Morris State Bancshares Announces Quarterly Earnings, Announces Retirement of Subordinated Debt and Declares Third Quarter Dividend

(Other OTC:MBLU),(OTC US:MBLU),

DUBLIN, Ga., July 29, 2025 (GLOBE NEWSWIRE) — Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank (the “Bank”), today announced net income of $6.0 million for the quarter ending June 30, 2025, representing an increase of $1.1 million, or 22.10%, compared to net income of $4.9 million for the quarter ended March 31, 2025. Compared to the same quarter a year ago, net income increased by $677 thousand, or 12.71%, from $5.3 million for the quarter ending June 30, 2024. Net interest income before provision for credit losses increased from the linked and prior year quarters by $744 thousand and $2.7 million, respectively.

“The Company delivered solid second quarter results, driven by continued net interest margin expansion and steady balance sheet growth,” said Spence Mullis, Chairman and CEO. “Our net interest margin at the end of June was 4.43%, an increase of 14 basis points from the linked quarter and 41 basis points higher than the same quarter a year ago. The average yield on earning assets grew 13 basis points during the second quarter from 6.07% to 6.20%, while the Bank's cost of funds increased 1 basis point from 1.97% to 1.98% during the same period. While we experienced significant payoffs during the quarter, our loan portfolio expanded by $16.0 million, or 1.41% for the quarter, an annualized growth rate of approximately 5.7%. Deposits increased by $24.8 million, or 1.91% for the quarter, which equates to an annualized growth rate of roughly 7.8%. As previously communicated, it was our intention to pay off the Company's remaining subordinated debt as soon as the opportunity became available. We're pleased to report that on July 22, 2025, we retired the full $15.0 million. This will result in significant interest expense savings for the Company going forward.”

The Bank's allowance for credit losses as a percentage of total loans was 1.28% for June 30, 2025, as compared to 1.30% for March 31, 2025, and 1.30% for June 30, 2024. The Bank's adversely classified index increased during the quarter from 4.66% as of March 31, 2025, to 9.51% as of June 30, 2025. The quarterly change was concentrated in one loan relationship. Overall, classified assets levels remain below historical trends.

The Bank's efficiency ratio improved to 50.97% for the quarter ending June 30, 2025, from 57.97% at March 31, 2025 and 58.36% at June 30, 2024. Noninterest expense declined by $287,000, or 3.00%, compared to the quarter ending March 31, 2025. This decrease was driven by lower salary and benefits costs, along with several routine operating expenses coming in below budget. Provision for income taxes increased $407 thousand, or 27.58%, as a result of higher pre-tax income.

The Company's total shareholders' equity increased 2.53% during the quarter to $203 million as of June 30, 2025, and up 8.97%, or $16.7 million, from June 30, 2024. The tangible book value of the Company grew to $18.06 as of June 30, 2025, from $17.66 as of March 31, 2025, and was up 9.26% from $16.53 as of June 30, 2024. On July 17, 2025, the board of directors approved a third quarter dividend of $0.12 per share payable on or about September 15, 2025, to all shareholders of record as of August 15, 2025.

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
June 30, March 31, June 30,
2025 2025 Change % Change 2024 Change % Change
(Unaudited) (Unaudited) (Unaudited)
ASSETS
Cash and due from banks $ 106,289,134 $ 92,342,678 $ 13,946,456 15.10 % $ 43,688,884 $ 62,600,250 143.29 %
Federal funds sold 24,863,860 15,606,716 9,257,144 59.32 % 14,624,710 10,239,150 70.01 %
Total cash and cash equivalents 131,152,994 107,949,394 23,203,600 21.49 % 58,313,594 72,839,400 124.91 %
Interest-bearing time deposits in other banks 100,000 100,000 0.00 % 100,000 0.00 %
Securities available for sale, at fair value 9,805,608 9,414,147 391,461 4.16 % 7,669,642 2,135,966 0.00 %
Securities held to maturity, at cost (net of CECL Reserve) 205,814,736 208,561,077 (2,746,341 ) -1.32 % 227,532,821 (21,718,085 ) -9.55 %
Federal Home Loan Bank stock, restricted, at cost 1,084,200 1,084,200 0.00 % 1,027,800 56,400 5.49 %
Loans, net of unearned income 1,155,735,771 1,139,719,828 16,015,943 1.41 % 1,081,790,223 73,945,548 6.84 %
Less-allowance for credit losses (14,816,647 ) (14,829,709 ) 13,062 -0.09 % (14,109,191 ) (707,456 ) 5.01 %
Loans, net 1,140,919,124 1,124,890,119 16,029,005 1.42 % 1,067,681,032 73,238,092 6.86 %
Bank premises and equipment, net 14,720,155 14,844,597 (124,442 ) -0.84 % 13,051,972 1,668,183 12.78 %
ROU assets for operating lease, net 601,700 692,339 (90,639 ) -13.09 % 945,268 (343,568 ) -36.35 %
Goodwill 9,361,704 9,361,704 0.00 % 9,361,704 0.00 %
Intangible assets, net 1,167,611 1,253,288 (85,677 ) -6.84 % 1,508,214 (340,603 ) -22.58 %
Other real estate and foreclosed assets 3,300 15,503 (12,203 ) -78.71 % 43,408 (40,108 ) -92.40 %
Accrued interest receivable 6,760,207 6,369,932 390,275 6.13 % 6,421,999 338,208 5.27 %
Cash surrender value of life insurance 15,340,444 15,233,512 106,932 0.70 % 14,915,967 424,477 2.85 %
Other assets 17,574,139 21,726,495 (4,152,356 ) -19.11 % 21,721,225 (4,147,086 ) -19.09 %
Total Assets $ 1,554,405,922 $ 1,521,496,307 $ 32,909,615 2.16 % $ 1,430,294,646 124,111,276 8.68 %
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 346,323,393 $ 330,414,834 $ 15,908,559 4.81 % $ 298,997,994 47,325,399 15.83 %
Interest bearing 972,826,660 963,948,287 8,878,373 0.92 % 914,360,430 58,466,230 6.39 %
1,319,150,053 1,294,363,121 24,786,932 1.91 % 1,213,358,424 105,791,629 8.72 %
Other borrowed funds 19,039,839 19,029,606 10,233 0.05 % 18,998,904 40,935 0.22 %
Lease liability for operating lease 601,700 692,339 (90,639 ) -13.09 % 945,268 (343,568 ) -36.35 %
Accrued interest payable 3,331,983 2,778,669 553,314 19.91 % 1,730,280 1,601,703 92.57 %
Accrued expenses and other liabilities 9,362,044 6,726,119 2,635,925 39.19 % 9,038,821 323,223 3.58 %
Total liabilities 1,351,485,619 1,323,589,854 27,895,765 2.11 % 1,244,071,697 107,413,922 8.63 %
Shareholders' Equity:
Common stock 10,754,034 10,701,756 52,278 0.49 % 10,688,223 65,811 0.62 %
Paid in capital surplus 35,876,904 35,307,009 569,895 1.61 % 34,729,351 1,147,553 3.30 %
Retained earnings 147,779,527 149,055,224 (1,275,697 ) -0.86 % 132,061,494 15,718,033 11.90 %
Current year earnings 10,912,007 4,913,056 5,998,951 122.10 % 10,213,197 698,810 6.84 %
Accumulated other comprehensive income (loss) 1,153,839 1,289,137 (135,298 ) -10.50 % 1,648,392 (494,553 ) -30.00 %
Treasury Stock, at cost 83,142 (3,556,008 ) (3,359,729 ) (196,279 ) 5.84 % (3,117,708 ) (438,300 ) 14.06 %
Total shareholders' equity 202,920,303 197,906,453 5,013,850 2.53 % 186,222,949 16,697,354 8.97 %
Total Liabilities and Shareholders' Equity $ 1,554,405,922 $ 1,521,496,307 32,909,615 2.16 % $ 1,430,294,646 124,111,276 8.68 %

MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
Consolidating Statement of Income
for the Three Months Ended
June 30, March 31, June 30,
2025 2025 Change % Change 2024 Change % Change
(Unaudited) (Unaudited) (Unaudited)
Interest and Dividend Income:
Interest and fees on loans $ 20,414,871 $ 19,338,360 $ 1,076,511 5.57 % $ 17,879,134 $ 2,535,737 14.18 %
Interest income on securities 1,568,867 1,671,657 (102,790 ) -6.15 % 1,837,396 (268,529 ) -14.61 %
Income on federal funds sold 201,101 534,479 (333,378 ) -62.37 % 156,184 44,917 28.76 %
Income on time deposits held in other banks 850,388 605,454 244,934 40.45 % 590,205 260,183 44.08 %
Other interest and dividend income 19,576 25,413 (5,837 ) -22.97 % 64,639 (45,063 ) -69.71 %
Total interest and dividend income 23,054,803 22,175,363 879,440 3.97 % 20,527,558 2,527,245 12.31 %
Interest Expense:
Deposits 6,545,646 6,413,065 132,581 2.07 % 6,568,679 (23,033 ) -0.35 %
Interest on other borrowed funds 289,514 286,480 3,034 1.06 % 389,629 (100,115 ) -25.69 %
Interest on federal funds purchased 0.00 % 0.00 %
Total interest expense 6,835,160 6,699,545 135,615 2.02 % 6,958,308 (123,148 ) -1.77 %
Net interest income before provision for loan losses 16,219,643 15,475,818 743,825 4.81 % 13,569,250 2,650,393 19.53 %
Less-provision for credit losses 439,040 577,123 (138,083 ) -23.93 % 272,419 166,621 61.16 %
Net interest income after provision for credit losses 15,780,603 14,898,695 881,908 5.92 % 13,296,831 2,483,772 18.68 %
Noninterest Income:
Service charges on deposit accounts 546,848 540,600 6,248 1.16 % 535,847 11,001 2.05 %
Other service charges, commisions and fees 384,400 380,482 3,918 1.03 % 397,787 (13,387 ) -3.37 %
Gain on sales of premises and equipment 141 (141 ) 0.00 %
Increase in CSV of life insurance 106,932 104,750 2,182 2.08 % 102,828 4,104 3.99 %
Other income 332,498 20,407 312,091 1529.33 % 355,155 (22,657 ) -6.38 %
Total noninterest income 1,370,678 1,046,239 324,439 31.01 % 1,391,758 (21,080 ) -1.51 %
Noninterest Expense:
Salaries and employee benefits 4,951,680 5,122,152 (170,472 ) -3.33 % 4,650,704 300,976 6.47 %
Occupancy and equipment expenses, net 609,642 527,532 82,110 15.56 % 536,330 73,312 13.67 %
Loss on sales and calls of securities 265 (265 ) -100.00 %
Loss on sales of foreclosed assets 1,400 1,400 0.00 %
Other expenses 3,706,152 3,905,857 (199,705 ) -5.11 % 3,860,188 (154,036 ) -3.99 %
Total noninterest expense 9,268,874 9,555,541 (286,667 ) -3.00 % 9,047,487 221,387 2.45 %
Income Before Income Taxes 7,882,407 6,389,393 1,493,014 23.37 % 5,641,102 2,241,305 39.73 %
Provision for income taxes 1,883,456 1,476,337 407,119 27.58 % 318,723 1,564,733 490.94 %
Net Income $ 5,998,951 $ 4,913,056 1,085,895 22.10 % $ 5,322,379 676,572 12.71 %
Earnings per common share:
Basic $ 0.57 $ 0.46 0.10 21.92 % $ 0.50 0.06 12.74 %
Diluted $ 0.57 $ 0.46 0.11 22.93 % $ 0.50 0.07 13.09 %

Quarter Ending
June 30, March 31, June 30,
2025 2025 2024
Dollars in thousand, except per share data (Unaudited) (Unaudited) (Unaudited)
Per Share Data
Basic Earnings per Common Share $ 0.57 $ 0.46 $ 0.50
Diluted Earnings per Common Share 0.57 0.46 0.50
Dividends per Common Share 0.12 0.12 0.092
Book Value per Common Share 19.05 18.66 17.56
Tangible Book Value per Common Share 18.06 17.66 16.53
Average Diluted Shared Outstanding 10,608,771 10,593,370 10,611,811
End of Period Common Shares Outstanding 10,650,112 10,606,258 10,605,080
Annualized Performance Ratios (Bank Only)
Return on Average Assets 1.71 % 1.41 % 1.73 %
Return on Average Equity 13.33 % 11.12 % 13.12 %
Equity/Assets 12.70 % 12.75 % 13.18 %
Yield on Earning Assets 6.20 % 6.07 % 5.96 %
Cost of Funds 1.98 % 1.97 % 2.16 %
Net Interest Margin 4.43 % 4.29 % 4.02 %
Efficiency Ratio 50.97 % 57.90 % 58.36 %
Credit Metrics
Allowance for Loan Losses to Total Loans 1.28 % 1.30 % 1.30 %
Adversely Classified Assets to Tier 1 Capital
plus Allowance for Loan Losses 9.51 % 4.66 % 6.02 %


CONTACT:Morris State BancsharesChris BondChief Financial Officer478-272-5202 

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