Merchants & Marine Bancorp, Inc. Announces Second Quarter Financial Results
- Net income through Q2 2023 increased to $1.87 million, or $1.41 per share, from $396 thousand, or $0.30 per share, in the same period in 2022.
- Second quarter income saw a significant increase of 197.89% to $709 thousand, or $0.53 per share, from the same period in 2022.
- Interest income on loans increased by 34.98% to $7.65 million, while net loans grew by 13.46% to $413.91 million at the end of Q2 2023.
- The company's balance sheet continued to contract, with total assets declining to $658.52 million at the end of Q2 2023 from $764.46 million in the same period last year.
- None.
Selected financial highlights:
-
Second quarter income was materially impacted by a
one-time expense associated with the application for an Equitable Recovery Program (ERP) grant from the$370 thousand U.S. Treasury’s Community Development Financial Institutions (CDFI) Fund. The Company has been awarded an ERP grant of approximately , and receipt of funds is expected in the second half of 2023.$3.70 million -
Total interest income for the second quarter increased to
from$7.65 million in the second quarter of 2022, a lift of$5.67 million 34.98% . The increase is primarily due to increased interest income on loans, which increased to in the second quarter from$6.24 7 million in the second quarter of 2022.$4,632 million -
Interest expense decreased to
in the second quarter from$352 thousand in the same period in 2022, a decline of$523 thousand 32.72% . This significant decline is due primarily to the planned exit of high-cost public funds and adherence to the Company’s deposit pricing strategy. -
Loan growth remained strong during the second quarter, with net loans increasing by
13.46% on a net basis from the same period in 2022 to at the end of the second quarter 2023.$413.91 million -
Credit quality remained strong during the second quarter. The ratio of loans past due 30-89 days remained flat at
1.07% of total loans at the end of the second quarter compared to1.04% at the end of linked quarter. The ratio of non-accrual loans increased to1.42% of total loans during the second quarter from1.20% of total loans in the first quarter of 2023. This increase was primarily due to administrative issues related to a single loan that have since been addressed. -
The bank adopted the Financial Accounting Standard Board’s Current Expected Credit Losses (CECL) methodology effective January 2023. The one-time impact on capital exceeded
and increased the allowance for loan and lease losses (ALLL) to gross loans ratio to over$4.4 million 2% at that time. The ALLL remains robust at1.97% of gross loans at the end of the second quarter. -
Accumulated Other Comprehensive Income (AOCI) mark-to-market losses in the securities portfolio worsened slightly to (
) at the end the second quarter from ($9.51 million ) at the end of the linked quarter. Tangible capital at the Company remains very robust at$8.88 million 17.85% of assets even when considering this relatively small AOCI impairment. -
Liquidity levels remain very healthy. Cash and cash equivalents remain elevated at
, or$43.47 million 6.60% of total assets at the end of the second quarter. In addition to these large cash balances, the bank’s investment portfolio remains liquid, with a significant portion able to be liquidated with no material loss.$145 million -
In addition to the sizeable on-balance sheet liquidity position, the bank has more than
in borrowing capacity available through lines with both the Federal Home Loan Bank and the Federal Reserve. It is important to note that the company currently has zero borrowed funds in its liability mix.$250 million
“Our long-term financial strategy continues to prove out through the second quarter of 2023,” said the company’s Chief Financial Officer, Casey Hill. “As we planned, and publicly shared those plans over the prior two years, our balance sheet continues to contract while our relative profitability continues to increase. Our conservative approach in deploying cash produced by post-COVID government stimulus has allowed us to exit higher-cost, non-core deposits as industry deposit betas have drastically accelerated. This approach has produced a peer-leading 23 basis point cost of funds. Combined with our careful redeployment of cash reserves into higher-yielding loans and investments over the prior 12 months, we’re pleased to now have a top-decile net interest margin of almost five percent. We are now positioning our balance sheet for flattening yields, and the possibility of rate decreases over the next several years.”
The company saw the realization of planned balance sheet contraction over the past twelve months to the tune of
“Our cost of funds has increased only 4 basis points over the linked quarter, and now stands at just
“At a time when many banks are struggling with increased funding costs, reduced margins and strained liquidity, our Company’s ‘Battle Ready Balance Sheet’ and increased operational capacity has allowed us to execute strategic plans that have steadily improved our core earnings,” remarked Clayton Legear, the company’s Chief Executive Officer. “Importantly, our improved earnings are inclusive of significant investments into new business lines like mortgage and government guaranteed lending that diversify our revenue and should help provide a buffer against eventual declines in market rates. In addition to our core earnings, we look forward to announcing a series of investments and grants made possible by our pending receipt of CDFI ERP funds in the days ahead that will help further strengthen our communities. Being able to leverage CDFI grant programs like ERP to support our ongoing efforts, and our communities, is a true win-win. Above all, we remain focused on leveraging all resources to build a best-in-class community banking franchise that drives strong value for our shareholders, our clients, our team members, and the communities we call home.”
Merchants & Marine Bancorp, Inc. (OTCQX: MNMB) is the parent company of Merchants & Marine Bank, a
MERCHANTS & MARINE BANCORP, INC. |
|||||||
CONSOLIDATED FINANCIALS (UNAUDITED) |
|||||||
BALANCE SHEET |
|||||||
ASSETS | June 30, 2023 |
June 30, 2022 |
|||||
TOTAL CASH & DUE FROM |
|
43,471,583.41 |
|
|
149,190,544.55 |
|
|
TOTAL SECURITIES |
|
145,094,229.38 |
|
|
198,268,611.53 |
|
|
TOTAL FEDERAL FUNDS SOLD |
|
199,563.45 |
|
|
- |
|
|
TOTAL LOANS |
|
422,226,713.78 |
|
|
369,209,458.23 |
|
|
Begin Year Reserve for Loss |
|
(3,566,893.00 |
) |
|
(4,455,469.00 |
) |
|
Recoveries on Charge Off |
|
(189,056.20 |
) |
|
(186,007.94 |
) |
|
Charge Offs Current Year |
|
387,559.91 |
|
|
446,176.08 |
|
|
Allowance-Current Year |
|
(4,945,682.71 |
) |
|
(217,168.14 |
) |
|
RESERVE FOR LOSSES ON LOANS |
|
(8,314,072.00 |
) |
|
(4,412,469.00 |
) |
|
NET LOANS |
|
413,912,641.78 |
|
|
364,796,989.23 |
|
|
NET FIXED ASSETS |
|
25,458,102.98 |
|
|
23,601,382.88 |
|
|
Other Real Estate |
|
27,000.00 |
|
|
458,000.10 |
|
|
Other Assets |
|
30,355,581.79 |
|
|
28,146,119.58 |
|
|
TOTAL OTHER ASSETS |
|
30,382,581.79 |
|
|
28,604,119.68 |
|
|
TOTAL ASSETS | $ |
658,518,702.79 |
|
|
764,461,647.87 |
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Liabilities | |||||||
Demand Deposits | $ |
361,025,898.80 |
|
|
379,485,673.48 |
|
|
Public Funds |
|
18,821,588.29 |
|
|
76,010,771.07 |
|
|
TOTAL DEMAND DEPOSITS |
|
379,847,487.09 |
|
|
455,496,444.55 |
|
|
Savings |
|
95,629,788.93 |
|
|
99,920,209.68 |
|
|
C D's |
|
41,012,210.52 |
|
|
57,075,767.75 |
|
|
I R A's |
|
8,304,380.75 |
|
|
9,693,105.17 |
|
|
CDARS |
|
2,452,228.58 |
|
|
7,797,252.72 |
|
|
TOTAL TIME & SAVINGS DEPOSITS |
|
147,398,608.78 |
|
|
174,486,335.32 |
|
|
TOTAL DEPOSITS |
|
527,246,095.87 |
|
|
629,982,779.87 |
|
|
SECURITIES SOLD UNDER REPO | |||||||
& BORROWINGS |
|
3,362,542.82 |
|
|
5,174,794.91 |
|
|
DIVIDENDS PAYABLE |
|
798,202.80 |
|
|
798,202.80 |
|
|
TOTAL OTHER LIABILITIES |
|
9,573,008.57 |
|
|
5,633,030.32 |
|
|
Stockholders' Equity | |||||||
Preferred Stock | $ |
50,595,000.00 |
|
$ |
50,595,000.00 |
|
|
Common Stock |
|
3,325,845.00 |
|
|
3,325,845.00 |
|
|
Earned Surplus |
|
14,500,000.00 |
|
|
14,500,000.00 |
|
|
Undivided Profits |
|
61,332,410.71 |
|
|
63,715,439.73 |
|
|
Current Profits |
|
1,870,543.97 |
|
|
396,122.23 |
|
|
Total Unrealized Gain/Loss AFS |
|
(9,505,333.95 |
) |
|
(8,518,049.44 |
) |
|
Defined Benefit Pension FASB 158 |
|
(4,579,613.00 |
) |
|
(2,723,832.00 |
) |
|
TOTAL CAPITAL |
|
117,538,852.73 |
|
|
122,872,839.97 |
|
|
TOTAL LIABILITIES & CAPITAL | $ |
658,518,702.79 |
|
$ |
764,461,647.87 |
|
MERCHANTS & MARINE BANCORP, INC. |
|||||||||||
CONSOLIDATED FINANCIALS (UNAUDITED) |
|||||||||||
INCOME STATEMENT |
|||||||||||
ACCOUNT NAME | SIX MONTHS ENDED JUNE 30, 2023 |
Q2 2023 |
SIX MONTHS ENDED JUNE 30, 2022 |
Q2 2022 |
|||||||
Interest & Fees on Loans | $ |
12,064,896.09 |
|
$ |
6,247,352.77 |
$ |
8,982,866.76 |
|
$ |
4,631,842.76 |
|
Interest on Securities Portfolio |
|
2,394,390.89 |
|
|
1,242,552.44 |
|
1,439,679.39 |
|
|
908,857.31 |
|
Interest on Fed Funds & EBA |
|
414,137.91 |
|
|
162,581.14 |
|
187,668.66 |
|
|
128,834.23 |
|
TOTAL INTEREST INCOME |
|
14,873,424.89 |
|
|
7,652,486.35 |
|
10,610,214.81 |
|
|
5,669,534.30 |
|
Total Service Charges |
|
1,413,344.60 |
|
|
700,439.52 |
|
1,363,987.13 |
|
|
677,113.75 |
|
Total Miscellaneous Income |
|
2,069,246.32 |
|
|
1,120,488.87 |
|
2,886,447.28 |
|
|
1,535,753.15 |
|
TOTAL NON INT INCOME |
|
3,482,590.92 |
|
|
1,820,928.39 |
|
4,250,434.41 |
|
|
2,212,866.90 |
|
Gains/(Losses) on Secs |
|
- |
|
|
- |
|
- |
|
|
- |
|
Gains/(Losses) on Sales REO |
|
27,000.00 |
|
|
27,000.00 |
|
(9,280.18 |
) |
|
(9,280.18 |
) |
Gains/(Losses) on Sale of Loans |
|
- |
|
|
- |
|
- |
|
|
(260.00 |
) |
TOTAL INCOME |
|
18,383,015.81 |
|
|
9,500,414.74 |
|
14,851,369.04 |
|
|
7,872,861.02 |
|
TOTAL INT ON DEPOSITS |
|
653,909.88 |
|
|
350,807.19 |
|
888,135.84 |
|
|
521,452.81 |
|
Int Fed Funds Purchased/Sec Sold Repo |
|
2,467.52 |
|
|
1,153.28 |
|
3,035.84 |
|
|
1,684.82 |
|
TOTAL INT EXPENSE |
|
656,377.40 |
|
|
351,960.47 |
|
891,171.68 |
|
|
523,137.63 |
|
PROVISION-LOAN LOSS |
|
(1,230.14 |
) |
|
38,930.96 |
|
217,168.14 |
|
|
3,572.48 |
|
Salary & Employee Benefits |
|
8,177,902.00 |
|
|
4,159,739.24 |
|
7,184,750.90 |
|
|
3,616,138.12 |
|
Total Premises Expense |
|
3,114,019.58 |
|
|
1,751,852.21 |
|
2,759,125.62 |
|
|
1,396,114.93 |
|
FDIC, Sales and Franchise |
|
201,214.70 |
|
|
107,935.55 |
|
159,215.62 |
|
|
82,408.34 |
|
Professional Fees |
|
1,129,837.10 |
|
|
819,859.00 |
|
676,467.58 |
|
|
449,327.57 |
|
Miscellaneous Office Expense |
|
384,094.25 |
|
|
205,930.88 |
|
399,871.79 |
|
|
201,243.83 |
|
Dues, Donations and Advertising |
|
449,975.28 |
|
|
198,607.70 |
|
432,380.29 |
|
|
252,282.96 |
|
Checking, ATM/Debit Card Expenses |
|
912,678.15 |
|
|
509,945.32 |
|
975,530.44 |
|
|
598,389.57 |
|
ORE Expenses |
|
4,200.00 |
|
|
2,100.00 |
|
43,753.72 |
|
|
23,218.72 |
|
Total Miscellaneous Expense |
|
1,166,651.14 |
|
|
525,944.48 |
|
927,157.03 |
|
|
497,630.32 |
|
TOTAL OTHER OPERATING |
|
15,540,572.20 |
|
|
8,281,914.38 |
|
13,558,252.99 |
|
|
7,116,754.36 |
|
FEDERAL & STATE INCOME TAXES |
|
316,752.38 |
|
|
118,500.00 |
|
(211,346.00 |
) |
|
(8,647.29 |
) |
TOTAL EXPENSES |
|
16,512,471.84 |
|
|
8,791,305.81 |
|
14,455,246.81 |
|
|
7,634,817.18 |
|
NET INCOME | $ |
1,870,543.97 |
|
$ |
709,108.93 |
$ |
396,122.23 |
|
$ |
238,043.84 |
|
EPS | $ |
1.41 |
|
$ |
0.53 |
$ |
0.30 |
|
$ |
0.18 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230808465202/en/
Casey Hill
Chief Financial Officer
Merchants & Marine Bank
(228) 934-1307
casey.hill@mandmbank.com
Source: Merchants & Marine Bancorp, Inc.
FAQ
What is the net income reported by Merchants & Marine Bancorp, Inc. in Q2 2023?
How much did interest income on loans increase in Q2 2023?
What was the percentage increase in net loans at the end of Q2 2023 compared to the same period in 2022?