Morris State Bancshares Announces Solid Earnings in 2023 and Increases Quarterly Dividend

DUBLIN, Ga., Jan. 31, 2024 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank (the “Bank”), today reported its financial results for the quarter and year ended December 31, 2023. Year over year and quarter by quarter comparisons are included herewith.

On January 24, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.46 per common share payable on or about March 15, 2024, to all shareholders of record as of February 15, 2024. This represents an increase of $0.02 per share, or 4.5%, from the quarterly dividend levels paid to shareholders in 2023.

“Morris Bank delivered another year of strong financial performance despite the Fed’s continued tighter monetary policy. We made net earnings of $19.3 million in 2023, compared to $21.1 million in 2022. As interest rates increased another 100 basis points during 2023, our cost of funds increased at a higher pace than our earning asset yields, causing our net interest margin (NIM) to compress 12 basis points. However, operationally we improved our core profitability as we generated earnings of $24.2 million before taxes and tax credit amortization expense compared to $22.3 million in 2022.” said Spence Mullis, Chairman and CEO. “At the bank level, we produced a 1.55% return on average assets and 12.25% return on average equity. This was while growing assets $5.8 million and total equity $13.2 million at the company level after distributing $3.7 million in dividends back to our shareholders. We continued our strategy of building cash reserves and plan to pay off a tranche of sub debt totaling $8.25 million when the debt’s window for payment opens on April 15^th of this year. We plan to continue to build cash reserves during 2024 in order to pay off our remaining sub debt totaling $15.0 million when its window opens in July of 2025.”

Following is a summary of the quarterly and annual highlights:

Fourth Quarter 2023 Highlights

• Net income for the fourth quarter of 2023 was $6.5 million, compared to $4.5 million for the third quarter of 2023 and $6.6 million for the fourth quarter of 2022.
• Diluted earnings per share for the fourth quarter of 2023 was $2.81, compared to $2.12 for the third quarter of 2023 and $3.14 for the fourth quarter of 2022.
• Earnings before taxes for the fourth quarter of 2023 was $6.1 million, compared to $4.7 million for the third quarter of 2023 and $5.9 million for the fourth quarter of 2022.
• Average cost of funds for the fourth quarter of 2023 was 192 basis points, compared to 169 basis points for the third quarter of 2023 and 77 basis points for the fourth quarter of 2022.
• Return on average assets (annualized) at the bank level for the fourth quarter of 2023 was 1.84%, compared to 1.45% for the third quarter of 2023 and 2.03% for the fourth quarter of 2022.
  

Full Year 2023 Highlights

• Total assets remained level at $1.44 billion at December 31, 2023, compared to $1.44 billion at December 31, 2022.
• Earnings before taxes and tax credit amortization expense totaled $24.2 million at December 31, 2023 compared to $22.3 million at December 31, 2022.
• Full year net income of $19.3 million in 2023, compared to $21.1 million in 2022.
• Return on average assets at the bank level of 1.55% for the full year 2023, compared to 1.66% for 2022.
• Diluted earnings per share of $9.14 in 2023, compared to $9.98 in 2022.
• Total shareholders’ equity increased 8% or $13.2 million to $178.1 million at December 31, 2023, compared to $164.9 million at December 31, 2022.
• Tangible book value per share of $78.97 at December 31, 2023, compared to $72.68 at December 31, 2022.
• Net loans grew $11.2 million, or 1.08%, during 2023.
• The Bank’s asset quality remains solid, ending the year with nonperforming assets to total loans and other real estate of 0.58%, past due and nonaccrual loans of 0.65% and net charge offs to average loans of 0.01% for 2023.
• Bank-level efficiency ratio of 57.51% in 2023, compared to 52.11% in 2022.

The Bank hired Jeremy Pritchard in December 2023 to serve in a newly created Chief Deposit Officer role. Mullis stated that “We are excited to bring someone onto the team with Jeremy’s experience and background, which includes overseeing a team of treasury sales professionals responsible for generating deposits across nine southeastern states, including Georgia, and serving on the NACHA Government Relations Board. We look forward to Jeremy leading commercial and retail deposit operation and treasury services for the Bank and are excited about him helping us in building further shareholder value through core deposit generation, strengthening the Bank’s sales culture, and ensuring consistency throughout the organization.”

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,” “plan,” “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, 2023
			December 31,				December 31,
				2023				2022			Change				% Change
			(Unaudited)				(Unaudited)
	ASSETS
	Cash and due from banks		$	51,060,389			$	49,302,788			$	1,757,601			3.56	%
	Federal funds sold			17,268,446				21,007,642				(3,739,196	)		-17.80	%
	Total cash and cash equivalents			68,328,835				70,310,430				(1,981,595	)		-2.82	%
	Interest-bearing time deposits in other banks			100,000				100,000				--			0.00	%
	Securities available for sale, at fair value			7,875,780				--				7,875,780			0.00	%
	Securities held to maturity, at cost			240,205,635				259,677,508				(19,471,873	)		-7.50	%
	Federal Home Loan Bank stock, restricted, at cost			1,029,600				1,578,400				(548,800	)		(34.77	%)
	Loans, net of unearned income			1,063,772,222				1,051,888,290				11,883,932			1.13	%
	Less-allowance for loan losses			(14,291,923	)			(13,629,255	)			(662,668	)		4.86	%
	Loans, net			1,049,480,299				1,038,259,035				11,221,264			1.08	%
	Bank premises and equipment, net			13,188,353				13,865,943				(677,590	)		-4.89	%
	ROU assets for operating lease, net			1,126,156				1,529,545				(403,389	)		-26.37	%
	Goodwill			9,361,704				9,361,704				--			0.00	%
	Intangible assets, net			1,679,989				2,023,540				(343,551	)		-16.98	%
	Other real estate and foreclosed assets			3,611,235				3,715,202				(103,967	)		-2.80	%
	Accrued interest receivable			6,424,090				5,341,616				1,082,474			20.26	%
	Cash surrender value of life insurance			14,711,623				14,333,544				378,079			2.64	%
	Other assets			25,321,095				16,467,513				8,853,582			53.76	%
	Total Assets		$	1,442,444,394			$	1,436,563,980			$	5,880,414			0.41	%
	LIABILITIES AND SHAREHOLDERS' EQUITY
	Deposits:
	Non-interest bearing		$	316,224,444			$	339,657,309			$	(23,432,865	)		-6.90	%
	Interest bearing			909,976,336				876,009,017				33,967,319			3.88	%
				1,226,200,780				1,215,666,326				10,534,454			0.87	%
	Other borrowed funds			27,151,283				48,826,681				(21,675,398	)		-44.39	%
	Lease liability for operating lease			1,126,156				1,529,545				(403,389	)		-26.37	%
	Accrued interest payable			1,059,226				143,899				915,327			636.09	%
	Accrued expenses and other liabilities			8,773,430				5,461,126				3,312,304			60.65	%
	Total liabilities			1,264,310,875				1,271,627,577				(7,316,702	)		-0.58	%
	Shareholders' Equity:
	Common stock			2,179,210				2,169,557				9,653			0.44	%
	Paid in capital surplus			42,177,860				41,302,572				875,288			2.12	%
	Retained earnings			115,232,197				99,943,774				15,288,423			15.30	%
	Current year earnings			19,332,490				21,108,630				(1,776,140	)		-8.41	%
	Accumulated other comprehensive income (loss)			1,968,846				2,608,086				(639,240	)		-24.51	%
	Treasury Stock, at cost 63,290 shares			(2,757,084	)			(2,196,216	)			(560,868	)		25.54	%
	Total shareholders' equity			178,133,519				164,936,403				13,197,116			8.00	%
	Total Liabilities and Shareholders' Equity		$	1,442,444,394			$	1,436,563,980				5,880,414			0.41	%

MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
Consolidating Statement of Income
December 31, 2023
			December 31,			December 31,
			2023			2022			Change				% Change
			(Unaudited)			(Unaudited)
	Interest and Dividend Income:
	Interest and fees on loans		$	62,157,217		$	52,930,545		$	9,226,672			17.43	%
	Interest income on securities			8,196,152			7,294,294			901,858			12.36	%
	Income on federal funds sold			627,235			186,056			441,179			237.12	%
	Income on time deposits held in other banks			1,214,072			807,990			406,082			50.26	%
	Other interest and dividend income			255,689			460,924			(205,235	)		-44.53	%
	Total interest and dividend income			72,450,365			61,679,809			10,770,556			17.46	%
	Interest Expense:
	Deposits			18,599,664			4,530,637			14,069,027			310.53	%
	Interest on other borrowed funds			2,148,019			1,741,037			406,982			23.38	%
	Interest on federal funds purchased			842			3,221			(2,379	)		-73.86	%
	Total interest expense			20,748,525			6,274,895			14,473,630			230.66	%
	Net interest income before provision for loan losses			51,701,840			55,404,914			(3,703,074	)		-6.68	%
	Less-provision for loan losses			450,475			5,100,000			(4,649,525	)		-91.17	%
	Net interest income after provision for loan losses			51,251,365			50,304,914			946,451			1.88	%
	Noninterest Income:
	Service charges on deposit accounts			2,143,550			2,417,905			(274,355	)		-11.35	%
	Other service charges, commisions and fees			1,589,747			1,512,194			77,553			5.13	%
	Gain on sales of foreclosed assets			--			608,935			(608,935	)		-100.00	%
	Gain on sales and calls of securities			--			--			--			--
	Gain on sale of loans			--			--			--			--
	Increase in CSV of life insurance			378,079			355,593			22,486			6.32	%
	Other income			606,754			162,625			444,129			273.10	%
	Total noninterest income			4,718,130			5,057,252			(339,122	)		-6.71	%
	Noninterest Expense:
	Salaries and employee benefits			17,414,685			18,532,771			(1,118,086	)		-6.03	%
	Occupancy and equipment expenses, net			2,250,663			2,290,897			(40,234	)		-1.76	%
	(Gain) Loss on sales of foreclosed assets and other real estate			321,783			--			321,783			0.00	%
	Loss on sales of premises and equipment			54,269			201,009			(146,740	)		-73.00	%
	Tax credit amortization expense			2,733,248			405,126			2,328,122			574.67	%
	Other expenses			11,713,424			11,992,056			(278,632	)		-2.32	%
	Total noninterest expense			34,488,072			33,421,859			1,066,213			3.19	%
	Income Before Income Taxes			21,481,423			21,940,307			(458,884	)		-2.09	%
	Provision for income taxes			2,148,933			831,677			1,317,256			158.39	%
	Net Income		$	19,332,490		$	21,108,630			(1,776,140	)		-8.41	%
	Earnings per common share:
	Basic		$	9.14		$	9.98			(0.84	)		-8.42	%
	Diluted		$	9.14		$	9.98			(0.84	)		-8.42	%

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,
			2023			2022				2023				2023				2023				2023				2022
	(Dollars in thousand, except per share data)	(Unaudited)			(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
	Per Share Data
	Basic Earnings per Common Share	$	9.14		$	9.98			$	2.81			$	2.12			$	2.27			$	1.94			$	3.14
	Diluted Earnings per Common Share		9.14			9.98				2.81				2.12				2.27				1.94				3.14
	Dividends per Common Share		1.76			1.76				0.44				0.44				0.44				0.44				0.44
	Book Value per Common Share		84.19			78.07				84.19				81.87				80.23				78.47				78.07
	Tangible Book Value per Common Share		78.97			72.68				78.97				76.61				74.93				73.14				72.68
	Average Diluted Shares Outstanding		2,116,078			2,114,934				2,116,078				2,116,186				2,118,681				2,112,019				2,116,521
	End of Period Common Shares Outstanding		2,115,920			2,112,645				2,115,920				2,116,196				2,116,061				2,120,598				2,114,753
	Selected Balance Sheet Data (Bank Only)
	Net Loans		1,049,480			1,063,772				1,049,480				1,048,418				1,023,367				1,040,412				1,063,772
	Non-Interest Bearing Deposits		315,953			339,785				315,953				336,698				339,177				346,232				339,785
	Interest Bearing Demand Deposits		286,112			270,473				286,112				249,649				243,744				260,624				270,473
	Savings & Money Market Deposits		393,139			444,170				393,139				401,234				422,048				441,911				444,170
	Time Deposits		231,692			161,933				231,692				211,590				193,110				175,534				161,933
	Earnings Summary
	Net Interest Income		51,701			55,405				13,352				12,853				13,036				12,879				13,846
	Provision for Credit Losses		450			5,100				242				(33	)			(141	)			383				600
	Non-Interest Income		4,718			5,057				1,098				1,037				1,108				1,479				1,000
	Non-Interest Expense		34,488			33,422				8,101				9,186				8,148				8,880				8,306
	Earnings before Taxes		21,481			21,940				6,108				4,737				6,137				5,095				5,940
	Income Taxes		2,149			832				(416	)			244				1,330				991				(704	)
	Net Income		19,332			21,109				6,524				4,493				4,807				4,104				6,644
	Annualized Performance Ratios (Bank Only)
	Return on Average Assets		1.55	%		1.66	%			1.84.	%			1.45	%			1.60	%			1.33	%			2.03	%
	Return on Average Equity		12.25	%		13.45	%			14.11	%			11.37	%			12.79	%			10.64	%			15.90	%
	Equity/Assets		13.07	%		12.83	%			13.07	%			12.79	%			12.45	%			11.90	%			12.83	%
	Cost of Funds		1.57	%		0.38	%			1.92	%			1.69	%			1.47	%			1.18	%			0.77	%
	Net Interest Margin		3.98	%		4.11	%			3.97	%			3.94	%			4.04	%			3.98	%			4.13	%
	Efficiency Ratio		57.51	%		52.11	%			55.18	%			62.24	%			53.45	%			59.21	%			54.12	%
	Efficiency Ratio Net of Tax Credit Amortization Expense		52.99	%		51.20	%			50.90	%			56.25	%			49.41	%			55.40	%			52.66	%
	Nonperforming Assets to Total Loans and Other Real Estate		0.58	%		0.71	%			0.58	%			0.58	%			0.64	%			0.68	%			0.71	%
	Past Due and Nonaccural Loans Ratio		0.65	%		0.62	%			0.65	%			0.64	%			0.55	%			0.62	%			0.62	%
	Net Chargeoffs to Average Loans		0.01	%		0.35	%			0.01	%			0.02	%			0.02	%			-0.01	%			0.35	%

 

 

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CONTACT: CONTACT:
Morris State Bancshares
Chris Bond
Chief Financial Officer
478-272-5202