DUBLIN, Ga. - Morris State Bancshares, Inc. (OTCQX: MBLU), the holding company for Morris Bank, disclosed a net income of $5.3 million for the quarter ending June 30, 2024. This figure represents a 10.70% increase from the $4.8 million reported in the same quarter the previous year. Comparatively, the net income saw an 8.82% rise from the $4.9 million recorded in the preceding quarter ending March 31, 2024.
The bank's net interest income before provision for credit losses also grew by $607 thousand, or 4.68%, from the prior quarter. This growth was attributed to an increase in both loan balances and loan yields, which elevated the net interest margin (NIM) to over 4.00% for the year.
Morris Bank's Chairman and CEO, Spence Mullis, expressed satisfaction with the second quarter performance, highlighting growth in construction and development loans in rapidly expanding markets. Mullis noted that the bank's earning asset yield growth exceeded the increase in the cost of funds by five basis points.
The bank's net interest margin stood at 4.06% for the second quarter of 2024, a slight increase from 3.99% in the first quarter of 2024 and 4.04% in the second quarter of 2023. The average yield on earning assets rose 12 basis points to 5.99%, while the cost of funds increased seven basis points to 2.16% during the same period.
Loan balances saw a $21.2 million or an annualized 7.24% increase during the second quarter. The provision for credit losses also went up by $267 thousand, primarily due to the bank's Current Expected Credit Losses (CECL) provision for unfunded commitments.
The company's efficiency ratio improved to 57.97% as of June 30, 2024, from 61.48% at the end of the first quarter. Shareholders' equity rose to $186 million as of June 30, 2024, a 2.33% increase over the quarter and up 9.69% from the same date in 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 shareholders on record as of August 15, 2024. Additionally, the company redeemed the remaining $8.25 million of its subordinated debt issued in 2019.
InvestingPro Insights
Morris State Bancshares, Inc. (MBLU) has demonstrated a robust financial performance in the second quarter of 2024, with a notable increase in net income and net interest margin. According to InvestingPro data, the company boasts a market capitalization of $175.5 million and has maintained a steady revenue growth, reporting a 3.98% increase in revenue over the last twelve months as of Q1 2024. The bank's commitment to efficiency is also reflected in its operating income margin, which stands at a healthy 38.77% for the same period.
While the bank's performance is commendable, it's important for investors to consider the InvestingPro Tips that highlight areas of concern. MBLU is currently trading at a high P/E ratio of 11.67, which may suggest that the stock is priced optimistically relative to its near-term earnings growth. Additionally, the company suffers from weak gross profit margins, which could impact its profitability in the long term. However, it's worth noting that MBLU has been profitable over the last twelve months, with a basic and diluted EPS from continuing operations of $1.9.
For investors seeking a more comprehensive analysis, there are additional InvestingPro Tips available for MBLU at https://www.investing.com/pro/MBLU. Utilizing the coupon code PRONEWS24, investors can receive up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, gaining access to valuable insights that can inform investment decisions.
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