Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.

Morris State Bancshares Announces Quarterly Earnings and Declares Second Quarter Dividend

MBLU

DUBLIN, Ga., April 27, 2023 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank, today announced net income of $4.1 million for the quarter ending March 31, 2023, representing a decrease of $2.5 million, or 38.23%, compared to net income of $6.6 million for the quarter ended December 31, 2022. Lower quarter over quarter net earnings were a result of higher deposit costs, higher noninterest expense, and higher tax provisioning.

“We continued to navigate a challenging economic environment in the first quarter marked by uncertainty in the banking industry with the backdrop of continued rising interest rates,” said Spence Mullis, Chairman and CEO. “While up 8.66% year over year in loans, we did see our loan book contract slightly, 1.09% or $11.4 million, from year-end. Our deposits held steady at $1.2 billion, which is in line with year-end deposit levels. The cost of these deposits, however, were up $1.2 million, or 51.86% over the fourth quarter of 2022. We expect deposit costs to continue to increase for the remainder of the year as the Fed signals that they will maintain higher rates for longer.”

The net interest margin was 3.98% for the first quarter of 2023 compared to 4.13% for the fourth quarter of 2022 and 4.04% for the first quarter of 2022. The average yield on earning assets grew 24 basis points from 4.82%, as of December 31, 2022, to 5.06%, while the bank’s cost of funds grew 41 basis points to 1.18% during the same period. Management expects the bank’s cost of funds to continue to increase and peak during the latter part of the third quarter of the year based on the current Fed rate forecast.

Noninterest expense increased $573,228, or 6.90%, over December 31, 2022, and provision for income taxes increased $1,695,418, or 240.81%, during the quarter. The increase in noninterest expense and income taxes quarter over quarter was due to the bank not investing in new solar tax credit projects and having to amortize the solar credits used in 2022. Provision for credit losses declined $216,624 during the quarter as the bank moved to the Current Expected Credit Losses Methodology (CECL). The Company’s asset quality remains consistent with an adversely classified index of 6.49% as of March 31, 2023, which compares with 5.99% as of December 31, 2022. The bank’s reserve as a percentage of total loans was 1.35% for March 31, 2023, as compared to 1.30% for March 31, 2022 and 1.30% for December 31, 2022.

The Company’s total shareholders’ equity increased 8.57% year-over-year to $166 million as of March 31, 2022, and up 0.83% or $1.4 million from December 31, 2022. Tangible book value of the company grew to $73.14 on March 31, 2023, from $66.98, or 9.20%, from March 31, 2022, and was in line with the value as of December 31, 2022 of $72.68. On April 19, 2023, the board of directors approved a second quarter dividend of $0.44 per share payable on or about June 15, 2023, to all shareholders of record as of May 15, 2023.

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
March 31, March 31, December 31,
2023 2022 Change % Change 2022 Change % Change
(Unaudited) (Unaudited) (Unaudited)
ASSETS
Cash and due from banks $ 51,448,341 $ 143,422,859 $ (91,974,518 ) -64.13 % $ 49,302,788 $ 2,145,553 4.35 %
Federal funds sold 16,102,872 15,664,564 438,308 2.80 % 21,007,642 (4,904,770 ) -23.35 %
Total cash and cash equivalents 67,551,213 159,087,423 (91,536,210 ) -57.54 % 70,310,430 (2,759,217 ) -3.92 %
Interest-bearing time deposits in other banks 100,000 350,000 (250,000 ) -71.43 % 100,000 - 0.00 %
Securities available for sale, at fair value
Securities held to maturity, at cost (net of CECL Reserve) 257,399,845 267,833,392 (10,433,547 ) -3.90 % 259,677,508 (2,277,663 ) -0.88 %
Federal Home Loan Bank stock, restricted, at cost 1,588,300 624,300 964,000 154.41 % 1,578,400 9,900 0.63 %
-
Loans, net of unearned income 1,040,411,604 957,533,245 82,878,359 8.66 % 1,051,888,290 (11,476,686 ) -1.09 %
Less-allowance for credit losses (14,047,855 ) (12,408,458 ) (1,639,397 ) 13.21 % (13,629,255 ) (418,600 ) 3.07 %
Loans, net 1,026,363,749 945,124,787 81,238,962 8.60 % 1,038,259,035 (11,895,286 ) -1.15 %
-
Bank premises and equipment, net 13,658,218 14,837,637 (1,179,419 ) -7.95 % 13,865,943 (207,725 ) -1.50 %
ROU assets for operating lease, net 1,431,413 1,158,386 273,027 23.57 % 1,529,545 (98,132 ) -6.42 %
Goodwill 9,361,704 9,361,704 - 0.00 % 9,361,704 - 0.00 %
Intangible assets, net 1,937,652 2,282,410 (344,758 ) -15.10 % 2,023,540 (85,888 ) -4.24 %
Other real estate and foreclosed assets 3,803,252 5,106,587 (1,303,335 ) -25.52 % 3,715,202 88,050 2.37 %
Accrued interest receivable 4,959,915 4,352,997 606,918 13.94 % 5,341,616 (381,701 ) -7.15 %
Cash surrender value of life insurance 14,423,960 14,065,097 358,863 2.55 % 14,333,544 90,416 0.63 %
Other assets 22,390,328 14,505,874 7,884,454 54.35 % 16,467,513 5,922,815 35.97 %
Total Assets $ 1,424,969,549 $ 1,438,690,594 $ (13,721,045 ) -0.95 % $ 1,436,563,980 (11,594,431 ) -0.81 %
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 323,091,870 $ 355,354,700 $ (32,262,830 ) -9.08 % $ 339,657,309 (16,565,439 ) -4.88 %
Interest bearing 877,794,418 896,502,158 (18,707,740 ) -2.09 % 876,009,017 1,785,401 0.20 %
1,200,886,288 1,251,856,858 (50,970,570 ) -4.07 % 1,215,666,326 (14,780,038 ) -1.22 %
-
Other borrowed funds 47,095,332 28,770,730 18,324,602 63.69 % 48,826,681 (1,731,349 ) -3.55 %
Lease liability for operating lease 1,431,413 1,158,386 273,027 23.57 % 1,529,545 (98,132 ) -6.42 %
Accrued interest payable 491,159 321,188 169,971 52.92 % 143,899 347,260 241.32 %
Accrued expenses and other liabilities 8,660,358 3,316,942 5,343,416 161.09 % 5,461,126 3,199,232 58.58 %
-
Total liabilities 1,258,564,550 1,285,424,104 (26,859,554 ) -2.09 % 1,271,627,577 (13,063,027 ) -1.03 %
Shareholders' Equity:
Common stock 2,177,510 2,165,730 11,780 0.54 % 2,169,557 7,953 0.37 %
Paid in capital surplus 42,045,076 40,907,274 1,137,802 2.78 % 41,302,572 742,504 1.80 %
Retained earnings 117,806,614 103,112,378 14,694,236 14.25 % 99,943,774 17,862,840 17.87 %
Current year earnings 4,103,935 5,561,414 (1,457,479 ) -26.21 % 21,108,630 (17,004,695 ) -80.56 %
Accumulated other comprehensive income (loss) 2,468,079 3,213,238 (745,159 ) -23.19 % 2,608,086 (140,007 ) -5.37 %
Treasury Stock, at cost 56,912 (2,196,215 ) (1,693,544 ) (502,671 ) 29.68 % (2,196,216 ) 1 -0.00 %
Total shareholders' equity 166,404,999 153,266,490 13,138,509 8.57 % 164,936,403 1,468,596 0.89 %
Total Liabilities and Shareholders' Equity $ 1,424,969,549 $ 1,438,690,594 (13,721,045 ) -0.95 % $ 1,436,563,980 (11,594,431 ) -0.81 %


MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
Consolidating Statement of Income
for the Three Months Ended
March 31, December 31, March 31,
2023 2022 Change % Change 2022 Change % Change
(Unaudited) (Unaudited) (Unaudited)
Interest and Dividend Income:
Interest and fees on loans $ 14,466,103 $ 14,155,669 $ 310,434 2.19 % $ 12,708,366 $ 1,757,737 13.83 %
Interest income on securities 2,005,741 2,020,319 (14,578 ) -0.72 % 1,581,771 423,970 26.80 %
Income on federal funds sold 132,805 104,483 28,322 27.11 % 4,771 128,034 2683.59 %
Income on time deposits held in other banks 247,252 311,472 (64,220 ) -20.62 % 66,520 180,732 271.70 %
Other interest and dividend income 61,186 57,094 4,092 7.17 % 50,708 10,478 20.66 %
Total interest and dividend income 16,913,087 16,649,037 264,050 1.59 % 14,412,136 2,500,951 17.35 %
Interest Expense:
Deposits 3,469,654 2,284,739 1,184,915 51.86 % 462,472 3,007,182 650.24 %
Interest on other borrowed funds 564,278 517,834 46,444 8.97 % 391,195 173,083 44.24 %
Interest on federal funds purchased -- 240 (240 ) -100.00 % -- -
Total interest expense 4,033,932 2,802,813 1,231,119 43.92 % 853,667 3,180,265 372.54 %
Net interest income before provision for loan losses 12,879,155 13,846,224 (967,069 ) -6.98 % 13,558,469 (679,314 ) -5.01 %
Less-provision for credit losses 383,376 600,000 (216,624 ) -36.10 % 375,000 8,376 2.23 %
Net interest income after provision for credit losses 12,495,779 13,246,224 (750,445 ) -5.67 % 13,183,469 (687,690 ) -5.22 %
Noninterest Income:
Service charges on deposit accounts 562,893 580,688 (17,795 ) -3.06 % 569,074 (6,181 ) -1.09 %
Other service charges, commissions and fees 403,583 264,603 138,980 52.52 % 363,780 39,803 10.94 %
Gain on sales of foreclosed assets 1,420 5,126 (3,706 ) -72.30 % 314,210 (312,790 ) -99.55 %
Gain on sales of premises and equipment -- 19,270 (19,270 ) -100.00 % -- -
Increase in CSV of life insurance 90,416 88,744 1,672 1.88 % 87,146 3,270 3.75 %
Other income 420,788 41,739 379,049 908.14 % 41,987 378,801 902.19 %
Total noninterest income 1,479,100 1,000,170 478,930 47.88 % 1,376,197 102,903 7.48 %
Noninterest Expense:
Salaries and employee benefits 4,896,748 4,450,154 446,594 10.04 % 5,066,729 (169,981 ) -3.35 %
Occupancy and equipment expenses, net 549,051 595,444 (46,393 ) -7.79 % 532,932 16,119 3.02 %
Other expenses 3,433,785 3,260,758 173,027 5.31 % 2,851,857 581,928 20.41 %
Total noninterest expense 8,879,584 8,306,356 573,228 6.90 % 8,451,518 428,066 5.06 %
Income Before Income Taxes 5,095,295 5,940,038 (844,743 ) -14.22 % 6,108,148 (1,012,853 ) -16.58 %
Provision for income taxes 991,360 (704,058 ) 1,695,418 240.81 % 546,734 444,626 81.32 %
-
Net Income $ 4,103,935 $ 6,644,096 (2,540,161 ) -38.23 % $ 5,561,414 (1,457,479 ) -26.21 %
Earnings per common share:
Basic $ 1.94 $ 3.14 (1.20 ) -38.22 % $ 2.64 (0.70 ) -26.52 %
Diluted $ 1.94 $ 3.14 (1.20 ) -38.22 % $ 2.64 (0.70 ) -26.52 %


Quarter Ending
March 31, December 31, March 31,
2023 2022 2022
Dollars in thousand, except per share data (Unaudited) (Unaudited) (Unaudited)
Per Share Data
Basic Earnings per Common Share $ 1.94 $ 3.14 $ 2.64
Diluted Earnings per Common Share 1.94 3.14 2.64
Dividends per Common Share 0.44 0.44 0.44
Book Value per Common Share 78.47 78.07 72.49
Tangible Book Value per Common Share 73.14 72.68 66.98
Average Diluted Shared Outstanding $ 2,111,955 $ 2,114,934 $ 2,108,037
End of Period Common Shares Outstanding $ 2,120,598 $ 2,112,645 $ 2,114,439
Annualized Performance Ratios (Bank Only)
Return on Average Assets 1.33 % 2.03 % 1.74 %
Return on Average Equity 10.64 % 15.90 % 14.87 %
Equity/Assets 11.90 % 12.83 % 11.90 %
Yield on Earning Assets 5.06 % 4.82 % 4.18 %
Cost of Funds 1.18 % 0.77 % 0.15 %
Net Interest Margin 3.98 % 4.13 % 4.04 %
Efficiency Ratio 59.32 % 54.12 % 53.50 %
Credit Metrics
Allowance for Loan Losses to Total Loans 1.35 % 1.30 % 1.30 %
Adversely Classified Assets to Tier 1 Capital plus Allowance for Loan Losses 6.49 % 5.99 % 8.27 %

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

Primary Logo