CIB Marine Bancshares, Inc. Announces 2017 Second Quarter Results

/EINPresswire.com/ -- WAUKESHA, WI--(Marketwired - July 12, 2017) - CIB Marine Bancshares, Inc. (the "Company" or "CIBM") (OTCQB: CIBH), the holding company of CIBM Bank (the "Bank"), today announces its results of operations and financial condition for the second quarter of 2017. Net income for the quarter was $1.0 million, or $0.06 basic earnings per share and $0.03 diluted earnings per share, and for the six months ending June 30, 2017, $1.9 million, or $0.11 basic and $0.05 diluted earnings per share.

A summary of financial results for the quarter is attached. Select highlights include:

Return on average assets was 0.65% for the quarter and 0.60% for the six months ending June 30, 2017, compared to 0.80% and 0.73% for the same periods in 2016.
Book and tangible book value per share of common stock are reported at $0.68 and $1.16, respectively, for June 30, 2017, compared to $0.51 and $0.99 from one year prior.
Net income for subsidiary CIBM Bank was $1.2 million for the quarter and $2.3 million for the six month period ending June 30, 2017, compared to net income of $1.4 million and $2.1 million for the same periods of 2016; reflecting stronger year to date results.
Net interest income of $4.8 million for the quarter is an increase of $0.3 million from the same quarter of 2016, and net interest income of $9.4 million for the six months ending June 30, 2017, is an increase of $0.5 million from the same period of 2016. The growth primarily reflects higher earning asset balances.
Noninterest income of $2.6 million for the quarter is a decrease of $0.2 million from the same quarter of 2016 and noninterest income of $4.5 million for the six months ending June 30, 2017, is a decrease of $0.4 million from the same period of 2016. The results reflect lower net mortgage banking revenue this year due to reduced refinancing activity and the prior year's net gain on sale of assets and write-downs related to collection activities which was $0.8 million in the 2016 year to date period.
During the first six months of 2017, gains on sale of SBA loans have been $0.7 million compared to $0.1 million in the same period of 2016.
Non-performing assets to total assets reported at 2.10% at June 30, 2017, compared to 1.67% at December 31, 2016, reflecting higher other real estate owned related to one relationship offset in part by lower non-accrual loans.
Non-accrual loans to total loans reported at 0.99% at June 30, 2017, compared to 1.26% at December 31, 2016, as a result of the collection of a larger construction and development loan.

J. Brian Chaffin, CIB Marine's President and CEO, commented, "CIB Marine's second quarter improvement over the first quarter of 2017 reflects the higher level of earning assets and improved quality of our non-interest income with more coming from our core business activities as opposed to collection activities. Thirteen of the last fourteen quarters have been profitable at CIBM Bank, and this marks the sixth consecutive quarter of profits. Although loan growth has slowed this year so far, our net interest margin has improved from 2.84% as reported in the fourth quarter of 2016 to 3.09% in the second quarter of 2017. Our balance sheet repricing structure, including interest rate swaps hedging certain fixed rate commercial real estate loans, has responded well to the three Fed rate hikes between December of last year and June of this year."

Mr. Chaffin added, "Improved gains on sale of SBA loans are a continued sign of progress in the development of our new Government Guaranteed Lending Division. At Avenue Mortgage, loan volumes have picked up from the first quarter but still lag behind last year due to the market slow-down in refinancing activity caused by higher interest rates. However, home purchase loans have picked up recently and our new lenders in central Illinois are gaining some traction."

Mr. Chaffin concluded, "We are very proud of the level of commercial lending we do within our communities to support local job creation and retention, as well as our growth in mortgage lending which supports local home ownership and property maintenance. Over the last several years, we have consistently been in the top quartile among peer banks in the loan to deposit ratio and our loan growth has exceeded the median peer level. Improved financial results have allowed us to make significant investments in the form of securities purchased that support affordable housing and small businesses, as well as provide both financial and professional service support for a variety of non-profit community service organizations within our markets. Community lending is an area of focus for our organization. It presents certain challenges in the current market environment, but we have committed substantial resources to continue growing and improving this area of the bank in order to meet the needs of our communities."

CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates 11 banking offices in Illinois, Wisconsin, and Indiana and 4 separate mortgage loan offices in Illinois, Wisconsin and Indiana. More information on the Company is available at www.cibmarine.com, including recent shareholder letters, links to regulatory financial reports, and audited financial statements.

Notice that Preferred Dividend has not been declared: Pursuant to Sections 5.4(e)(v) and 5.5(e)(v) of the Company's Articles of Incorporation, notice is hereby given that the Board of Directors of the Company has not declared a dividend on its Series A Preferred Stock or its Series B Convertible Preferred Stock for the period ended June 30, 2017 and, accordingly, no dividend will be paid to preferred shareholders for such Dividend Period.

FORWARD-LOOKING STATEMENTS
CIB Marine has made statements in this release that may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. CIB Marine intends these forward-looking statements to be subject to the safe harbor created thereby and is including this statement to avail itself of the safe harbor. Forward-looking statements are identified generally by statements containing words and phrases such as "may," "project," "are confident," "should be," "intend," "predict," "believe," "plan," "expect," "estimate," "anticipate" and similar expressions. These forward-looking statements reflect CIB Marine's current views with respect to future events and financial performance that are subject to many uncertainties and factors relating to CIB Marine's operations and the business environment, which could change at any time.

There are inherent difficulties in predicting factors that may affect the accuracy of forward-looking statements.

Stockholders should note that many factors, some of which are discussed elsewhere in this Earnings Release and in the documents that are incorporated by reference, could affect the future financial results of CIB Marine and could cause those results to differ materially from those expressed in forward-looking statements contained or incorporated by reference in this document. These factors, many of which are beyond CIB Marine's control, include but are not limited to:

operating, legal, and regulatory risks;
economic, political, and competitive forces affecting CIB Marine's banking business;
the impact on net interest income and securities values from changes in monetary policy and general economic and political conditions; and
the risk that CIB Marine's analyses of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful.

These factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. Forward-looking statements speak only as of the date they are made. CIB Marine undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Forward-looking statements are subject to significant risks and uncertainties and CIB Marine's actual results may differ materially from the results discussed in forward-looking statements.

CIB MARINE BANCSHARES, INC.

Selected Unaudited Consolidated Financial Data


			At or for the
			Quarters Ended															Six Months Ended
			June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
			2017			2017			2016			2016			2016			2017			2016
			(Dollars in thousands, except share and per share data)
Selected Statement of Operations Data
Interest and dividend income			$	5,732		$	5,562		$	5,273		$	5,286		$	5,214		$	11,294		$	10,390
Interest expense				973			892			793			740			729			1,865			1,464
	Net interest income			4,759			4,670			4,480			4,546			4,485			9,429			8,926
Provision for (reversal of) loan losses				47			228			(796	)		69			118			275			179
	Net interest income after provision for (reversal of) loan losses			4,712			4,442			5,276			4,477			4,367			9,154			8,747
Noninterest income (1)				2,611			1,847			1,908			2,651			2,788			4,458			4,841
Noninterest expense				6,279			5,401			6,127			6,220			5,951			11,680			11,432
	Income before income taxes			1,044			888			1,057			908			1,204			1,932			2,156
Income tax expense				20			0			(5	)		40			15			20			15
	Net income		$	1,024		$	888		$	1,062		$	868		$	1,189		$	1,912		$	2,141

Common Share Data
	Basic net income (loss) per share		$	0.06		$	0.05		$	0.06		$	0.05		$	0.07		$	0.11		$	0.12
	Diluted net income (loss) per share			0.03			0.02			0.03			0.02			0.03			0.05			0.06
	Dividend			0			0			0			0			0			0			0
	Tangible book value per share (2)			1.16			1.08			1.01			1.04			0.99			1.16			0.99
	Book value per share (2)			0.68			0.60			0.53			0.56			0.51			0.68			0.51
	Weighted average shares outstanding - basic			18,153,029			18,127,892			18,127,892			18,127,892			18,127,892			18,140,530			18,127,892
	Weighted average shares outstanding - diluted			36,516,207			36,193,353			36,082,522			35,818,022			35,631,892			36,355,672			35,631,892
Financial Condition Data
	Total assets		$	650,051		$	631,160		$	653,559		$	632,628		$	615,708		$	650,051		$	615,708
	Loans			488,289			483,501			483,518			466,057			461,859			488,289			461,859
	Allowance for loan losses			(7,653	)		(7,567	)		(7,592	)		(8,549	)		(8,219	)		(7,653	)		(8,219	)
	Investment securities			111,160			111,745			112,072			103,853			103,542			111,160			103,542
	Deposits			493,364			497,144			483,097			476,428			468,377			493,364			468,377
	Borrowings			82,025			60,837			96,944			81,636			72,833			82,025			72,833
	Stockholders' equity			72,279			70,819			69,523			70,094			69,266			72,279			69,266
Financial Ratios and Other Data
	Performance Ratios:
		Net interest margin (3)		3.09	%		3.02	%		2.84	%		2.95	%		3.11	%		3.06	%		3.13	%
		Net interest spread (4)		2.92	%		2.87	%		2.70	%		2.80	%		2.96	%		2.89	%		2.98	%
		Noninterest income to average assets (5)		1.65	%		1.16	%		1.18	%		1.68	%		1.88	%		1.40	%		1.65	%
		Noninterest expense to average assets		3.96	%		3.40	%		3.79	%		3.93	%		4.02	%		3.68	%		3.90	%
		Efficiency ratio (6)		85.20	%		82.88	%		95.91	%		86.42	%		81.82	%		84.11	%		83.04	%
		Earnings (loss) on average assets (7)		0.65	%		0.56	%		0.66	%		0.55	%		0.80	%		0.60	%		0.73	%
		Earnings (loss) on average equity (8)		5.71	%		5.10	%		5.93	%		4.89	%		6.98	%		5.41	%		6.37	%
Asset Quality Ratios:
	Nonaccrual loans to loans (9)			0.99	%		1.32	%		1.26	%		1.16	%		0.81	%		0.99	%		0.81	%
	Nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing to total loans (9)			2.15	%		1.65	%		1.60	%		1.58	%		1.63	%		2.15	%		1.63	%
	Nonperforming assets, restructured loans and loans 90 days or more past due and still accruing to total assets (9)			2.10	%		1.77	%		1.67	%		1.32	%		1.59	%		2.10	%		1.59	%
	Allowance for loan losses to total loans			1.57	%		1.57	%		1.57	%		1.83	%		1.78	%		1.57	%		1.78	%
	Allowance for loan losses to nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing (9)			72.81	%		94.67	%		97.99	%		116.08	%		109.14	%		72.81	%		109.14	%
	Net charge-offs (recoveries) annualized to average loans			-0.03	%		0.21	%		0.14	%		-0.22	%		0.12	%		0.09	%		0.01	%
Capital Ratios:
	Total equity to total assets			11.12	%		11.02	%		10.64	%		11.08	%		11.25	%		11.12	%		11.25	%
	Total risk-based capital ratio			15.92	%		15.90	%		15.40	%		15.66	%		15.60	%		15.92	%		15.60	%
	Tier 1 risk-based capital ratio			14.66	%		14.65	%		14.15	%		14.41	%		14.34	%		14.66	%		14.34	%
	Leverage capital ratio			11.56	%		11.21	%		11.14	%		11.20	%		11.69	%		11.56	%		11.69	%
Other Data:
	Number of employees (full-time equivalent)			181			181			171			169			167			181			167
	Number of banking facilities			11			11			11			11			11			11			11

(1) Noninterest income includes gains and losses on securities.

(2) Tangible book value per share is the shareholder equity less the carry value of the preferred stock and less the goodwill and intangible assets, divided by the total shares of common outstanding. Book value per share is the shareholder equity less the liquidation preference of the preferred stock, divided by the total shares of common outstanding.

(3) Net interest margin is the ratio of net interest income to average interest-earning assets.

(4) Net interest spread is the yield on average interest-earning assets less the rate on average interest-bearing liabilities.

(5) Noninterest income to average assets excludes gains and losses on securities.

(6) The efficiency ratio is noninterest expense divided by the sum of net interest income plus noninterest income, excluding gains and losses on securities.

(7) Earnings on average assets are net income divided by average total assets.

(8) Earnings on average equity are net income divided by average common equity.

(9) Excludes loans held for sale.

CIB MARINE BANCSHARES, INC.
Consolidated Balance Sheets (unaudited)

			June 30,			March 31,			December 31,			September 30,			June 30,
			2017			2017			2016			2016			2016
			(Dollars in thousands, except share data)
Assets
Cash and due from banks			$	10,462		$	12,773		$	10,291		$	11,427		$	9,808
Reverse repurchase agreements				20,440			11,019			24,275			27,560			20,313
Securities available for sale				111,160			111,745			112,072			103,853			103,542
Loans held for sale				9,166			2,448			11,469			15,875			11,602

Loans				488,289			483,501			483,518			466,057			461,859
Allowance for loan losses				(7,653	)		(7,567	)		(7,592	)		(8,549	)		(8,219	)
	Net loans			480,636			475,934			475,926			457,508			453,640

Federal Home Loan Bank Stock				2,948			2,070			3,803			3,803			2,170
Premises and equipment, net				4,309			4,369			4,427			4,256			4,358
Accrued interest receivable				1,386			1,377			1,382			1,289			1,290
Other real estate owned, net				3,153			3,153			3,159			982			2,283
Bank owned life insurance				4,441			4,414			4,389			4,363			4,336
Goodwill and other intangible assets				209			215			221			226			232
Other assets				1,741			1,643			2,145			1,486			2,134
		Total Assets	$	650,051		$	631,160		$	653,559		$	632,628		$	615,708

Liabilities and Stockholders' Equity
Deposits:
	Noninterest-bearing demand		$	79,888		$	76,088		$	77,154		$	87,216		$	82,460
	Interest-bearing demand			31,961			33,027			33,832			29,821			31,508
	Savings			183,608			192,175			176,435			169,390			175,955
	Time			197,907			195,854			195,676			190,001			178,454
		Total deposits		493,364			497,144			483,097			476,428			468,377
Short-term borrowings				82,025			60,837			96,944			81,636			72,833
Accrued interest payable				358			327			349			319			335
Other liabilities				2,025			2,033			3,646			4,151			4,897
		Total liabilities		577,772			560,341			584,036			562,534			546,442

Stockholders' Equity
Preferred stock, $1 par value; 5,000,000 authorized shares; 7% fixed rate noncumulative perpetual issued-55,624 shares of series A and 4,376 shares of series B; convertible; aggregate liquidation preference- $60,000				51,000			51,000			51,000			51,000			51,000
Common stock, $1 par value; 50,000,000 authorized shares; 18,383,891 issued shares; 18,172,844 outstanding shares				18,384			18,346			18,346			18,346			18,346
Capital surplus				158,640			158,602			158,552			158,510			158,493
Accumulated deficit				(153,605	)		(154,629	)		(155,517	)		(156,579	)		(157,446	)
Accumulated other comprehensive loss, net				(1,611	)		(1,971	)		(2,329	)		(654	)		(598	)
Treasury stock 218,499 shares at cost				(529	)		(529	)		(529	)		(529	)		(529	)
		Total stockholders' equity		72,279			70,819			69,523			70,094			69,266
		Total liabilities and stockholders' equity	$	650,051		$	631,160		$	653,559		$	632,628		$	615,708

CIB MARINE BANCSHARES, INC.

Consolidated Statements of Operations (Unaudited)


			At or for the
			Quarters Ended												Six Months Ended
			June 30,		March 31,		December 31,			September 30,			June 30,		June 30,		June 30,
			2017		2017		2016			2016			2016		2017		2016
			(Dollars in thousands)

Interest Income
Loans			$	4,997	$	4,826	$	4,493		$	4,540		$	4,635	$	9,823	$	9,207
Loans held for sale				79		46		141			153			95		125		178
Securities				598		611		563			513			478		1,209		995
Other investments				58		79		76			80			6		137		10
	Total interest income			5,732		5,562		5,273			5,286			5,214		11,294		10,390

Interest Expense
Deposits				817		749		697			659			692		1,566		1,397
Short-term borrowings				156		143		96			81			37		299		67
	Total interest expense			973		892		793			740			729		1,865		1,464
	Net interest income			4,759		4,670		4,480			4,546			4,485		9,429		8,926
Provision for (reversal of) loan losses				47		228		(796	)		69			118		275		179
	Net interest income after provision for (reversal of) loan losses			4,712		4,442		5,276			4,477			4,367		9,154		8,747

Noninterest Income
Deposit service charges				129		113		121			125			121		242		224
Other service fees				54		46		45			47			52		100		119
Mortgage Banking revenue, net				2,027		1,142		1,414			2,285			2,102		3,169		3,438
Other income				127		97		136			206			96		224		213
Net gains on sale of securities				0		0		0			0			0		0		0
Net gains (losses) on sale of assets and (writedowns)				274		449		192			(12	)		417		723		847
	Total noninterest income			2,611		1,847		1,908			2,651			2,788		4,458		4,841

Noninterest Expense
Compensation and employee benefits				4,333		3,705		4,228			4,426			4,143		8,038		7,767
Equipment				319		290		305			277			293		609		566
Occupancy and premises				381		390		390			377			389		771		824
Data Processing				136		140		123			185			151		276		305
Federal deposit insurance				81		87		92			105			106		168		212
Professional services				130		200		156			157			213		330		462
Telephone and data communication				88		81		90			92			99		169		208
Insurance				96		59		60			60			56		155		110
Other expense				715		449		683			541			501		1,164		978
	Total noninterest expense			6,279		5,401		6,127			6,220			5,951		11,680		11,432
Income from operations
before income taxes				1,044		888		1,057			908			1,204		1,932		2,156
Income tax expense				20		0		(5	)		40			15		20		15
	Net income			1,024		888		1,062			868			1,189		1,912		2,141
Preferred stock dividend				0		0		0			0			0		0		0
		Net income allocated to common stockholders	$	1,024	$	888	$	1,062		$	868		$	1,189	$	1,912	$	2,141

FOR INFORMATION CONTACT:
J. Brian Chaffin
President & CEO
(217) 355-0900
brian.chaffin@cibmbank.com

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