Tax Law Income

Morris State Bancshares Pronounces Strong Outcomes In 2020, Growing Quarterly Dividend Different OTC: MBLU

February 12, 2021

DUBLIN, Ga., Feb. 12, 2021 (GLOBE NEWSWIRE) – Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent company of Morris Bank, today announced net income of $ 17.4 million ended December 31, 2020, an increase of $ 3.8 million, or 27.80%, over 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, which is 20.82%. Up from diluted earnings per share of $ 6.87 for 2019. Earnings resulted from disciplined fund management costs and strong fee income from the SBA Paycheck Protection Program (PPP) and strong mortgage production.

“We are very pleased with the company's financial performance in 2020. It has been a year of significant changes and challenges with the pandemic. Our team has worked to strengthen partnerships with our customers in unprecedented economic conditions, ”said Spence Mullis, President and CEO. “We continued to create significant value for our shareholders as we increased core deposits by over 37% to $ 896 million. Interest-free deposit growth was $ 87.7 million, or 45% of total core deposit growth. "

The company's total equity increased 16.15% to $ 129 million as of December 31, 2020, compared to $ 111 million as of December 31, 2019. The tangible book value per share increased to $ 56.04 as of December 31, 2020, which is an increase of 18.78%, or $ 8.86 per share as of December 31, 2019. On January 27, 2021, the Board of Directors approved an increase in its dividend for the first quarter to $ 0.38 per share on or about March 15, 2021 is payable to all registered shareholders by February 28, 20. 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 lots of moving parts in 2020, the bank's net interest margin ended at 4.53% as of December 31, 2020, the same level as on December 31, 2019. The bank has been an active participant in PPP, booked over $ 86 million in loans and booked fee income of $ 2.2 million in 2020. The persistence of the margin resulted from careful fund management costs, which were able to offset a moderate decline in returns. Our return on earnings decreased from 5.47% for 2019 to 5.00% for the year ended December 31, 2020, a decrease of 47 basis points. Our financing costs decreased from 1.02% for 2019 to 0.52% for the year ended December 31, 2020, a reduction of 50 basis points. We anticipate that margin will continue to come under pressure in the future as it will be difficult to cut our financing costs significantly while competition for good credit remains.

The provision for credit losses was $ 3.6 million for the fiscal year ended December 31, 2020 compared to $ 1.7 million for the fiscal year ended December 31, 2019. Our provision as a percentage of total loans was 1.39% when PPP – Loans as of December offset total loans as of December 31, 2020, down from 1.31% as of December 31, 2019. Our unfavorably classified coverage ratio was 8.75% as of December 31, 2020 versus 14.49% as of December 31, 2019. Our stake in other property owners (ORE) decreased to $ 131,000 as of December 31, 2020 from $ 384,000 as of December 31, 2019. This level of problem assets and ORE is the lowest the bank has held in over ten years.

Noninterest expense increased 9.62%, or $ 2.46 million, to $ 28.1 million for the fiscal year ended December 31, 2020, compared to $ 25.6 million as of December 31, 2019. Most of that increase was on Salaries and employee benefits.

Forward-Looking Statements

Certain statements in this press release may not be based on historical facts and are forward-looking statements. These forward-looking statements may be identified by reference to one or more future periods or by the use of forward-looking terminology such as "anticipate", "believe", "estimate", "expect", "may", "may", "will", "would", "could" or "intend". We caution you not to place undue reliance on the forward-looking statements contained in this press release because actual results could differ materially from those expressed in such forward-looking statements due to a number of factors, including but not limited to. the business and economic conditions; Risks associated with the integration of acquired companies and future acquisitions; Changes in management staff; Interest rate risk; Ability to implement planned expansion and organic growth; Credit risk and concentrations related to the company's credit portfolio; Quality of assets and write-offs on loans; Inaccuracy in the assumptions and estimates that company management makes in establishing provisions for probable credit losses and other estimates; Lack of liquidity; Impairment of securities, goodwill or other intangible assets; the company's risk management strategies; increased competition; System errors or failures to prevent breaches of our network security; Changes to federal tax law or tax policy; the impact of recent and future legislative and regulatory changes; and increasing capital requirements. We assume no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this press release.

CONTACT:
Morris State Bancshares
Chris Bond
CFO
478-272-5202

MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
Consolidation of the income statement
December 31, 2020
2020 2019 change % Change
(Unchecked)
Interest and dividend income:
Interest and fees on loans $ 50,465,805 $ 43,205,235 $ 7,260,570 16.80 %.
Interest income from securities 4,015,455 2,885,821 1,129,634 39.14 %.
Income from sold federal funds 103.208 513.422 (410.214 ) -79.90 %.
Income from time deposits with other banks 286,418 925.860 (639,442 ) -69.06 %.
Other interest and dividend income 59,919 137.457 (77,538 ) -56.41 %.
Total interest and dividend income 54.930.805 47,667,795 7,263,010 15.24 %.
Interest expenses:
insoles 5,037,818 7,963,852 $ (2,926,034 ) -36.74 %.
Interest on other borrowed funds 1,091,607 733,330 358.277 48.86 %.
Interest on Federal Funds Purchased 72 151 (79 ) -52.32 %.
Total interest expense 6,129,497 8,697,333 (2,567,836 ) -29.52 %.
Net interest income before risk provisioning 48,801,308 38,970,462 9,830,846 25.23 %.
Less provision for loan losses 3,635,000 1,650,000 1,985,000 120.30 %.
Net interest income after risk provisioning 45,166,308 37.320.462 7,845,846 02/21 %.
Non-interest income:
Service fees on deposit accounts 1,951,399 2,303,415 (352.016 ) -15.28 %.
Other service fees, commissions and fees 1,282,853 828.467 454.386 54.85 %.
Profit from the sale of loans 187.006 263.029 (76.023 ) -28.90 %.
Increase in life insurance CSV 372.060 213,246 158.814 74.47 %.
Different income 366,850 401,956 (35, 106 ) -8.73 %.
Total interest-free income 4,160,168 4,010,113 150,055 3.74 %.
Non-interest-related costs:
Salaries and employee benefits 16,656,208 14,358,637 2,297,571 4 p.m. %.
Occupancy and equipment costs, net 2,650,008 2,372,548 277,460 11.69 %.
(Profit) loss from sales and retrieval of securities (46.323 ) 24,471 (70, 794 ) -289.30 %.
Loss (profit) on the sale of foreclosed assets and other real estate 74.094 (270.572 ) 344.666 -127.38 %.
Profit from the sale of premises and equipment (4,000 ) (1,000 ) (3,000 ) 300.00 %.
Other issues 8,732,695 9,116,832 (384.137 ) -4.21 %.
Total interest-independent expense 28,062,682 25,600,916 2,461,766 9.62 %.
Pre-tax income 21,263,794 15,729,659 5,534,135 35.18 %.
Provision for income taxes 3,855,806 2,108,705 1,747,101 82.85 %.
Net result $ 17,407,988 $ 13,620,954 $ 3,787,034 27.80 %.
Earnings per common share:
basic $ 8.30 $ 6.87 $ 1.43 20.82 %.
Diluted $ 8.30 $ 6.87 $ 1.43 20.82 %.
MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
Consolidation of the balance sheet
December 31, 2020
2020 2019 change % Change
(Unchecked)
FINANCIAL ASSETS
Cash and due from banks $ 56,290,263 $ 77,696,887 $ (21.406.624 ) -27.55 %.
Federal funds sold 93.200.409 16,293,628 76.906.781 472.01 %.
Sum of cash and cash equivalents 149.490.672 93.990.515 55.500.157 59.05 %.
Interest-bearing time deposits with other banks 350,000 1,350,000 (1,000,000 ) -74.07 %.
Available-for-sale securities at fair value 205.427.671 124,315,098 81,112,573 65.25 %.
Securities held to maturity at cost 12,730,837 4,752,384 7,978,453 167.88 %.
Federal Home Loan Bank shares, restricted, at cost 899,700 842,900 56,800 6.74 %.
Loans less unearned income 837,333,161 738,886,405 98,446,756 13.32 %.
Less allowance for credit losses (10,781,434 ) (9,716,060 ) (1.065.374 ) 10.97 %.
Loans, net 826.551.727 729,170,345 97,381,382 13.36 %.
Bank rooms and equipment, net 15,348,697 15,618,198 (269.501 ) -1.73 %.
Operating lease ROU assets, net 641.008 519,601 121,407 23.37 %.
Goodwill 9,361,770 9,361,770 – – 0.00 %.
Intangible assets, net 2,717,311 3,067,075 (349.764 ) -11.40 %.
Other real estate and excluded assets 141.255 396,486 (255.231 ) -64.37 %.
Accrued interest claims 4,763,849 3,962,808 801.041 20.21 %.
Surrender value of life insurance 13,620,443 13,248,384 372.059 2.81 %.
Other assets 7,370,992 6,352,407 1,018,585 16.03 %.
Total assets $ 1,249,415,932 $ 1,006,947,971 $ 242,467,961 08/24 %.
LIABILITY AND EQUITY OF THE SHAREHOLDERS
Insoles:
Not interest-bearing $ 282,746,775 $ 195.016.772 $ 87.730.003 44.99 %.
Interest-bearing 804,440,237 682,509,497 121.930.740 17.87 %.
1,087,187,012 877,526,269 209.660.743 23.89 %.
Other borrowed funds 28,677,477 14,483,605 14,193,872 98.00 %.
Lease liability for operating leases 641.008 519,601 121,407 23.37 %.
Accrued interest 269,880 537,598 (267.718 ) -49.80 %.
Provisions and other liabilities 3,221,471 2,455,266 766.205 31.21 %.
Total liabilities 1,119,996,848 895.522.339 224,474,509 25.07 %.
Equity:
Common stock 2,144,766 2,144,766 – – 0.00 %.
Paid in excess of capital 39,292,064 39,292,064 – – 0.00 %.
Retained earnings 65,858,082 55.916.996 9,941,086 17.78 %.
Result of the current year 17,407,988 13,620,954 3,787,034 27.80 %.
Cumulative other comprehensive income (loss) 6,381,381 1,830,484 4,550,897 248.62 %.
Treasury shares priced at 50,927 in 2020 and 46,517 shares in 2019 (1,665,197 ) (1,379,632 ) (285,565 ) 20.70 %.
Total equity 129,419,084 111,425,632 17,993,452 16.15 %.
Total liabilities and equity $ 1,249,415,932 $ 1,006,947,971 242,467,961 08/24 %.
MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES
Selected financial information
end of year Quarter ended
December 31, December 31, December 31, 30. September June 30th March 31, December 31,
2020 2019 2020 2020 2020 2020 2019
(Dollars in thousands, excluding data per share) (Unchecked) (Unchecked) (Unchecked) (Unchecked) (Unchecked) (Unchecked)
Data per share
Basic income per common share $ 8.30 $ 6.87 $ 2.64 $ 1.95 $ 0.95 $ 2.50 $ 1.48
Diluted earnings per common share 8.30 6.87 2.64 1.95 0.95 2.50 1.48
Dividends per common share 1.75 0.93 – – – – – – 1.02 – –
Book value per common share 61.81 53.11 61.81 51.87 49.78 46.71 53.11
Material value per ordinary share 56.04 47.18 56.04 45.91 43.62 45.18 47.18
Average Diluted Shares Outstanding 2,095,633 1,997,735 2,095,185 2,058,039 1,988,231 1,840,764 2,100,395
End of period common stock outstanding 2,093,839 2,098,250 2,093,839 2,100,842 2,057,568 1,840,980 2,098,250
Annualized KPIs (Bank only)
Return on average wealth 1.78% 1.63% 2.05% 1.74% 1.51% 1.75% 1.49%
Return on average equity 14.38% 14.56% 16.31% 14.07% 11.82% 14.46% 12.37%
Equity / Assets 11.98% 11.81% 11.98% 12.48% 2.00% 11.88% 11.65%
Cost of funds 0.52% 1.03% 0.31% 0.40% 0.57% 0.84% 0.91%
Net interest margin 4.53% 4.53% 4.44% 4.40% 4.70% 4.59% 4.41%
Efficiency ratio 51.52% 57.80% 51.45% 51.38% 50.56% 53.26% 54.88%