Morris State Bancshares Announces Solid Earnings in 2020 and Increases Quarterly Dividend

DUBLIN, Ga., Feb. 12, 2021 (GLOBE NEWSWIRE) — Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank, today announced net income of $17.4 million for the year ended December 31, 2020, representing an increase of $3.8 million, or 27.80%, compared to net income of $13.6 million for the year ended December 31, 2019. The company also announced diluted earnings per share of $8.30 for 2020, representing a 20.82% increase over diluted earnings per share of $6.87 for 2019. Earnings were a result of disciplined cost of funds management and strong fee income from the SBA Paycheck Protection Program, or PPP, and strong mortgage production.
“We are very pleased with the financial performance of the Company in 2020. It was a year of significant change and challenges with the pandemic. Our team worked to strengthen community partnerships with our customers during the unprecedented economic conditions,” said Spence Mullis, President and CEO. “We continued to create significant value for our shareholders as we grew core deposits over 37% to $896 million. Noninterest-bearing deposit growth represented $87.7 million, or 45%, of the overall core deposit growth.”The Company’s total shareholders’ equity increased 16.15% to $129 million as of December 31, 2020, as compared to $111 million as of December 31, 2019. Tangible book value per share increased to $56.04 as of December 31, 2020, an 18.78% increase or $8.86 per share from December 31, 2019. On January 27, 2021, the board of directors approved an increase in its first quarter dividend to $0.38 per share payable on or about March 15, 2021 to all shareholders of record as of February 28, 2021.Net interest income for the years ended December 31, 2020 and 2019 was $48.8 million and $38.9 million respectively, an increase of $9.8 million, or 25.23%. With many moving parts during 2020, the net interest margin at the bank ended at 4.53% for December 31, 2020, which was equal to the December 31, 2019 level. The bank was an active participant in PPP, booking over $86 million in loans and recognizing $2.2 million in fee income during 2020. The margin’s stamina was a result of diligent cost of funds management that offset moderate earning asset yield contraction. Our earning asset yield declined form 5.47% for 2019 to 5.00% for the year ended December 31, 2020, a 47-basis point reduction. Our cost of funds declined from 1.02% for 2019 to 0.52% for the year ended December 31, 2020, a 50-basis point reduction. We anticipate continued pressure on the margin going forward as it will be difficult to significantly lower our cost of funds while competition for good loans will remain.Provision for loan losses was $3.6 million for the year ended December 31, 2020 versus $1.7 million for the year ended December 31, 2019. Our reserve as a percentage of total loans was 1.39% when PPP loans are netted out of total loans as of December 31, 2020, versus 1.31% as of December 31, 2019. Our adversely classified coverage ratio was 8.75% as of December 31, 2020 versus 14.49% as of December 31, 2019. Our level of other real estate owned (ORE) decreased to $131 thousand as of December 31, 2020 from $384 thousand as of December 31, 2019. This level of problem assets and ORE are the lowest held by the bank in over ten years.Noninterest expense increased 9.62%, or $2.46 million, to $28.1 million for the year ended December 31, 2020 versus $25.6 million as of December 31, 2019. Most of this increase was related to salaries and employee benefits.
Forward-looking StatementsCertain 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