Merchants & Marine Bancorp, Inc. Announces Third Quarter Financial Results

Rhea-AI Summary

Merchants & Marine Bancorp (OTCQX: MNMB) reported Q3 2024 net income of $3.40 million ($2.55 per share), down from $5.17 million ($3.88 per share) in the same period last year. The company saw significant growth with gross income up 24.17% to $37.56 million, balance sheet footings increased 12.24% to $725.73 million, and net loans grew 9.23% to $449.34 million. Total deposits rose 13.25% to $582.31 million. The acquisition of Mississippi River Bank in April 2024 drove balance sheet growth and one-time non-interest expenses. The company maintains strong liquidity with $43.97 million in cash equivalents and over $250 million in additional borrowing capacity.

Positive

• Gross income increased 24.17% to $37.56 million
• Total deposits grew 13.25% to $582.31 million
• Interest income rose 28.97% to $29.66 million
• Balance sheet footings increased 12.24% to $725.73 million
• Net loans grew 9.23% to $449.34 million
• Strong liquidity position with $43.97 million in cash equivalents

Negative

• Net income decreased to $3.40 million from $5.17 million year-over-year
• EPS declined to $2.55 from $3.88 compared to previous year
• Interest expenses increased from 22 to 64 basis points
• Loans past due 30-89 days increased to 1.13% of total loans

PASCAGOULA, Miss.--(BUSINESS WIRE)-- Merchants & Marine Bancorp, Inc. (OTCQX: MNMB), the parent company of Merchants & Marine Bank, reported net income through the third quarter of $3.40 million, or $2.55 per share, compared with earnings of $5.17 million, or $3.88 per share, in the same period of the prior year. Gross income through the first nine months of 2024 totaled $37.56 million, an increase of 24.17% from the prior year. Balance sheet footings increased by 12.24% to $725.73 million during the 12 months ended September 30, 2024. Net loans grew to $449.34 million in at September 30, 2024 from $411.36 million at the end of the same period in the prior year, an increase of 9.23%. Total deposits increased 13.25% from the same period in the prior year, from $514.19 million to $582.31 million. Balance sheet growth, and the significant increase in one-time non-interest expenses during the first nine months of 2024, was driven primarily by the acquisition of Mississippi River Bank, which was completed on April 10, 2024.

Selected financial highlights:

• Net loans grew by $37.98 million, or 9.23%, from September 30, 2023.
• Total interest income for the first nine months of the year increased to $29.66 million from $22.99 million during the same period in 2023, a lift of 28.97%. The increase is primarily due to increased interest income on loans, which increased to $23.33 million the first nine months of 2024 from $18.79 million during the same period in 2023. This increase is due both to improved loan yields in the company’s legacy loan portfolio and, to a lesser extent, loan growth from the Mississippi River Bank acquisition.
• The company’s cost of funding its assets also increased through September 30th, though much more slowly than seen in the broader market. Interest expense as a function of total assets grew to 64 basis points (annualized) from 22 basis points (annualized) in the first nine months of 2023. The increase in funding costs is primarily due to the company’s utilization of the Federal Reserve Bank Term Funding Program (BTFP). All liabilities under the BTFP were repaid from excess on balance sheet liquidity in September 2024 in concert with the Federal Reserve lowering its target rate by 50 BPs. This will lower interest expense going forward by roughly half.
• Credit quality remained strong at the end of the third quarter. While the ratio of loans past due 30-89 days increased to 1.13% of total loans, this is almost exclusively due to a single problem loan that is currently being resolved.
• Accumulated Other Comprehensive Income (AOCI) mark-to-market losses in the securities portfolio decreased to ($6.62 million) at the end of the quarter from ($13.20 million) at the end of the same period in 2023. These losses represent just 4.24% and 9.33%, respectively, of the total securities portfolio for these reporting periods.
• On balance sheet liquidity levels remain very healthy, with cash and cash equivalents totaling $43.97 million at the end of the third quarter 2024. In addition to these large cash balances, the Company’s $156 million investment portfolio remains highly liquid, with a significant portion able to be liquidated with minimal losses.
• In addition to the sizeable on-balance sheet liquidity position, the Company has more than $250 million in additional borrowing capacity at the Federal Home Loan Bank of Dallas and the Federal Reserve.

“The company’s core financial performance continues to strengthen,” said Casey Hill, the company’s Chief Financial Officer. He continued, “From an interest income perspective, we are running nearly 30% ahead of the same measurement period last year. Total revenues are on track to approach, if not exceed, $50 million by the end of the fiscal year. We expect to see further revenue lift as we still have a significant amount of loans originated in the zero-target rate environment of 2020-2022 that will continue to reprice materially upward in the coming 12-24 months. This is significant given that the bank is now running above a 1% return on assets each month and did so for all three months of Q3. Our investments are truly starting to yield significant returns, and this should only be accentuated as we continue to find new partners to add to our family of brands.”

The bank repaid the $50 million borrowing it garnered from the Federal Reserve’s Bank Term Funding Program (BTFP) in the third quarter from excess on balance sheet liquidity. “While we were making a small spread on the BTFP funds, that spread evaporated once the Fed lowered its target rate; and, given the strong on-balance sheet liquidity metrics we possessed without BTFP funds, it just didn’t make sense to continue to house it on our balance sheet,” said Hill. This repayment should precipitate a significant decrease in interest expense going forward.

“The continued improvement in our bank’s earnings, which are now consistently above a 1% return on average assets on an annualized monthly basis, is a direct result of our team’s diligent execution of a long-term vision and strategic plan that was adopted in 2021,” remarked Clayton Legear, the company’s Chief Executive Officer. “Our third quarter performance is reflective of the strength of our company, which now includes significantly diversified income streams, a high quality loan portfolio, and robust on-balance sheet liquidity built on a stable and low cost deposit base. Each of these factors is impressive in its own right in the current economic environment, and they’re even more impressive when considered as a whole. While we are pleased with our team’s continued progress, we believe that exciting additional opportunities lie ahead as we continue leveraging our unique operating model and ‘Battle Ready Balance Sheet’ to further grow and scale both our family of brands, our revenue, and our overall profitability.”

Merchants & Marine Bancorp, Inc. (OTCQX: MNMB) is the parent company of Merchants & Marine Bank, a Mississippi chartered community bank serving the Gulf South region. Originally founded in 1899, Merchants & Marine Bank was reborn in 1932 during the middle of the worst economic disaster in the history of the United States: The Great Depression. More than eight decades later, Merchants & Marine Bank has grown from $25,000 to nearly $800 million in assets. The bank offers banking services to customers in Southern Mississippi and Coastal Alabama under its legacy Merchants & Marine Bank brand, and in Southern Louisiana through its Mississippi River Bank division. It offers mortgage financing through its Canvas Mortgage division, medical cannabis banking through its CannaFirst Financial division, and access to government-guaranteed credit through Voyager Lending. It provides bank operational, risk, and support services through its Community of Resources bank services division. For more information on Merchants & Marine Bancorp, Inc., visit https://mandmbank.com/investor-relations.

MERCHANTS & MARINE BANCORP, INC.
CONSOLIDATED FINANCIALS (UNAUDITED)
BALANCE SHEET
ASSETS		September 30, 2024			September 30, 2023
TOTAL CASH & DUE FROM			43,967,970.91			33,686,902.41
TOTAL SECURITIES			155,941,748.19			141,469,728.54
TOTAL FEDERAL FUNDS SOLD			72,166.08			168,717.12
TOTAL LOANS			457,431,690.58			419,674,991.80
Begin Year Reserve for Loss			(7,684,072.00	)		(3,566,893.00	)
Recoveries on Charge Off			(228,347.57	)		(244,933.58	)
Charge Offs Current Year			302,427.48			487,351.06
Allowance-Current Year			(479,374.91	)		(4,989,596.48	)
RESERVE FOR LOSSES ON LOANS			(8,089,367.00	)		(8,314,072.00	)
NET LOANS			449,342,323.58			411,360,919.80
NET FIXED ASSETS			30,433,420.03			26,569,218.43
Other Real Estate			-			22,400.00
Other Assets			45,972,392.39			32,271,400.77
TOTAL OTHER ASSETS			45,972,392.39			32,293,800.77
TOTAL ASSETS		$	725,730,021.18		$	645,549,287.07
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Demand Deposits		$	402,450,207.82		$	353,407,475.92
Public Funds			16,722,554.10			15,604,157.32
TOTAL DEMAND DEPOSITS			419,172,761.92			369,011,633.24
Savings			109,096,156.77			98,672,597.34
C D's			43,955,920.19			36,049,803.21
I R A's			7,616,670.45			8,226,264.63
CDARS			2,464,157.08			2,227,361.83
TOTAL TIME & SAVINGS DEPOSITS			163,132,904.49			145,176,027.01
TOTAL DEPOSITS			582,305,666.41			514,187,660.25
SECURITIES SOLD UNDER REPO
& BORRROWINGS			3,683,307.79			4,211,031.87
DIVIDENDS PAYABLE			399,101.40			399,101.40
TOTAL OTHER LIABILITIES			11,448,136.35			8,534,018.02
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			66,518,636.48			62,415,023.30
Current Profits			3,398,529.15			5,165,536.00
Total Unrealized Gain/Loss AFS			(6,619,692.40	)		(13,204,315.77	)
Defined Benefit Pension FASB 158			(3,824,509.00	)		(4,579,613.00	)
TOTAL CAPITAL			127,893,809.23			118,217,475.53
TOTAL LIABILITIES & CAPITAL		$	725,730,021.18		$	645,549,287.07

MERCHANTS & MARINE BANCORP, INC.
CONSOLIDATED FINANCIALS (UNAUDITED)
INCOME STATEMENT
ACCOUNT NAME	NINE MONTHS ENDED SEP 30, 2024		Q3-Only 2024		NINE MONTHS ENDED SEP 30, 2023		Q3-Only 2023
Interest & Fees on Loans	$	23,328,827.13	$	8,261,508.12	$	18,788,173.73	$	6,723,277.64
Interest on Securities Portfolio		5,916,281.34		2,173,659.22		3,571,738.56		1,177,347.67
Interest on Fed Funds & EBA		410,130.11		160,127.11		633,211.89		219,073.98
TOTAL INTEREST INCOME		29,655,238.58		10,595,294.45		22,993,124.18		8,119,699.29
Total Service Charges		2,479,264.81		847,904.68		2,188,100.25		774,755.65
Total Miscellaneous Income		5,204,625.77		1,551,282.14		7,140,621.31		5,071,374.99
TOTAL NON INT INCOME		7,683,890.58		2,399,186.82		9,328,721.56		5,846,130.64
Gains/(Losses) on Secs		223,935.49		40,099.63		-		-
Gains/(Losses) on Sales REO		823.47		-		36,786.16		9,786.16
Gains/(Losses) on Sale of Loans		-		-		-		-
TOTAL INCOME		37,563,888.12		13,034,580.90		32,358,631.90		13,975,616.09
TOTAL INT ON DEPOSITS		1,773,769.43		489,155.54		1,047,526.46		393,616.58
Int Fed Funds Purchased/Sec Sold Repo		1,712,514.85		649,633.12		3,701.89		1,234.37
TOTAL INT EXPENSE		3,486,284.28		1,138,788.66		1,051,228.35		394,850.95
PROVISION-LOAN LOSS		440,102.91		311,257.09		42,683.63		43,913.77
Salary & Employee Benefits		16,140,971.36		5,048,511.07		13,217,465.24		5,039,563.24
Total Premises Expense		6,312,221.13		2,204,214.20		4,787,752.01		1,673,732.43
FDIC, Sales and Franchise		411,291.48		163,289.70		359,679.46		158,464.76
Professional Fees		1,686,099.83		353,868.42		1,497,074.22		367,237.12
Miscellaneous Office Expense		640,205.90		194,811.53		606,819.66		222,725.41
Dues, Donations and Advertising		620,488.99		218,769.52		906,999.65		457,024.37
Checking, ATM/Debit Card Expenses		1,556,349.63		498,149.95		1,323,649.47		410,971.32
ORE Expenses		1,169.64		300.00		8,148.12		3,948.12
Total Miscellaneous Expense		1,917,512.15		587,151.33		1,948,843.71		782,192.57
TOTAL OTHER OPERATING		29,286,310.11		9,269,065.72		24,656,431.54		9,115,859.34
FEDERAL & STATE INCOME TAXES		677,200.00		386,700.00		1,442,752.38		1,126,000.00
TOTAL EXPENSES		33,889,897.30		11,105,811.47		27,193,095.90		10,680,624.06
NET INCOME	$	3,673,990.82	$	1,928,769.43	$	5,165,536.00	$	3,294,992.03
Preferred Stock Dividends	$	275,461.67	$	252,975.00	$	-	$	-
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	3,398,529.15	$	1,675,794.43	$	5,165,536.00	$	3,294,992.03

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241030220292/en/

Casey Hill

Chief Financial Officer

casey.hill@mandmbank.com

(228) 934-1307

Source: Merchants & Marine Bancorp, Inc.

FAQ

What was MNMB's net income for Q3 2024?

Merchants & Marine Bancorp reported net income of $3.40 million ($2.55 per share) for Q3 2024.

How much did MNMB's total deposits grow in Q3 2024?

Total deposits increased 13.25% year-over-year, from $514.19 million to $582.31 million.

When did MNMB acquire Mississippi River Bank?

MNMB completed the acquisition of Mississippi River Bank on April 10, 2024.

What was MNMB's interest income growth in Q3 2024?

Total interest income increased 28.97% to $29.66 million from $22.99 million in the same period of 2023.