Morris State Bancshares Announces Quarterly Earnings and Declares Third Quarter Dividend

Jul 29th, 2022 12:18 EST

DUBLIN, Ga., July 29, 2022 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank, today announced net income of $6.8 million for the quarter ended June 30, 2022, representing an increase of $1.2 million, or 22.31%, compared to net income of $5.6 million for the quarter ended March 31, 2022. The company also announced diluted earnings per share of $3.21 for quarter, representing a 21.59% increase over diluted earnings per share of $2.64 for prior quarter. Higher quarter over quarter net earnings were driven primarily by increased net interest income and lower non-interest expense. The decline in non-interest expense was driven by a one-time adjustment to health insurance expense during the quarter. At the bank level, the company generated a Return on Average Assets (ROA) of 2.08% during the quarter ending June 30, 2022, versus a 1.74% ROA during the quarter ending March 31, 2022.

“The second quarter was a very solid one for the company. During the quarter, our team generated loan growth of over $52.3 million, which was an increase of over 5.4% (annualized over 21%) from the quarter ending March 31, 2022. As our loan portfolio grew with only slightly higher deposit costs, we produced net interest income of $14.1 million, a 3.66% increase over the first quarter’s level of $13.6 million,” said Spence Mullis, CEO and Chairman. “We’re proud of our results in the second quarter, and we’re positioned well for the second half of the year. As the Federal Reserve continues to try and tame inflation through tighter monetary policy, we expect some softening in the broader economy along with higher deposit costs in the coming months. However, our balance sheet is positioned well to perform in this scenario as we are entering the second half of the year with a low-cost deposit mix as well as solid credit metrics.”

The Company’s total shareholders’ equity increased 3.72% to $159 million as of June 30, 2022, as compared to $153 million as of March 31, 2022. Tangible book value per share increased to $69.52 as of June 30, 2022, a 3.79% increase from $66.98 per share on March 31, 2022. On July 20, 2022, the board of directors approved a third quarter dividend of $0.44 per share payable on or about September 15th to all shareholders of record as of August 15th.

The bank sold a piece of other real estate during the second quarter and realized a gain of $305 thousand, which contributed to an overall net gain on sales of other real estate of $290 thousand during the quarter. Provision for loan losses was $375 thousand for the quarter ended June 30, 2022, which is in line with the quarter ending March 31, 2022. The bank’s reserve as a percentage of total loans was 1.24% as of June 30, 2022, versus 1.30% as of March 31, 2022. Asset quality improved during the quarter as the bank’s adversely classified coverage ratio improved to 6.82% as of June 30, 2022, versus 8.28% as of March 31, 2022.

“We are very excited about our bank’s footprint and future with the recent announcement of several industrial and manufacturing projects in our service areas. Large manufacturing projects were announced in both Houston and Bulloch counties during the second quarter, as well as an electric vehicle manufacturer just to the south of our Bulloch County market, which will be transformational for the whole region,” said Mullis. “We look forward to continuing to serve our customers, communities, team members as well as our shareholders with a commitment to enhancing value for each every day.”

*In the prior earnings release dated April 28, 2022, net income for the first quarter of 2022 was understated by $314 thousand.  The understatement was related to a gain on sale of other real estate (different from this quarter’s aforementioned gain).  All other performance ratios, per share data and credit metrics were correct in the April 28, 2022, earnings announcement. 

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 
    
               
               
     June 30, March 31,     June 30, 
      2022   2022  Change % Change  2021  
     (Unaudited)  (Unaudited)      (Unaudited)  
 ASSETS             
              `
 Cash and due from banks   $74,271,951  $143,422,859  $(69,150,908) -48.21% $66,121,775  
 Federal funds sold    18,873,609   15,664,564   3,209,045  20.49%  87,869,237  
 Total cash and cash equivalents    93,145,560   159,087,423   (65,941,863) -41.45%  153,991,012  
               
 Interest-bearing time deposits in other banks    350,000   350,000   --  --   350,000  
 Securities available for sale, at fair value    --   --   --  --   263,891,405  
 Securities held to maturity, at cost    275,498,923   267,833,392   7,665,531  2.86%  1,682,445  
 Federal Home Loan Bank stock, restricted, at cost    744,500   624,300   120,200  19.25%  624,200  
               
 Loans, net of unearned income    1,009,838,142   957,533,245   52,304,897  5.46%  858,178,798  
 Less-allowance for loan losses    (12,519,189)  (12,408,458)  (110,731) 0.89%  (12,099,672) 
 Loans, net    997,318,953   945,124,787   52,194,166  5.52%  846,079,126  
               
 Bank premises and equipment, net    14,721,005   14,837,637   (116,632) -0.79%  15,178,731  
 ROU assets for operating lease, net    1,061,310   1,158,386   (97,076) -8.38%  505,635  
 Goodwill    9,361,704   9,361,704   --  --   9,361,770  
 Intangible assets, net    2,196,485   2,282,410   (85,925) -3.76%  2,543,350  
 Other real estate and foreclosed assets    3,751,184   5,106,587   (1,355,403) -26.54%  271,389  
 Accrued interest receivable    4,685,278   4,352,997   332,281  7.63%  4,362,402  
 Cash surrender value of life insurance    14,153,898   14,065,097   88,801  0.63%  13,798,452  
 Other assets    14,274,462   14,505,874   (231,412) -1.60%  10,029,683  
       Total Assets   $1,431,263,262  $1,438,690,594  $(7,427,332) -0.52% $1,322,669,600  
               
               
 LIABILITIES AND SHAREHOLDERS' EQUITY             
               
 Deposits:             
 Non-interest bearing   $367,004,039  $355,354,700  $11,649,339  3.28% $306,244,572  
 Interest bearing    871,719,946   896,502,158   (24,782,212) -2.76%  853,411,310  
      1,238,723,985   1,251,856,858   (13,132,873) -1.05%  1,159,655,882  
               
 Other borrowed funds    28,789,380   28,770,730   18,650  0.06%  28,714,778  
 Lease liability for operating lease    1,061,310   1,158,386   (97,076) -8.38%  505,635  
 Accrued interest payable    106,192   321,188   (214,996) -66.94%  198,992  
 Accrued expenses and other liabilities    3,616,439   3,316,942   299,497  9.03%  6,958,927  
               
 Total liabilities    1,272,297,306   1,285,424,104   (13,126,798) -1.02%  1,196,034,214  
               
 Shareholders' Equity:             
 Common stock    2,171,665   2,165,730   5,935  0.27%  2,151,398  
 Paid in capital surplus    41,391,867   40,907,274   484,593  1.18%  39,735,842  
 Retained earnings    101,723,321   103,112,378   (1,389,057) -1.35%  81,672,346  
 Current year earnings    12,363,616   5,561,414   6,802,202  122.31%  10,679,804  
 Accumulated other comprehensive income (loss)    3,009,031   3,213,238   (204,207) -6.36%  5,061,193  
 Treasury Stock, at cost 51,291    (1,693,544)  (1,693,544)  --  --   (1,665,197) 
 Total shareholders' equity    158,965,956   153,266,490   5,699,466  3.72%  137,635,386  
               
       Total Liabilities and Shareholders' Equity   $1,431,263,262  $1,438,690,594   (7,427,332) -0.52% $1,333,669,600  
               
                 
               

MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
                
Consolidating Statement of Income
 
                
                
     June 30, March 31,     June 30,  
     2022 2022 Change % Change  2021   
     (Unaudited)  (Unaudited)      (Unaudited)   
 Interest and Dividend Income:              
 Interest and fees on loans   $12,916,106 $12,708,366 $207,740  1.63% $12,795,036   
 Interest income on securities    1,809,274  1,581,771  227,503  14.38%  1,449,522   
 Income on federal funds sold    18,380  4,771  13,609  285.24%  18,769   
 Income on time deposits held in other banks    145,381  66,520  78,861  118.55%  28,685   
 Other interest and dividend income    49,189  50,708  (1,519) -3.00%  53,518   
 Total interest and dividend income    14,938,330  14,412,136  526,194  3.65%  14,345,530   
                
 Interest Expense:              
 Deposits    485,077  462,472  22,605  4.89%  626,030   
 Interest on other borrowed funds    398,866  391,195  7,671  1.96%  387,005   
 Interest on federal funds purchased    --  --  --  --   --   
 Total interest expense    883,943  853,667  30,276  3.55%  1,013,035   
                
 Net interest income before provision for loan losses    14,054,387  13,558,469  495,918  3.66%  13,332,495   
 Less-provision for loan losses    375,000  375,000  -  0.00%  750,000   
 Net interest income after provision for loan losses    13,679,387  13,183,469  495,918  3.76%  12,582,495   
                
 Noninterest Income:              
 Service charges on deposit accounts    628,174  569,074  59,100  10.39%  418,331   
 Other service charges, commisions and fees    472,427  363,780  108,647  29.87%  365,636   
 Gain on sales of foreclosed assets    290,564  314,210  (23,646) -7.53%  --   
 Gain on sales and calls of securities    --  --  --  --   --   
 Gain on sale of loans    --  --  --  --   --   
 Increase in CSV of life insurance    88,800  87,146  1,654  1.90%  89,787   
 Other income    7,992  41,987  (33,995) -80.97%  41,655   
 Total noninterest income    1,487,957  1,376,197  111,760  8.12%  915,409   
                
 Noninterest Expense:              
 Salaries and employee benefits    4,516,545  5,066,729  (550,184) -10.86%  4,449,439   
 Occupancy and equipment expenses, net    543,815  532,932  10,883  2.04%  573,066   
 Loss (gain) on sales of foreclosed assets and other real estate   --  --  --  --   (138)  
 Other expenses    2,883,858  2,851,857  32,001  1.12%  2,467,806   
 Total noninterest expense    7,944,218  8,451,518  (507,300) -6.00%  7,490,173   
                
 Income Before Income Taxes    7,223,126  6,108,148  1,114,978  18.25%  6,007,731   
 Provision for income taxes    420,925  546,734  (125,809) -23.01%  547,193   
                
 Net Income   $6,802,201 $5,561,414  1,240,787  22.31% $5,460,538   
                
                
 Earnings per common share:              
 Basic   $3.21 $2.64  0.57  21.59% $2.60   
 Diluted   $3.21 $2.64  0.57  21.59% $2.60   
                

MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
           
Selected Financial Information
           
 Quarter Ending
           
     June 30, March 31, June 30, 
     2022 2022 2021 
Dollars in thousand, except per share data (Unaudited) (Unaudited) (Unaudited) 
           
           
Per Share Data          
Basic Earnings per Common Share    $3.21  $2.64  $2.60  
Diluted Earnings per Common Share   3.21   2.64   2.60  
Dividends per Common Share   0.44   0.44   0.38  
Book Value per Common Share   74.97   72.49   65.53  
Tangible Book Value per Common Share  69.52   66.98   59.86  
           
           
           
Average Diluted Shared Outstanding  $2,112,305  $2,108,037  $2,097,534  
End of Period Common Shares Outstanding $2,120,374  $2,114,439  $2,100,471  
           
Annualized Performance Ratios (Bank Only)          
Return on Average Assets     2.08%  1.74%  1.80% 
Return on Average Equity    16.93%  14.87%  15.23% 
Equity/Assets    12.44%  11.90%  12.02% 
Yield on Earning Assets    4.29%  4.18%  4.30% 
Cost of Funds    0.16%  0.15%  0.22% 
Net Interest Margin    4.14%  4.04%  4.10% 
Efficiency Ratio    48.06%  53.50%  51.03% 
           
Credit Metrics          
Allowance for Loan Losses to Total Loans  1.24%  1.30%  1.41% 
Allowance for Loan Losses to Total Loans*  1.24%  1.30%  1.47% 
Adversely Classified Assets to Tier 1 Capital       
plus Allowance for Loan Losses   6.82%  8.28%  8.43% 
           
           
* Excludes PPP Loans         

Related Links

SHARE

You must be logged in to post a comment.

Recent Publications

You must be logged in to post a comment.

Email newsletter

Receive the latest stock news and signals