Merchants & Marine Bancorp. Q1 FY23 Net Income Grows 635% To $1.16M

Merchants & Marine Bancorp, Inc. MNMB, the parent company of Merchants & Marine Bank, reported net income for the first quarter of 2023 of $1.161 million, or $0.87 per share, compared with earnings of $158,000, or $0.12 per share, for the same period in the prior year.

First quarter gross income increased 27.29% to $8.883 million from $6.979 million for the same period in 2022. Total deposits decreased by 17.67% from the same period in the prior year, from $649 million to $534 million at the end of the first quarter 2023. However, when adjusting for planned runoff in high-cost public funds that exited the bank during the second and third quarters of 2022, total deposits declined by just 7.54% from the previous year. Total interest expense for the quarter decreased by 17.29% compared to the same period in 2022.

Q1 2023 Financial Highlights

• Gross revenues increased by 2.85% from the previous quarter, to $8.88 million. First quarter gross revenues increased by $1.904 million, or 6.14%, from the same period last year.

• Net loans grew by $3.68 million from the prior quarter and by $43.36 million, or 12.07%, from the same period in 2022.

• Credit quality remained strong during the first quarter. The ratio of loans past due 30-89 days decreased to 1.04% of total loans at the end of the first quarter of 2023 from 1.49% at the end of the same period last year. The ratio of non-accrual loans remained relatively flat at 1.22% of total loans, compared to 1.20% at the end of the first quarter of 2022.

• Interest expense totaled $304,000 during the first quarter of 2023, a decline of 17.29% from $412,000 in the same quarter in 2022.

• Accumulated other comprehensive income (AOCI) mark-to-market losses in the securities portfolio eased to ($8.88 million) at the end the first quarter from ($10.09 million) at the end of the linked quarter. Tangible equity at the bank subsidiary stands at a robust 12.79% of total assets even when including AOCI unrealized losses.

• Cash and cash equivalents remain elevated at $47.814 million. In addition to these balances, the bank’s investment portfolio stands at $162 million, $19 million of which will mature during the second quarter of 2023. The bank has more than $150 million in borrowing capacity available through lines with both the Federal Home Loan Bank and the Federal Reserve.

“The first quarter of 2023 has confirmed the proper execution of our strategic plans,” stated Casey Hill, the company’s CFO. “Over the past 18 months, we’ve experienced the full cycle of the investment curve. Our investments in Canvas Mortgage, CannaFirst Financial and Voyager Lending are proving fruitful. Even better, we still see a very significant runway for earnings lift in these entities prior to a reversion to industry mean growth rates, such that we see the ability to continue to ride the investment curve upward for quite some time,” continued Hill.

About Merchants & Marine Bancorp

Merchants & Marine Bancorp is the parent company of Merchants & Marine Bank, a Mississippi chartered community bank serving the Gulf South region. The bank 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.

Photo by Giorgio Trovato on Unsplash