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 | ||||||||||||||||
