DUBLIN, Ga., May 03, 2024 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank, today announced net income of $4.9 million for the quarter ending March 31, 2024, representing an increase of $787 thousand, or 19.17%, compared to net income of $4.1 million for the quarter ended March 31, 2023. In the linked quarter comparison, the bank’s net income decreased $1.0 million, or 17.55%, compared to net income of $5.9 million for the quarter ended December 31, 2023. Net interest income before provision for credit losses was in line with prior quarter levels. Lower linked quarter net earnings were a result of higher salaries and employee benefits expense related to beginning of the year pay raises, bonuses, and equity-related benefits.
“We are pleased with the first quarter and the stability of our core earnings as evidenced by a solid net interest margin and net interest income. While our cost of funds has continued to rise, we’ve been able to keep pace with parallel increases in our earning asset yield. We continue to experience larger loan payoffs that have impeded our loan growth for the year but have provided higher pricing opportunities for new loans in addition to the repricing of scheduled maturities within the portfolio. We were also able to reduce our non-earning asset levels through a significant reduction in our other real estate (ORE) during the first quarter. Other real estate and foreclosed assets declined by over $3.5 million down to $39 thousand during the quarter,” said Spence Mullis, Chairman and CEO.
The net interest margin was 3.99% for the first quarter of 2024 compared to 3.97% for the fourth quarter of 2023 and 3.98% for the first quarter of 2023. The average yield on earning assets grew 17 basis points from 5.70%, as of December 31, 2023, to 5.87%, while the bank’s cost of funds grew 17 basis points from 1.92% to 2.09% during the same period.
Provision for credit losses declined $237 thousand during the quarter as a result of lower unfunded commitments which decreased the required CECL unfunded commitment reserve and with reduced loan levels due to the slight contraction in the loan portfolio of $3.0 million since the beginning of the year. The Company’s asset quality improved with a $3.5 million reduction in Other Real Estate during the quarter, which improved the bank’s adversely classified index from 6.69% as of December 31, 2023, to 5.22% as of March 31, 2024. The bank’s reserve as a percentage of total loans was 1.34% for March 31, 2024, as compared to 1.34% for December 31, 2023, and 1.35% for March 31, 2023. Noninterest expense increased $847,951, or 10.25%, over December 31, 2023, due mainly to the previously mentioned higher salary and benefits expense. Provision for income taxes increased $568,470, or 136.56%, during the quarter.
The Company’s total shareholders’ equity increased 2.16% during the quarter to $182 million as of March 31, 2024, and up 9.36%, or $15.6 million, from March 31, 2023. Tangible book value of the company grew to $80.831 on March 31, 2024, from $78.971 on December 31, 2023, and was up 10.51% from $73.14 as of March 31, 2023. On April 17, 2024, the board of directors approved a second quarter dividend of $0.461 per share payable on or about June 15, 2024, to all shareholders of record as of May 15, 2024. As announced on April 23, 2024, the bank declared a 4 for 1 stock dividend to all shareholders of record on that date. As such, the aforementioned cash dividend approved on April 17 will equate to approximately $0.09 cents per share outstanding of record on May 15, 2024, after giving effect to the stock dividend.
Forward-looking Statements
Certain statements contained in this release may not be based on historical facts and are forward-looking statements. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “may,” “might,” “will,” “would,” “could” or “intend.” We caution you not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors, including, among others, the business and economic conditions; risks related to the integration of acquired businesses and any future acquisitions; changes in management personnel; interest rate risk; ability to execute on planned expansion and organic growth; credit risk and concentrations associated with the Company’s loan portfolio; asset quality and loan charge-offs; inaccuracy of the assumptions and estimates management of the Company makes in establishing reserves for probable loan losses and other estimates; lack of liquidity; impairment of investment securities, goodwill or other intangible assets; the Company’s risk management strategies; increased competition; system failures or failures to prevent breaches of our network security; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes; and increases in capital requirements. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release.
______________________________ 1 Per share amounts have not been adjusted to reflect the April 23, 2024 4-for-1 stock dividend.
MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
Consolidating Balance Sheet
March 31,
December 31,
March 31,
2024
2023
Change
% Change
2023
Change
% Change
(Unaudited)
(Unaudited)
(Unaudited)
ASSETS
Cash and due from banks
$
67,354,916
$
33,192,772
$
34,162,144
102.92
%
$
51,448,341
$
15,906,575
30.92
%
Federal funds sold
3,746,408
17,268,446
(13,522,038
)
-78.30
%
16,102,872
(12,356,464
)
-76.73
%
Total cash and cash equivalents
71,101,324
50,461,218
20,640,106
40.90
%
67,551,213
3,550,111
5.26
%
Interest-bearing time deposits in other banks
100,000
100,000
-
0.00
%
100,000
-
0.00
%
Securities available for sale, at fair value
7,845,095
7,875,780
(30,685
)
-0.39
%
-
7,845,095
0.00
%
Securities held to maturity, at cost (net of CECL Reserve)
231,758,455
240,205,635
(8,447,180
)
-3.52
%
257,399,845
(25,641,390
)
-9.96
%
Federal Home Loan Bank stock, restricted, at cost
1,029,600
1,029,600
-
0.00
%
1,588,300
(558,700
)
-35.18
%
Loans, net of unearned income
1,060,755,992
1,063,772,222
(3,016,230
)
(0.28
%)
1,040,411,604
20,344,388
1.96
%
Less-allowance for credit losses
(14,236,149
)
(14,291,923
)
55,774
-0.39
%
(14,047,855
)
(188,294
)
1.34
%
Loans, net
1,046,519,843
1,049,480,299
(2,960,456
)
-0.28
%
1,026,363,749
20,156,094
1.96
%
-
Bank premises and equipment, net
13,112,437
13,188,353
(75,916
)
-0.58
%
13,658,218
(545,781
)
-4.00
%
ROU assets for operating lease, net
1,035,712
1,126,156
(90,444
)
-8.03
%
1,431,413
(395,701
)
-27.64
%
Goodwill
9,361,704
9,361,704
-
0.00
%
9,361,704
-
0.00
%
Intangible assets, net
1,594,101
1,679,989
(85,888
)
-5.11
%
1,937,652
(343,551
)
-17.73
%
Other real estate and foreclosed assets
38,558
3,611,235
(3,572,677
)
-98.93
%
3,803,252
(3,764,694
)
-98.99
%
Accrued interest receivable
5,964,911
6,424,090
(459,179
)
-7.15
%
4,959,915
1,004,996
20.26
%
Cash surrender value of life insurance
14,813,139
14,711,623
101,516
0.69
%
14,423,960
389,179
2.70
%
Other assets
25,151,653
25,321,095
(169,442
)
-0.67
%
22,390,328
2,761,325
12.33
%
Total Assets
$
1,429,426,532
$
1,424,576,777
$
4,849,755
0.34
%
$
1,424,969,549
4,456,983
0.31
%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing
$
302,810,356
$
298,356,827
$
4,453,529
1.49
%
$
323,091,870
(20,281,514
)
-6.28
%
Interest bearing
904,181,606
909,976,336
(5,794,730
)
-0.64
%
877,794,418
26,387,188
3.01
%
1,206,991,962
1,208,333,163
(1,341,201
)
-0.11
%
1,200,886,288
6,105,674
0.51
%
-
Other borrowed funds
27,169,934
27,151,283
18,651
0.07
%
47,095,332
(19,925,398
)
-42.31
%
Lease liability for operating lease
1,035,712
1,126,156
(90,444
)
-8.03
%
1,431,413
(395,701
)
-27.64
%
Accrued interest payable
1,419,439
1,059,226
360,213
34.01
%
491,159
928,280
189.00
%
Accrued expenses and other liabilities
10,830,616
8,773,430
2,057,186
23.45
%
8,660,358
2,170,258
25.06
%
-
Total liabilities
1,247,447,663
1,246,443,258
1,004,405
0.08
%
1,258,564,550
(11,116,887
)
-0.88
%
Shareholders' Equity:
Common stock
2,179,210
2,179,210
-
0.00
%
2,177,510
1,700
0.08
%
Paid in capital surplus
42,816,048
41,635,204
1,180,844
2.84
%
41,281,108
1,534,940
3.72
%
Retained earnings
133,038,717
115,774,853
17,263,864
14.91
%
118,570,582
14,468,135
12.20
%
Current year earnings
4,890,818
19,332,490
(14,441,672
)
-74.70
%
4,103,935
786,883
19.17
%
Accumulated other comprehensive income (loss)
1,811,160
1,968,846
(157,686
)
-8.01
%
2,468,079
(656,919
)
-26.62
%
Treasury Stock, at cost 63,290
(2,757,084
)
(2,757,084
)
-
0.00
%
(2,196,215
)
(560,869
)
25.54
%
Total shareholders' equity
181,978,869
178,133,519
3,845,350
2.16
%
166,404,999
15,573,870
9.36
%
Total Liabilities and Shareholders' Equity
$
1,429,426,532
$
1,424,576,777
4,849,755
0.34
%
$
1,424,969,549
4,456,983
0.31
%
MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
Consolidating Statement of Income
for the Three Months Ended
March 31,
December 31,
March 31,
2024
2023
Change
% Change
2023
Change
% Change
(Unaudited)
(Unaudited)
(Unaudited)
Interest and Dividend Income:
Interest and fees on loans
$
17,124,889
$
16,525,637
$
599,252
3.63
%
$
14,466,103
$
2,658,786
18.38
%
Interest income on securities
1,970,394
2,039,123
(68,729
)
-3.37
%
2,005,741
(35,347
)
-1.76
%
Income on federal funds sold
168,129
171,564
(3,435
)
-2.00
%
132,805
35,324
26.60
%
Income on time deposits held in other banks
408,412
397,228
11,184
2.82
%
247,252
161,160
65.18
%
Other interest and dividend income
75,848
84,638
(8,790
)
-10.39
%
61,186
14,662
23.96
%
Total interest and dividend income
19,747,672
19,218,190
529,482
2.76
%
16,913,087
2,834,585
16.76
%
Interest Expense:
Deposits
6,339,843
5,730,050
609,793
10.64
%
3,469,654
2,870,189
82.72
%
Interest on other borrowed funds
445,278
554,336
(109,058
)
-19.67
%
564,278
(119,000
)
-21.09
%
Interest on federal funds purchased
--
137
(137
)
-100.00
%
--
-
0.00
%
Total interest expense
6,785,121
6,284,523
500,598
7.97
%
4,033,932
2,751,189
68.20
%
Net interest income before provision for loan losses
12,962,551
12,933,667
28,884
0.22
%
12,879,155
83,396
0.65
%
Less-provision for credit losses
4,501
241,637
(237,136
)
-98.14
%
383,376
(378,875
)
-98.83
%
Net interest income after provision for credit losses
12,958,050
12,692,030
266,020
2.10
%
12,495,779
462,271
3.70
%
Noninterest Income:
Service charges on deposit accounts
491,568
514,786
(23,218
)
-4.51
%
562,893
(71,325
)
-12.67
%
Other service charges, commisions and fees
362,692
410,311
(47,619
)
-11.61
%
403,583
(40,891
)
-10.13
%
Gain on sales of foreclosed assets
700
2,723
(2,023
)
-74.29
%
1,420
(720
)
-50.70
%
Gain on sales of premises and equipment
--
--
--
--
--
--
--
Increase in CSV of life insurance
101,516
98,285
3,231
3.29
%
90,416
11,100
12.28
%
Other income
251,361
72,233
179,128
247.99
%
420,788
(169,427
)
-40.26
%
Total noninterest income
1,207,837
1,098,338
109,499
9.97
%
1,479,100
(271,263
)
-18.34
%
Noninterest Expense:
Salaries and employee benefits
4,861,534
4,254,389
607,145
14.27
%
4,896,748
(35,214
)
-0.72
%
Occupancy and equipment expenses, net
545,126
530,833
14,293
2.69
%
549,051
(3,925
)
-0.71
%
Other expenses
3,716,219
3,489,706
226,513
6.49
%
3,433,785
282,434
8.23
%
Total noninterest expense
9,122,879
8,274,928
847,951
10.25
%
8,879,584
243,295
2.74
%
Income Before Income Taxes
5,043,008
5,515,440
(472,432
)
-8.57
%
5,095,295
(52,287
)
-1.03
%
Provision for income taxes
152,190
(416,280
)
568,470
136.56
%
991,360
(839,170
)
-84.65
%
-
Net Income
$
4,890,818
$
5,931,720
(1,040,902
)
-17.55
%
$
4,103,935
786,883
19.17
%
Earnings per common share:
Basic
$
2.31
$
2.81
(0.50
)
-17.79
%
$
1.94
0.37
19.07
%
Diluted
$
2.31
$
2.81
(0.50
)
-17.79
%
$
1.94
0.37
19.07
%
Quarter Ending
March 31,
December 31,
March 31,
2024
2023
2023
Dollars in thousand, except per share data
(Unaudited)
(Unaudited)
(Unaudited)
Per Share Data
Basic Earnings per Common Share
$
2.31
$
2.81
$
1.94
Diluted Earnings per Common Share
2.31
2.81
1.94
Dividends per Common Share
0.46
0.44
0.44
Book Value per Common Share
86.00
84.14
78.47
Tangible Book Value per Common Share
80.83
78.97
73.14
Average Diluted Shared Outstanding
$
2,116,078
$
2,116,078
$
2,111,955
End of Period Common Shares Outstanding
$
2,115,919
$
2,115,920
$
2,120,598
Annualized Performance Ratios (Bank Only)
Return on Average Assets
1.55
%
1.84
%
1.33
%
Return on Average Equity
11.74
%
14.11
%
10.64
%
Equity/Assets
13.09
%
13.07
%
11.90
%
Yield on Earning Assets
5.87
%
5.70
%
5.06
%
Cost of Funds
2.09
%
1.92
%
1.18
%
Net Interest Margin
3.99
%
3.97
%
3.98
%
Efficiency Ratio
61.48
%
55.18
%
59.32
%
Credit Metrics
Allowance for Loan Losses to Total Loans
1.34
%
1.34
%
1.35
%
Adversely Classified Assets to Tier 1 Capital
plus Allowance for Loan Losses
5.22
%
6.69
%
6.49
%
CONTACT: CONTACT: Morris State Bancshares Chris Bond Chief Financial Officer 478-272-5202
