Morris State Bancshares Announces Quarterly Earnings and Declares Second Quarter Dividend


DUBLIN, Ga., April 30, 2021 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank, today announced net income of $5.2 million for the quarter ended March 31, 2021, representing an increase of $1.2 million, or 29.26%, compared to net income of $4.0 million for the quarter ended March 31, 2020. The company also announced diluted earnings per share of $2.49 for 2021, representing a 29.02% increase over diluted earnings per share of $1.93 for 2020. Earnings were a result of strong fee income from the SBA Paycheck Protection Program, or PPP, continued cost of funds management, and strong mortgage production.

“In the first quarter, we experienced net interest income growth of $2.9 million, or 26.65%,” said Spence Mullis, President and CEO. “Our increased net interest income and improved operational efficiency led to very solid earnings for the quarter. We continued to create significant value for our shareholders with strong core deposit growth. Noninterest-bearing deposit growth represented $111.5 million, or a 57% increase.”

The Company’s total shareholders’ equity increased 14.80% to $131 million as of March 31, 2021, as compared to $114 million as of March 31, 2020. Tangible book value per share increased to $56.77 as of March 31, 2021, a 16.69% increase from $48.65 per share on March 31, 2020. On April 21, 2021, the board of directors approved its first quarter dividend of $0.38 per share payable on or about June 15th to all shareholders of record as of June 1st.

Net interest income for the quarter ended March 31, 2021 and 2020 was $13.6 million and $10.7 million respectively, an increase of $2.9 million, or 26.65%. The bank’s net interest margin was 4.37% for March 31, 2021, a decline of 21 basis points from 4.58% on March 31, 2020. The bank participated in the second round of PPP, booking over $24 million in loans and recognizing $1.4 million in fee income during the quarter ended March 31, 2021. The margin’s reduction was a result of earning asset yields declining faster than the cost of funds. Our earning asset yield declined from 5.35% for March 31, 2020 to 4.60% for March 31, 2021, a 75-basis point reduction. Our cost of funds declined from 0.84% on March 31, 2020 to 0.25% on March 31, 2021, a 59-basis point reduction. Continued pressure on the margin is anticipated as it will be difficult to lower our cost of funds significantly while remaining competitive on pricing of good loans.

Provision for loan losses was $650 thousand as of March 31, 2021 versus $435 thousand as of March 31, 2020. Our reserve as a percentage of total loans was 1.42% when PPP loans are netted out of total loans as of March 31, 2021, versus 1.29% as of March 31, 2020. Our adversely classified coverage ratio was 9.20% as of March 31, 2021 versus 14.46% as of March 30, 2020 as the bank’s asset quality remains strong.

Noninterest expense increased 15.21%, or $967 million, to $7.3 million as of March 31, 2021 versus $6.4 million as of March 31, 2020. Most of this increase was related to salaries and employee benefits.

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 Statement of Income
March 31, 2021
         
         
         
   2021  2020 Change % Change
  (Unaudited)  (Unaudited)     
Interest and Dividend Income:        
Interest and fees on loans $13,183,691 $11,536,693 $1,646,998  14.28%
Interest income on securities  1,273,895  877,946  395,949  45.10%
Income on federal funds sold  19,057  79,065  (60,008) -75.90%
Income on time deposits held in other banks  27,936  5,345  22,591  422.66%
Other interest and dividend income  21,217  209,220  (188,003) -89.86%
Total interest and dividend income  14,525,796  12,708,269  1,817,527  14.30%
         
Interest Expense:        
Deposits  569,068  1,839,673 $(1,270,605) -69.07%
Interest on other borrowed funds  393,271  158,799  234,472  147.65%
Interest on federal funds purchased  --  --  --  -- 
Total interest expense  962,339  1,998,472  (1,036,133) -51.85%
         
Net interest income before provision for loan losses  13,563,457  10,709,797  2,853,660  26.65%
Less-provision for loan losses  650,000  435,000  215,000  49.43%
Net interest income after provision for loan losses  12,913,457  10,274,797  2,638,660  25.68%
         
Noninterest Income:        
Service charges on deposit accounts  469,437  604,173  (134,736) -22.30%
Other service charges, commissions and fees  375,312  502,401  (127,089) -25.30%
Gain on sale of loans  --  --  --  -- 
Increase in CSV of life insurance  88,222  92,995  (4,773) -5.13%
Other income  248,699  4,413  244,286  5535.60%
Total noninterest income  1,181,670  1,203,982  (22,312) -1.85%
         
Noninterest Expense:        
Salaries and employee benefits  4,318,080  3,713,931  604,149  16.27%
Occupancy and equipment expenses, net  513,406  627,425  (114,019) -18.17%
(Gain) loss on sales and calls of securities  --  --  --  -- 
Loss (gain) on sales of foreclosed assets and other real estate 4,202  5,072 
Gain on sales of premises and equipment  --  --  --  -- 
Other expenses  2,486,633  2,009,074  477,559  23.77%
Total noninterest expense  7,322,321  6,355,502  966,819  15.21%
         
Income Before Income Taxes  6,772,806  5,123,277  1,649,529  32.20%
Provision for income taxes  1,553,540   1,085,525   468,015  43.11%
         
Net Income $5,219,266 $4,037,752 $1,181,514  29.26%
         
         
Earnings per common share:        
Basic $2.49 $1.93 $0.56  29.02%
Diluted $2.49 $1.93 $0.56  29.02%
         


 

MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
         
Consolidating Balance Sheet
March 31, 2021
         
         
         
   2021   2020  Change % Change
  (Unaudited)  (Unaudited)     
ASSETS        
         
Cash and due from banks $71,164,883  $52,915,891  $18,248,992  34.49%
Federal funds sold  115,957,486   27,300,392   88,657,094  324.75%
Total cash and cash equivalents  187,122,369   80,216,283   106,906,086  133.27%
         
Interest-bearing time deposits in other banks  350,000   1,350,000   (1,000,000) -74.07%
Securities available for sale, at fair value  245,200,205   139,307,643   105,892,562  76.01%
Securities held to maturity, at cost  12,707,803   4,743,041   7,964,762  167.93%
Federal Home Loan Bank stock, restricted, at cost  899,700   842,900   56,800  6.74%
         
Loans, net of unearned income  851,806,225   753,148,006   98,658,219  13.10%
Less-allowance for loan losses  (11,400,979)  (9,788,969)  (1,612,010) 16.47%
Loans, net  840,405,246   743,359,037   97,046,209  13.06%
         
Bank premises and equipment, net  15,278,014   15,628,803   (350,789) -2.24%
ROU assets for operating lease, net  570,961   467,579   103,382  22.11%
Goodwill  9,361,770   9,361,770   -  0.00%
Intangible assets, net  2,630,331   2,979,230   (348,899) -11.71%
Other real estate and foreclosed assets  265,542   589,675   (324,133) -54.97%
Accrued interest receivable  4,358,189   2,889,890   1,468,299  50.81%
Cash surrender value of life insurance  13,708,665   13,341,379   367,286  2.75%
Other assets  6,882,236   7,352,653   (470,417) -6.40%
Total Assets $1,339,741,031  $1,022,429,883  $317,311,148  31.04%
         
         
LIABILITIES AND SHAREHOLDERS’ EQUITY        
         
Deposits:        
Non-interest bearing $305,974,839  $194,485,444  $111,489,395  57.33%
Interest bearing  870,266,327   694,767,211   175,499,116  25.26%
   1,176,241,166   889,252,655   286,988,511  32.27%
         
Other borrowed funds  28,696,127   14,124,000   14,572,127  103.17%
Lease liability for operating lease  570,961   467,579   103,382  22.11%
Accrued interest payable  413,062   421,993   (8,931) -2.12%
Accrued expenses and other liabilities  2,613,863   3,868,481   (1,254,618) -32.43%
         
Total liabilities  1,208,535,179   908,134,708   300,400,471  33.08%
         
Shareholders’ Equity:        
Common stock  2,150,798   2,144,766   6,032  0.28%
Paid in capital surplus  39,690,242   39,292,064   398,178  1.01%
Retained earnings  82,470,411   68,070,150   14,400,261  21.16%
Current year earnings  5,219,266   4,037,752   1,181,514  29.26%
Accumulated other comprehensive income (loss)  3,340,332   2,315,012   1,025,320  44.29%
Treasury Stock, at cost 50,927  (1,665,197)  (1,564,569)  (100,628) 6.43%
Total shareholders’ equity  131,205,852   114,295,175   16,910,677  14.80%
         
Total Liabilities and Shareholders’ Equity $1,339,741,031  $1,022,429,883   317,311,148  31.04%
         


 

   Quarter Ending Year Ending
  March 31, March 31, December 31,
   2021   2020   2020 
Dollars in thousand, except per share data) (Unaudited) (Unaudited)  
       
Per Share Data      
Basic Earnings per Common Share $2.49  $1.93  $8.30 
Diluted Earnings per Common Share  2.49   1.93   8.30 
Dividends per Common Share  0.38   0.70   1.75 
Book Value per Common Share  62.48   54.54   61.81 
Tangible Book Value per Common Share  56.77   48.65   56.04 
       
       
Average Diluted Shared Outstanding  2,094,978   2,096,415   2,095,633 
End of Period Common Shares Outstanding  2,099,871   2,095,468   2,093,839 
       
       
Annualized Performance Ratios (Bank Only)      
Return on Average Assets  1.81%  1.71%  1.78%
Return on Average Equity  15.25%  14.46%  14.38%
Equity/Assets  11.37%  11.88%  11.98%
Yield on Earning Assets  4.60%  5.35%  5.00%
Cost of Funds  0.25%  0.84%  0.52%
Net Interest Margin  4.37%  4.58%  4.56%
Efficiency Ratio  47.80%  53.26%  51.52%
       
Credit Metrics      
Allowance for Loan Losses to Total Loans  1.34%  1.30%  1.30%
Allowance for Loan Losses to Total Loans*  1.42%  1.30%  1.39%
Adversely Classified Assets to Total Capital      
plus Allowance for Loan Losses  9.20%  14.46%  8.76%
       
       
* Excludes PPP Loans      
       

 

 

 

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