Source: GlobeNewswire (MIL-OSI)
DUBLIN, Ga., Oct. 23, 2024 (GLOBE NEWSWIRE) — Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank, today announced net income of $5.4 million for the quarter ending September 30, 2024, representing an increase of $124 thousand, or 2.34%, compared to net income of $5.3 million for the quarter ended June 30, 2024. Year over year the Company’s net income increased $954 thousand, or 21.23%, compared to net income of $4.5 million for the quarter ended September 30, 2023. The Company’s quarterly net earnings rose due to sustained loan growth, higher loan yields, an increase in noninterest-bearing deposit accounts, and some stabilization in the cost of funds. These factors combined to strengthen the bank’s net interest margin, bringing it to 4.10%.
“We had a solid third quarter. Our core earnings engine remains strong as reflected by the growth in our net interest income. In the third quarter, we generated net interest income of $14.0 million, which was $428 thousand above the June 30, 2024, level of $13.6 million and $1.1 million above the September 30, 2023 level of $12.9 million,” said Spence Mullis, Chairman and CEO. “The Federal Reserve’s reduction in the Fed funds rate, combined with robust growth in noninterest-bearing balances, has contributed to stabilizing our cost of funds. Despite continued payoffs of larger loans, we continue to fund a good volume of new loans and previously unfunded commitments driving our loan balances slightly higher.”
The net interest margin was 4.10% for the third quarter of 2024 compared to 4.02% for the second quarter of 2024 and 3.94% for the third quarter of 2023. The average yield on earning assets grew nine basis points from 5.96%, as of June 30, 2024, to 6.05%, while the Company’s cost of funds increased two basis points from 2.16% to 2.18% during the same period.
Total deposits declined during the quarter by $16.6 million, or 1.37%, which included a $24 million reduction in brokered money market deposits. However, non-interest-bearing deposits increased $21.5 million, or 7.19% during the quarter, helping to bolster the net interest margin. The bank took down $15.0 million in borrowings from the Federal Home Loan Bank during the third quarter of 2024 to help fund new loan demand and offset the reduction in brokered deposits. Loans increased $6.3 million, or an annualized 2.36% during the third quarter, slowing from the second quarter’s annualized growth of 7.24%. Management anticipates steady loan demand in the fourth quarter as political uncertainty eases in November, providing customers with greater clarity to advance their growth strategies.
The bank’s reserve as a percentage of total loans was 1.30% for September 30, 2024, as compared to 1.30% for June 30, 2024, and 1.32% as of September 30, 2023. The Company’s adversely classified index increased slightly from 6.04% as of June 30, 2024, to 6.15% as of September 30, 2024. The bank’s efficiency ratio increased slightly from 58.36% as of June 30, 2024, to 58.90% as of September 30, 2024.
The Company’s total shareholders’ equity increased 2.35% to $190.6 million as of September 30, 2024, as compared to $186.2 million as of June 30, 2024. Tangible book value per share increased to $16.97 as of September 30, 2024, a 2.66% increase from $16.53 per share on June 30, 2024. On October 16, 2024, the board of directors approved its fourth quarter dividend of $0.092 per share payable on or about December 15th to all shareholders of record as of November 15th.
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.
| MORRIS STATE BANCSHARES, INC. | ||||||||||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||||||||||
| Consolidating Balance Sheet | ||||||||||||||||||||||||||||||
| September 30, | June 30, | September 30, | ||||||||||||||||||||||||||||
| 2024 | 2024 | Change | % Change | 2023 | Change | % Change | ||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||||
| Cash and due from banks | $ | 48,180,615 | $ | 43,688,884 | $ | 4,491,731 | 10.28 | % | $ | 36,373,555 | $ | 11,807,060 | 32.46 | % | ||||||||||||||||
| Federal funds sold | 11,932,122 | 14,624,710 | (2,692,588 | ) | -18.41 | % | 8,695,149 | 3,236,973 | 37.23 | % | ||||||||||||||||||||
| Total cash and cash equivalents | 60,112,737 | 58,313,594 | 1,799,143 | 3.09 | % | 45,068,704 | 15,044,033 | 33.38 | % | |||||||||||||||||||||
| Interest-bearing time deposits in other banks | 100,000 | 100,000 | — | 0.00 | % | 100,000 | — | 0.00 | % | |||||||||||||||||||||
| Securities available for sale, at fair value | 6,299,609 | 7,669,642 | (1,370,033 | ) | -17.86 | % | 3,879,531 | 2,420,078 | 0.00 | % | ||||||||||||||||||||
| Securities held to maturity, at cost (net of CECL Reserve) | 224,532,603 | 227,532,821 | (3,000,218 | ) | -1.32 | % | 244,837,916 | (20,305,313 | ) | -8.29 | % | |||||||||||||||||||
| Federal Home Loan Bank stock, restricted, at cost | 1,740,300 | 1,027,800 | 712,500 | 69.32 | % | 1,727,100 | 13,200 | 0.76 | % | |||||||||||||||||||||
| Loans, net of unearned income | 1,088,132,851 | 1,081,790,223 | 6,342,628 | 0.59 | % | 1,049,730,890 | 38,401,961 | 3.66 | % | |||||||||||||||||||||
| Less-allowance for credit losses | (14,179,392 | ) | (14,109,191 | ) | (70,201 | ) | 0.50 | % | (13,860,420 | ) | (318,972 | ) | 2.30 | % | ||||||||||||||||
| Loans, net | 1,073,953,459 | 1,067,681,032 | 6,272,427 | 0.59 | % | 1,035,870,470 | 38,082,989 | 3.68 | % | |||||||||||||||||||||
| – | ||||||||||||||||||||||||||||||
| Bank premises and equipment, net | 12,912,111 | 13,051,972 | (139,861 | ) | -1.07 | % | 13,325,846 | (413,735 | ) | -3.10 | % | |||||||||||||||||||
| ROU assets for operating lease, net | 854,808 | 945,268 | (90,460 | ) | -9.57 | % | 1,216,601 | (361,793 | ) | -29.74 | % | |||||||||||||||||||
| Goodwill | 9,361,704 | 9,361,704 | — | 0.00 | % | 9,361,704 | — | 0.00 | % | |||||||||||||||||||||
| Intangible assets, net | 1,422,326 | 1,508,214 | (85,888 | ) | -5.69 | % | 1,765,877 | (343,551 | ) | -19.45 | % | |||||||||||||||||||
| Other real estate and foreclosed assets | 39,755 | 43,408 | (3,653 | ) | -8.42 | % | 3,567,309 | (3,527,554 | ) | -98.89 | % | |||||||||||||||||||
| Accrued interest receivable | 6,640,617 | 6,421,999 | 218,618 | 3.40 | % | 5,585,081 | 1,055,536 | 18.90 | % | |||||||||||||||||||||
| Cash surrender value of life insurance | 15,022,374 | 14,915,967 | 106,407 | 0.71 | % | 14,613,337 | 409,037 | 2.80 | % | |||||||||||||||||||||
| Other assets | 22,311,520 | 21,721,225 | 590,295 | 2.72 | % | 25,711,989 | (3,400,469 | ) | -13.23 | % | ||||||||||||||||||||
| Total Assets | $ | 1,435,303,923 | $ | 1,430,294,646 | $ | 5,009,277 | 0.35 | % | $ | 1,406,631,465 | 28,672,458 | 2.04 | % | |||||||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||||||||
| Non-interest bearing | $ | 320,503,732 | $ | 298,997,994 | $ | 21,505,738 | 7.19 | % | $ | 316,825,603 | 3,678,129 | 1.16 | % | |||||||||||||||||
| Interest bearing | 876,274,737 | 914,360,430 | (38,085,693 | ) | -4.17 | % | 862,167,812 | 14,106,925 | 1.64 | % | ||||||||||||||||||||
| 1,196,778,469 | 1,213,358,424 | (16,579,955 | ) | -1.37 | % | 1,178,993,415 | 17,785,054 | 1.51 | % | |||||||||||||||||||||
| – | ||||||||||||||||||||||||||||||
| Other borrowed funds | 34,009,138 | 18,998,904 | 15,010,234 | 79.01 | % | 42,132,633 | (8,123,495 | ) | -19.28 | % | ||||||||||||||||||||
| Lease liability for operating lease | 854,808 | 945,268 | (90,460 | ) | -9.57 | % | 1,216,601 | (361,793 | ) | -29.74 | % | |||||||||||||||||||
| Accrued interest payable | 2,114,956 | 1,730,280 | 384,676 | 22.23 | % | 979,913 | 1,135,043 | 115.83 | % | |||||||||||||||||||||
| Accrued expenses and other liabilities | 10,938,057 | 9,038,821 | 1,899,236 | 21.01 | % | 10,056,934 | 881,123 | 8.76 | % | |||||||||||||||||||||
| – | ||||||||||||||||||||||||||||||
| Total liabilities | 1,244,695,428 | 1,244,071,697 | 623,731 | 0.05 | % | 1,233,379,496 | 11,315,932 | 0.92 | % | |||||||||||||||||||||
| Shareholders’ Equity: | ||||||||||||||||||||||||||||||
| Common stock | 10,688,223 | 10,688,223 | — | 0.00 | % | 2,179,210 | 8,509,013 | 390.46 | % | |||||||||||||||||||||
| Paid in capital surplus | 34,867,691 | 34,729,351 | 138,340 | 0.40 | % | 41,548,417 | (6,680,726 | ) | -16.08 | % | ||||||||||||||||||||
| Retained earnings | 131,085,914 | 132,061,494 | (975,580 | ) | -0.74 | % | 116,705,941 | 14,379,973 | 12.32 | % | ||||||||||||||||||||
| Current year earnings | 15,660,043 | 10,213,197 | 5,446,846 | 53.33 | % | 13,404,804 | 2,255,239 | 16.82 | % | |||||||||||||||||||||
| Accumulated other comprehensive income (loss) | 1,582,952 | 1,648,392 | (65,440 | ) | -3.97 | % | 2,148,509 | (565,557 | ) | -26.32 | % | |||||||||||||||||||
| Treasury Stock, at cost 91,878 | (3,276,328 | ) | (3,117,708 | ) | (158,620 | ) | 5.09 | % | (2,734,912 | ) | (541,416 | ) | 19.80 | % | ||||||||||||||||
| Total shareholders’ equity | 190,608,495 | 186,222,949 | 4,385,546 | 2.35 | % | 173,251,969 | 17,356,526 | 10.02 | % | |||||||||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 1,435,303,923 | $ | 1,430,294,646 | 5,009,277 | 0.35 | % | $ | 1,406,631,465 | 28,672,458 | 2.04 | % | ||||||||||||||||||
| MORRIS STATE BANCSHARES, INC. | ||||||||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||||||||
| Consolidating Statement of Income | ||||||||||||||||||||||||||||
| for the Three Months Ended | ||||||||||||||||||||||||||||
| September 30, | June 30, | September 30, |
||||||||||||||||||||||||||
| 2024 | 2024 | Change | % Change | 2023 | Change | % Change | ||||||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||
| Interest and Dividend Income: | ||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 18,630,690 | $ | 17,879,134 | $ | 751,556 | 4.20 | % | $ | 15,803,711 | $ | 2,826,979 | 17.89 | % | ||||||||||||||
| Interest income on securities | 1,825,236 | 1,837,396 | (12,160 | ) | -0.66 | % | 2,051,695 | (226,459 | ) | -11.04 | % | |||||||||||||||||
| Income on federal funds sold | 163,624 | 156,184 | 7,440 | 4.76 | % | 216,377 | (52,753 | ) | -24.38 | % | ||||||||||||||||||
| Income on time deposits held in other banks | 338,433 | 590,205 | (251,772 | ) | -42.66 | % | 302,545 | 35,888 | 11.86 | % | ||||||||||||||||||
| Other interest and dividend income | 21,031 | 64,639 | (43,608 | ) | -67.46 | % | 43,630 | (22,599 | ) | -51.80 | % | |||||||||||||||||
| Total interest and dividend income | 20,979,014 | 20,527,558 | 451,456 | 2.20 | % | 18,417,958 | 2,561,056 | 13.91 | % | |||||||||||||||||||
| Interest Expense: | ||||||||||||||||||||||||||||
| Deposits | 6,671,982 | 6,568,679 | 103,303 | 1.57 | % | 5,109,712 | 1,562,270 | 30.57 | % | |||||||||||||||||||
| Interest on other borrowed funds | 309,265 | 389,629 | (80,364 | ) | -20.63 | % | 455,105 | (145,840 | ) | -32.05 | % | |||||||||||||||||
| Interest on federal funds purchased | — | — | — | — | — | — | 0.00 | % | ||||||||||||||||||||
| Total interest expense | 6,981,247 | 6,958,308 | 22,939 | 0.33 | % | 5,564,817 | 1,416,430 | 25.45 | % | |||||||||||||||||||
| Net interest income before provision for loan losses | 13,997,767 | 13,569,250 | 428,517 | 3.16 | % | 12,853,141 | 1,144,626 | 8.91 | % | |||||||||||||||||||
| Less-provision for credit losses | 252,021 | 272,419 | (20,398 | ) | -7.49 | % | (33,351 | ) | 285,372 | -855.66 | % | |||||||||||||||||
| Net interest income after provision for credit losses | 13,745,746 | 13,296,831 | 448,915 | 3.38 | % | 12,886,492 | 859,254 | 6.67 | % | |||||||||||||||||||
| Noninterest Income: | ||||||||||||||||||||||||||||
| Service charges on deposit accounts | 576,751 | 535,847 | 40,904 | 7.63 | % | 532,598 | 44,153 | 8.29 | % | |||||||||||||||||||
| Other service charges, commissions and fees | 399,839 | 397,787 | 2,052 | 0.52 | % | 399,587 | 252 | 0.06 | % | |||||||||||||||||||
| Gain on sales of foreclosed assets | — | — | — | 0.00 | % | — | — | 0.00 | % | |||||||||||||||||||
| Gain on sales of premises and equipment | — | 141 | (141 | ) | -100.00 | % | — | — | 0.00 | % | ||||||||||||||||||
| Increase in CSV of life insurance | 106,407 | 102,828 | 3,579 | 3.48 | % | 97,005 | 9,402 | 9.69 | % | |||||||||||||||||||
| Other income | 23,002 | 355,155 | (332,153 | ) | -93.52 | % | 7,681 | 15,321 | 199.47 | % | ||||||||||||||||||
| Total noninterest income | 1,105,999 | 1,391,758 | (285,759 | ) | -20.53 | % | 1,036,871 | 69,128 | 6.67 | % | ||||||||||||||||||
| Noninterest Expense: | ||||||||||||||||||||||||||||
| Salaries and employee benefits | 4,794,940 | 4,650,704 | 144,236 | 3.10 | % | 4,374,087 | 420,853 | 9.62 | % | |||||||||||||||||||
| Occupancy and equipment expenses, net | 592,165 | 536,330 | 55,835 | 10.41 | % | 599,714 | (7,549 | ) | -1.26 | % | ||||||||||||||||||
| Loss on sales and calls of securities | — | 265 | (265 | ) | 0.00 | % | — | — | 0.00 | % | ||||||||||||||||||
| Loss on Sales of premises and equipment | — | — | — | 0.00 | % | 54,269 | (54,269.0 | ) | 0.00 | % | ||||||||||||||||||
| Loss on sales of foreclosed assets | 2,065 | — | 2,065 | 0.00 | % | 320,110 | (318,045 | ) | 0.00 | % | ||||||||||||||||||
| Other expenses | 3,752,517 | 3,860,188 | (107,671 | ) | -2.79 | % | 3,837,844 | (85,327 | ) | -2.22 | % | |||||||||||||||||
| Total noninterest expense | 9,141,687 | 9,047,487 | 94,200 | 1.04 | % | 9,186,024 | (44,337 | ) | -0.48 | % | ||||||||||||||||||
| Income Before Income Taxes | 5,710,058 | 5,641,102 | 68,956 | 1.22 | % | 4,737,339 | 972,719 | 20.53 | % | |||||||||||||||||||
| Provision for income taxes | 263,212 | 318,723 | (55,511 | ) | 17.42 | % | 244,258 | 18,954 | 7.76 | % | ||||||||||||||||||
| – | ||||||||||||||||||||||||||||
| Net Income | $ | 5,446,846 | $ | 5,322,379 | 124,467 | 2.34 | % | $ | 4,493,081 | 953,765 | 21.23 | % | ||||||||||||||||
| Earnings per common share: | ||||||||||||||||||||||||||||
| Basic | $ | 0.51 | $ | 0.50 | 0.01 | 2.43 | % | $ | 0.42 | 0.09 | 21.00 | % | ||||||||||||||||
| Diluted | $ | 0.51 | $ | 0.50 | 0.01 | 2.00 | % | $ | 0.42 | 0.09 | 21.43 | % | ||||||||||||||||
| Per share amounts for September 30, 2023 and previous quarters have been adjusted to reflect the April 22, 2024 5-for-1 stock dividend. | ||||||||||||||||||||||||||||
| Quarter Ending |
||||||||||||||||
| September 30, | June 30, | September 30, | ||||||||||||||
| 2024 | 2024 | 2023 | ||||||||||||||
| Dollars in thousand | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Per Share Data | ||||||||||||||||
| Basic Earnings per Common Share | $ | 0.51 | $ | 0.50 | $ | 0.42 | ||||||||||
| Diluted Earnings per Common Share | 0.51 | 0.50 | 0.42 | |||||||||||||
| Dividends per Common Share | 0.092 | 0.092 | 0.088 | |||||||||||||
| Book Value per Common Share | 17.99 | 17.56 | 16.37 | |||||||||||||
| Tangible Book Value per Common Share | 16.97 | 16.53 | 15.32 | |||||||||||||
| Average Diluted Shared Outstanding | 10,602,348 | 10,611,811 | 10,582,485 | |||||||||||||
| End of Period Common Shares Outstanding | 10,596,345 | 10,605,080 | 10,582,494 | |||||||||||||
| Annualized Performance Ratios (Bank Only) | ||||||||||||||||
| Return on Average Assets | 1.65% | 1.73% | 1.45% | |||||||||||||
| Return on Average Equity | 12.37% | 13.12% | 11.37% | |||||||||||||
| Equity/Assets | 13.23% | 13.18% | 12.79% | |||||||||||||
| Yield on Earning Assets | 6.05% | 5.96% | 5.48% | |||||||||||||
| Cost of Funds | 2.18% | 2.16% | 1.69% | |||||||||||||
| Net Interest Margin | 4.10% | 4.02% | 3.94% | |||||||||||||
| Efficiency Ratio | 58.90% | 58.36% | 62.24% | |||||||||||||
| Credit Metrics | ||||||||||||||||
| Allowance for Loan Losses to Total Loans | 1.30% | 1.30% | 1.32% | |||||||||||||
| Adversely Classified Assets to Tier 1 Capital | ||||||||||||||||
| plus Allowance for Loan Losses | 6.15% | 6.04% | 7.00% | |||||||||||||
| Per share amounts for September 30, 2023 and previous quarters have been adjusted to reflect the April 22, 2024 5-for-1 stock dividend. | ||||||||||||||||