CIB Marine Bancshares, Inc. Announces First Quarter 2019 Results

BROOKFIELD, Wis., April 12, 2019 (GLOBE NEWSWIRE) -- CIB Marine Bancshares, Inc. (the “Company” or “CIBM”) (OTCQB: CIBH), the holding company of CIBM Bank, announced its unaudited results of operations and financial condition for the first quarter of 2019. Net income for the quarter ended March 31, 2019, was $0.6 million or $0.03 basic and $0.02 diluted earnings per share, compared to $0.7 million or $0.04 basic and $0.02 diluted earnings per share for the same period of 2018. Pre-tax income for the quarter ended March 31, 2019, was $0.9 million compared to $1.0 million for the same period of 2018.

Select highlights for the quarter include:

Tangible book value per share and stated book value per share at March 31, 2019, were $2.90 and $2.53 per share of common stock, respectively, compared to $2.82 and $2.45, respectively, at December 31, 2018. The increase reflects income for the quarter and a reduction in accumulated other comprehensive loss due to improved available for sale security values as a result of lower mid- and long-term interest rates.
Income before taxes for subsidiary CIBM Bank was $0.8 million for the quarter ended March 31, 2019, compared to $1.1 million in the same period of 2018. Comparing the two periods, there was a $0.6 million decrease in non-interest income due primarily to lower mortgage production resulting in a $0.4 million decline in net mortgage banking revenues, and reduced SBA originations resulting in a $0.1 million decline in gain on sale of assets. There was likewise a reduction in non-interest expenses of $0.3 million due to a decline in compensation related mainly to the reduction in residential and SBA loan production.
Non-performing assets, restructured loans, and loans 90 days or more past due and still accruing to total assets was 1.51% at March 31, 2019, versus 1.45% at December 31, 2018, and 0.85% at March 31, 2018. The increase from one year prior is primarily the result of one loan placed on non-accrual during the fourth quarter of 2018. CIB Marine’s allowance for loan losses to total loans was 1.61% and had net recoveries of loans previously charged of $76,000 for the quarter ending March 31, 2019, compared to 1.55% and net charge-offs of $244,000 during the same period ending in 2018.

Mr. J. Brian Chaffin, President and CEO of CIBM, commented, “Net interest income was up for the first quarter compared to the first quarter of last year and, although it was behind compared to the fourth quarter of 2018, our net interest margin improved slightly over that same period. Our net interest margin has been challenged with rising cost of funds and some of our unique lower spread higher quality assets, like the SBA repo, even though the latter contributes favorably to the bottom line.”

He added, “Our corporate banking team opened the year with stronger than budgeted originations despite a $5 million reduction of high-quality, short-term commercial paper in the loan portfolio. Our non-interest income business lines had a softer first quarter as our SBA group felt the effects of the government shut-down and our mortgage group was impacted by seasonal factors. Although we did not record any gains on the sale of SBA loans in the first quarter of 2019, the pipeline has grown and, coupled with lower mortgage rates, a seasonal turn in housing, and our welcoming of several new originators to the mortgage team, we are planning on a stronger second quarter for non-interest income.

“CIBM Bank and the industry as a whole have seen a significant upturn in their cost of funds and, in particular, at the margin for new and repricing deposits used to help fund the strong loan growth seen in our markets the last several years. CIBM continues to focus on its deposit products and services and plans to enhance them in 2019 through the addition of person-to-person and person-to-business electronic money transfer capabilities, and reciprocal deposit services (i.e., a transparent and convenient way of providing broader FDIC insurance coverage for larger balance clients). To support developing new deposit customers, we have upgraded our website, unified all markets and divisions under the name CIBM Bank, focused on ways to make banking with us easier and more convenient, and established a full-time marketing director position to ensure more consistent and proactive marketing activities in the future.

“Lastly, our shareholder meeting is just around the corner. We plan on providing an update on our banking activities and our preferred stock activities at the meeting, which will be held on April 25^th in Champaign, Illinois. We hope to see many of you there.”

CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates eleven banking offices and four 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.

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, execution, credit, market, security (including cyber), 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															3 Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,			March 31,			March 31,
		2019			2018			2018			2018			2018			2019			2018

	(Dollars in thousands, except share and per share data)
Selected Statement of Operations Data
Interest and dividend income	$	7,015		$	7,009		$	6,798		$	6,387		$	6,009		$	7,015		$	6,009
Interest expense		2,178			2,064			1,767			1,406			1,185			2,178			1,185
Net interest income		4,837			4,945			5,031			4,981			4,824			4,837			4,824
Provision for (reversal of) loan losses		(158	)		(1,195	)		(13	)		149			(126	)		(158	)		(126	)
Net interest income after provision for
(reversal of) loan losses		4,995			6,140			5,044			4,832			4,950			4,995			4,950
Noninterest income (1)		1,362			1,546			3,063			2,968			1,832			1,362			1,832
Noninterest expense		5,505			6,415			6,871			6,737			5,824			5,505			5,824
Income before income taxes		852			1,271			1,236			1,063			958			852			958
Income tax expense		229			313			345			241			289			229			289
Net income	$	623		$	958		$	891		$	822		$	669		$	623		$	669

Common Share Data
Basic net income per share (2)	$	0.03		$	0.05		$	0.14		$	0.05		$	0.04		$	0.03		$	0.04
Diluted net income per share (2)		0.02			0.03			0.07			0.02			0.02			0.02			0.02
Dividend		0.00			0.00			0.00			0.00			0.00			0.00			0.00
Tangible book value per share (3)		2.90			2.82			2.71			2.58			2.54			2.90			2.54
Book value per share (3)		2.53			2.45			2.34			2.10			2.06			2.53			2.06
Weighted average shares outstanding - basic		18,232,169			18,232,169			18,232,169			18,209,032			18,161,989			18,232,169			18,161,989
Weighted average shares outstanding - diluted		32,815,744			32,757,855			34,589,375			36,783,724			36,544,029			32,815,744			36,544,029
Financial Condition Data
Total assets	$	702,152		$	721,259		$	723,733		$	694,812		$	663,580		$	702,152		$	663,580
Loans		489,273			491,337			507,677			488,762			472,746			489,273			472,746
Allowance for loan losses		(7,865	)		(7,947	)		(8,217	)		(8,055	)		(7,331	)		(7,865	)		(7,331	)
Investment securities		123,500			121,281			118,345			119,571			115,596			123,500			115,596
Deposits		542,938			536,931			523,729			517,452			484,258			542,938			484,258
Borrowings		57,220			86,710			104,357			76,427			79,227			57,220			79,227
Stockholders' equity		92,507			91,035			88,993			97,313			97,407			92,507			97,407
Financial Ratios and Other Data
Performance Ratios:
Net interest margin (4)		2.94	%		2.89	%		2.97	%		3.15	%		3.20	%		2.94	%		3.20	%
Net interest spread (5)		2.64	%		2.62	%		2.72	%		2.92	%		3.00	%		2.64	%		3.00	%
Noninterest income to average assets (6)		0.78	%		0.84	%		1.72	%		1.77	%		1.15	%		0.78	%		1.15	%
Noninterest expense to average assets		3.14	%		3.54	%		3.82	%		3.99	%		3.63	%		3.14	%		3.63	%
Efficiency ratio (7)		88.80	%		99.18	%		84.63	%		84.56	%		87.28	%		88.80	%		87.28	%
Earnings on average assets (8)		0.36	%		0.53	%		0.50	%		0.49	%		0.42	%		0.36	%		0.42	%
Earnings on average equity (9)		2.76	%		4.23	%		3.77	%		3.36	%		2.78	%		2.76	%		2.78	%
Asset Quality Ratios:
Nonaccrual loans to loans (10)		1.29	%		1.34	%		0.73	%		0.53	%		0.19	%		1.29	%		0.19	%
Nonaccrual loans, restructured loans and
loans 90 days or more past due and still
accruing to total loans (10)		1.66	%		1.62	%		1.09	%		0.82	%		0.53	%		1.66	%		0.53	%
Nonperforming assets, restructured loans
and loans 90 days or more past due and still
accruing to total assets (10)		1.51	%		1.45	%		1.11	%		0.94	%		0.85	%		1.51	%		0.85	%
Allowance for loan losses to total loans (10)		1.61	%		1.62	%		1.62	%		1.65	%		1.55	%		1.61	%		1.55	%
Allowance for loan losses to nonaccrual loans,
restructured loans and loans 90 days or
more past due and still accruing (10)		96.96	%		99.72	%		148.99	%		200.97	%		294.77	%		96.96	%		294.77	%
Net charge-offs (recoveries) annualized
to average loans (10)		(0.06	%)		(0.74	%)		(0.14	%)		(0.48	%)		0.21	%		(0.06	%)		0.21	%
Capital Ratios:
Total equity to total assets		13.17	%		12.62	%		12.30	%		14.01	%		14.68	%		13.17	%		14.68	%
Total risk-based capital ratio		15.56	%		15.34	%		14.43	%		16.40	%		16.90	%		15.56	%		16.90	%
Tier 1 risk-based capital ratio		14.30	%		14.09	%		13.18	%		15.14	%		15.64	%		14.30	%		15.64	%
Leverage capital ratio		10.39	%		10.10	%		9.90	%		11.70	%		12.15	%		10.39	%		12.15	%
Other Data:
Number of employees (full-time equivalent)		177			183			188			184			184			177			184
Number of banking facilities		11			11			11			11			11			11			11


(1) Noninterest income includes gains and losses on securities.
(2) Net income available to common stockholders in the calculation of earnings per share includes the difference between the carrying amount less the consideration paid for redeemed preferred stock, and that difference was $1.7 million and $0.1 million for the third and second quarters of 2018, respectively.
(3) Tangible book value per share is the stockholder 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 stockholder equity less the liquidation preference of the preferred stock, divided by the total shares of common outstanding. As presented here, shares of common outstanding excludes unvested Restricted Stock Awards totalling 1,331,384 shares of common stock at March 31, 2019.
(4) Net interest margin is the ratio of net interest income to average interest-earning assets.
(5) Net interest spread is the yield on average interest-earning assets less the rate on average interest-bearing liabilities.
(6) Noninterest income to average assets excludes gains and losses on securities.
(7) The efficiency ratio is noninterest expense divided by the sum of net interest income plus noninterest income, excluding gains and losses on securities.
(8) Earnings on average assets are net income divided by average total assets.
(9) Earnings on average equity are net income divided by average stockholders' equity.
(10) Excludes loans held for sale.


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

	March 31,			December 31,			September 30,			June 30,			March 31,
		2019			2018			2018			2018			2018
	(Dollars in Thousands, Except Shares)
Assets
Cash and due from banks	$	8,168		$	13,037		$	10,055		$	9,752		$	10,829
Reverse repurchase agreements		42,729			58,662			45,076			28,403			23,032
Securities available for sale		121,115			118,926			116,013			117,221			113,227
Equity securities at fair value		2,385			2,355			2,332			2,350			2,369
Loans held for sale		4,467			4,632			8,145			15,407			6,689

Loans		489,273			491,337			507,677			488,762			472,746
Allowance for loan losses		(7,865	)		(7,947	)		(8,217	)		(8,055	)		(7,331	)
Net loans		481,408			483,390			499,460			480,707			465,415

Federal Home Loan Bank Stock		2,003			3,172			3,870			2,610			2,857
Premises and equipment, net (1)		7,220			4,498			4,409			4,296			4,314
Accrued interest receivable		1,873			1,570			1,858			1,580			1,583
Deferred tax assets, net		21,156			21,422			22,410			22,604			22,836
Other real estate owned, net		2,466			2,486			2,494			2,494			3,164
Bank owned life insurance		4,613			4,590			4,565			4,541			4,516
Goodwill and other intangible assets		171			176			181			187			193
Other assets		2,378			2,343			2,865			2,660			2,556
Total Assets	$	702,152		$	721,259		$	723,733		$	694,812		$	663,580

Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing demand	$	62,553		$	63,507		$	69,165		$	72,839		$	74,397
Interest-bearing demand		32,467			33,660			33,701			32,615			34,657
Savings		188,110			181,432			164,603			175,343			182,795
Time		259,808			258,332			256,260			236,655			192,409
Total deposits		542,938			536,931			523,729			517,452			484,258
Short-term borrowings		57,220			86,710			104,357			76,427			79,227
Accrued interest payable		727			710			694			497			398
Other liabilities		8,760			5,873			5,960			3,123			2,290
Total liabilities		609,645			630,224			634,740			597,499			566,173

Stockholders' Equity
Preferred stock, $1 par value; 5,000,000
authorized shares; 7% fixed rate noncumulative perpetual issued; 42,955 shares of series A and 3,380 shares of series B; convertible; aggregate liquidation preference- $46.3 million		39,384			39,384			39,384			50,107			51,000
Common stock, $1 par value; 75,000,000
authorized shares; 18,455,610 issued shares; 18,244,563 outstanding shares		18,456			18,456			18,454			18,454			18,384
Capital surplus		160,930			160,815			160,716			158,903			158,749
Accumulated deficit		(125,173	)		(125,796	)		(126,754	)		(127,140	)		(127,962	)
Accumulated other comprehensive loss, net		(556	)		(1,290	)		(2,273	)		(2,477	)		(2,230	)
Treasury stock 221,902 shares at cost		(534	)		(534	)		(534	)		(534	)		(534	)
Total stockholders' equity		92,507			91,035			88,993			97,313			97,407
Total liabilities and stockholders' equity	$	702,152		$	721,259		$	723,733		$	694,812		$	663,580

(1) Increase in premise and equipment, net in 2018 is due to the adoption of new lease accounting standards effective January 1, 2019.


CIB MARINE BANCSHARES, INC.
Consolidated Statements of Operations (Unaudited)

	At or for the
	Quarters Ended															3 Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,			March 31,			March 31,
		2019			2018			2018			2018			2018			2019			2018

	(Dollars in thousands)

Interest Income
Loans	$	5,693		$	5,686		$	5,638		$	5,372		$	5,125		$	5,693		$	5,125
Loans held for sale		85			86			112			117			73			85			73
Securities		804			828			720			720			775			804			775
Other investments		433			409			328			178			36			433			36
Total interest income		7,015			7,009			6,798			6,387			6,009			7,015			6,009

Interest Expense
Deposits		1,805			1,547			1,343			1,038			948			1,805			948
Short-term borrowings		373			517			424			368			237			373			237
Total interest expense		2,178			2,064			1,767			1,406			1,185			2,178			1,185
Net interest income		4,837			4,945			5,031			4,981			4,824			4,837			4,824
Provision for (reversal of) loan losses		(158	)		(1,195	)		(13	)		149			(126	)		(158	)		(126	)
Net interest income after provision for
(reversal of) loan losses		4,995			6,140			5,044			4,832			4,950			4,995			4,950

Noninterest Income
Deposit service charges		83			79			105			110			111			83			111
Other service fees		20			31			30			40			34			20			34
Mortgage Banking revenue, net		978			1,057			1,760			2,155			1,374			978			1,374
Other income		165			143			173			153			132			165			132
Net gains (losses) on sale of securities available for sale		0			0			(7	)		0			22			0			22
Unrealized gains (losses) recognized on equity securities		30			23			(18	)		(18	)		(39	)		30			(39	)
Net gains on sale of assets		86			213			1,020			528			198			86			198
Total noninterest income		1,362			1,546			3,063			2,968			1,832			1,362			1,832

Noninterest Expense
Compensation and employee benefits		3,687			4,206			4,514			4,682			4,056			3,687			4,056
Equipment		335			364			351			337			311			335			311
Occupancy and premises		456			423			378			422			417			456			417
Data Processing		166			169			184			162			154			166			154
Federal deposit insurance		82			74			51			48			49			82			49
Professional services		140			270			623			290			166			140			166
Telephone and data communication		78			86			78			79			78			78			78
Insurance		53			47			60			63			61			53			61
Other expense		508			776			632			654			532			508			532
Total noninterest expense		5,505			6,415			6,871			6,737			5,824			5,505			5,824
Income from operations
before income taxes		852			1,271			1,236			1,063			958			852			958
Income tax expense		229			313			345			241			289			229			289
Net income		623			958			891			822			669			623			669
Preferred stock dividend		0			0			0			0			0			0			0
Discount from repurchase of preferred shares		0			0			1,703			105			0			0			0
Net income allocated to
common stockholders	$	623		$	958		$	2,594		$	927		$	669		$	623		$	669

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

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CIB Marine Bancshares, Inc. Announces First Quarter 2019 Results

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