Morris State Bancshares Announces Strong Quarterly Earnings and Declares Fourth Quarter Dividend

Rhea-AI Summary

Morris State Bancshares (OTCQX: MBLU) reported Q3 2025 net income of $9.2M, up 53.43% sequentially and 68.98% year-over-year. The quarter included two one-time items: a COVID Employee Retention Credit of just under $2.5M and a PAM accounting adoption that reversed $1.7M of amortization, together boosting pre-tax income by $4.2M.

Core trends: NIM rose 5 bp to 4.48%, loans increased $18.2M (1.58%) QoQ, deposits declined $5.5M (-0.42%), allowance for credit losses was 1.27% of loans, and tangible book value rose to $18.51 per share. The board declared a $0.12 per share Q4 dividend payable ~Dec 10 to shareholders of record Nov 10.

Positive

• Net income of $9.2M for Q3 2025, +53.43% QoQ
• Net interest margin increased 5 bp to 4.48%
• Loans rose $18.2M (1.58%) sequentially
• Total shareholders' equity up 2.27% to $207.5M
• Declared Q4 dividend of $0.12 per share

Negative

• Q3 results boosted by $4.2M of one-time items (ERC ~$2.5M and PAM $1.7M)
• Provision for credit losses increased 158.28% QoQ to $1.133M
• Total deposits declined $5.5M (-0.42%) QoQ

DUBLIN, Ga., Oct. 31, 2025 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank (the “Bank”), today announced net income of $9.2 million for the quarter ending September 30, 2025, representing an increase of $3.2 million, or 53.43%, compared to net income of $5.9 million for the quarter ended June 30, 2025. Year-over-year the Company’s net income increased $3.7 million, or 68.98%, compared to net income of $5.4 million for the quarter ended September 30, 2024. The Bank’s record quarterly net earnings were primarily driven by two non-recurring items, one that increased non-interest income and another, an accounting change, that reduced non-interest expenses.

“We had a very strong third quarter. Core earnings continued to grow steadily this quarter, supported by higher net interest income as our net interest margin (NIM) increased 5 basis points (bp) to 4.48%. Additionally, we had a couple of one-time items that enhanced both our non-interest income and non-interest expense levels, producing the highest quarterly income in the Bank’s history. The Bank received the COVID Employee Retention Credit (ERC) of just under $2.5 million in July as a result of eligible payroll expenses incurred during the pandemic under the federal relief program. We also retroactively adopted FASB’s Proportional Amortization Method (PAM) as it relates to the Bank’s investment tax credits at the beginning of the year. Due to the adoption of PAM, we recorded a reduction to equity and a corresponding increase in accumulated amortization of investment tax credits. However, this retroactive adoption of PAM reduced our current year amortization expense, which resulted in the reversal of $1.7 million in amortization expenses during the third quarter. So combined, the ERC and PAM adoption boosted pre-tax income by $4.2 million and increased overall net income by $3.2 million from the prior quarter,” said Spence Mullis, Chairman and CEO.  “Again, even without these one-time items, our net interest income grew due to our NIM expanding as a result of solid loan growth. Future earnings will also be enhanced by reduced amortization expense with the shift to PAM.”

The net interest margin was 4.48% for the third quarter of 2025 compared to 4.43% for the second quarter of 2025 and 4.10% for the third quarter of 2024. The average yield on earning assets grew three basis points from 6.20%, as of June 30, 2025, to 6.23%, while the Bank’s cost of funds decreased two basis points from 1.98% to 1.96% during the same period.

Total deposits declined slightly during the quarter by $5.5 million, or 0.42%. Loans increased $18.2 million during the third quarter. Management expects loan demand to remain largely unchanged for the remainder of the year, with the potential for a slight increase resulting from recent M&A activity by other banks in its markets.

The Bank’s allowance for credit losses as a percentage of total loans was 1.27% for September 30, 2025, as compared to 1.28% for June 30, 2025, and 1.30% as of September 30, 2024. The Company’s adversely classified index reduced slightly from 9.51% as of June 30, 2025, to 9.39% as of September 30, 2025. The Bank’s efficiency ratio improved significantly from 50.97% as of June 30, 2025, to 36.96% as of September 30, 2025, because of the previously mentioned additional income from the ERC and PAM amortization accounting adjustment.

The Company’s total shareholders’ equity increased 2.27% to $207.5 million as of September 30, 2025, as compared to $202.9 million as of June 30, 2025. Tangible book value per share increased to $18.51 as of September 30, 2025, a 2.49% increase from $18.06 per share on June 30, 2025.  On October 15, 2025, the board of directors approved its fourth quarter dividend of $0.12 per share payable on or about December 10th to all shareholders of record as of November 10th. 

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. 

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

MORRIS STATE BANCSHARES, INC. AND SUBSIDIARIES Consolidating Balance Sheet
	September 30, 2025				June 30, 2025				Change				% Change			September 30, 2024				Change				% Change
	(Unaudited)				(Unaudited)											(Unaudited)
ASSETS
Cash and due from banks	$	84,825,539			$	106,289,134			$	(21,463,595	)		-20.19	%		$	48,180,615			$	36,644,924			76.06	%
Federal funds sold		15,499,910				24,863,860				(9,363,950	)		-37.66	%			11,932,122				3,567,788			29.90	%
Total cash and cash equivalents		100,325,449				131,152,994				(30,827,545	)		-23.51	%			60,112,737				40,212,712			66.90	%
Interest-bearing time deposits in other banks		100,000				100,000				--			0.00	%			100,000				--			0.00	%
Securities available for sale, at fair value		22,248,768				9,805,608				12,443,160			126.90	%			6,299,609				15,949,159			0.00	%
Securities held to maturity, at cost (net of CECL Reserve)		191,253,253				205,814,736				(14,561,483	)		-7.08	%			224,532,603				(33,279,350	)		-14.82	%
Federal Home Loan Bank stock, restricted, at cost		1,084,200				1,084,200				--			0.00	%			1,740,300				(656,100	)		-37.70	%
Loans, net of unearned income		1,174,036,110				1,155,735,771				18,300,339			1.58	%			1,088,132,851				85,903,259			7.89	%
Less-allowance for credit losses		(14,959,466	)			(14,816,647	)			(142,819	)		0.96	%			(14,179,392	)			(780,074	)		5.50	%
Loans, net		1,159,076,644				1,140,919,124				18,157,520			1.59	%			1,073,953,459				85,123,185			7.93	%
																					-
Bank premises and equipment, net		14,698,463				14,720,155				(21,692	)		-0.15	%			12,912,111				1,786,352			13.83	%
ROU assets for operating lease, net		660,649				601,700				58,949			9.80	%			854,808				(194,159	)		-22.71	%
Goodwill		9,361,704				9,361,704				--			0.00	%			9,361,704				--			0.00	%
Intangible assets, net		1,085,256				1,167,611				(82,355	)		-7.05	%			1,422,326				(337,070	)		-23.70	%
Other real estate and foreclosed assets		5,700				3,300				2,400			72.73	%			39,755				(34,055	)		-85.66	%
Accrued interest receivable		7,388,887				6,760,207				628,680			9.30	%			6,640,617				748,270			11.27	%
Cash surrender value of life insurance		15,450,301				15,340,444				109,857			0.72	%			15,022,374				427,927			2.85	%
Other assets		17,652,382				17,574,139				78,243			0.45	%			22,311,520				(4,659,138	)		-20.88	%
Total Assets	$	1,540,391,656			$	1,554,405,922			$	(14,014,266	)		-0.90	%		$	1,435,303,923				105,087,733			7.32	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing	$	335,465,880			$	346,323,393			$	(10,857,513	)		-3.14	%		$	320,503,732				14,962,148			4.67	%
Interest bearing		978,169,036				972,826,660				5,342,376			0.55	%			876,274,737				101,894,299			11.63	%
		1,313,634,916				1,319,150,053				(5,515,137	)		-0.42	%			1,196,778,469				116,856,447			9.76	%
																					-
Other borrowed funds		4,124,000				19,039,839				(14,915,839	)		-78.34	%			34,009,138				(29,885,138	)		-87.87	%
Lease liability for operating lease		660,649				601,700				58,949			9.80	%			854,808				(194,159	)		-22.71	%
Accrued interest payable		2,941,286				3,331,983				(390,697	)		-11.73	%			2,114,956				826,330			39.07	%
Accrued expenses and other liabilities		11,494,708				9,362,044				2,132,664			22.78	%			10,938,057				556,651			5.09	%
Total liabilities		1,332,855,559				1,351,485,619				(18,630,060	)		-1.38	%			1,244,695,428				88,160,131			7.08	%
Shareholders' Equity:
Common stock		10,754,034				10,754,034				--			0.00	%			10,688,223				65,811			0.62	%
Paid in capital surplus		36,029,228				35,876,904				152,324			0.42	%			34,867,691				1,161,537			3.33	%
Retained earnings		143,109,304				147,779,527				(4,670,223	)		-3.16	%			131,085,914				12,023,390			9.17	%
Current year earnings		20,116,252				10,912,007				9,204,245			84.35	%			15,660,043				4,456,209			28.46	%
Accumulated other comprehensive income (loss)		1,083,287				1,153,839				(70,552	)		-6.11	%			1,582,952				(499,665	)		-31.57	%
Treasury Stock, at cost 103,922		(3,556,008	)			(3,556,008	)			--			0.00	%			(3,276,328	)			(279,680	)		8.54	%
Total shareholders' equity		207,536,097				202,920,303				4,615,794			2.27	%			190,608,495				16,927,602			8.88	%
Total Liabilities and Shareholders' Equity	$	1,540,391,656			$	1,554,405,922				(14,014,266	)		-0.90	%		$	1,435,303,923				105,087,733			7.32	%

MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
Consolidating Statement of Income
for the Three Months Ended
	September 30,				June 30,											September 30,
		2025				2025			Change				% Change				2024			Change				% Change
	(Unaudited)				(Unaudited)											(Unaudited)
Interest and Dividend Income:
Interest and fees on loans	$	20,986,965			$	20,414,871			$	572,094			2.80	%		$	18,630,690			$	2,356,275			12.65	%
Interest income on securities		1,600,983				1,568,867				32,116			2.05	%			1,825,236				(224,253	)		-12.29	%
Income on federal funds sold		156,033				201,101				(45,068	)		-22.41	%			163,624				(7,591	)		-4.64	%
Income on time deposits held in other banks		1,034,737				850,388				184,349			21.68	%			338,433				696,304			205.74	%
Other interest and dividend income		19,768				19,576				192			0.98	%			21,031				(1,263	)		-6.01	%
Total interest and dividend income		23,798,486				23,054,803				743,683			3.23	%			20,979,014				2,819,472			13.44	%
Interest Expense:
Deposits		6,634,933				6,545,646				89,287			1.36	%			6,671,982				(37,049	)		-0.56	%
Interest on other borrowed funds		208,252				289,514				(81,262	)		-28.07	%			309,265				(101,013	)		-32.66	%
Interest on federal funds purchased		--				--				--			--				--				--			0.00	%
Total interest expense		6,843,185				6,835,160				8,025			0.12	%			6,981,247				(138,062	)		-1.98	%
Net interest income before provision for loan losses		16,955,301				16,219,643				735,658			4.54	%			13,997,767				2,957,534			21.13	%
Less-provision for credit losses		1,133,932				439,040				694,892			158.28	%			252,021				881,911			349.94	%
Net interest income after provision for credit losses		15,821,369				15,780,603				40,766			0.26	%			13,745,746				2,075,623			15.10	%
Noninterest Income:
Service charges on deposit accounts		618,127				546,848				71,279			13.03	%			576,751				41,376			7.17	%
Other service charges, commissions and fees		372,841				384,400				(11,559	)		-3.01	%			399,839				(26,998	)		-6.75	%
Gain on sales of foreclosed assets		--				--				--			--				--				--			0.00	%
Gain on sales of premises and equipment		--				--				--			--				--				--			0.00	%
Increase in CSV of life insurance		109,856				106,932				2,924			2.73	%			106,407				3,449			3.24	%
Other income		2,865,191				332,498				2,532,693			761.72	%			23,002				2,842,189			12356.27	%
Total noninterest income		3,966,015				1,370,678				2,595,337			189.35	%			1,105,999				2,860,016			258.59	%
Noninterest Expense:
Salaries and employee benefits		5,024,507				4,951,680				72,827			1.47	%			4,794,940				229,567			4.79	%
Occupancy and equipment expenses, net		566,265				609,642				(43,377	)		-7.12	%			592,165				(25,900	)		-4.37	%
Loss on sales and calls of securities		--				--				--			--				--				--			0.00	%
Loss on Sales of premises and equipment		--				--				--			--				--				--			0.00	%
Loss on sales of foreclosed assets		--				1,400				(1,400	)		-100.00	%			2,065				(2,065	)		0.00	%
Other expenses		2,065,393				3,706,152				(1,640,759	)		-44.27	%			3,752,517				(1,687,124	)		-44.96	%
Total noninterest expense		7,656,165				9,268,874				(1,612,709	)		-17.40	%			9,141,687				(1,485,522	)		-16.25	%
Income Before Income Taxes		12,131,219				7,882,407				4,248,812			53.90	%			5,710,058				6,421,161			112.45	%
Provision for income taxes		2,926,975				1,883,456				1,043,519			-55.40	%			263,212				2,663,763			1012.02	%
Net Income	$	9,204,244			$	5,998,951				3,205,293			53.43	%		$	5,446,846				3,757,398			68.98	%
Earnings per common share:
Basic	$	0.87			$	0.57				0.30			52.01	%		$	0.51				0.36			69.90	%
Diluted	$	0.87			$	0.57				0.30			52.63	%		$	0.51				0.36			70.59	%

	Quarter Ending
	September 30,			June 30,			September 30,
		2025			2025			2024
Dollars in thousand, except per share data	(Unaudited)			(Unaudited)			(Unaudited)
Per Share Data
Basic Earnings per Common Share	$	0.87		$	0.57		$	0.51
Diluted Earnings per Common Share		0.87			0.57			0.51
Dividends per Common Share		0.12			0.12			0.092
Book Value per Common Share		19.49			19.05			17.99
Tangible Book Value per Common Share		18.51			18.06			16.97
Average Diluted Shares Outstanding		10,622,703			10,608,771			10,602,348
End of Period Common Shares Outstanding		10,650,112			10,650,112			10,596,345
Annualized Performance Ratios (Bank Only)
Return on Average Assets		2.43	%		1.71	%		1.65	%
Return on Average Equity		18.97	%		13.33	%		12.37	%
Equity/Assets		13.03	%		12.70	%		13.23	%
Yield on Earning Assets		6.23	%		6.20	%		6.05	%
Cost of Funds		1.96	%		1.98	%		2.18	%
Net Interest Margin		4.48	%		4.43	%		4.10	%
Efficiency Ratio		36.96	%		50.97	%		58.90	%
Credit Metrics
Allowance for Loan Losses to Total Loans		1.27	%		1.28	%		1.30	%
Adversely Classified Assets to Tier 1 Capital plus Allowance for Loan Losses		9.39	%		9.51	%		6.15	%

FAQ

What did MBLU report for Q3 2025 net income and EPS?

MBLU reported $9.2M net income for Q3 2025 and basic/diluted EPS of $0.87.

How did Morris State Bancshares' net interest margin change in Q3 2025?

Net interest margin rose 5 basis points sequentially to 4.48% in Q3 2025.

What one-time items affected MBLU's Q3 2025 earnings?

Q3 was aided by a COVID Employee Retention Credit of just under $2.5M and a $1.7M reversal from adopting PAM for investment tax credits, totaling ~$4.2M pre-tax impact.

What dividend did MBLU declare for fourth quarter 2025 and payment dates?

The board approved a $0.12 per share Q4 dividend payable on or about December 10, 2025 to shareholders of record as of November 10, 2025.

How did loans and deposits change at MBLU in Q3 2025?

Loans increased by $18.2M (1.58%) while total deposits decreased by $5.5M (-0.42%) sequentially.

What happened to MBLU's allowance for credit losses and efficiency ratio in Q3 2025?

Allowance for credit losses was 1.27% of loans; the efficiency ratio improved to 36.96%, driven by the one-time income items.