Morris State Bancshares Announces Quarterly Earnings, Announces Retirement of Subordinated Debt and Declares Third Quarter Dividend

Rhea-AI Summary

Morris State Bancshares (OTCQX: MBLU) reported strong Q2 2025 financial results with net income of $6.0 million, marking a 22.10% increase from Q1 2025 and a 12.71% rise year-over-year. The bank's performance was driven by net interest margin expansion to 4.43% and steady balance sheet growth.

Key highlights include loan portfolio growth of $16.0 million (1.41% quarterly) and deposit growth of $24.8 million (1.91% quarterly). The company retired $15.0 million in subordinated debt on July 22, 2025, which will reduce future interest expenses. Additionally, the board declared a Q3 dividend of $0.12 per share, payable September 15, 2025.

Positive

• Net income increased 22.10% quarter-over-quarter to $6.0 million
• Net interest margin expanded to 4.43%, up 41 basis points year-over-year
• Efficiency ratio improved to 50.97% from 57.97% in previous quarter
• Tangible book value increased 9.26% year-over-year to $18.06
• Full retirement of $15.0 million subordinated debt will reduce interest expenses
• Deposit growth of $24.8 million (7.8% annualized rate)

Negative

• Adversely classified assets index doubled to 9.51% from 4.66% in previous quarter
• Noninterest income declined 1.51% year-over-year
• Operating expenses increased 2.45% year-over-year

DUBLIN, Ga., July 29, 2025 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank (the “Bank”), today announced net income of $6.0 million for the quarter ending June 30, 2025, representing an increase of $1.1 million, or 22.10%, compared to net income of $4.9 million for the quarter ended March 31, 2025. Compared to the same quarter a year ago, net income increased by $677 thousand, or 12.71%, from $5.3 million for the quarter ending June 30, 2024. Net interest income before provision for credit losses increased from the linked and prior year quarters by $744 thousand and $2.7 million, respectively.

“The Company delivered solid second quarter results, driven by continued net interest margin expansion and steady balance sheet growth,” said Spence Mullis, Chairman and CEO. “Our net interest margin at the end of June was 4.43%, an increase of 14 basis points from the linked quarter and 41 basis points higher than the same quarter a year ago. The average yield on earning assets grew 13 basis points during the second quarter from 6.07% to 6.20%, while the Bank’s cost of funds increased 1 basis point from 1.97% to 1.98% during the same period. While we experienced significant payoffs during the quarter, our loan portfolio expanded by $16.0 million, or 1.41% for the quarter, an annualized growth rate of approximately 5.7%. Deposits increased by $24.8 million, or 1.91% for the quarter, which equates to an annualized growth rate of roughly 7.8%. As previously communicated, it was our intention to pay off the Company’s remaining subordinated debt as soon as the opportunity became available. We’re pleased to report that on July 22, 2025, we retired the full $15.0 million. This will result in significant interest expense savings for the Company going forward.”

The Bank’s allowance for credit losses as a percentage of total loans was 1.28% for June 30, 2025, as compared to 1.30% for March 31, 2025, and 1.30% for June 30, 2024. The Bank’s adversely classified index increased during the quarter from 4.66% as of March 31, 2025, to 9.51% as of June 30, 2025. The quarterly change was concentrated in one loan relationship. Overall, classified assets levels remain below historical trends.

The Bank’s efficiency ratio improved to 50.97% for the quarter ending June 30, 2025, from 57.97% at March 31, 2025 and 58.36% at June 30, 2024. Noninterest expense declined by $287,000, or 3.00%, compared to the quarter ending March 31, 2025. This decrease was driven by lower salary and benefits costs, along with several routine operating expenses coming in below budget. Provision for income taxes increased $407 thousand, or 27.58%, as a result of higher pre-tax income.

The Company’s total shareholders’ equity increased 2.53% during the quarter to $203 million as of June 30, 2025, and up 8.97%, or $16.7 million, from June 30, 2024. The tangible book value of the Company grew to $18.06 as of June 30, 2025, from $17.66 as of March 31, 2025, and was up 9.26% from $16.53 as of June 30, 2024. On July 17, 2025, the board of directors approved a third quarter dividend of $0.12 per share payable on or about September 15, 2025, to all shareholders of record as of August 15, 2025.

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,
			2025				2025			Change				% Change				2024			Change				% Change
		(Unaudited)				(Unaudited)											(Unaudited)
ASSETS
Cash and due from banks		$	106,289,134			$	92,342,678			$	13,946,456			15.10	%		$	43,688,884			$	62,600,250			143.29	%
Federal funds sold			24,863,860				15,606,716				9,257,144			59.32	%			14,624,710				10,239,150			70.01	%
Total cash and cash equivalents			131,152,994				107,949,394				23,203,600			21.49	%			58,313,594				72,839,400			124.91	%
Interest-bearing time deposits in other banks			100,000				100,000				--			0.00	%			100,000				--			0.00	%
Securities available for sale, at fair value			9,805,608				9,414,147				391,461			4.16	%			7,669,642				2,135,966			0.00	%
Securities held to maturity, at cost (net of CECL Reserve)			205,814,736				208,561,077				(2,746,341	)		-1.32	%			227,532,821				(21,718,085	)		-9.55	%
Federal Home Loan Bank stock, restricted, at cost			1,084,200				1,084,200				--			0.00	%			1,027,800				56,400			5.49	%
Loans, net of unearned income			1,155,735,771				1,139,719,828				16,015,943			1.41	%			1,081,790,223				73,945,548			6.84	%
Less-allowance for credit losses			(14,816,647	)			(14,829,709	)			13,062			-0.09	%			(14,109,191	)			(707,456	)		5.01	%
Loans, net			1,140,919,124				1,124,890,119				16,029,005			1.42	%			1,067,681,032				73,238,092			6.86	%
																						-
Bank premises and equipment, net			14,720,155				14,844,597				(124,442	)		-0.84	%			13,051,972				1,668,183			12.78	%
ROU assets for operating lease, net			601,700				692,339				(90,639	)		-13.09	%			945,268				(343,568	)		-36.35	%
Goodwill			9,361,704				9,361,704				--			0.00	%			9,361,704				--			0.00	%
Intangible assets, net			1,167,611				1,253,288				(85,677	)		-6.84	%			1,508,214				(340,603	)		-22.58	%
Other real estate and foreclosed assets			3,300				15,503				(12,203	)		-78.71	%			43,408				(40,108	)		-92.40	%
Accrued interest receivable			6,760,207				6,369,932				390,275			6.13	%			6,421,999				338,208			5.27	%
Cash surrender value of life insurance			15,340,444				15,233,512				106,932			0.70	%			14,915,967				424,477			2.85	%
Other assets			17,574,139				21,726,495				(4,152,356	)		-19.11	%			21,721,225				(4,147,086	)		-19.09	%
Total Assets		$	1,554,405,922			$	1,521,496,307			$	32,909,615			2.16	%		$	1,430,294,646				124,111,276			8.68	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing		$	346,323,393			$	330,414,834			$	15,908,559			4.81	%		$	298,997,994				47,325,399			15.83	%
Interest bearing			972,826,660				963,948,287				8,878,373			0.92	%			914,360,430				58,466,230			6.39	%
			1,319,150,053				1,294,363,121				24,786,932			1.91	%			1,213,358,424				105,791,629			8.72	%
Other borrowed funds			19,039,839				19,029,606				10,233			0.05	%			18,998,904				40,935			0.22	%
Lease liability for operating lease			601,700				692,339				(90,639	)		-13.09	%			945,268				(343,568	)		-36.35	%
Accrued interest payable			3,331,983				2,778,669				553,314			19.91	%			1,730,280				1,601,703			92.57	%
Accrued expenses and other liabilities			9,362,044				6,726,119				2,635,925			39.19	%			9,038,821				323,223			3.58	%
																						-
Total liabilities			1,351,485,619				1,323,589,854				27,895,765			2.11	%			1,244,071,697				107,413,922			8.63	%
Shareholders' Equity:
Common stock			10,754,034				10,701,756				52,278			0.49	%			10,688,223				65,811			0.62	%
Paid in capital surplus			35,876,904				35,307,009				569,895			1.61	%			34,729,351				1,147,553			3.30	%
Retained earnings			147,779,527				149,055,224				(1,275,697	)		-0.86	%			132,061,494				15,718,033			11.90	%
Current year earnings			10,912,007				4,913,056				5,998,951			122.10	%			10,213,197				698,810			6.84	%
Accumulated other comprehensive income (loss)			1,153,839				1,289,137				(135,298	)		-10.50	%			1,648,392				(494,553	)		-30.00	%
Treasury Stock, at cost 83,142			(3,556,008	)			(3,359,729	)			(196,279	)		5.84	%			(3,117,708	)			(438,300	)		14.06	%
Total shareholders' equity			202,920,303				197,906,453				5,013,850			2.53	%			186,222,949				16,697,354			8.97	%
Total Liabilities and Shareholders' Equity		$	1,554,405,922			$	1,521,496,307				32,909,615			2.16	%		$	1,430,294,646				124,111,276			8.68	%

MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
Consolidating Statement of Income
for the Three Months Ended
		June 30,			March 31,										June 30,
		2025			2025			Change				% Change			2024			Change				% Change
		(Unaudited)			(Unaudited)										(Unaudited)
Interest and Dividend Income:
Interest and fees on loans		$	20,414,871		$	19,338,360		$	1,076,511			5.57	%		$	17,879,134		$	2,535,737			14.18	%
Interest income on securities			1,568,867			1,671,657			(102,790	)		-6.15	%			1,837,396			(268,529	)		-14.61	%
Income on federal funds sold			201,101			534,479			(333,378	)		-62.37	%			156,184			44,917			28.76	%
Income on time deposits held in other banks			850,388			605,454			244,934			40.45	%			590,205			260,183			44.08	%
Other interest and dividend income			19,576			25,413			(5,837	)		-22.97	%			64,639			(45,063	)		-69.71	%
Total interest and dividend income			23,054,803			22,175,363			879,440			3.97	%			20,527,558			2,527,245			12.31	%
Interest Expense:
Deposits			6,545,646			6,413,065			132,581			2.07	%			6,568,679			(23,033	)		-0.35	%
Interest on other borrowed funds			289,514			286,480			3,034			1.06	%			389,629			(100,115	)		-25.69	%
Interest on federal funds purchased			--			--			--			0.00	%			--			--			0.00	%
Total interest expense			6,835,160			6,699,545			135,615			2.02	%			6,958,308			(123,148	)		-1.77	%
Net interest income before provision for loan losses			16,219,643			15,475,818			743,825			4.81	%			13,569,250			2,650,393			19.53	%
Less-provision for credit losses			439,040			577,123			(138,083	)		-23.93	%			272,419			166,621			61.16	%
Net interest income after provision for credit losses			15,780,603			14,898,695			881,908			5.92	%			13,296,831			2,483,772			18.68	%
Noninterest Income:
Service charges on deposit accounts			546,848			540,600			6,248			1.16	%			535,847			11,001			2.05	%
Other service charges, commisions and fees			384,400			380,482			3,918			1.03	%			397,787			(13,387	)		-3.37	%
Gain on sales of premises and equipment			--			--			--			--				141			(141	)		0.00	%
Increase in CSV of life insurance			106,932			104,750			2,182			2.08	%			102,828			4,104			3.99	%
Other income			332,498			20,407			312,091			1529.33	%			355,155			(22,657	)		-6.38	%
Total noninterest income			1,370,678			1,046,239			324,439			31.01	%			1,391,758			(21,080	)		-1.51	%
Noninterest Expense:
Salaries and employee benefits			4,951,680			5,122,152			(170,472	)		-3.33	%			4,650,704			300,976			6.47	%
Occupancy and equipment expenses, net			609,642			527,532			82,110			15.56	%			536,330			73,312			13.67	%
Loss on sales and calls of securities			--			--			--			--				265			(265	)		-100.00	%
Loss on sales of foreclosed assets			1,400			--			--			--				--			1,400			0.00	%
Other expenses			3,706,152			3,905,857			(199,705	)		-5.11	%			3,860,188			(154,036	)		-3.99	%
Total noninterest expense			9,268,874			9,555,541			(286,667	)		-3.00	%			9,047,487			221,387			2.45	%
Income Before Income Taxes			7,882,407			6,389,393			1,493,014			23.37	%			5,641,102			2,241,305			39.73	%
Provision for income taxes			1,883,456			1,476,337			407,119			27.58	%			318,723			1,564,733			490.94	%
																			-
Net Income		$	5,998,951		$	4,913,056			1,085,895			22.10	%		$	5,322,379			676,572			12.71	%
Earnings per common share:
Basic		$	0.57		$	0.46			0.10			21.92	%		$	0.50			0.06			12.74	%
Diluted		$	0.57		$	0.46			0.11			22.93	%		$	0.50			0.07			13.09	%

					Quarter Ending
		June 30,			March 31,			June 30,
			2025			2025			2024
Dollars in thousand, except per share data		(Unaudited)			(Unaudited)			(Unaudited)
Per Share Data
Basic Earnings per Common Share		$	0.57		$	0.46		$	0.50
Diluted Earnings per Common Share			0.57			0.46			0.50
Dividends per Common Share			0.12			0.12			0.092
Book Value per Common Share			19.05			18.66			17.56
Tangible Book Value per Common Share			18.06			17.66			16.53
Average Diluted Shared Outstanding			10,608,771			10,593,370			10,611,811
End of Period Common Shares Outstanding			10,650,112			10,606,258			10,605,080
Annualized Performance Ratios (Bank Only)
Return on Average Assets			1.71	%		1.41	%		1.73	%
Return on Average Equity			13.33	%		11.12	%		13.12	%
Equity/Assets			12.70	%		12.75	%		13.18	%
Yield on Earning Assets			6.20	%		6.07	%		5.96	%
Cost of Funds			1.98	%		1.97	%		2.16	%
Net Interest Margin			4.43	%		4.29	%		4.02	%
Efficiency Ratio			50.97	%		57.90	%		58.36	%
Credit Metrics
Allowance for Loan Losses to Total Loans			1.28	%		1.30	%		1.30	%
Adversely Classified Assets to Tier 1 Capital
plus Allowance for Loan Losses			9.51	%		4.66	%		6.02	%

---

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

FAQ

What was Morris State Bancshares (MBLU) earnings for Q2 2025?

Morris State Bancshares reported net income of $6.0 million for Q2 2025, representing a 22.10% increase from Q1 2025 and a 12.71% increase year-over-year.

What is MBLU's dividend for Q3 2025?

Morris State Bancshares declared a quarterly dividend of $0.12 per share, payable September 15, 2025, to shareholders of record as of August 15, 2025.

How much subordinated debt did MBLU retire in July 2025?

Morris State Bancshares retired $15.0 million in subordinated debt on July 22, 2025, which will result in significant interest expense savings going forward.

What was Morris State Bancshares' net interest margin in Q2 2025?

The bank's net interest margin was 4.43%, an increase of 14 basis points from the previous quarter and 41 basis points higher than the same quarter last year.

How much did MBLU's deposits grow in Q2 2025?

Deposits increased by $24.8 million or 1.91% for the quarter, representing an annualized growth rate of approximately 7.8%.