GlobeNewswire Inc | Jan 31, 2022 03:34PM EST

January 31, 2022

DUBLIN, Ga., Jan. 31, 2022 (GLOBE NEWSWIRE) -- Morris State Bancshares, Inc. (OTCQX: MBLU) (the Company), the parent of Morris Bank (the Bank), today announced net income of $24.0 million for the year-ended December31, 2021, representing an increase of $6.6 million, or 37.66%, compared to net income of $17.4 million for the year-ended December31, 2020. The company also announced diluted earnings per share of $11.40 for 2021, representing a 37.35% increase over diluted earnings per share of $8.30 for 2020.

Highlights of the Companys and Banks performance in 2021 include the following:

-- Growth in net interest income of $5.6 million, representing an increase of 11.52% over 2020 -- Organic growth in loans of $146 million, or 19.01% exclusive of PPP loans -- Return on average assets (Bank) of 1.96%, compared to 1.78% in 2020 -- Return on average tangible common equity (Bank) of 16.55%, compared with 14.38% in 2020 -- Net interest margin (Bank) of 4.09% during 2021, down 42 basis points from 2020 amid a challenging rate environment -- Growth in tangible book value per share of 15.56%, from $56.04 at the end of 2020 to $64.77 at the end of 2021 -- Successful lift-out and integration of a team of seasoned commercial and mortgage lenders in the Bulloch County market leading the Company to record more security deeds than any competitor in that market over a 12-month period -- Successful upgrade of core banking platform that will enhance our technology services for customers -- Efficiency ratio of 50.56% versus 51.52% at the end of 2020 -- Net charge-offs of 0.09% of average total loans -- Continued management of nonperforming assets, down 32 basis points to 0.89% of total loans and other real estate as of 12/31/2021 compared to 12/31/2020.

Im very proud of the companys performance this year. Our team worked hard to complete another round of SBAs Paycheck Protection Program (PPP) loans while continuing to grow core commercial business and consumer mortgage relationships throughout our markets. On a sequential basis, we finished the year strong growing both loans and deposits in the fourth quarter producing strong net interest income capping off a very strong performance for the year, said Spence Mullis, President and CEO.

The Companys total shareholders equity increased 14.56% to $148.3 million as of December31, 2021, as compared to $129 million as of December31, 2020. Tangible book value per share increased to $64.77 as of December 31, 2021, a 15.56% increase or $8.73 per share from December 31, 2020. On January 24, 2022, the board of directors approved an increase in its first quarter dividend to $0.44 per share payable on or about March 15, 2022 to all shareholders of record as of February 15, 2022.

Net interest income before provision for loan losses for the year-ended December 31, 2021 and December 31, 2020 was $54.4 million and $48.8 million respectively, an increase of $5.6 million, or 11.52%. The Banks net interest margin for the year-ended December 31, 2021 was 4.09%, which was a decline from 4.51% for the year-ended December 31, 2020. The Banks cost of funds declined from 0.52% for the year-ended December 31, 2020 to 0.20% for the year-ended December 31, 2021.

As the Federal Reserve is expected to dial back its accommodative monetary policy via rate hikes and tapering of its net asset purchases in the coming quarters, our management team is focused on offering prudent terms to both our borrowers and depositors and growing non-interest-bearing deposits further in order to maintain a solid net interest margin, said Mullis.

Provision for loan losses was $2.0 million for the year ended December 31, 2021, versus $3.6 million for the year ended December 30, 2020. The Banks reserve as a percentage of total loans remained at 1.30% for the year ended December 31, 2021, as it was on December 31, 2020. The Banks adversely classified coverage ratio was 8.74% as of December 31, 2021, as compared to 8.76% as of December 31, 2020. The Banks non-performing assets to total loans and other real estate declined from 1.21% as of December 31, 2020, to 0.89% as of December 31, 2021.

Noninterest expense increased 9.75%, or $2.7 million, to $30.9 million for the year ended December 31, 2021, versus $28.1 million as of December 31, 2020. Most of this increase was related to salaries and employee benefits as the labor market remains tight.

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 Companys 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 Companys 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.

MORRIS STATE BANCSHARES, INC.AND SUBSIDIARIES Consolidating Balance SheetDecember 31, 2021 December 31, December 31, 2021 2020 Change % Change (Unaudited) (Unaudited) ASSETS Cash and due $ 162,649,843 $ 56,290,263 $ 106,359,580 188.95 %from banksFederal funds 14,278,248 93,200,409 (78,922,161 ) -84.68 %soldTotal cash and 176,928,091 149,490,672 27,437,419 18.35 %cash equivalents Interest-bearingtime deposits in 350,000 350,000 - 0.00 %other banksSecuritiesavailable for 244,979,034 205,427,671 39,551,363 19.25 %sale, at fairvalueSecurities heldto maturity, at 11,123,253 12,730,837 (1,607,584 ) (12.63 %)costFederal HomeLoan Bank stock, 624,300 899,700 (275,400 ) (30.61 %)restricted, atcost Loans, net of 926,226,134 837,333,161 88,892,973 10.62 %unearned incomeLess-allowance (12,008,416 ) (10,781,434 ) (1,226,982 ) 11.38 %for loan lossesLoans, net 914,217,718 826,551,727 87,665,991 10.61 % Bank premisesand equipment, 14,938,591 15,348,697 (410,106 ) -2.67 %netROU assets foroperating lease, 1,239,826 641,008 598,818 93.42 %netGoodwill 9,361,704 9,361,770 (66 ) -0.00 %Intangible 2,369,390 2,717,311 (347,921 ) -12.80 %assets, netOther realestate and 5,332,096 141,255 5,190,841 3674.80 %foreclosedassetsAccrued interest 4,647,197 4,763,849 (116,652 ) -2.45 %receivableCash surrendervalue of life 13,977,951 13,620,443 357,508 2.62 %insuranceOther assets 11,014,182 7,370,992 3,643,190 49.43 %Total Assets $ 1,411,103,333 $ 1,249,415,932 $ 161,687,401 12.94 % LIABILITIES ANDSHAREHOLDERS' EQUITY Deposits: Non-interest $ 337,810,442 $ 282,746,775 $ 55,063,667 19.47 %bearingInterest bearing 886,394,003 804,440,237 81,953,766 10.19 % 1,224,204,445 1,087,187,012 137,017,433 12.60 % Other borrowed 28,752,079 28,677,477 74,602 0.26 %fundsLease liabilityfor operating 1,239,826 641,008 598,818 93.42 %leaseAccrued interest 134,392 269,880 (135,488 ) -50.20 %payableAccrued expensesand other 8,513,648 3,221,471 5,292,177 164.28 %liabilities Total 1,262,844,390 1,119,996,848 142,847,542 12.75 %liabilities Shareholders' Equity:Common stock 2,159,148 2,144,766 14,382 0.67 %Paid in capital 40,349,139 39,292,064 1,057,075 2.69 %surplusRetained 80,075,546 65,858,082 14,217,464 21.59 %earningsCurrent year 23,964,290 17,407,988 6,556,302 37.66 %earningsAccumulatedother 3,404,364 6,381,381 (2,977,017 ) -46.65 %comprehensiveincome (loss)Treasury Stock, (1,693,544 ) (1,665,197 ) (28,347 ) 1.70 %at cost 51,291Totalshareholders' 148,258,943 129,419,084 18,839,859 14.56 %equity TotalLiabilities and $ 1,411,103,333 $ 1,249,415,932 161,687,401 12.94 %Shareholders'Equity

MORRIS STATE BANCSHARES, INC.AND SUBSIDIARIES Consolidating Statement of IncomeDecember 31, 2021 December 31, December 31, 2021 2020 Change % Change (Unaudited) (Unaudited) Interest andDividend Income:Interest and $ 52,043,715 $ 50,465,805 $ 1,577,910 3.13 %fees on loansInterestincome on 5,895,358 4,015,455 1,879,903 46.82 %securitiesIncome onfederal funds 74,911 103,208 (28,297 ) -27.42 %soldIncome on timedeposits held 130,572 286,418 (155,846 ) -54.41 %in other banksOther interestand dividend 177,004 59,919 117,085 195.41 %incomeTotal interestand dividend 58,321,560 54,930,805 3,390,755 6.17 %income Interest Expense:Deposits 2,338,787 5,037,818 (2,699,031 ) -53.58 %Interest onother borrowed 1,559,428 1,091,607 467,821 42.86 %fundsInterest onfederal funds -- 72 (72 ) -100.00 %purchasedTotal interest 3,898,215 6,129,497 (2,231,282 ) -36.40 %expense Net interestincome before 54,423,345 48,801,308 5,622,037 11.52 %provision forloan lossesLess-provisionfor loan 2,000,000 3,635,000 (1,635,000 ) -44.98 %lossesNet interestincome after 52,423,345 45,166,308 7,257,037 16.07 %provision forloan losses Noninterest Income:Servicecharges on 1,983,721 1,951,399 32,322 1.66 %depositaccountsOther servicecharges, 1,600,219 1,282,853 317,366 24.74 %commissionsand feesGain on salesand calls of 299,870 46,323 253,547 547.35 %securitiesGain on sale 37,683 187,006 (149,323 ) -79.85 %of loansGain on salesof premises -- 4,000 (4,000 ) -100.00 %and equipmentIncrease inCSV of life 357,508 372,060 (14,552 ) -3.91 %insuranceOther income 380,138 366,850 13,288 3.62 %Totalnoninterest 4,659,139 4,210,491 448,648 10.66 %income Noninterest Expense:Salaries andemployee 18,241,891 16,656,208 1,585,683 9.52 %benefitsOccupancy andequipment 2,201,420 2,650,008 (448,588 ) -16.93 %expenses, net(Gain) Loss onsales offoreclosed (2,610 ) 74,094 (76,704 ) -103.52 %assets andother realestateOther expenses 10,413,609 8,732,695 1,680,914 19.25 %Totalnoninterest 30,854,310 28,113,005 2,741,305 9.75 %expense Income Before 26,228,174 21,263,794 4,964,380 23.35 %Income TaxesProvision for 2,263,886 3,855,806 (1,591,920 ) -41.29 %income taxes Net Income $ 23,964,288 $ 17,407,988 $ 6,556,300 37.66 % Earnings per common share:Basic $ 11.40 $ 8.30 $ 3.10 37.35 %Diluted $ 11.40 $ 8.30 $ 3.10 37.35 %

MORRIS STATE BANCSHARES, INC.AND SUBSIDIARIES Selected Financial Information Year Quarter Ended Ending December 31, December 31, December 31, September 30, June 30, March 31, December 31, 2021 2020 2021 2021 2021 2021 2020 (Dollars inthousand, (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)except pershare data) Per Share DataBasicEarnings per $ 11.40 $ 8.31 $ 3.38 $ 2.93 $ 2.60 $ 2.49 $ 2.64 Common ShareDilutedEarnings per 11.40 8.31 3.38 2.93 2.60 2.49 2.64 Common ShareDividendsper Common 1.52 1.75 0.38 0.38 0.38 0.38 0.35 ShareBook Valueper Common 70.34 61.81 70.34 67.99 65.53 62.48 61.81 ShareTangibleBook Value 64.77 56.04 64.77 62.36 59.86 56.77 56.04 per CommonShare AverageDiluted 2,102,359 2,095,633 2,106,819 2,105,370 2,102,108 2,094,978 2,095,185 SharesOutstandingEnd ofPeriodCommon 2,107,857 2,093,839 2,107,857 2,100,471 2,100,471 2,099,871 2,093,839 SharesOutstanding SelectedBalance Sheet Data(Bank Only)Loans (net 913,818 767,833 913,818 861,455 824,190 798,555 767,833 of PPP)PPP Loans 9,974 63,945 9,974 20,421 32,700 51,349 63,945 Total Loans 923,792 831,778 923,792 881,876 856,890 849,904 831,778 Non-InterestBearing 343,437 286,868 343,437 338,952 308,270 309,533 286,868 DepositsInterestBearing 271,693 227,097 271,693 242,023 236,871 248,681 227,097 DemandDepositsSavings &Money Market 436,462 383,786 436,462 434,810 433,902 436,697 383,786 Deposits Earnings SummaryNet Interest 54,423 48,801 14,029 13,421 13,332 13,563 12,190 IncomeProvisionfor Loan 2,000 3,635 150 450 750 650 750 LossesNon-Interest 4,659 4,210 1,397 1,345 915 1,182 1,219 IncomeNon-Interest 30,854 28,113 8,186 7,969 7,490 7,322 6,989 ExpenseEarnings 26,228 21,264 7,090 6,347 6,008 6,773 5,669 before TaxesIncome Taxes 2,264 3,856 - 163 547 1,554 121 Net Income 23,964 17,408 7,090 6,184 5,461 5,219 5,548 AnnualizedPerformance Ratios (BankOnly)Return onAverage 1.96 % 1.78 % 2.24 % 1.97 % 1.80 % 1.81 % 2.03 %AssetsReturn onAverage 16.55 % 14.38 % 18.99 % 16.56 % 15.23 % 15.25 % 16.17 %EquityEquity/ 11.85 % 11.98 % 11.85 % 11.77 % 12.02 % 11.37 % 11.98 %AssetsCost of 0.20 % 0.52 % 0.17 % 0.17 % 0.22 % 0.25 % 0.31 %FundsNet Interest 4.09 % 4.51 % 4.16 % 4.10 % 4.10 % 4.37 % 4.43 %MarginEfficiency 50.56 % 51.52 % 51.25 % 52.12 % 51.03 % 47.80 % 51.45 %Ratio

CONTACT:Morris State BancsharesChris BondChief Financial Officer478-272-5202