DUBLIN, Ga., July 29, 2021 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank, today announced net income of $5.5 million for the quarter ended June 30, 2021, representing an increase of $241 thousand, or 4.62%, compared to net income of $5.2 million for the quarter ended March 31, 2021. The company also announced diluted earnings per share of $2.60 for quarter, representing a 4.42% increase over diluted earnings per share of $2.49 for prior quarter. Net earnings were slightly higher quarter over quarter because of lower provisioning for income taxes due to the company’s investment in certain tax credits.
“In the second quarter, we generated net interest income of $13.3 million, just below the first quarter’s level of $13.6 million” said Spence Mullis, President and CEO. “As projected, our margin continued to compress slightly in the second quarter due to our excess liquidity levels, continued forgiveness/payoffs of SBA Payroll Protection Program (PPP) loans, and the competitive pricing of new and renewed loans. Our non-interest expense increased slightly during the quarter as we launched a new website, completed a core system conversion, and lifted a team of seasoned commercial and mortgage bankers from another institution. We look forward to these investments augmenting shareholder value in the quarters to come.”
The Company’s total shareholders’ equity increased 4.90% to $138 million as of June 30, 2021, as compared to $131 million as of March 31, 2021. Tangible book value per share increased to $59.86 as of June 30, 2021, a 5.40% increase from $56.77 per share on March 31, 2021. On July 21, 2021, the board of directors approved its third quarter dividend of $0.38 per share payable on or about September 15th to all shareholders of record as of August 10th.
Loans, net of PPP loans, grew $25.0 million during the quarter or 2.9%, while revenue on the gross portfolio decreased 3.0% or $388 thousand from the first quarter. The gross decrease was driven primarily by lower PPP fee revenue. PPP fee revenue of $811 thousand was recognized during the quarter, which was a decline of 42% from the $1.4 million recognized during the first quarter. Gross secondary mortgage revenue for the quarter remained strong at $785 thousand, up $47 thousand or 6.4% from the first quarter. With the recent drop in market rates and the addition of mortgage originators via the aforementioned lift out, management expects solid mortgage revenue in the coming quarter.
Provision for loan losses was $750 thousand as of June 30, 2021 versus $650 thousand as of March 31, 2021. Our reserve as a percentage of total loans was 1.47% when PPP loans are netted out of total loans as of June 30, 2021, versus 1.42% as of March 31, 2021. Our adversely classified coverage ratio was 8.43% as of June 30, 2021 versus 9.20% as of March 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 | |||||||||||||||||||||||||
| June 30, | March 31, | June 30, | |||||||||||||||||||||||
| 2021 | 2021 | Change | % Change | 2020 | |||||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||
| Cash and due from banks | $ | 66,121,775 | $ | 71,164,883 | $ | (5,043,108 | ) | -7.09 | % | $ | 56,702,226 | ||||||||||||||
| Federal funds sold | 87,869,237 | 115,957,486 | (28,088,249 | ) | -24.22 | % | 28,826,177 | ||||||||||||||||||
| Total cash and cash equivalents | 153,991,012 | 187,122,369 | (33,131,357 | ) | -17.71 | % | 85,528,403 | ||||||||||||||||||
| Interest-bearing time deposits in other banks | 350,000 | 350,000 | - | 0.00 | % | 1,350,000 | |||||||||||||||||||
| Securities available for sale, at fair value | 263,891,405 | 245,200,205 | 18,691,200 | 7.62 | % | 139,789,954 | |||||||||||||||||||
| Securities held to maturity, at cost | 12,682,445 | 12,707,803 | (25,358 | ) | (0.20 | %) | 9,983,201 | ||||||||||||||||||
| Federal Home Loan Bank stock, restricted, at cost | 624,200 | 899,700 | (275,500 | ) | (30.62 | %) | 899,700 | ||||||||||||||||||
| Loans, net of unearned income | 858,178,798 | 851,806,225 | 6,372,573 | 0.75 | % | 845,165,974 | |||||||||||||||||||
| Less-allowance for loan losses | (12,099,672 | ) | (11,400,979 | ) | (698,693 | ) | 6.13 | % | (10,149,609 | ) | |||||||||||||||
| Loans, net | 846,079,126 | 840,405,246 | 5,673,880 | 0.68 | % | 835,016,365 | |||||||||||||||||||
| Bank premises and equipment, net | 15,178,731 | 15,278,014 | (99,283 | ) | -0.65 | % | 15,593,015 | ||||||||||||||||||
| ROU assets for operating lease, net | 505,635 | 570,961 | (65,326 | ) | -11.44 | % | 410,758 | ||||||||||||||||||
| Goodwill | 9,361,770 | 9,361,770 | - | 0.00 | % | 9,361,770 | |||||||||||||||||||
| Intangible assets, net | 2,543,350 | 2,630,331 | (86,981 | ) | -3.31 | % | 2,891,386 | ||||||||||||||||||
| Other real estate and foreclosed assets | 271,389 | 265,542 | 5,847 | 2.20 | % | 645,231 | |||||||||||||||||||
| Accrued interest receivable | 4,362,402 | 4,358,189 | 4,213 | 0.10 | % | 5,799,765 | |||||||||||||||||||
| Cash surrender value of life insurance | 13,798,452 | 13,708,665 | 89,787 | 0.65 | % | 13,434,514 | |||||||||||||||||||
| Other assets | 10,029,683 | 6,882,236 | 3,147,447 | 45.73 | % | 6,150,319 | |||||||||||||||||||
| Total Assets | $ | 1,333,669,600 | $ | 1,339,741,031 | $ | (6,071,431 | ) | -0.45 | % | $ | 1,126,854,381 | ||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||
| Non-interest bearing | $ | 306,244,572 | $ | 305,974,839 | $ | 269,733 | 0.09 | % | $ | 261,805,349 | |||||||||||||||
| Interest bearing | 853,411,310 | 870,266,327 | (16,855,017 | ) | -1.94 | % | 723,800,470 | ||||||||||||||||||
| 1,159,655,882 | 1,176,241,166 | (16,585,284 | ) | -1.41 | % | 985,605,819 | |||||||||||||||||||
| Other borrowed funds | 28,714,778 | 28,696,127 | 18,651 | 0.06 | % | 14,124,000 | |||||||||||||||||||
| Lease liability for operating lease | 505,635 | 570,961 | (65,326 | ) | -11.44 | % | 410,758 | ||||||||||||||||||
| Accrued interest payable | 198,992 | 413,062 | (214,070 | ) | -51.83 | % | 393,973 | ||||||||||||||||||
| Accrued expenses and other liabilities | 6,958,927 | 2,613,863 | 4,345,064 | 166.23 | % | 7,042,426 | |||||||||||||||||||
| Total liabilities | 1,196,034,214 | 1,208,535,179 | (12,500,965 | ) | -1.03 | % | 1,007,576,976 | ||||||||||||||||||
| Shareholders' Equity: | |||||||||||||||||||||||||
| Common stock | 2,151,398 | 2,150,798 | 600 | 0.03 | % | 2,144,766 | |||||||||||||||||||
| Paid in capital surplus | 39,735,842 | 39,690,242 | 45,600 | 0.11 | % | 39,292,064 | |||||||||||||||||||
| Retained earnings | 81,672,346 | 82,470,411 | (798,065 | ) | -0.97 | % | 67,336,736 | ||||||||||||||||||
| Current year earnings | 10,679,804 | 5,219,266 | 5,460,538 | 104.62 | % | 7,407,128 | |||||||||||||||||||
| Accumulated other comprehensive income (loss) | 5,061,193 | 3,340,332 | 1,720,861 | 51.52 | % | 4,661,280 | |||||||||||||||||||
| Treasury Stock, at cost 50,927 | (1,665,197 | ) | (1,665,197 | ) | - | 0.00 | % | (1,564,569 | ) | ||||||||||||||||
| Total shareholders' equity | 137,635,386 | 131,205,852 | 6,429,534 | 4.90 | % | 119,277,405 | |||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 1,333,669,600 | $ | 1,339,741,031 | (6,071,431 | ) | -0.45 | % | $ | 1,126,854,381 | |||||||||||||||
| MORRIS STATE BANCSHARES, INC. | ||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||
| Consolidating Statement of Income | ||||||||||||||||||||||
| for the Three Months Ended | ||||||||||||||||||||||
| June 30, | March 31, | June 30, | ||||||||||||||||||||
| 2021 | 2021 | Change | % Change | 2020 | ||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||
| Interest and Dividend Income: | ||||||||||||||||||||||
| Interest and fees on loans | $ | 12,795,036 | $ | 13,183,691 | $ | (388,655 | ) | -2.95 | % | $ | 12,758,312 | |||||||||||
| Interest income on securities | 1,449,522 | 1,273,895 | 175,627 | 13.79 | % | 942,506 | ||||||||||||||||
| Income on federal funds sold | 18,769 | 19,057 | (288 | ) | -1.51 | % | 8,615 | |||||||||||||||
| Income on time deposits held in other banks | 28,685 | 27,936 | 749 | 2.68 | % | 7,766 | ||||||||||||||||
| Other interest and dividend income | 53,518 | 21,217 | 32,301 | 152.24 | % | 38,358 | ||||||||||||||||
| Total interest and dividend income | 14,345,530 | 14,525,796 | (180,266 | ) | -1.24 | % | 13,755,557 | |||||||||||||||
| Interest Expense: | ||||||||||||||||||||||
| Deposits | 626,030 | 569,068 | $ | 56,962 | 10.01 | % | 1,381,632 | |||||||||||||||
| Interest on other borrowed funds | 387,005 | 393,271 | (6,266 | ) | -1.59 | % | 179,337 | |||||||||||||||
| Interest on federal funds purchased | -- | -- | -- | -- | -- | |||||||||||||||||
| Total interest expense | 1,013,035 | 962,339 | 50,696 | 5.27 | % | 1,560,969 | ||||||||||||||||
| Net interest income before provision for loan losses | 13,332,495 | 13,563,457 | (230,962 | ) | -1.70 | % | 12,194,588 | |||||||||||||||
| Less-provision for loan losses | 750,000 | 650,000 | 100,000 | 15.38 | % | 2,000,000 | ||||||||||||||||
| Net interest income after provision for loan losses | 12,582,495 | 12,913,457 | (330,962 | ) | -2.56 | % | 10,194,588 | |||||||||||||||
| Noninterest Income: | ||||||||||||||||||||||
| Service charges on deposit accounts | 418,331 | 469,437 | (51,106 | ) | -10.89 | % | 387,440 | |||||||||||||||
| Other service charges, commissions and fees | 365,636 | 375,312 | (9,676 | ) | -2.58 | % | 544,539 | |||||||||||||||
| Gain on sale of loans | -- | -- | -- | -- | -- | |||||||||||||||||
| Increase in CSV of life insurance | 89,787 | 88,222 | 1,565 | 1.77 | % | 93,136 | ||||||||||||||||
| Other income | 41,655 | 248,699 | (207,044 | ) | -83.25 | % | 9,742 | |||||||||||||||
| Total noninterest income | 915,409 | 1,181,670 | (266,261 | ) | -22.53 | % | 1,034,857 | |||||||||||||||
| Noninterest Expense: | ||||||||||||||||||||||
| Salaries and employee benefits | 4,449,439 | 4,318,080 | 131,359 | 3.04 | % | 4,377,552 | ||||||||||||||||
| Occupancy and equipment expenses, net | 573,066 | 513,406 | 59,660 | 11.62 | % | 603,710 | ||||||||||||||||
| (Gain) loss on sales and calls of securities | -- | -- | -- | -- | -- | |||||||||||||||||
| Loss (gain) on sales of foreclosed assets and other real estate | (138 | ) | 4,202 | (4,340 | ) | -103.28 | % | 2,240 | ||||||||||||||
| Gain on sales of premises and equipment | -- | -- | -- | -- | -- | |||||||||||||||||
| Other expenses | 2,467,806 | 2,486,633 | (18,827 | ) | -0.76 | % | 1,601,247 | |||||||||||||||
| Total noninterest expense | 7,490,173 | 7,322,321 | 167,852 | 2.29 | % | 6,584,749 | ||||||||||||||||
| Income Before Income Taxes | 6,007,731 | 6,772,806 | (765,075 | ) | -11.30 | % | 4,644,696 | |||||||||||||||
| Provision for income taxes | 547,193 | 1,553,540 | (1,006,347 | ) | -64.78 | % | 1,275,320 | |||||||||||||||
| Net Income | $ | 5,460,538 | $ | 5,219,266 | $ | 241,272 | 4.62 | % | $ | 3,369,376 | ||||||||||||
| Earnings per common share: | ||||||||||||||||||||||
| Basic | $ | 2.60 | $ | 2.49 | $ | 0.11 | 4.42 | % | $ | 1.60 | ||||||||||||
| Diluted | $ | 2.60 | $ | 2.49 | $ | 0.11 | 4.42 | % | $ | 1.60 | ||||||||||||
| MORRIS STATE BANCSHARES, INC. | ||||||||||||
| AND SUBSIDIARIES | ||||||||||||
| Selected Financial Information | ||||||||||||
| Quarter Ending | ||||||||||||
| June 30, | March 31, | June 30, | ||||||||||
| 2021 | 2021 | 2020 | ||||||||||
| Dollars in thousand, except per share data) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
| Per Share Data | ||||||||||||
| Basic Earnings per Common Share | $ | 2.60 | $ | 2.49 | $ | 1.60 | ||||||
| Diluted Earnings per Common Share | 2.60 | 2.49 | 1.60 | |||||||||
| Dividends per Common Share | 0.38 | 0.38 | 0.35 | |||||||||
| Book Value per Common Share | 65.53 | 62.48 | 56.92 | |||||||||
| Tangible Book Value per Common Share | 59.86 | 56.77 | 51.07 | |||||||||
| Average Diluted Shared Outstanding | 2,097,534 | 2,094,978 | 2,095,468 | |||||||||
| End of Period Common Shares Outstanding | 2,100,471 | 2,099,871 | 2,095,468 | |||||||||
| Annualized Performance Ratios (Bank Only) | ||||||||||||
| Return on Average Assets | 1.80 | % | 1.81 | % | 1.31 | % | ||||||
| Return on Average Equity | 15.23 | % | 15.25 | % | 10.65 | % | ||||||
| Equity/Assets | 12.02 | % | 11.37 | % | 11.31 | % | ||||||
| Yield on Earning Assets | 4.30 | % | 4.60 | % | 5.21 | % | ||||||
| Cost of Funds | 0.22 | % | 0.25 | % | 0.57 | % | ||||||
| Net Interest Margin | 4.10 | % | 4.37 | % | 4.69 | % | ||||||
| Efficiency Ratio | 51.03 | % | 47.80 | % | 50.56 | % | ||||||
| Credit Metrics | ||||||||||||
| Allowance for Loan Losses to Total Loans | 1.41 | % | 1.34 | % | 1.21 | % | ||||||
| Allowance for Loan Losses to Total Loans* | 1.47 | % | 1.42 | % | 1.34 | % | ||||||
| Adversely Classified Assets to Total Capital | ||||||||||||
| plus Allowance for Loan Losses | 8.43 | % | 9.20 | % | 12.25 | % | ||||||
| * Excludes PPP Loans | ||||||||||||