KS Bancorp, Inc. Files Form 15 to Deregister Its Common Stock; Trading Continues Through the OTC Bulletin Board and Announces Market Maker.

SMITHFIELD, N.C. -- The Board of Directors of KS Bancorp, Inc. (OTCBB: KSBI) announced today that on March 23, 2005 the Company filed a Form 15 with the Securities and Exchange Commission to deregister the Company's common stock and suspend its reporting obligations under the Securities Exchange Act of 1934, as amended. The Company expects the deregistration to become effective within 90 days of filing with the SEC. As a result of the filing of the Form 15, the Company's obligation to file certain reports and forms, including Forms 10-KSB, 10-QSB and 8-K, with the SEC has been suspended.

Harold T. Keen, President and CEO of KS Bancorp stated, "KS Bancorp's efforts to deregister have been driven by our goal to reduce current expense and to avoid future expenses related to additional auditing requirements created by the Sarbanes-Oxley Act. The Company will continue to provide quarterly and annual financial reports and meet all applicable auditing standards as a regulated financial institution."

The Company's common stock will continue to be eligible for quotation on the OTC Bulletin Board. The Company's OTCBB trading symbol has been changed from KSAV to KSBI effective March 18, 2005.

In addition, the Company announced that Howe Barnes Investments, Inc. has agreed to become a primary marker maker in KS Bancorp common stock, though it has no obligation to do so at all or for any particular length of time. Howe Barnes is actively engaged in the trading of non-SEC reporting companies on the OTC Bulletin Board and in the Pink Sheets. Earl W. Worley, Jr., Chief Financial Officer for KS Bancorp, stated, "we are pleased to forge this relationship with Howe Barnes to alleviate investor concerns about liquidity in the Company's common stock."

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 emphasizes being 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.