing. They want to buy 992,000 more shares at $35 per share.

Keen owns about 10% of KS shares, worth more than $4 million. The Holdings’ family stake in their banks exceeds $600 million. KS shares traded for about $30 Monday. The company has been public for 24 years, Keen said.

Mills River, NC branch

David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at

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