Morris State Bancshares Announces Quarterly Earnings and Declares Third Quarter Dividend

DUBLIN, Ga., July 29, 2021 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank, today announced net income of $5.5 million for the quarter ended June 30, 2021, representing an increase of $241 thousand, or 4.62%, compared to net income of $5.2 million for the quarter ended March 31, 2021. The company also announced diluted earnings per share of $2.60 for quarter, representing a 4.42% increase over diluted earnings per share of $2.49 for prior quarter. Net earnings were slightly higher quarter over quarter because of lower provisioning for income taxes due to the company’s investment in certain tax credits.

“In the second quarter, we generated net interest income of $13.3 million, just below the first quarter’s level of $13.6 million” said Spence Mullis, President and CEO. “As projected, our margin continued to compress slightly in the second quarter due to our excess liquidity levels, continued forgiveness/payoffs of SBA Payroll Protection Program (PPP) loans, and the competitive pricing of new and renewed loans. Our non-interest expense increased slightly during the quarter as we launched a new website, completed a core system conversion, and lifted a team of seasoned commercial and mortgage bankers from another institution. We look forward to these investments augmenting shareholder value in the quarters to come.”

The Company’s total shareholders’ equity increased 4.90% to $138 million as of June 30, 2021, as compared to $131 million as of March 31, 2021. Tangible book value per share increased to $59.86 as of June 30, 2021, a 5.40% increase from $56.77 per share on March 31, 2021. On July 21, 2021, the board of directors approved its third quarter dividend of $0.38 per share payable on or about September 15th to all shareholders of record as of August 10th.

Loans, net of PPP loans, grew $25.0 million during the quarter or 2.9%, while revenue on the gross portfolio decreased 3.0% or $388 thousand from the first quarter. The gross decrease was driven primarily by lower PPP fee revenue. PPP fee revenue of $811 thousand was recognized during the quarter, which was a decline of 42% from the $1.4 million recognized during the first quarter. Gross secondary mortgage revenue for the quarter remained strong at $785 thousand, up $47 thousand or 6.4% from the first quarter. With the recent drop in market rates and the addition of mortgage originators via the aforementioned lift out, management expects solid mortgage revenue in the coming quarter.

Provision for loan losses was $750 thousand as of June 30, 2021 versus $650 thousand as of March 31, 2021. Our reserve as a percentage of total loans was 1.47% when PPP loans are netted out of total loans as of June 30, 2021, versus 1.42% as of March 31, 2021. Our adversely classified coverage ratio was 8.43% as of June 30, 2021 versus 9.20% as of March 30, 2021.

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.

CONTACT: Morris State Bancshares Chris Bond Chief Financial Officer 478-272-5202