Morris State Bancshares Announces Solid Earnings in 2022 and Declares Dividend

Morris State Bancshares Announces Solid Earnings in 2022 and Declares Dividend

DUBLIN, Ga., Feb. 02, 2023 (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, 2022. Year over year and quarter by quarter comparisons are included herewith. Following is a summary of the quarterly and annual highlights:

Fourth Quarter 2022 Highlights

  • Net income for the fourth quarter of 2022 was $6.6 million, compared to $2.1 million for the third quarter of 2022 and $7.1 million for the fourth quarter of 2021.
  • Diluted earnings per share for the fourth quarter of 2022 was $3.14, compared to $0.99 for the third quarter of 2022 and $3.38 for the fourth quarter of 2021.
  • Earnings before taxes for the fourth quarter of 2022 was $5.9 million, compared to $2.7 million for the third quarter of 2022 and $7.1 million for the fourth quarter of 2021.
  • Average cost of funds for the fourth quarter of 2022 was 77 basis points, compared to 43 basis points for the third quarter of 2022 and 17 basis points for the fourth quarter of 2021.
  • Loans net of PPP grew $20.5 million, or 7.8% annualized, during the fourth quarter of 2022 as compared to September 30, 2022.
  • Return on average assets at the bank level for the fourth quarter of 2022 was 2.03%, compared to 0.80% for the third quarter of 2022 and 2.24% annualized for the fourth quarter of 2021.

Full Year 2022 Highlights

  • Total assets were $1.44 billion at December 31, 2022, compared to $1.41 billion at December 31, 2021.
  • Total shareholders’ equity was $165.0 million at December 31, 2022, compared to $148.3 at December 31, 2021.
  • Full year net income of $21.1 million in 2022, compared to $24.0 million in 2021.
  • Diluted earnings per share of $9.98 in 2022, compared to $11.40 in 2021.
  • Net loans grew $125.7 million, or 13.57%, during 2022.
  • Bank-level efficiency ratio of 52.11% in 2022, compared to 50.56% in 2021.
  • Tangible book value per share of $72.65 at December 31, 2022, compared to $64.77 at December 31, 2021.
  • Return on average assets at the bank level of 1.66% for the full year 2022, compared to 1.96% for 2021.

“We are very pleased with the overall financial performance of the Company in 2022. In a year in which the Fed raised interest rates an unprecedented seven times and the occurrence of a fraud-related $3 million isolated loan loss we were still able to produce very strong returns for our shareholders,” said Spence Mullis, Chairman and CEO. “At the bank level we produced a 1.66% return on average assets and 13.45% return on average equity while growing assets $25.5 million and total equity $16.8 million at the company level after distributing $3.7 million in dividends back to our shareholders.”

On January 25, 2023, the company approved a first quarter dividend of $0.44 per share payable on or about March 15, 2023, to all shareholders of record as of February 28, 2023. The company also announced that Morris Bank’s Chief Banking Officer Stacy Brantley will be leaving the bank on February 3, 2023, to pursue other career opportunities. Mullis stated, “I would like to thank Stacy Brantley for his contributions to the bank since joining in 2009. Stacy is a great friend to me and has contributed to the growth and success of Morris Bank. I wish him well in his future endeavors.” Mullis was appointed to the additional role of Acting Chief Banking Officer of Morris Bank with Stacy’s departure.

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
December 31, 2022

                               
                               
    December 31,
  December 31,
             
    2022   2021   Change
  % Change
    (Unaudited)
  (Unaudited)
             
ASSETS                              
                               
Cash and due from banks   $ 49,302,788     $ 162,649,843     $ (113,347,055 )   -69.69 %
Federal funds sold     21,007,642       14,278,248       6,729,394     47.13 %
Total cash and cash equivalents     70,310,430       176,928,091       (106,617,661 )   -60.26 %
                               
Interest-bearing time deposits in other banks     100,000       350,000       (250,000 )   -71.43 %
Securities available for sale, at fair value           244,979,034       (244,979,034 )    
Securities held to maturity, at cost     259,677,508       11,123,253       248,554,255     2234.55 %
Federal Home Loan Bank stock, restricted, at cost     1,578,400       624,300       954,100     152.83 %
                               
Loans, net of unearned income     1,051,888,290       926,226,134       125,662,156     13.57 %
Less-allowance for loan losses     (13,629,255 )     (12,008,416 )     (1,620,839 )   13.50 %
Loans, net     1,038,259,035       914,217,718       124,041,317     13.57 %
                               
Bank premises and equipment, net     13,865,943       14,938,591       (1,072,648 )   -7.18 %
ROU assets for operating lease, net     1,529,545       1,239,826       289,719     23.37 %
Goodwill     9,361,704       9,361,704            
Intangible assets, net     2,023,540       2,369,390       (345,850 )   -14.60 %
Other real estate and foreclosed assets     3,715,202       5,332,096       (1,616,894 )   -30.32 %
Accrued interest receivable     5,341,616       4,647,197       694,419     14.94 %
Cash surrender value of life insurance     14,333,544       13,977,951       355,593     2.54 %
Other assets     16,558,916       11,014,182       5,544,734     50.34 %
Total Assets   $ 1,436,655,383     $ 1,411,103,333     $ 25,552,050     1.81 %
                               
                               
LIABILITIES AND SHAREHOLDERS’ EQUITY                              
                               
Deposits:                              
Non-interest bearing   $ 339,657,309     $ 337,810,442     $ 1,846,867     0.55 %
Interest bearing     876,009,017       886,394,003       (10,384,986 )   -1.17 %
      1,215,666,326       1,224,204,445       (8,538,119 )   -0.70 %
                               
Other borrowed funds     48,826,681       28,752,079       20,074,602     69.82 %
Lease liability for operating lease     1,529,545       1,239,826       289,719     23.37 %
Accrued interest payable     143,899       134,392       9,507     7.07 %
Accrued expenses and other liabilities     5,461,126       8,513,648       (3,052,522 )   -35.85 %
                               
Total liabilities     1,271,627,577       1,262,844,390       8,783,187     0.70 %
                               
Shareholders’ Equity:                              
Common stock     2,171,665       2,159,148       12,517     0.58 %
Paid in capital surplus     41,086,276       40,349,139       737,137     1.83 %
Retained earnings     99,943,774       80,075,546       19,868,228     24.81 %
Current year earnings     21,108,630       23,964,290       (2,855,660 )   -11.92 %
Accumulated other comprehensive income (loss)     2,608,086       3,404,364       (796,278 )   -23.39 %
Treasury Stock, at cost 56,912 shares     (1,890,625 )     (1,693,544 )     (197,081 )   11.64 %
Total shareholders’ equity     165,027,806       148,258,943       16,768,863     11.31 %
                               
Total Liabilities and Shareholders’ Equity   $ 1,436,655,383     $ 1,411,103,333       25,552,050     1.81 %
                               

 
MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
                               
Consolidating Statement of Income
December 31, 2022
                 
                 
    December 31,   December 31,        
    2022   2021     Change   % Change
    (Unaudited)   (Unaudited)        
Interest and Dividend Income:                
Interest and fees on loans   $ 52,930,545     $ 52,043,715     $ 886,830     1.70 %
Interest income on securities     7,294,294       5,895,358       1,398,936     23.73 %
Income on federal funds sold     186,056       74,911       111,145     148.37 %
Income on time deposits held in other banks     807,990       130,572       677,418     518.81 %
Other interest and dividend income     460,924       177,004       283,920     160.40 %
Total interest and dividend income     61,679,809       58,321,560       3,358,249     5.76 %
                 
Interest Expense:                
Deposits     4,530,637       2,338,787       2,191,850     93.72 %
Interest on other borrowed funds     1,741,037       1,559,428       181,609     11.65 %
Interest on federal funds purchased     3,221             3,221      
Total interest expense     6,274,895       3,898,215       2,376,680     60.97 %
                 
Net interest income before provision for loan losses     55,404,914       54,423,345       981,569     1.80 %
Less-provision for loan losses     5,100,000       2,000,000       3,100,000     155.00 %
Net interest income after provision for loan losses     50,304,914       52,423,345       (2,118,431 )   -4.04 %
                 
Noninterest Income:                
Service charges on deposit accounts     2,417,905       1,983,721       434,184     21.89 %
Other service charges, commissions and fees     1,512,194       1,600,219       (88,025 )   -5.50 %
Gain on sales of foreclosed assets     608,935             608,935      
Gain on sales and calls of securities           299,870       (299,870 )    
Gain on sale of loans           37,683       (37,683 )    
Increase in CSV of life insurance     355,593       357,508       (1,915 )   -0.54 %
Other income     162,625       380,138       (217,513 )   -57.22 %
Total noninterest income     5,057,252       4,659,139       398,113     8.54 %
                 
Noninterest Expense:                
Salaries and employee benefits     18,532,771       18,241,891       290,880     1.59 %
Occupancy and equipment expenses, net     2,290,897       2,201,420       89,477     4.06 %
(Gain) Loss on sales of foreclosed assets and other real estate           (2,610 )     2,610     -100.00 %
Loss on sales of premises and equipment     201,009             201,009      
Other expenses     12,397,182       10,413,609       1,983,573     19.05 %
Total noninterest expense     33,421,859       30,854,310       2,567,549     8.32 %
                 
Income Before Income Taxes     21,940,307       26,228,174       (4,287,867 )   -16.35 %
Provision for income taxes     831,677       2,263,886       (1,432,209 )   -63.26 %
                 
Net Income   $ 21,108,630     $ 23,964,288       (2,855,658 )   -11.92 %
                 
                 
Earnings per common share:                
Basic   $ 9.98     $ 11.40       (1.42 )   -12.46 %
Diluted   $ 9.98     $ 11.40       (1.42 )   -12.46 %
                 

         
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,
    2022 2021   2022   2022   2022   2022   2021
(Dollars in thousand, except per share data)   (Unaudited) (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
                           
Per Share Data                          
Basic Earnings per Common Share   $ 9.98   $ 11.40     $ 3.14     $ 0.99     $ 3.21     $ 1.79     $ 3.38  
Diluted Earnings per Common Share     9.98     11.40       3.14       0.99       3.21       1.79       3.38  
Dividends per Common Share     1.76     1.52       0.44       0.44       0.44       0.44       0.38  
Book Value per Common Share     78.04     70.34       78.04       75.42       74.97       72.49       70.34  
Tangible Book Value per Common Share     72.65     64.77       72.65       70.01       69.52       66.98       64.77  
                           
                           
Average Diluted Shares Outstanding     2,115,032     2,102,359       2,116,521       2,118,910       2,116,526       2,108,037       2,106,819  
End of Period Common Shares Outstanding     2,114,753     2,107,857       2,114,753       2,116,921       2,120,374       2,114,439       2,107,857  
                           
Selected Balance Sheet Data (Bank Only)                          
Loans (net of PPP)     1,049,916     913,818       1,049,916       1,029,464       1,006,632       952,139       913,818  
PPP Loans     33     9,974       33       66       2,768       5,284       9,974  
Total Loans     1,049,949     923,792       1,049,949       1,029,530       1,009,399       957,423       923,792  
                           
Non-Interest Bearing Deposits     339,785     343,437       339,785       366,924       367,639       365,018       343,437  
Interest Bearing Demand Deposits     270,473     271,693       270,473       271,193       283,448       288,575       271,693  
Savings & Money Market Deposits     444,170     436,462       444,170       434,765       415,922       434,635       436,462  
                           
Earnings Summary                          
Net Interest Income     55,405     54,423       13,846       13,946       14,054       13,558       14,029  
Provision for Loan Losses     5,100     2,000       600       3,750       375       375       150  
Non-Interest Income     5,057     4,659       1,000       1,213       1,488       1,376       1,397  
Non-Interest Expense     33,422     30,854       8,306       8,740       7,944       8,452       8,186  
Earnings before Taxes     21,940     26,228       5,940       2,669       7,223       6,108       7,090  
Income Taxes     832     2,264       (704 )     568       421       547        
Net Income     21,109     23,964       6,644       2,101       6,802       5,561       7,090  
                           
Annualized Performance Ratios (Bank Only)                          
Return on Average Assets     1.66 %   1.96 %     2.03 %     0.80 %     2.08 %     1.74 %     2.24 %
Return on Average Equity     13.45 %   16.55 %     15.90 %     6.34 %     16.93 %     14.87 %     18.99 %
Equity/Assets     12.83 %   11.85 %     12.83 %     12.49 %     12.44 %     11.90 %     11.85 %
Cost of Funds     0.38 %   0.20 %     0.77 %     0.43 %     0.16 %     0.15 %     0.17 %
Net Interest Margin     4.11 %   4.18 %     4.13 %     4.12 %     4.14 %     4.04 %     4.16 %
Efficiency Ratio     52.11 %   50.56 %     54.12 %     52.81 %     48.06 %     53.50 %     51.25 %

 

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

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