Morris State Bancshares Announces Quarterly Earnings and Declares Second Quarter Dividend

DUBLIN, Ga., May 03, 2024 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank, today announced net income of $4.9 million for the quarter ending March 31, 2024, representing an increase of $787 thousand, or 19.17%, compared to net income of $4.1 million for the quarter ended March 31, 2023. In the linked quarter comparison, the bank’s net income decreased $1.0 million, or 17.55%, compared to net income of $5.9 million for the quarter ended December 31, 2023. Net interest income before provision for credit losses was in line with prior quarter levels. Lower linked quarter net earnings were a result of higher salaries and employee benefits expense related to beginning of the year pay raises, bonuses, and equity-related benefits.

“We are pleased with the first quarter and the stability of our core earnings as evidenced by a solid net interest margin and net interest income. While our cost of funds has continued to rise, we’ve been able to keep pace with parallel increases in our earning asset yield. We continue to experience larger loan payoffs that have impeded our loan growth for the year but have provided higher pricing opportunities for new loans in addition to the repricing of scheduled maturities within the portfolio. We were also able to reduce our non-earning asset levels through a significant reduction in our other real estate (ORE) during the first quarter. Other real estate and foreclosed assets declined by over $3.5 million down to $39 thousand during the quarter,” said Spence Mullis, Chairman and CEO.

The net interest margin was 3.99% for the first quarter of 2024 compared to 3.97% for the fourth quarter of 2023 and 3.98% for the first quarter of 2023. The average yield on earning assets grew 17 basis points from 5.70%, as of December 31, 2023, to 5.87%, while the bank’s cost of funds grew 17 basis points from 1.92% to 2.09% during the same period.

Provision for credit losses declined $237 thousand during the quarter as a result of lower unfunded commitments which decreased the required CECL unfunded commitment reserve and with reduced loan levels due to the slight contraction in the loan portfolio of $3.0 million since the beginning of the year. The Company’s asset quality improved with a $3.5 million reduction in Other Real Estate during the quarter, which improved the bank’s adversely classified index from 6.69% as of December 31, 2023, to 5.22% as of March 31, 2024. The bank’s reserve as a percentage of total loans was 1.34% for March 31, 2024, as compared to 1.34% for December 31, 2023, and 1.35% for March 31, 2023. Noninterest expense increased $847,951, or 10.25%, over December 31, 2023, due mainly to the previously mentioned higher salary and benefits expense. Provision for income taxes increased $568,470, or 136.56%, during the quarter.

The Company’s total shareholders’ equity increased 2.16% during the quarter to $182 million as of March 31, 2024, and up 9.36%, or $15.6 million, from March 31, 2023. Tangible book value of the company grew to $80.83¹ on March 31, 2024, from $78.97¹ on December 31, 2023, and was up 10.51% from $73.14 as of March 31, 2023. On April 17, 2024, the board of directors approved a second quarter dividend of $0.46¹ per share payable on or about June 15, 2024, to all shareholders of record as of May 15, 2024. As announced on April 23, 2024, the bank declared a 4 for 1 stock dividend to all shareholders of record on that date. As such, the aforementioned cash dividend approved on April 17 will equate to approximately $0.09 cents per share outstanding of record on May 15, 2024, after giving effect to the stock dividend.

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.

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¹ Per share amounts have not been adjusted to reflect the April 23, 2024 4-for-1 stock dividend.