DUBLIN, Ga., Oct. 23, 2024 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the "Company”), the parent of Morris Bank, today announced net income of $5.4 million for the quarter ending September 30, 2024, representing an increase of $124 thousand, or 2.34%, compared to net income of $5.3 million for the quarter ended June 30, 2024. Year over year the Company's net income increased $954 thousand, or 21.23%, compared to net income of $4.5 million for the quarter ended September 30, 2023. The Company's quarterly net earnings rose due to sustained loan growth, higher loan yields, an increase in noninterest-bearing deposit accounts, and some stabilization in the cost of funds. These factors combined to strengthen the bank's net interest margin, bringing it to 4.10%.
"We had a solid third quarter. Our core earnings engine remains strong as reflected by the growth in our net interest income. In the third quarter, we generated net interest income of $14.0 million, which was $428 thousand above the June 30, 2024, level of $13.6 million and $1.1 million above the September 30, 2023 level of $12.9 million,” said Spence Mullis, Chairman and CEO. "The Federal Reserve's reduction in the Fed funds rate, combined with robust growth in noninterest-bearing balances, has contributed to stabilizing our cost of funds. Despite continued payoffs of larger loans, we continue to fund a good volume of new loans and previously unfunded commitments driving our loan balances slightly higher.”
The net interest margin was 4.10% for the third quarter of 2024 compared to 4.02% for the second quarter of 2024 and 3.94% for the third quarter of 2023. The average yield on earning assets grew nine basis points from 5.96%, as of June 30, 2024, to 6.05%, while the Company's cost of funds increased two basis points from 2.16% to 2.18% during the same period.
Total deposits declined during the quarter by $16.6 million, or 1.37%, which included a $24 million reduction in brokered money market deposits. However, non-interest-bearing deposits increased $21.5 million, or 7.19% during the quarter, helping to bolster the net interest margin. The bank took down $15.0 million in borrowings from the Federal Home Loan Bank during the third quarter of 2024 to help fund new loan demand and offset the reduction in brokered deposits. Loans increased $6.3 million, or an annualized 2.36% during the third quarter, slowing from the second quarter's annualized growth of 7.24%. Management anticipates steady loan demand in the fourth quarter as political uncertainty eases in November, providing customers with greater clarity to advance their growth strategies.
The bank's reserve as a percentage of total loans was 1.30% for September 30, 2024, as compared to 1.30% for June 30, 2024, and 1.32% as of September 30, 2023. The Company's adversely classified index increased slightly from 6.04% as of June 30, 2024, to 6.15% as of September 30, 2024. The bank's efficiency ratio increased slightly from 58.36% as of June 30, 2024, to 58.90% as of September 30, 2024.
The Company's total shareholders' equity increased 2.35% to $190.6 million as of September 30, 2024, as compared to $186.2 million as of June 30, 2024. Tangible book value per share increased to $16.97 as of September 30, 2024, a 2.66% increase from $16.53 per share on June 30, 2024. On October 16, 2024, the board of directors approved its fourth quarter dividend of $0.092 per share payable on or about December 15th to all shareholders of record as of November 15th.
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 | ||||||||||||||||||||||||||||||
September 30, | June 30, | September 30, | ||||||||||||||||||||||||||||
2024 | 2024 | Change | % Change | 2023 | Change | % Change | ||||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||
Cash and due from banks | $ | 48,180,615 | $ | 43,688,884 | $ | 4,491,731 | 10.28 | % | $ | 36,373,555 | $ | 11,807,060 | 32.46 | % | ||||||||||||||||
Federal funds sold | 11,932,122 | 14,624,710 | (2,692,588 | ) | -18.41 | % | 8,695,149 | 3,236,973 | 37.23 | % | ||||||||||||||||||||
Total cash and cash equivalents | 60,112,737 | 58,313,594 | 1,799,143 | 3.09 | % | 45,068,704 | 15,044,033 | 33.38 | % | |||||||||||||||||||||
Interest-bearing time deposits in other banks | 100,000 | 100,000 | -- | 0.00 | % | 100,000 | -- | 0.00 | % | |||||||||||||||||||||
Securities available for sale, at fair value | 6,299,609 | 7,669,642 | (1,370,033 | ) | -17.86 | % | 3,879,531 | 2,420,078 | 0.00 | % | ||||||||||||||||||||
Securities held to maturity, at cost (net of CECL Reserve) | 224,532,603 | 227,532,821 | (3,000,218 | ) | -1.32 | % | 244,837,916 | (20,305,313 | ) | -8.29 | % | |||||||||||||||||||
Federal Home Loan Bank stock, restricted, at cost | 1,740,300 | 1,027,800 | 712,500 | 69.32 | % | 1,727,100 | 13,200 | 0.76 | % | |||||||||||||||||||||
Loans, net of unearned income | 1,088,132,851 | 1,081,790,223 | 6,342,628 | 0.59 | % | 1,049,730,890 | 38,401,961 | 3.66 | % | |||||||||||||||||||||
Less-allowance for credit losses | (14,179,392 | ) | (14,109,191 | ) | (70,201 | ) | 0.50 | % | (13,860,420 | ) | (318,972 | ) | 2.30 | % | ||||||||||||||||
Loans, net | 1,073,953,459 | 1,067,681,032 | 6,272,427 | 0.59 | % | 1,035,870,470 | 38,082,989 | 3.68 | % | |||||||||||||||||||||
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Bank premises and equipment, net | 12,912,111 | 13,051,972 | (139,861 | ) | -1.07 | % | 13,325,846 | (413,735 | ) | -3.10 | % | |||||||||||||||||||
ROU assets for operating lease, net | 854,808 | 945,268 | (90,460 | ) | -9.57 | % | 1,216,601 | (361,793 | ) | -29.74 | % | |||||||||||||||||||
Goodwill | 9,361,704 | 9,361,704 | -- | 0.00 | % | 9,361,704 | -- | 0.00 | % | |||||||||||||||||||||
Intangible assets, net |
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