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 15th 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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