Morris State Bancshares Announces Quarterly Earnings and Declares Fourth Quarter Dividend

Rhea-AI Summary

Morris State Bancshares (MBLU) reported Q3 2024 net income of $5.4 million, up 2.34% from Q2 2024 and 21.23% year-over-year. Net interest margin improved to 4.10%, with net interest income reaching $14.0 million. The company saw increased loan yields and noninterest-bearing deposits, while maintaining stable cost of funds. Total deposits declined by $16.6 million, but non-interest-bearing deposits grew by $21.5 million. Loans increased by $6.3 million, showing an annualized growth of 2.36%. The board declared a Q4 dividend of $0.092 per share.

Positive

• Net income increased 21.23% YoY to $5.4 million
• Net interest margin improved to 4.10% from 3.94% YoY
• Net interest income grew to $14.0 million, up $1.1 million YoY
• Non-interest-bearing deposits increased by $21.5 million (7.19%)
• Tangible book value per share increased 2.66% to $16.97

Negative

• Total deposits declined by $16.6 million (1.37%)
• Loan growth slowed to 2.36% annualized from 7.24% in Q2
• Adversely classified index increased to 6.15% from 6.04%
• Efficiency ratio worsened to 58.90% from 58.36%

DUBLIN, Ga., Oct. 23, 2024 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank, today announced net income of $5.4 million for the quarter ending September 30, 2024, representing an increase of $124 thousand, or 2.34%, compared to net income of $5.3 million for the quarter ended June 30, 2024. Year over year the Company’s net income increased $954 thousand, or 21.23%, compared to net income of $4.5 million for the quarter ended September 30, 2023. The Company’s quarterly net earnings rose due to sustained loan growth, higher loan yields, an increase in noninterest-bearing deposit accounts, and some stabilization in the cost of funds. These factors combined to strengthen the bank’s net interest margin, bringing it to 4.10%.

“We had a solid third quarter. Our core earnings engine remains strong as reflected by the growth in our net interest income. In the third quarter, we generated net interest income of $14.0 million, which was $428 thousand above the June 30, 2024, level of $13.6 million and $1.1 million above the September 30, 2023 level of $12.9 million,” said Spence Mullis, Chairman and CEO. “The Federal Reserve’s reduction in the Fed funds rate, combined with robust growth in noninterest-bearing balances, has contributed to stabilizing our cost of funds. Despite continued payoffs of larger loans, we continue to fund a good volume of new loans and previously unfunded commitments driving our loan balances slightly higher.”

The net interest margin was 4.10% for the third quarter of 2024 compared to 4.02% for the second quarter of 2024 and 3.94% for the third quarter of 2023. The average yield on earning assets grew nine basis points from 5.96%, as of June 30, 2024, to 6.05%, while the Company’s cost of funds increased two basis points from 2.16% to 2.18% during the same period.

Total deposits declined during the quarter by $16.6 million, or 1.37%, which included a $24 million reduction in brokered money market deposits. However, non-interest-bearing deposits increased $21.5 million, or 7.19% during the quarter, helping to bolster the net interest margin. The bank took down $15.0 million in borrowings from the Federal Home Loan Bank during the third quarter of 2024 to help fund new loan demand and offset the reduction in brokered deposits. Loans increased $6.3 million, or an annualized 2.36% during the third quarter, slowing from the second quarter’s annualized growth of 7.24%. Management anticipates steady loan demand in the fourth quarter as political uncertainty eases in November, providing customers with greater clarity to advance their growth strategies.

The bank’s reserve as a percentage of total loans was 1.30% for September 30, 2024, as compared to 1.30% for June 30, 2024, and 1.32% as of September 30, 2023. The Company’s adversely classified index increased slightly from 6.04% as of June 30, 2024, to 6.15% as of September 30, 2024. The bank’s efficiency ratio increased slightly from 58.36% as of June 30, 2024, to 58.90% as of September 30, 2024.

The Company’s total shareholders’ equity increased 2.35% to $190.6 million as of September 30, 2024, as compared to $186.2 million as of June 30, 2024. Tangible book value per share increased to $16.97 as of September 30, 2024, a 2.66% increase from $16.53 per share on June 30, 2024.  On October 16, 2024, the board of directors approved its fourth quarter dividend of $0.092 per share payable on or about December 15th to all shareholders of record as of November 15th. 

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
						September 30,				June 30,											September 30,
							2024				2024			Change				% Change				2023			Change				% Change
						(Unaudited)				(Unaudited)											(Unaudited)
ASSETS
Cash and due from banks						$	48,180,615			$	43,688,884			$	4,491,731			10.28	%		$	36,373,555			$	11,807,060			32.46	%
Federal funds sold							11,932,122				14,624,710				(2,692,588	)		-18.41	%			8,695,149				3,236,973			37.23	%
Total cash and cash equivalents							60,112,737				58,313,594				1,799,143			3.09	%			45,068,704				15,044,033			33.38	%
Interest-bearing time deposits in other banks							100,000				100,000				--			0.00	%			100,000				--			0.00	%
Securities available for sale, at fair value							6,299,609				7,669,642				(1,370,033	)		-17.86	%			3,879,531				2,420,078			0.00	%
Securities held to maturity, at cost (net of CECL Reserve)							224,532,603				227,532,821				(3,000,218	)		-1.32	%			244,837,916				(20,305,313	)		-8.29	%
Federal Home Loan Bank stock, restricted, at cost							1,740,300				1,027,800				712,500			69.32	%			1,727,100				13,200			0.76	%
Loans, net of unearned income							1,088,132,851				1,081,790,223				6,342,628			0.59	%			1,049,730,890				38,401,961			3.66	%
Less-allowance for credit losses							(14,179,392	)			(14,109,191	)			(70,201	)		0.50	%			(13,860,420	)			(318,972	)		2.30	%
Loans, net							1,073,953,459				1,067,681,032				6,272,427			0.59	%			1,035,870,470				38,082,989			3.68	%
																										-
Bank premises and equipment, net							12,912,111				13,051,972				(139,861	)		-1.07	%			13,325,846				(413,735	)		-3.10	%
ROU assets for operating lease, net							854,808				945,268				(90,460	)		-9.57	%			1,216,601				(361,793	)		-29.74	%
Goodwill							9,361,704				9,361,704				--			0.00	%			9,361,704				--			0.00	%
Intangible assets, net							1,422,326				1,508,214				(85,888	)		-5.69	%			1,765,877				(343,551	)		-19.45	%
Other real estate and foreclosed assets							39,755				43,408				(3,653	)		-8.42	%			3,567,309				(3,527,554	)		-98.89	%
Accrued interest receivable							6,640,617				6,421,999				218,618			3.40	%			5,585,081				1,055,536			18.90	%
Cash surrender value of life insurance							15,022,374				14,915,967				106,407			0.71	%			14,613,337				409,037			2.80	%
Other assets							22,311,520				21,721,225				590,295			2.72	%			25,711,989				(3,400,469	)		-13.23	%
Total Assets						$	1,435,303,923			$	1,430,294,646			$	5,009,277			0.35	%		$	1,406,631,465				28,672,458			2.04	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing						$	320,503,732			$	298,997,994			$	21,505,738			7.19	%		$	316,825,603				3,678,129			1.16	%
Interest bearing							876,274,737				914,360,430				(38,085,693	)		-4.17	%			862,167,812				14,106,925			1.64	%
							1,196,778,469				1,213,358,424				(16,579,955	)		-1.37	%			1,178,993,415				17,785,054			1.51	%
																										-
Other borrowed funds							34,009,138				18,998,904				15,010,234			79.01	%			42,132,633				(8,123,495	)		-19.28	%
Lease liability for operating lease							854,808				945,268				(90,460	)		-9.57	%			1,216,601				(361,793	)		-29.74	%
Accrued interest payable							2,114,956				1,730,280				384,676			22.23	%			979,913				1,135,043			115.83	%
Accrued expenses and other liabilities							10,938,057				9,038,821				1,899,236			21.01	%			10,056,934				881,123			8.76	%
																										-
Total liabilities							1,244,695,428				1,244,071,697				623,731			0.05	%			1,233,379,496				11,315,932			0.92	%
Shareholders' Equity:
Common stock							10,688,223				10,688,223				--			0.00	%			2,179,210				8,509,013			390.46	%
Paid in capital surplus							34,867,691				34,729,351				138,340			0.40	%			41,548,417				(6,680,726	)		-16.08	%
Retained earnings							131,085,914				132,061,494				(975,580	)		-0.74	%			116,705,941				14,379,973			12.32	%
Current year earnings							15,660,043				10,213,197				5,446,846			53.33	%			13,404,804				2,255,239			16.82	%
Accumulated other comprehensive income (loss)							1,582,952				1,648,392				(65,440	)		-3.97	%			2,148,509				(565,557	)		-26.32	%
Treasury Stock, at cost 91,878							(3,276,328	)			(3,117,708	)			(158,620	)		5.09	%			(2,734,912	)			(541,416	)		19.80	%
Total shareholders' equity							190,608,495				186,222,949				4,385,546			2.35	%			173,251,969				17,356,526			10.02	%
Total Liabilities and Shareholders' Equity						$	1,435,303,923			$	1,430,294,646				5,009,277			0.35	%		$	1,406,631,465				28,672,458			2.04	%

MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
Consolidating Statement of Income
for the Three Months Ended
						September 30,			June 30,										September 30,
							2024			2024		Change				% Change				2023			Change				% Change
						(Unaudited)			(Unaudited)										(Unaudited)
Interest and Dividend Income:
Interest and fees on loans						$	18,630,690		$	17,879,134		$	751,556			4.20	%		$	15,803,711			$	2,826,979			17.89	%
Interest income on securities							1,825,236			1,837,396			(12,160	)		-0.66	%			2,051,695				(226,459	)		-11.04	%
Income on federal funds sold							163,624			156,184			7,440			4.76	%			216,377				(52,753	)		-24.38	%
Income on time deposits held in other banks							338,433			590,205			(251,772	)		-42.66	%			302,545				35,888			11.86	%
Other interest and dividend income							21,031			64,639			(43,608	)		-67.46	%			43,630				(22,599	)		-51.80	%
Total interest and dividend income							20,979,014			20,527,558			451,456			2.20	%			18,417,958				2,561,056			13.91	%
Interest Expense:
Deposits							6,671,982			6,568,679			103,303			1.57	%			5,109,712				1,562,270			30.57	%
Interest on other borrowed funds							309,265			389,629			(80,364	)		-20.63	%			455,105				(145,840	)		-32.05	%
Interest on federal funds purchased							--			--			--			--				--				--			0.00	%
Total interest expense							6,981,247			6,958,308			22,939			0.33	%			5,564,817				1,416,430			25.45	%
Net interest income before provision for loan losses							13,997,767			13,569,250			428,517			3.16	%			12,853,141				1,144,626			8.91	%
Less-provision for credit losses							252,021			272,419			(20,398	)		-7.49	%			(33,351	)			285,372			-855.66	%
Net interest income after provision for credit losses							13,745,746			13,296,831			448,915			3.38	%			12,886,492				859,254			6.67	%
Noninterest Income:
Service charges on deposit accounts							576,751			535,847			40,904			7.63	%			532,598				44,153			8.29	%
Other service charges, commissions and fees							399,839			397,787			2,052			0.52	%			399,587				252			0.06	%
Gain on sales of foreclosed assets							--			--			--			0.00	%			--				--			0.00	%
Gain on sales of premises and equipment							--			141			(141	)		-100.00	%			--				--			0.00	%
Increase in CSV of life insurance							106,407			102,828			3,579			3.48	%			97,005				9,402			9.69	%
Other income							23,002			355,155			(332,153	)		-93.52	%			7,681				15,321			199.47	%
Total noninterest income							1,105,999			1,391,758			(285,759	)		-20.53	%			1,036,871				69,128			6.67	%
Noninterest Expense:
Salaries and employee benefits							4,794,940			4,650,704			144,236			3.10	%			4,374,087				420,853			9.62	%
Occupancy and equipment expenses, net							592,165			536,330			55,835			10.41	%			599,714				(7,549	)		-1.26	%
Loss on sales and calls of securities							--			265			(265	)		0.00	%			--				--			0.00	%
Loss on Sales of premises and equipment							--			--			--			0.00	%			54,269				(54,269.0	)		0.00	%
Loss on sales of foreclosed assets							2,065			--			2,065			0.00	%			320,110				(318,045	)		0.00	%
Other expenses							3,752,517			3,860,188			(107,671	)		-2.79	%			3,837,844				(85,327	)		-2.22	%
Total noninterest expense							9,141,687			9,047,487			94,200			1.04	%			9,186,024				(44,337	)		-0.48	%
Income Before Income Taxes							5,710,058			5,641,102			68,956			1.22	%			4,737,339				972,719			20.53	%
Provision for income taxes							263,212			318,723			(55,511	)		17.42	%			244,258				18,954			7.76	%
																								-
Net Income						$	5,446,846		$	5,322,379			124,467			2.34	%		$	4,493,081				953,765			21.23	%
Earnings per common share:
Basic						$	0.51		$	0.50			0.01			2.43	%		$	0.42				0.09			21.00	%
Diluted						$	0.51		$	0.50			0.01			2.00	%		$	0.42				0.09			21.43	%
Per share amounts for September 30, 2023 and previous quarters have been adjusted to reflect the April 22, 2024 5-for-1 stock dividend.

						Quarter Ending
						September 30,			June 30,				September 30,
							2024				2024				2023
Dollars in thousand						(Unaudited)			(Unaudited)				(Unaudited)
Per Share Data
Basic Earnings per Common Share						$	0.51			$	0.50			$	0.42
Diluted Earnings per Common Share							0.51				0.50				0.42
Dividends per Common Share							0.092				0.092				0.088
Book Value per Common Share							17.99				17.56				16.37
Tangible Book Value per Common Share							16.97				16.53				15.32
Average Diluted Shared Outstanding							10,602,348				10,611,811				10,582,485
End of Period Common Shares Outstanding							10,596,345				10,605,080				10,582,494
Annualized Performance Ratios (Bank Only)
Return on Average Assets							1.65%				1.73%				1.45%
Return on Average Equity							12.37%				13.12%				11.37%
Equity/Assets							13.23%				13.18%				12.79%
Yield on Earning Assets							6.05%				5.96%				5.48%
Cost of Funds							2.18%				2.16%				1.69%
Net Interest Margin							4.10%				4.02%				3.94%
Efficiency Ratio							58.90%				58.36%				62.24%
Credit Metrics
Allowance for Loan Losses to Total Loans							1.30%				1.30%				1.32%
Adversely Classified Assets to Tier 1 Capital
plus Allowance for Loan Losses							6.15%				6.04%				7.00%
Per share amounts for September 30, 2023 and previous quarters have been adjusted to reflect the April 22, 2024 5-for-1 stock dividend.

FAQ

What was Morris State Bancshares (MBLU) Q3 2024 net income?

Morris State Bancshares reported net income of $5.4 million for Q3 2024, representing a 2.34% increase from Q2 2024 and a 21.23% increase year-over-year.

What is MBLU's Q4 2024 dividend payment?

The board approved a fourth quarter dividend of $0.092 per share, payable around December 15th to shareholders of record as of November 15th.

What was MBLU's net interest margin in Q3 2024?

The net interest margin was 4.10% for Q3 2024, compared to 4.02% in Q2 2024 and 3.94% in Q3 2023.

How much did MBLU's deposits change in Q3 2024?

Total deposits declined by $16.6 million (1.37%), while non-interest-bearing deposits increased by $21.5 million (7.19%) during Q3 2024.