Morris State Bancshares Announces Strong Quarterly Earnings and Declares Fourth Quarter Dividend

DUBLIN, Ga., Oct. 31, 2025 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank (the “Bank”), today announced net income of $9.2 million for the quarter ending September 30, 2025, representing an increase of $3.2 million, or 53.43%, compared to net income of $5.9 million for the quarter ended June 30, 2025. Year-over-year the Company’s net income increased $3.7 million, or 68.98%, compared to net income of $5.4 million for the quarter ended September 30, 2024. The Bank’s record quarterly net earnings were primarily driven by two non-recurring items, one that increased non-interest income and another, an accounting change, that reduced non-interest expenses.

“We had a very strong third quarter. Core earnings continued to grow steadily this quarter, supported by higher net interest income as our net interest margin (NIM) increased 5 basis points (bp) to 4.48%. Additionally, we had a couple of one-time items that enhanced both our non-interest income and non-interest expense levels, producing the highest quarterly income in the Bank’s history. The Bank received the COVID Employee Retention Credit (ERC) of just under $2.5 million in July as a result of eligible payroll expenses incurred during the pandemic under the federal relief program. We also retroactively adopted FASB’s Proportional Amortization Method (PAM) as it relates to the Bank’s investment tax credits at the beginning of the year. Due to the adoption of PAM, we recorded a reduction to equity and a corresponding increase in accumulated amortization of investment tax credits. However, this retroactive adoption of PAM reduced our current year amortization expense, which resulted in the reversal of $1.7 million in amortization expenses during the third quarter. So combined, the ERC and PAM adoption boosted pre-tax income by $4.2 million and increased overall net income by $3.2 million from the prior quarter,” said Spence Mullis, Chairman and CEO. “Again, even without these one-time items, our net interest income grew due to our NIM expanding as a result of solid loan growth. Future earnings will also be enhanced by reduced amortization expense with the shift to PAM.”

The net interest margin was 4.48% for the third quarter of 2025 compared to 4.43% for the second quarter of 2025 and 4.10% for the third quarter of 2024. The average yield on earning assets grew three basis points from 6.20%, as of June 30, 2025, to 6.23%, while the Bank’s cost of funds decreased two basis points from 1.98% to 1.96% during the same period.

Total deposits declined slightly during the quarter by $5.5 million, or 0.42%. Loans increased $18.2 million during the third quarter. Management expects loan demand to remain largely unchanged for the remainder of the year, with the potential for a slight increase resulting from recent M&A activity by other banks in its markets.

The Bank’s allowance for credit losses as a percentage of total loans was 1.27% for September 30, 2025, as compared to 1.28% for June 30, 2025, and 1.30% as of September 30, 2024. The Company’s adversely classified index reduced slightly from 9.51% as of June 30, 2025, to 9.39% as of September 30, 2025. The Bank’s efficiency ratio improved significantly from 50.97% as of June 30, 2025, to 36.96% as of September 30, 2025, because of the previously mentioned additional income from the ERC and PAM amortization accounting adjustment.

The Company’s total shareholders’ equity increased 2.27% to $207.5 million as of September 30, 2025, as compared to $202.9 million as of June 30, 2025. Tangible book value per share increased to $18.51 as of September 30, 2025, a 2.49% increase from $18.06 per share on June 30, 2025. On October 15, 2025, the board of directors approved its fourth quarter dividend of $0.12 per share payable on or about December 10th to all shareholders of record as of November 10th.

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.

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


MORRIS STATE BANCSHARES, INC. AND SUBSIDIARIES Consolidating Balance Sheet

	September 30, 2025			June 30, 2025			Change			% Change		September 30, 2024			Change			% Change
	(Unaudited)			(Unaudited)								(Unaudited)
ASSETS

Cash and due from banks	$	84,825,539		$	106,289,134		$	(21,463,595	)	-20.19	%	$	48,180,615		$	36,644,924		76.06	%
Federal funds sold		15,499,910			24,863,860			(9,363,950	)	-37.66	%		11,932,122			3,567,788		29.90	%
Total cash and cash equivalents		100,325,449			131,152,994			(30,827,545	)	-23.51	%		60,112,737			40,212,712		66.90	%

Interest-bearing time deposits in other banks		100,000			100,000			--		0.00	%		100,000			--		0.00	%
Securities available for sale, at fair value		22,248,768			9,805,608			12,443,160		126.90	%		6,299,609			15,949,159		0.00	%
Securities held to maturity, at cost (net of CECL Reserve)		191,253,253			205,814,736			(14,561,483	)	-7.08	%		224,532,603			(33,279,350	)	-14.82	%
Federal Home Loan Bank stock, restricted, at cost		1,084,200			1,084,200			--		0.00	%		1,740,300			(656,100	)	-37.70	%
Loans, net of unearned income		1,174,036,110			1,155,735,771			18,300,339		1.58	%		1,088,132,851			85,903,259		7.89	%
Less-allowance for credit losses		(14,959,466	)		(14,816,647	)		(142,819	)	0.96	%		(14,179,392	)		(780,074	)	5.50	%
Loans, net		1,159,076,644			1,140,919,124			18,157,520		1.59	%		1,073,953,459			85,123,185		7.93	%
																-
Bank premises and equipment, net		14,698,463			14,720,155			(21,692	)	-0.15	%		12,912,111			1,786,352		13.83	%
ROU assets for operating lease, net		660,649			601,700			58,949		9.80	%		854,808			(194,159	)	-22.71	%
Goodwill		9,361,704			9,361,704			--		0.00	%		9,361,704			--		0.00	%
Intangible assets, net		1,085,256			1,167,611			(82,355	)	-7.05	%		1,422,326			(337,070	)	-23.70	%
Other real estate and foreclosed assets		5,700			3,300			2,400		72.73	%		39,755			(34,055	)	-85.66	%
Accrued interest receivable		7,388,887			6,760,207			628,680		9.30	%		6,640,617			748,270		11.27	%
Cash surrender value of life insurance		15,450,301			15,340,444			109,857		0.72	%		15,022,374			427,927		2.85	%
Other assets		17,652,382			17,574,139			78,243		0.45	%		22,311,520			(4,659,138	)	-20.88	%
Total Assets	$	1,540,391,656		$	1,554,405,922		$	(14,014,266	)	-0.90	%	$	1,435,303,923			105,087,733		7.32	%


LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits:
Non-interest bearing	$	335,465,880		$	346,323,393		$	(10,857,513	)	-3.14	%	$	320,503,732			14,962,148		4.67	%
Interest bearing		978,169,036			972,826,660			5,342,376		0.55	%		876,274,737			101,894,299		11.63	%
		1,313,634,916			1,319,150,053			(5,515,137	)	-0.42	%		1,196,778,469			116,856,447		9.76	%
																-
Other borrowed funds		4,124,000			19,039,839			(14,915,839	)	-78.34	%		34,009,138			(29,885,138	)	-87.87	%
Lease liability for operating lease		660,649			601,700			58,949		9.80	%		854,808			(194,159	)	-22.71	%
Accrued interest payable		2,941,286			3,331,983			(390,697	)	-11.73	%		2,114,956			826,330		39.07	%
Accrued expenses and other liabilities		11,494,708			9,362,044			2,132,664		22.78	%		10,938,057			556,651		5.09	%

Total liabilities		1,332,855,559			1,351,485,619			(18,630,060	)	-1.38	%		1,244,695,428			88,160,131		7.08	%

Shareholders' Equity:
Common stock		10,754,034			10,754,034			--		0.00	%		10,688,223			65,811		0.62	%
Paid in capital surplus		36,029,228			35,876,904			152,324		0.42	%		34,867,691			1,161,537		3.33	%
Retained earnings		143,109,304			147,779,527			(4,670,223	)	-3.16	%		131,085,914			12,023,390		9.17	%
Current year earnings		20,116,252			10,912,007			9,204,245		84.35	%		15,660,043			4,456,209		28.46	%
Accumulated other comprehensive income (loss)		1,083,287			1,153,839			(70,552	)	-6.11	%		1,582,952			(499,665	)	-31.57	%
Treasury Stock, at cost 103,922		(3,556,008	)		(3,556,008	)		--		0.00	%		(3,276,328	)		(279,680	)	8.54	%
Total shareholders' equity		207,536,097			202,920,303			4,615,794		2.27	%		190,608,495			16,927,602		8.88	%

Total Liabilities and Shareholders' Equity	$	1,540,391,656		$	1,554,405,922			(14,014,266	)	-0.90	%	$	1,435,303,923			105,087,733		7.32	%

MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES

Consolidating Statement of Income
for the Three Months Ended


	September 30,		June 30,							September 30,
		2025		2025	Change			% Change			2024	Change			% Change
	(Unaudited)		(Unaudited)							(Unaudited)
Interest and Dividend Income:
Interest and fees on loans	$	20,986,965	$	20,414,871	$	572,094		2.80	%	$	18,630,690	$	2,356,275		12.65	%
Interest income on securities		1,600,983		1,568,867		32,116		2.05	%		1,825,236		(224,253	)	-12.29	%
Income on federal funds sold		156,033		201,101		(45,068	)	-22.41	%		163,624		(7,591	)	-4.64	%
Income on time deposits held in other banks		1,034,737		850,388		184,349		21.68	%		338,433		696,304		205.74	%
Other interest and dividend income		19,768		19,576		192		0.98	%		21,031		(1,263	)	-6.01	%
Total interest and dividend income		23,798,486		23,054,803		743,683		3.23	%		20,979,014		2,819,472		13.44	%

Interest Expense:
Deposits		6,634,933		6,545,646		89,287		1.36	%		6,671,982		(37,049	)	-0.56	%
Interest on other borrowed funds		208,252		289,514		(81,262	)	-28.07	%		309,265		(101,013	)	-32.66	%
Interest on federal funds purchased		--		--		--		--			--		--		0.00	%
Total interest expense		6,843,185		6,835,160		8,025		0.12	%		6,981,247		(138,062	)	-1.98	%

Net interest income before provision for loan losses		16,955,301		16,219,643		735,658		4.54	%		13,997,767		2,957,534		21.13	%
Less-provision for credit losses		1,133,932		439,040		694,892		158.28	%		252,021		881,911		349.94	%
Net interest income after provision for credit losses		15,821,369		15,780,603		40,766		0.26	%		13,745,746		2,075,623		15.10	%

Noninterest Income:
Service charges on deposit accounts		618,127		546,848		71,279		13.03	%		576,751		41,376		7.17	%
Other service charges, commissions and fees		372,841		384,400		(11,559	)	-3.01	%		399,839		(26,998	)	-6.75	%
Gain on sales of foreclosed assets		--		--		--		--			--		--		0.00	%
Gain on sales of premises and equipment		--		--		--		--			--		--		0.00	%
Increase in CSV of life insurance		109,856		106,932		2,924		2.73	%		106,407		3,449		3.24	%
Other income		2,865,191		332,498		2,532,693		761.72	%		23,002		2,842,189		12356.27	%
Total noninterest income		3,966,015		1,370,678		2,595,337		189.35	%		1,105,999		2,860,016		258.59	%

Noninterest Expense:
Salaries and employee benefits		5,024,507		4,951,680		72,827		1.47	%		4,794,940		229,567		4.79	%
Occupancy and equipment expenses, net		566,265		609,642		(43,377	)	-7.12	%		592,165		(25,900	)	-4.37	%
Loss on sales and calls of securities		--		--		--		--			--		--		0.00	%
Loss on Sales of premises and equipment		--		--		--		--			--		--		0.00	%
Loss on sales of foreclosed assets		--		1,400		(1,400	)	-100.00	%		2,065		(2,065	)	0.00	%
Other expenses		2,065,393		3,706,152		(1,640,759	)	-44.27	%		3,752,517		(1,687,124	)	-44.96	%
Total noninterest expense		7,656,165		9,268,874		(1,612,709	)	-17.40	%		9,141,687		(1,485,522	)	-16.25	%

Income Before Income Taxes		12,131,219		7,882,407		4,248,812		53.90	%		5,710,058		6,421,161		112.45	%
Provision for income taxes		2,926,975		1,883,456		1,043,519		-55.40	%		263,212		2,663,763		1012.02	%

Net Income	$	9,204,244	$	5,998,951		3,205,293		53.43	%	$	5,446,846		3,757,398		68.98	%


Earnings per common share:
Basic	$	0.87	$	0.57		0.30		52.01	%	$	0.51		0.36		69.90	%
Diluted	$	0.87	$	0.57		0.30		52.63	%	$	0.51		0.36		70.59	%

	Quarter Ending

	September 30,			June 30,			September 30,
		2025			2025			2024
Dollars in thousand, except per share data	(Unaudited)			(Unaudited)			(Unaudited)


Per Share Data
Basic Earnings per Common Share	$	0.87		$	0.57		$	0.51
Diluted Earnings per Common Share		0.87			0.57			0.51
Dividends per Common Share		0.12			0.12			0.092
Book Value per Common Share		19.49			19.05			17.99
Tangible Book Value per Common Share		18.51			18.06			16.97

Average Diluted Shares Outstanding		10,622,703			10,608,771			10,602,348
End of Period Common Shares Outstanding		10,650,112			10,650,112			10,596,345


Annualized Performance Ratios (Bank Only)
Return on Average Assets		2.43	%		1.71	%		1.65	%
Return on Average Equity		18.97	%		13.33	%		12.37	%
Equity/Assets		13.03	%		12.70	%		13.23	%
Yield on Earning Assets		6.23	%		6.20	%		6.05	%
Cost of Funds		1.96	%		1.98	%		2.18	%
Net Interest Margin		4.48	%		4.43	%		4.10	%
Efficiency Ratio		36.96	%		50.97	%		58.90	%

Credit Metrics
Allowance for Loan Losses to Total Loans		1.27	%		1.28	%		1.30	%
Adversely Classified Assets to Tier 1 Capital plus Allowance for Loan Losses		9.39	%		9.51	%		6.15	%

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