Morris State Bancshares Announces Quarterly Earnings and Declares Fourth Quarter Dividend
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
%
$
