DUBLIN, Ga., July 30, 2024 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX:MBLU) (the "Company"), the parent of Morris Bank, today announced net income of $5.3 million for the quarter ending June 30, 2024, representing an increase of $515 thousand, or 10.70%, compared to net income of $4.8 million for the quarter ended June 30, 2023. In the linked quarter comparison, the Company's net income increased $432 thousand, or 8.82%, compared to net income of $4.9 million for the quarter ended March 31, 2024. Net interest income before provision for credit losses increased $607 thousand, or 4.68%, from prior quarter levels. Increased quarterly net earnings were a result of growth in both loan balances and loan yields which pushed the bank's net interest margin (NIM) back over 4.00% for the year. "We are very pleased with the second quarter as we continued to outpace our budget. Our bankers have diligently continued to grow loans, mostly construction and development in our faster growing markets, which is providing steady growth in our earning asset yield as these loans fund. The growth in our earning asset yield outpaced the increase in our cost of funds by five basis points. We remain focused on growing our deposits, specifically noninterest bearing deposits to help further protect our margin," said Spence Mullis, Chairman and CEO.   The net interest margin was 4.06% for the second quarter of 2024 compared to 3.99% for the first quarter of 2024 and 4.04% for the second quarter of 2023. The average yield on earning assets grew 12 basis points from 5.87%, as of March 31, 2024, to 5.99%, while the bank's cost of funds increased seven basis points from 2.09% to 2.16% during the same period. Loans increased $21.2 million or an annualized 7.24% during the second quarter. The provision for credit losses increased $267 thousand, primarily driven by the bank's CECL provision for unfunded commitments. The bank's reserve as a percentage of total loans was 1.30% for June 30, 2024, as compared to 1.34% for March 31, 2024, and 1.36% as of June 30, 2023. The Company's adversely classified index increased slightly from 5.22% as of March 31, 2024 to 6.04% as of June 30, 2024, but was down from 6.41% from the quarter ended June 30, 2023. The bank's efficiency ratio improved to 57.97% as of June 30, 2024 from 61.48% at March 31, 2024. The Company's total shareholders' equity increased 2.33% during the quarter to $186 million as of June 30, 2024, and up 9.69%, or $16.4 million, from June 30, 2023. Tangible book value of the Company grew to $16.531 on June 30, 2024, from $16.171 on March 31, 2024, and was up 10.27% from $14.99 as of June 30, 2023. On July 17, 2024, the board of directors approved a second quarter dividend of $0.0921 per share payable on or about September 15, 2024, to all shareholders of record as of August 15, 2024. During the quarter, the Company also redeemed in full the remaining $8.25 million of its subordinated debt issued in 2019.  This debt was set to reprice from its original fixed rate to a floating rate of 3-month SOFR plus 408 basis points, or 9.28% based upon current rates.  The adjustment in the rate payable on this issuance would have increased the Company's pre-tax interest expense on the issuance from $129 thousand to $193 thousand per quarter, based upon rates at the time of the redemption.  The Company has one remaining issuance of subordinated debt of $15.0 million, which will convert from its current fixed rate of 5.25% to a floating rate currently equal to 10.20% in July 2025, at which time the debt will also be redeemable by the Company.  As the Company continues to build cash reserves, it is management's intention to retire this tranche in full as well when it is eligible for redemption.  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.  _______________1 Per share amounts for March 31, 2024 and previous quarters have been adjusted to reflect the April 22, 2024 4-for-1 stock dividend. MORRIS STATE BANCSHARES, INC. AND SUBSIDIARIES                             Consolidating Balance Sheet                                                           June 30,   March 31,           June 30,             2024       2024     Change   % Change     2023     Change   % Change   (Unaudited)   (Unaudited)           (Unaudited)         ASSETS                                                       Cash and due from banks $ 43,688,884     $ 67,354,916     $ (23,666,032 )   -35.14 %   $ 49,157,915     $ (5,469,031 )   -11.13 % Federal funds sold   14,624,710       3,746,408       10,878,302     290.37 %     16,908,217       (2,283,507 )   -13.51 % Total cash and cash equivalents   58,313,594       71,101,324       (12,787,730 )   -17.99 %     66,066,132       (7,752,538 )   -11.73 %                             Interest-bearing time deposits in other banks   100,000       100,000       -     0.00 %     100,000       -     0.00 % Securities available for sale, at fair value   7,669,642       7,845,095       (175,453 )   -2.24 %     -       7,669,642     0.00 % Securities held to maturity, at cost (net of CECL Reserve)   227,532,821       231,758,455       (4,225,634 )   -1.82 %     253,917,288       (26,384,467 )   -10.39 % Federal Home Loan Bank stock, restricted, at cost   1,027,800       1,029,600       (1,800 )   -0.17 %     1,494,300       (466,500 )   -31.22 % Loans, net of unearned income   1,081,790,223       1,060,755,992       21,034,231     1.98 %     1,024,348,931       57,441,292     5.61 % Less-allowance for credit losses   (14,109,191 )     (14,236,149 )     126,958     -0.89 %     (13,912,231 )     (196,960 )   1.42 % Loans, net   1,067,681,032       1,046,519,843       21,161,189     2.02 %     1,010,436,700       57,244,332     5.67 %                         -       Bank premises and equipment, net   13,051,972       13,112,437       (60,465 )   -0.46 %     13,528,556       (476,584 )   -3.52 % ROU assets for operating lease, net   945,268       1,035,712       (90,444 )   -8.73 %     1,327,882       (382,614 )   -28.81 % Goodwill   9,361,704       9,361,704       -     0.00 %     9,361,704       -     0.00 % Intangible assets, net   1,508,214       1,594,101       (85,887 )   -5.39 %     1,851,765       (343,551 )   -18.55 % Other real estate and foreclosed assets   43,408       38,558       4,850     12.58 %     3,749,267       (3,705,859 )   -98.84 % Accrued interest receivable   6,421,999       5,964,911       457,088     7.66 %     5,224,150       1,197,849     22.93 % Cash surrender value of life insurance   14,915,967       14,813,139       102,828     0.69 %     14,516,332       399,635     2.75 % Other assets   21,721,225       25,151,653       (3,430,428 )   -13.64 %     23,327,101       (1,605,876 )   -6.88 % Total Assets $ 1,430,294,646     $ 1,429,426,532     $ 868,114     0.06 %   $ 1,404,901,177       25,393,469     1.81 %                                                         LIABILITIES AND SHAREHOLDERS' EQUITY                                                       Deposits: