DUBLIN, Ga., Jan. 31, 2022 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank (the “Bank”), today announced net income of $24.0 million for the year-ended December 31, 2021, representing an increase of $6.6 million, or 37.66%, compared to net income of $17.4 million for the year-ended December 31, 2020. The company also announced diluted earnings per share of $11.40 for 2021, representing a 37.35% increase over diluted earnings per share of $8.30 for 2020.
Highlights of the Company’s and Bank’s performance in 2021 include the following:
- Growth in net interest income of $5.6 million, representing an increase of 11.52% over 2020
- Organic growth in loans of $146 million, or 19.01% exclusive of PPP loans
- Return on average assets (Bank) of 1.96%, compared to 1.78% in 2020
- Return on average tangible common equity (Bank) of 16.55%, compared with 14.38% in 2020
- Net interest margin (Bank) of 4.09% during 2021, down 42 basis points from 2020 amid a challenging rate environment
- Growth in tangible book value per share of 15.56%, from $56.04 at the end of 2020 to $64.77 at the end of 2021
- Successful lift-out and integration of a team of seasoned commercial and mortgage lenders in the Bulloch County market leading the Company to record more security deeds than any competitor in that market over a 12-month period
- Successful upgrade of core banking platform that will enhance our technology services for customers
- Efficiency ratio of 50.56% versus 51.52% at the end of 2020
- Net charge-offs of 0.09% of average total loans
- Continued management of nonperforming assets, down 32 basis points to 0.89% of total loans and other real estate as of 12/31/2021 compared to 12/31/2020.
“I’m very proud of the company’s performance this year. Our team worked hard to complete another round of SBA’s Paycheck Protection Program (PPP) loans while continuing to grow core commercial business and consumer mortgage relationships throughout our markets. On a sequential basis, we finished the year strong growing both loans and deposits in the fourth quarter producing strong net interest income capping off a very strong performance for the year,” said Spence Mullis, President and CEO.
The Company’s total shareholders’ equity increased 14.56% to $148.3 million as of December 31, 2021, as compared to $129 million as of December 31, 2020. Tangible book value per share increased to $64.77 as of December 31, 2021, a 15.56% increase or $8.73 per share from December 31, 2020. On January 24, 2022, the board of directors approved an increase in its first quarter dividend to $0.44 per share payable on or about March 15, 2022 to all shareholders of record as of February 15, 2022.
Net interest income before provision for loan losses for the year-ended December 31, 2021 and December 31, 2020 was $54.4 million and $48.8 million respectively, an increase of $5.6 million, or 11.52%. The Bank’s net interest margin for the year-ended December 31, 2021 was 4.09%, which was a decline from 4.51% for the year-ended December 31, 2020. The Bank’s cost of funds declined from 0.52% for the year-ended December 31, 2020 to 0.20% for the year-ended December 31, 2021.
“As the Federal Reserve is expected to dial back its accommodative monetary policy via rate hikes and tapering of its net asset purchases in the coming quarters, our management team is focused on offering prudent terms to both our borrowers and depositors and growing non-interest-bearing deposits further in order to maintain a solid net interest margin,” said Mullis.
Provision for loan losses was $2.0 million for the year ended December 31, 2021, versus $3.6 million for the year ended December 30, 2020. The Bank’s reserve as a percentage of total loans remained at 1.30% for the year ended December 31, 2021, as it was on December 31, 2020. The Bank’s adversely classified coverage ratio was 8.74% as of December 31, 2021, as compared to 8.76% as of December 31, 2020. The Bank’s non-performing assets to total loans and other real estate declined from 1.21% as of December 31, 2020, to 0.89% as of December 31, 2021.
Noninterest expense increased 9.75%, or $2.7 million, to $30.9 million for the year ended December 31, 2021, versus $28.1 million as of December 31, 2020. Most of this increase was related to salaries and employee benefits as the labor market remains tight.
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 | ||||||||||||||
| December 31, 2021 | ||||||||||||||
| December 31, | December 31, | |||||||||||||
| 2021 | 2020 | Change | % Change | |||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||
| ASSETS | ||||||||||||||
| Cash and due from banks | $ | 162,649,843 | $ | 56,290,263 | $ | 106,359,580 | 188.95 | % | ||||||
| Federal funds sold | 14,278,248 | 93,200,409 | (78,922,161 | ) | -84.68 | % | ||||||||
| Total cash and cash equivalents | 176,928,091 | 149,490,672 | 27,437,419 | 18.35 | % | |||||||||
| Interest-bearing time deposits in other banks | 350,000 | 350,000 | - | 0.00 | % | |||||||||
| Securities available for sale, at fair value | 244,979,034 | 205,427,671 | 39,551,363 | 19.25 | % | |||||||||
| Securities held to maturity, at cost | 11,123,253 | 12,730,837 | (1,607,584 | ) | (12.63 | %) | ||||||||
| Federal Home Loan Bank stock, restricted, at cost | 624,300 | 899,700 | (275,400 | ) | (30.61 | %) | ||||||||
| Loans, net of unearned income | 926,226,134 | 837,333,161 | 88,892,973 | 10.62 | % | |||||||||
| Less-allowance for loan losses | (12,008,416 | ) | (10,781,434 | ) | (1,226,982 | ) | 11.38 | % | ||||||
| Loans, net | 914,217,718 | 826,551,727 | 87,665,991 | 10.61 | % | |||||||||
| Bank premises and equipment, net | 14,938,591 | 15,348,697 | (410,106 | ) | -2.67 | % | ||||||||
| ROU assets for operating lease, net | 1,239,826 | 641,008 | 598,818 | 93.42 | % | |||||||||
| Goodwill | 9,361,704 | 9,361,770 | (66 | ) | -0.00 | % | ||||||||
| Intangible assets, net | 2,369,390 | 2,717,311 | (347,921 | ) | -12.80 | % | ||||||||
| Other real estate and foreclosed assets | 5,332,096 | 141,255 | 5,190,841 | 3674.80 | % | |||||||||
| Accrued interest receivable | 4,647,197 | 4,763,849 | (116,652 | ) | -2.45 | % | ||||||||
| Cash surrender value of life insurance | 13,977,951 | 13,620,443 | 357,508 | 2.62 | % | |||||||||
| Other assets | 11,014,182 | 7,370,992 | 3,643,190 | 49.43 | % | |||||||||
| Total Assets | $ | 1,411,103,333 | $ | 1,249,415,932 | $ | 161,687,401 | 12.94 | % | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||
| Deposits: | ||||||||||||||
| Non-interest bearing | $ | 337,810,442 | $ | 282,746,775 | $ | 55,063,667 | 19.47 | % | ||||||
| Interest bearing | 886,394,003 | 804,440,237 | 81,953,766 | 10.19 | % | |||||||||
| 1,224,204,445 | 1,087,187,012 | 137,017,433 | 12.60 | % | ||||||||||
| Other borrowed funds | 28,752,079 | 28,677,477 | 74,602 | 0.26 | % | |||||||||
| Lease liability for operating lease | 1,239,826 | 641,008 | 598,818 | 93.42 | % | |||||||||
| Accrued interest payable | 134,392 | 269,880 | (135,488 | ) | -50.20 | % | ||||||||
| Accrued expenses and other liabilities | 8,513,648 | 3,221,471 | 5,292,177 | 164.28 | % | |||||||||
| Total liabilities | 1,262,844,390 | 1,119,996,848 | 142,847,542 | 12.75 | % | |||||||||
| Shareholders' Equity: | ||||||||||||||
| Common stock | 2,159,148 | 2,144,766 | 14,382 | 0.67 | % | |||||||||
| Paid in capital surplus | 40,349,139 | 39,292,064 | 1,057,075 | 2.69 | % | |||||||||
| Retained earnings | 80,075,546 | 65,858,082 | 14,217,464 | 21.59 | % | |||||||||
| Current year earnings | 23,964,290 | 17,407,988 | 6,556,302 | 37.66 | % | |||||||||
| Accumulated other comprehensive income (loss) | 3,404,364 | 6,381,381 | (2,977,017 | ) | -46.65 | % | ||||||||
| Treasury Stock, at cost 51,291 | (1,693,544 | ) | (1,665,197 | ) | (28,347 | ) | 1.70 | % | ||||||
| Total shareholders' equity | 148,258,943 | 129,419,084 | 18,839,859 | 14.56 | % | |||||||||
| Total Liabilities and Shareholders' Equity | $ | 1,411,103,333 | $ | 1,249,415,932 | 161,687,401 | 12.94 | % | |||||||
| MORRIS STATE BANCSHARES, INC. | ||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||
| Consolidating Statement of Income | ||||||||||||||
| December 31, 2021 | ||||||||||||||
| December 31, | December 31, | |||||||||||||
| 2021 | 2020 | Change | % Change | |||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||
| Interest and Dividend Income: | ||||||||||||||
| Interest and fees on loans | $ | 52,043,715 | $ | 50,465,805 | $ | 1,577,910 | 3.13 | % | ||||||
| Interest income on securities | 5,895,358 | 4,015,455 | 1,879,903 | 46.82 | % | |||||||||
| Income on federal funds sold | 74,911 | 103,208 | (28,297 | ) | -27.42 | % | ||||||||
| Income on time deposits held in other banks | 130,572 | 286,418 | (155,846 | ) | -54.41 | % | ||||||||
| Other interest and dividend income | 177,004 | 59,919 | 117,085 | 195.41 | % | |||||||||
| Total interest and dividend income | 58,321,560 | 54,930,805 | 3,390,755 | 6.17 | % | |||||||||
| Interest Expense: | ||||||||||||||
| Deposits | 2,338,787 | 5,037,818 | (2,699,031 | ) | -53.58 | % | ||||||||
| Interest on other borrowed funds | 1,559,428 | 1,091,607 | 467,821 | 42.86 | % | |||||||||
| Interest on federal funds purchased | -- | 72 | (72 | ) | -100.00 | % | ||||||||
| Total interest expense | 3,898,215 | 6,129,497 | (2,231,282 | ) | -36.40 | % | ||||||||
| Net interest income before provision for loan losses | 54,423,345 | 48,801,308 | 5,622,037 | 11.52 | % | |||||||||
| Less-provision for loan losses | 2,000,000 | 3,635,000 | (1,635,000 | ) | -44.98 | % | ||||||||
| Net interest income after provision for loan losses | 52,423,345 | 45,166,308 | 7,257,037 | 16.07 | % | |||||||||
| Noninterest Income: | ||||||||||||||
| Service charges on deposit accounts | 1,983,721 | 1,951,399 | 32,322 | 1.66 | % | |||||||||
| Other service charges, commissions and fees | 1,600,219 | 1,282,853 | 317,366 | 24.74 | % | |||||||||
| Gain on sales and calls of securities | 299,870 | 46,323 | 253,547 | 547.35 | % | |||||||||
| Gain on sale of loans | 37,683 | 187,006 | (149,323 | ) | -79.85 | % | ||||||||
| Gain on sales of premises and equipment | -- | 4,000 | (4,000 | ) | -100.00 | % | ||||||||
| Increase in CSV of life insurance | 357,508 | 372,060 | (14,552 | ) | -3.91 | % | ||||||||
| Other income | 380,138 | 366,850 | 13,288 | 3.62 | % | |||||||||
| Total noninterest income | 4,659,139 | 4,210,491 | 448,648 | 10.66 | % | |||||||||
| Noninterest Expense: | ||||||||||||||
| Salaries and employee benefits | 18,241,891 | 16,656,208 | 1,585,683 | 9.52 | % | |||||||||
| Occupancy and equipment expenses, net | 2,201,420 | 2,650,008 | (448,588 | ) | -16.93 | % | ||||||||
| (Gain) Loss on sales of foreclosed assets and other real estate | (2,610 | ) | 74,094 | (76,704 | ) | -103.52 | % | |||||||
| Other expenses | 10,413,609 | 8,732,695 | 1,680,914 | 19.25 | % | |||||||||
| Total noninterest expense | 30,854,310 | 28,113,005 | 2,741,305 | 9.75 | % | |||||||||
| Income Before Income Taxes | 26,228,174 | 21,263,794 | 4,964,380 | 23.35 | % | |||||||||
| Provision for income taxes | 2,263,886 | 3,855,806 | (1,591,920 | ) | -41.29 | % | ||||||||
| Net Income | $ | 23,964,288 | $ | 17,407,988 | $ | 6,556,300 | 37.66 | % | ||||||
| Earnings per common share: | ||||||||||||||
| Basic | $ | 11.40 | $ | 8.30 | $ | 3.10 | 37.35 | % | ||||||
| Diluted | $ | 11.40 | $ | 8.30 | $ | 3.10 | 37.35 | % | ||||||
| MORRIS STATE BANCSHARES, INC. | ||||||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||||||
| Selected Financial Information | ||||||||||||||||||||||||||
| Year Ending | Quarter Ended | |||||||||||||||||||||||||
| December 31, | December 31, | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||||||
| 2021 | 2020 | 2021 | 2021 | 2021 | 2021 | 2020 | ||||||||||||||||||||
| (Dollars in thousand, except per share data) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||
| Per Share Data | ||||||||||||||||||||||||||
| Basic Earnings per Common Share | $ | 11.40 | $ | 8.31 | $ | 3.38 | $ | 2.93 | $ | 2.60 | $ | 2.49 | $ | 2.64 | ||||||||||||
| Diluted Earnings per Common Share | 11.40 | 8.31 | 3.38 | 2.93 | 2.60 | 2.49 | 2.64 | |||||||||||||||||||
| Dividends per Common Share | 1.52 | 1.75 | 0.38 | 0.38 | 0.38 | 0.38 | 0.35 | |||||||||||||||||||
| Book Value per Common Share | 70.34 | 61.81 | 70.34 | 67.99 | 65.53 | 62.48 | 61.81 | |||||||||||||||||||
| Tangible Book Value per Common Share | 64.77 | 56.04 | 64.77 | 62.36 | 59.86 | 56.77 | 56.04 | |||||||||||||||||||
| Average Diluted Shares Outstanding | 2,102,359 | 2,095,633 | 2,106,819 | 2,105,370 | 2,102,108 | 2,094,978 | 2,095,185 | |||||||||||||||||||
| End of Period Common Shares Outstanding | 2,107,857 | 2,093,839 | 2,107,857 | 2,100,471 | 2,100,471 | 2,099,871 | 2,093,839 | |||||||||||||||||||
| Selected Balance Sheet Data (Bank Only) | ||||||||||||||||||||||||||
| Loans (net of PPP) | 913,818 | 767,833 | 913,818 | 861,455 | 824,190 | 798,555 | 767,833 | |||||||||||||||||||
| PPP Loans | 9,974 | 63,945 | 9,974 | 20,421 | 32,700 | 51,349 | 63,945 | |||||||||||||||||||
| Total Loans | 923,792 | 831,778 | 923,792 | 881,876 | 856,890 | 849,904 | 831,778 | |||||||||||||||||||
| Non-Interest Bearing Deposits | 343,437 | 286,868 | 343,437 | 338,952 | 308,270 | 309,533 | 286,868 | |||||||||||||||||||
| Interest Bearing Demand Deposits | 271,693 | 227,097 | 271,693 | 242,023 | 236,871 | 248,681 | 227,097 | |||||||||||||||||||
| Savings & Money Market Deposits | 436,462 | 383,786 | 436,462 | 434,810 | 433,902 | 436,697 | 383,786 | |||||||||||||||||||
| Earnings Summary | ||||||||||||||||||||||||||
| Net Interest Income | 54,423 | 48,801 | 14,029 | 13,421 | 13,332 | 13,563 | 12,190 | |||||||||||||||||||
| Provision for Loan Losses | 2,000 | 3,635 | 150 | 450 | 750 | 650 | 750 | |||||||||||||||||||
| Non-Interest Income | 4,659 | 4,210 | 1,397 | 1,345 | 915 | 1,182 | 1,219 | |||||||||||||||||||
| Non-Interest Expense | 30,854 | 28,113 | 8,186 | 7,969 | 7,490 | 7,322 | 6,989 | |||||||||||||||||||
| Earnings before Taxes | 26,228 | 21,264 | 7,090 | 6,347 | 6,008 | 6,773 | 5,669 | |||||||||||||||||||
| Income Taxes | 2,264 | 3,856 | - | 163 | 547 | 1,554 | 121 | |||||||||||||||||||
| Net Income | 23,964 | 17,408 | 7,090 | 6,184 | 5,461 | 5,219 | 5,548 | |||||||||||||||||||
| Annualized Performance Ratios (Bank Only) | ||||||||||||||||||||||||||
| Return on Average Assets | 1.96 | % | 1.78 | % | 2.24 | % | 1.97 | % | 1.80 | % | 1.81 | % | 2.03 | % | ||||||||||||
| Return on Average Equity | 16.55 | % | 14.38 | % | 18.99 | % | 16.56 | % | 15.23 | % | 15.25 | % | 16.17 | % | ||||||||||||
| Equity/Assets | 11.85 | % | 11.98 | % | 11.85 | % | 11.77 | % | 12.02 | % | 11.37 | % | 11.98 | % | ||||||||||||
| Cost of Funds | 0.20 | % | 0.52 | % | 0.17 | % | 0.17 | % | 0.22 | % | 0.25 | % | 0.31 | % | ||||||||||||
| Net Interest Margin | 4.09 | % | 4.51 | % | 4.16 | % | 4.10 | % | 4.10 | % | 4.37 | % | 4.43 | % | ||||||||||||
| Efficiency Ratio | 50.56 | % | 51.52 | % | 51.25 | % | 52.12 | % | 51.03 | % | 47.80 | % | 51.45 | % | ||||||||||||
