Morris State Bancshares Announces Quarterly Earnings and Declares Third Quarter Dividend

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.