Merchants & Marine Bancorp, Inc. Announces 2024 Financial Results

Merchants & Marine Bancorp, Inc. (OTCQX: MNMB), the parent company of Merchants & Marine Bank, reported net income in 2024 of $5.94 million, or $4.46 per share, compared with earnings of $6.29 million, or $4.73 per share, in the same period of the prior year. Net income available to common shareholders, net of preferred dividends, totaled $4.06 per share. Gross income in 2024 totaled $50.55 million, an increase of 18.17% from the prior year. Balance sheet footings increased by 4.37% to $716.86 million during the 12 months ended December 31, 2024. Net loans grew to $464.36 million during the year from $418.00 million at the end of the same period in the prior year, an increase of 11.09%. Total deposits increased 15.14% from the same period in the prior year, from $498.13 million to $573.53 million. Balance sheet growth, and the significant increase in one-time non-interest expenses during 2024, was driven primarily by the acquisition of Mississippi River Bank, which was completed on April 10, 2024. It should also be noted that the company repaid the Bank Term Funding facility from the Federal Reserve during the latter half of 2024, resulting in a net impact of ($50MM) to the balance sheet.

Selected financial highlights:

• Net loans grew by $46.35 million, or 11.09%, from during FY 2024. This includes approximately $26MM of loans in the acquisition of Mississippi River Bank, with the remainder being organic growth across the Company’s family of brands throughout the year.
• Total interest income during the year increased to $39.58 million from $31.09 million during 2023, a lift of 27.32%. The increase is primarily due to increased interest income on loans, which increased to $31.85 million in 2024 from $25.29 million during 2023. This 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 for FY 2024, though much more slowly than seen in the broader market. Interest expense as a function of total assets grew to 58 basis points in 2024 from 28 basis points in 2023. The increase in funding costs is primarily due to the company’s utilization of the Federal Reserve Bank Term Funding Program (BTFP) to create an enhanced liquidity buffer. 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. When discounting the expense associated with the BTFP, funding costs as a function of total assets totaled just 33 basis points in 2024.
• Credit quality remained strong at the end of 2024. While the ratio of loans past due 30-89 days increased to 1.52% of total loans, the increase is due to a small number of larger loans that are being actively resolved rather than deterioration in the broader loan portfolio.
• Accumulated Other Comprehensive Income (AOCI) mark-to-market losses in the securities portfolio increased slightly to ($9.27 million) at the end of 2024 from ($8.56) at the end of 2023. These losses represent just 6.52% and 5.88%, respectively, of the total securities portfolio for these reporting periods.
• On balance sheet liquidity levels remain healthy, with cash and cash equivalents totaling $33.41 million at the end of 2024. In addition to these large cash balances, the Company’s $142 million investment portfolio remains highly liquid, with a significant portion able to be liquidated with either no or only 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.

“As evidenced by fourth-quarter only net income of $2.26 million before preferred dividend payments, our corporate performance continues the improvement that we’ve seen over the past year. On an annualized basis, fourth quarter net income yields a return on assets of 1.26%, and 1.12% after the preferred dividends,” remarked Casey Hill, the company’s Chief Financial Officer. Hill continued, “This performance is being driven by a very strong net interest margin resulting from continued efforts in repricing our loan book while maintaining an exceptionally low cost of funding. While the bank did recognize a one-time income item from a CDFI fund grant of $725 thousand before taxes, we’ve also expensed a comparable figure this year in non-recurring items related to merger activities. While finding and purchasing more franchises to add to our family of brands model will continue to be part of our strategy going forward, we expect the financial impact these activities on non-interest expense to lessen as a function of total income as we continue to grow. We also continue to explore other strategies to maximize our current balance sheet.”

The bank repaid the $50 million borrowing it garnered from the Federal Reserve’s Bank Term Funding Program (BTFP) in the third quarter of 2024 from excess on balance sheet liquidity. “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 as an enhanced liquidity buffer following the Fed lowering its target rate in September,” said Hill.

“We remain pleased with the results that our team is posting as they continue carefully executing our long term strategic financial plan,” remarked Clayton Legear, the company’s Chief Executive Officer. “Our performance during the fourth quarter highlights the strength of our ‘Battle Ready Balance Sheet,’ which has allowed us to build best-in-class levels of on balance sheet liquidity and capital while also significantly improving credit quality, our net interest margin, and overall profitability. With the addition of Mississippi River Bank to our family of brands, our company’s continued organic growth, and the continued recognition of our efforts related to our mission as a certified Community Development Financial Institution, we are entering 2025 from a position of significant strength. We look forward to continuing to leverage this strength to continue driving further success for years to come.“

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

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