Morris State Bancshares Achieves Impressive Earnings Surge
Morris State Bancshares Reports Exceptional Quarterly Earnings
Morris State Bancshares, Inc. (OTCQX: MBLU), the parent company of Morris Bank, has reported remarkable net income of $9.2 million for the latest quarter, marking an impressive 53.43% increase from the $5.9 million reported in the previous quarter. When compared year-over-year, the latest quarter’s earnings reflect a 68.98% growth from $5.4 million during the same period last year. This remarkable increase can be attributed to significant operational improvements and strategic adjustments.
Key Highlights from the Third Quarter
Spence Mullis, Chairman and CEO of Morris State Bancshares, highlighted that the third quarter not only saw core earnings continuing to grow, but it also benefitted from two notable non-recurring events. The net interest margin (NIM) also saw a favorable uptick of 5 basis points, hitting 4.48%. The bank welcomed the COVID Employee Retention Credit (ERC) which amounted to just under $2.5 million under the federal relief program, in addition to a retroactive adoption of the Proportional Amortization Method (PAM) that decreased non-interest expenses. These adjustments produced the highest quarterly income in the Bank’s history.
Growth in Net Interest Income
The net interest margin stood at 4.48% compared to 4.43% from the preceding quarter and a notable increase from 4.10% in the same quarter of the previous year. The average yield on earning assets also increased slightly by 3 basis points.
Loan and Deposit Dynamics
While total deposits witnessed a minor decline of $5.5 million or 0.42%, loans accelerated by an impressive $18.2 million in the same period. Management expresses optimism regarding the sustained loan demand for the remaining year, with potential increments anticipated due to recent mergers and acquisitions within its operating areas.
Credit Quality Metrics and Operational Efficiency
Morris Bank’s allowance for credit losses represented 1.27% of total loans as of the quarter-end, showing a slight decline from previous periods. Additionally, the efficiency ratio demonstrated a significant improvement, evidencing effective cost management.
Shareholders’ Equity and Dividend Announcement
By the end of the quarter, the total shareholders’ equity rose by 2.27%, bringing it to $207.5 million. The Company has experienced favorable movement in its tangible book value per share, which has risen to $18.51. Furthermore, on October 15, 2025, the board of directors approved a fourth-quarter dividend of $0.12 per share, to be distributed to shareholders of record in November.
Outlook and Strategic Direction
With the seen improvements in financial metrics, Morris State Bancshares has set its sight on continued growth and efficiency. Their operational strategy aims for enhanced future earnings through decreased amortization expenses owing to the shift to PAM and further increases in net interest income supported by their strong loan growth.
Frequently Asked Questions
What drove Morris State Bancshares' quarterly earnings increase?
The company's quarterly earnings surged primarily due to non-recurring items like the COVID Employee Retention Credit (ERC) and changes in accounting methods that reduced non-interest expenses.
What is the current net interest margin of the bank?
The current net interest margin stands at 4.48%, marking an increase from the previous quarters.
How has the loan demand changed for Morris State Bancshares?
Loan demand has increased significantly during the third quarter, with expectations of maintaining this demand through the end of the year.
What was the dividend declared by the board?
The board declared a fourth-quarter dividend of $0.12 per share, payable to all shareholders of record.
What is the overall financial outlook for Morris State Bancshares?
The outlook remains positive, driven by strategic growth initiatives, enhanced operational efficiency, and a commitment to providing value to shareholders.
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