DUBLIN, Ga., Oct. 28, 2021 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank, today announced net income of $6.2 million for the quarter ended September 30, 2021, representing an increase of $723 thousand, or 13.24%, compared to net income of $5.5 million for the quarter ended June 30, 2021. The company also announced diluted earnings per share of $2.94 for the quarter, representing a 13.08% increase over diluted earnings per share of $2.60 for the prior quarter. Net earnings were higher quarter over quarter because of lower credit and tax provisioning as well as higher non-interest income related to service charges and credit insurance premiums.

“In the third quarter, we generated net interest income of $13.4 million, slightly better than the second quarter’s level of $13.3 million,” said Spence Mullis, President and CEO. “We generated both solid loan and deposit growth during the quarter. We are particularly proud of our loan growth, which net of SBA Payroll Protection Program (PPP) loans was $37.0 million or 4.48%. While the average yield on our loans decreased slightly, loan volume and our strong non-interest-bearing deposit growth led to our net interest margin remaining solid at 4.10%. We grew non-interest-bearing deposits $25.4 million or 8.30% during the quarter.”

The Company’s total shareholders’ equity increased 3.76% to $143 million as of September 30, 2021, as compared to $138 million as of June 30, 2021. Tangible book value per share increased to $62.36 as of September 30, 2021, a 4.18% increase from $59.86 per share as of June 30, 2021. On October 20, 2021, the board of directors approved its fourth quarter dividend of $0.38 per share payable on or about December 15th to all shareholders of record as of November 15th.

Secondary mortgage revenue for the quarter was strong at $908 thousand, up $122 thousand or 15.5% from the second quarter. While mortgage rates have ticked up slightly, demand for both purchases and refinances in the Company’s markets remains strong.

The bank had a loan relationship that was stagnant in a Chapter 11 bankruptcy since June of 2019. The borrowing entity was finally discharged from bankruptcy this quarter which allowed the bank to foreclose on a new, but unoccupied assisted living facility as well other ancillary collateral for this relationship. As a result, the relationship which had been on a non-accrual status migrated into other real estate in the amount of $5.2 million. There was no net effect on the bank’s adversely classified ratio, or the ratio of adversely classified loans and other real estate owned to Tier 1 regulatory capital plus the allowance for loan losses, which decreased during the quarter to 8.04% versus 8.43% as of the end of the previous quarter. As previously mentioned, the bank’s provision for loan losses of $450 thousand for the three months ended September 30, 2021 was down from $750 thousand for the three months ended June 30, 2021. The bank’s allowance for loan losses as a percentage of total loans was 1.41% when PPP loans are netted out of total loans as of September 30, 2021, versus 1.47% as of June 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. 


 
MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
         
Consolidating Balance Sheet
         
  September 30, June 30,    
   2021   2021  Change % Change
  (Unaudited)  (Unaudited)     
ASSETS        
         
Cash and due from banks $98,488,262  $66,121,775  $32,366,487  48.95%
Federal funds sold  67,966,892   87,869,237   (19,902,345) -22.65%
Total cash and cash equivalents  166,455,154   153,991,012   12,464,142  8.09%
         
Interest-bearing time deposits in other banks  350,000   350,000   -  0.00%
Securities available for sale, at fair value  253,026,739   263,891,405   (10,864,666) -4.12%
Securities held to maturity, at cost  13,220,095   12,682,445   537,650  4.24%
Federal Home Loan Bank stock, restricted, at cost  624,200   624,200   -  0.00%
         
Loans, net of unearned income  882,889,280   858,178,798   24,710,482  2.88%
Less-allowance for loan losses  (12,125,731)  (12,099,672)  (26,059) 0.22%
Loans, net  870,763,549   846,079,126   24,684,423  2.92%
         
Bank premises and equipment, net  15,127,699   15,178,731   (51,032) -0.34%
ROU assets for operating lease, net  420,363   505,635   (85,272) -16.86%
Goodwill  9,361,770   9,361,770   -  0.00%
Intangible assets, net  2,456,370   2,543,350   (86,980) -3.42%
Other real estate and foreclosed assets  5,470,761   271,389   5,199,372  1915.84%
Accrued interest receivable  4,670,208   4,362,402   307,806  7.06%
Cash surrender value of life insurance  13,889,164   13,798,452   90,712  0.66%
Other assets  10,057,607   10,029,683   27,924  0.28%
Total Assets $1,365,893,679  $1,333,669,600  $32,224,079  2.42%
         
         
LIABILITIES AND SHAREHOLDERS' EQUITY        
         
Deposits:        
Non-interest bearing $331,663,248  $306,244,572  $25,418,676  8.30%
Interest bearing  854,987,023   853,411,310   1,575,713  0.18%
   1,186,650,271   1,159,655,882   26,994,389  2.33%
         
Other borrowed funds  28,733,428   28,714,778   18,650  0.06%
Lease liability for operating lease  420,363   505,635   (85,272) -16.86%
Accrued interest payable  146,945   198,992   (52,047) -26.16%
Accrued expenses and other liabilities  7,137,289   6,958,927   178,362  2.56%
         
Total liabilities  1,223,088,296   1,196,034,214   27,054,082  2.26%
         
Shareholders' Equity:        
Common stock  2,151,398   2,151,398   -  0.00%
Paid in capital surplus  39,735,842   39,735,842   -  0.00%
Retained earnings  80,874,167   81,672,346   (798,179) -0.98%
Current year earnings  16,863,337   10,679,804   6,183,533  57.90%
Accumulated other comprehensive income (loss)  4,845,836   5,061,193   (215,357)  -4.26%
Treasury Stock, at cost 50,927  (1,665,197)  (1,665,197)  -  0.00%
Total shareholders' equity  142,805,383   137,635,386   5,169,997  3.76%
         
Total Liabilities and Shareholders' Equity $1,365,893,679  $1,333,669,600   32,224,079  2.42%
         
         



MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
         
Consolidating Statement of Income
for the Three Months Ended
         
  September 30, June 30,    
   2021   2021  Change % Change
  (Unaudited)  (Unaudited)     
Interest and Dividend Income:        
Interest and fees on loans $12,642,615  $12,795,036  $(152,421) -1.19%
Interest income on securities  1,580,691   1,449,522   131,169  9.05%
Income on federal funds sold  21,720   18,769   2,951  15.72%
Income on time deposits held in other banks  29,479   28,685   794  2.77%
Other interest and dividend income  51,191   53,518   (2,327) -4.35%
Total interest and dividend income  14,325,696   14,345,530   (19,834) -0.14%
         
Interest Expense:        
Deposits  515,038   626,030  $(110,992) -17.73%
Interest on other borrowed funds  389,377   387,005   2,372  0.61%
Interest on federal funds purchased  --   --   --  -- 
Total interest expense  904,415   1,013,035   (108,620) -10.72%
         
Net interest income before provision for loan losses  13,421,281   13,332,495   88,786  0.67%
Less-provision for loan losses  450,000   750,000   (300,000) -40.00%
Net interest income after provision for loan losses  12,971,281   12,582,495   388,786  3.09%
         
Noninterest Income:        
Service charges on deposit accounts  517,470   418,331   99,139  23.70%
Other service charges, commisions and fees  488,866   365,636   123,230  33.70%
Gain on sale of loans  --   --   --  -- 
Increase in CSV of life insurance  90,712   89,787   925  1.03%
Other income  247,726   41,655   206,071  494.71%
Total noninterest income  1,344,774   915,409   429,365  46.90%
         
Noninterest Expense:        
Salaries and employee benefits  4,648,196   4,449,439   198,757  4.47%
Occupancy and equipment expenses, net  575,664   573,066   2,598  0.45%
(Gain) loss on sales and calls of securities  --   --   --  -- 
Loss (gain) on sales of foreclosed assets and other real estate  4,580   (138)  4,718  -3418.84%
Gain on sales of premises and equipment  --   --   --  -- 
Other expenses  2,740,932   2,467,806   273,126  11.07%
Total noninterest expense  7,969,372   7,490,173   479,199  6.40%
         
Income Before Income Taxes  6,346,683   6,007,731   338,952  5.64%
Provision for income taxes  163,153   547,193   (384,040) -70.18%
         
Net Income $6,183,530  $5,460,538  $722,992  13.24%
         
         
Earnings per common share:        
Basic $2.94  $2.60  $0.34  13.08%
Diluted $2.94  $2.60  $0.34  13.08%
         
         



  Quarter Ending  
  September 30,June 30, September 30,
   2021   2021   2020 
Dollars in thousand, except per share data)(Unaudited) (Unaudited) (Unaudited)
       
Per Share Data      
Basic Earnings per Common Share $2.94  $2.60  $2.13 
Diluted Earnings per Common Share  2.94   2.60   2.13 
Dividends per Common Share  0.38   0.38   0.35 
Book Value per Common Share  67.99   65.53   59.27 
Tangible Book Value per Common Share  62.36   59.86   53.47 
       
       
Average Diluted Shared Outstanding  2,098,933   2,097,534   2,095,783 
End of Period Common Shares Outstanding 2,100,471   2,100,471   2,095,468 
       
       
Annualized Performance Ratios (Bank Only)      
Return on Average Assets  1.97%  1.80%  1.72%
Return on Average Equity  16.56%  15.23%  14.07%
Equity/Assets  11.77%  12.02%  12.48%
Yield on Earning Assets  4.26%  4.30%  4.76%
Cost of Funds  0.17%  0.22%  0.40%
Net Interest Margin  4.10%  4.10%  4.39%
Efficiency Ratio  52.12%  51.03%  51.38%
       
Credit Metrics      
Allowance for Loan Losses to Total Loans 1.37%  1.41%  1.22%
Allowance for Loan Losses to Total Loans* 1.41%  1.47%  1.22%
Adversely Classified Assets to Tier 1 Capital     
plus Allowance for Loan Losses  8.04%  8.43%  10.29%
       
       
* Excludes PPP Loans