BROOKFIELD, Wis., July 19, 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 second quarter of 2019.  Income before taxes for the quarter was $1.0 million compared to $1.1 million for the same period in 2018, and for the six months ending June 30, 2019, it was $1.9 million compared to $2.0 million for the same period in 2018.

A summary of financial results for the quarter and six months ended June 30, 2019, is attached.  Select highlights include:

• Tangible book value per share and stated book value per share at June 30, 2019, were $2.97 and $2.60 per share of common stock, respectively, compared to $2.82 and $2.45, respectively, at December 31, 2018.  The increase reflects reported income for the six months ended June 30, 2019, and improved net accumulated other comprehensive income (loss) due to improved available for sale security values as a result of lower market interest rates. 
• Income before taxes for subsidiary CIBM Bank was $1.2 million for the quarter compared to $1.4 million for the same period in 2018, and $2.0 million for the six months ending June 30, 2019, compared to $2.5 million for the same period in 2018.  Comparing the two six month periods, there was a decline in net interest income of $0.2 million due primarily to rising cost of funds, and a decline in non-interest income of $0.9 million due to lower net mortgage banking revenues and SBA gains on sale as a result of lower origination volumes.  This was offset, in part, by lower non-interest expenses of $0.4 million and a $0.2 million improvement in provisions to loan losses.
• Non-performing assets, restructured loans, and loans 90 days or more past due and still accruing to total assets was 1.40% at June 30, 2019, versus 1.45% at December 31, 2018, and 0.94% at June 30, 2018. The increase from one year ago is primarily the result of one loan placed on non-accrual during the fourth quarter of 2018.  CIB Marine’s allowance for loan losses was 1.41% at June 30, 2019, versus 1.62% at December 31, 2018, and 1.65% at June 30, 2018.  The decline was primarily due to a $0.5 million charge-off of a loan that was previously reserved for.      

Mr. J. Brian Chaffin, President and CEO of CIBM, commented, “Our mortgage division increased mortgage loan closings by $47 million in the second quarter versus the first quarter of 2019 and net mortgage banking revenue increased by $1.2 million over the same period.  The improvements are attributable to a number of factors including seasonality, the division’s success in purchase money lending activity, a number of new hires, and lower interest rates.  At the same time, our loan portfolio grew by $24 million during the quarter with contributions from all major portfolio segments, including commercial, residential, and home equity lines of credit.  Our SBA loan originations continue to be softer than the prior year with our gains on sale year to date totaling $0.3 million compared to $0.7 million for the same period last year, but there is a significant pipeline developed that we expect to support higher originations and gains on sale in the quarters ahead.”

He added, “Our rising trend in cost of funds has slowed due to a number of factors, including slower total balance sheet growth in the industry and market pricing for lower future short- and mid-term interest rates.  However, it continues to have an adverse effect on our net interest income growth and our net interest margin, which reported at 2.89% for the second quarter of 2019, down from 2.94% in the first quarter.       

“Lastly, we concluded the offering period of the second of three planned preferred stock modified Dutch auctions in June of 2019.  Of the approximately 29,475 shares of preferred stock offered for sale, approximately 2,229 shares met the criteria for repurchase laid out by the Board of Directors of CIBM and are anticipated to be accepted by CIBM for a total price of $1.6 million, pending necessary regulatory approvals.  It is contemplated a discount of $0.3 million to the carrying value of preferred stock shares will be transferred to paid-in capital upon acceptance by CIBM of these offered shares.  CIBM plans to settle the transactions from cash and no additional capital has been or is contemplated to be issued to provide funding for the purchases.  As a reminder, a $3.5 million liability currently exists for the purchase of 4,923 preferred shares, which will settle on or before December 1, 2019, as agreed to in 2018.”

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

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

CIB MARINE BANCSHARES, INC.
Selected Unaudited Consolidated Financial Data
	At or for the
	Quarters Ended																6 Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,				June 30,			June 30,
		2019			2019			2018			2018			2018				2019			2018
	(Dollars in thousands, except share and per share data)
Selected Statement of Operations Data
Interest and dividend income	$	7,078		$	7,015		$	7,009		$	6,798		$	6,387			$	14,093		$	12,396
Interest expense		2,256			2,178			2,064			1,767			1,406				4,434			2,591
Net interest income		4,822			4,837			4,945			5,031			4,981				9,659			9,805
Provision for (reversal of) loan losses		(67	)		(158	)		(1,195	)		(13	)		149				(225	)		23
Net interest income after provision for
(reversal of) loan losses		4,889			4,995			6,140			5,044			4,832				9,884			9,782
Noninterest income (1)		2,710			1,362			1,546			3,063			2,968				4,072			4,800
Noninterest expense		6,557			5,505			6,415			6,871			6,737				12,062			12,561
Income before income taxes		1,042			852			1,271			1,236			1,063				1,894			2,021
Income tax expense		281			229			313			345			241				510			530
Net income	$	761		$	623		$	958		$	891		$	822			$	1,384		$	1,491
Common Share Data
Basic net income per share (2)	$	0.04		$	0.03		$	0.05		$	0.14		$	0.05			$	0.08		$	0.09
Diluted net income per share (2)		0.02			0.02			0.03			0.07			0.02				0.04			0.04
Dividend		0.00			0.00			0.00			0.00			0.00				0.00			0.00
Tangible book value per share (3)		2.97			2.90			2.82			2.71			2.58				2.97			2.58
Book value per share (3)		2.60			2.53			2.45			2.34			2.10				2.60			2.10
Weighted average shares outstanding - basic		18,290,674			18,232,169			18,232,169			18,232,169			18,209,032				18,261,584			18,185,641
Weighted average shares outstanding - diluted		33,009,983			32,815,744			32,757,855			34,589,375			36,783,724				32,950,273			36,664,538
Financial Condition Data
Total assets	$	708,270		$	702,152		$	721,259		$	723,733		$	694,812			$	708,270		$	694,812
Loans		513,755			489,273			491,337			507,677			488,762				513,755			488,762
Allowance for loan losses		(7,251	)		(7,865	)		(7,947	)		(8,217	)		(8,055	)			(7,251	)		(8,055	)
Investment securities		124,784			123,500			121,281			118,345			119,571				124,784			119,571
Deposits		535,367			542,938			536,931			523,729			517,452				535,367			517,452
Borrowings		69,174			57,220			86,710			104,357			76,427				69,174			76,427
Stockholders' equity		94,035			92,507			91,035			88,993			97,313				94,035			97,313
Financial Ratios and Other Data
Performance Ratios:
Net interest margin (4)		2.89	%		2.94	%		2.89	%		2.97	%		3.15	%			2.92	%		3.18	%
Net interest spread (5)		2.58	%		2.64	%		2.62	%		2.72	%		2.92	%			2.62	%		2.96	%
Noninterest income to average assets (6)		1.52	%		0.76	%		0.84	%		1.72	%		1.77	%			1.14	%		1.47	%
Noninterest expense to average assets		3.72	%		3.14	%		3.54	%		3.82	%		3.99	%			3.44	%		3.82	%
Efficiency ratio (7)		87.45	%		89.24	%		99.18	%		84.63	%		84.56	%			88.26	%		85.80	%
Earnings on average assets (8)		0.43	%		0.36	%		0.53	%		0.50	%		0.49	%			0.39	%		0.45	%
Earnings on average equity (9)		3.28	%		2.76	%		4.23	%		3.77	%		3.36	%			3.03	%		3.07	%
Asset Quality Ratios:
Nonaccrual loans to loans (10)		1.12	%		1.29	%		1.34	%		0.73	%		0.53	%			1.12	%		0.53	%
Nonaccrual loans, restructured loans and
loans 90 days or more past due and still
accruing to total loans (10)		1.45	%		1.66	%		1.62	%		1.09	%		0.82	%			1.45	%		0.82	%
Nonperforming assets, restructured loans
and loans 90 days or more past due and still
accruing to total assets (10)		1.40	%		1.51	%		1.45	%		1.11	%		0.94	%			1.40	%		0.94	%
Allowance for loan losses to total loans (10)		1.41	%		1.61	%		1.62	%		1.62	%		1.65	%			1.41	%		1.65	%
Allowance for loan losses to nonaccrual loans,
restructured loans and loans 90 days or
more past due and still accruing (10)		97.34	%		96.96	%		99.72	%		148.99	%		200.97	%			97.34	%		200.97	%
Net charge-offs (recoveries) annualized
to average loans (10)		0.44	%		(0.06	%)		(0.74	%)		(0.14	%)		(0.48	%)			0.19	%		-0.14	%
Capital Ratios:
Total equity to total assets		13.28	%		13.17	%		12.62	%		12.30	%		14.01	%			13.28	%		14.01	%
Total risk-based capital ratio		15.32	%		15.56	%		15.34	%		14.43	%		16.40	%			15.32	%		16.40	%
Tier 1 risk-based capital ratio		14.07	%		14.31	%		14.09	%		13.18	%		15.14	%			14.07	%		15.14	%
Leverage capital ratio		10.64	%		10.39	%		10.10	%		9.90	%		11.70	%			10.64	%		11.70	%
Other Data:
Number of employees (full-time equivalent)		180			177			183			188			184				180			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 for the second and third quarters of 2018 and the six months ended June 30, 2018 includes the difference between the carrying amount less the consideration paid for redeemed preferred stock of $0.1 million, $1.7 million and $0.1 million, 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 1,244,105 shares of common stock at June 30, 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)
		June 30,			March 31,			December 31,			September 30,			June 30,
		2019			2019			2018			2018			2018
	(Dollars in Thousands, Except Shares)
Assets
Cash and due from banks	$	8,791		$	8,168		$	13,037		$	10,055		$	9,752
Reverse repurchase agreements		18,347			42,729			58,662			45,076			28,403
Securities available for sale		122,365			121,115			118,926			116,013			117,221
Equity securities at fair value		2,419			2,385			2,355			2,332			2,350
Loans held for sale		8,450			4,467			4,632			8,145			15,407
Loans		513,755			489,273			491,337			507,677			488,762
Allowance for loan losses		(7,251	)		(7,865	)		(7,947	)		(8,217	)		(8,055	)
Net loans		506,504			481,408			483,390			499,460			480,707
Federal Home Loan Bank Stock		2,363			2,003			3,172			3,870			2,610
Premises and equipment, net (1)		7,386			7,220			4,498			4,409			4,296
Accrued interest receivable		1,820			1,873			1,570			1,858			1,580
Deferred tax assets, net		20,703			21,156			21,422			22,410			22,604
Other real estate owned, net		2,466			2,466			2,486			2,494			2,494
Bank owned life insurance		4,640			4,613			4,590			4,565			4,541
Goodwill and other intangible assets		165			171			176			181			187
Other assets		1,851			2,378			2,343			2,865			2,660
Total Assets	$	708,270		$	702,152		$	721,259		$	723,733		$	694,812
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing demand	$	62,424		$	62,553		$	63,507		$	69,165		$	72,839
Interest-bearing demand		32,649			32,467			33,660			33,701			32,615
Savings		192,133			188,110			181,432			164,603			175,343
Time		248,161			259,808			258,332			256,260			236,655
Total deposits		535,367			542,938			536,931			523,729			517,452
Short-term borrowings		69,174			57,220			86,710			104,357			76,427
Accrued interest payable		725			727			710			694			497
Other liabilities		8,969			8,760			5,873			5,960			3,123
Total liabilities		614,235			609,645			630,224			634,740			597,499
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			39,384			50,107
Common stock, $1 par value; 75,000,000
authorized shares; 18,455,610 issued shares; 18,244,563 outstanding shares		18,543			18,456			18,456			18,454			18,454
Capital surplus		160,991			160,930			160,815			160,716			158,903
Accumulated deficit		(124,412	)		(125,173	)		(125,796	)		(126,754	)		(127,140	)
Accumulated other comprehensive income (loss), net		63			(556	)		(1,290	)		(2,273	)		(2,477	)
Treasury stock 221,902 shares at cost		(534	)		(534	)		(534	)		(534	)		(534	)
Total stockholders' equity		94,035			92,507			91,035			88,993			97,313
Total liabilities and stockholders' equity	$	708,270		$	702,152		$	721,259		$	723,733		$	694,812
(1) The adoption of the new lease accounting standards effective January 1, 2019 resulted in $2.8 million of right of use assets being recorded in premise and equipment, net and a corresponding liability in other liabilities.

 

CIB MARINE BANCSHARES, INC.
Consolidated Statements of Operations (Unaudited)
	At or for the
	Quarters Ended																6 Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,				June 30,			June 30,
		2019			2019			2018			2018			2018				2019			2018
	(Dollars in thousands)
Interest Income
Loans	$	5,811		$	5,693		$	5,686		$	5,638		$	5,372			$	11,504		$	10,497
Loans held for sale		97			85			86			112			117				182			190
Securities		868			804			828			720			720				1,672			1,495
Other investments		302			433			409			328			178				735			214
Total interest income		7,078			7,015			7,009			6,798			6,387				14,093			12,396
Interest Expense
Deposits		1,949			1,805			1,547			1,343			1,038				3,754			1,986
Short-term borrowings		307			373			517			424			368				680			605
Total interest expense		2,256			2,178			2,064			1,767			1,406				4,434			2,591
Net interest income		4,822			4,837			4,945			5,031			4,981				9,659			9,805
Provision for (reversal of) loan losses		(67	)		(158	)		(1,195	)		(13	)		149				(225	)		23
Net interest income after provision for
(reversal of) loan losses		4,889			4,995			6,140			5,044			4,832				9,884			9,782
Noninterest Income
Deposit service charges		95			83			79			105			110				178			221
Other service fees		29			20			31			30			40				49			74
Mortgage Banking revenue, net		2,148			978			1,057			1,760			2,155				3,126			3,529
Other income		179			165			143			173			153				344			285
Net gains (losses) on sale of securities available for sale		0			0			0			(7	)		0				0			22
Unrealized gains (losses) recognized on equity securities		34			30			23			(18	)		(18	)			64			(57	)
Net gains on sale of assets		225			86			213			1,020			528				311			726
Total noninterest income		2,710			1,362			1,546			3,063			2,968				4,072			4,800
Noninterest Expense
Compensation and employee benefits		4,445			3,687			4,206			4,514			4,682				8,132			8,738
Equipment		353			335			364			351			337				688			648
Occupancy and premises		437			456			423			378			422				893			839
Data Processing		160			166			169			184			162				326			316
Federal deposit insurance		66			82			74			51			48				148			97
Professional services		207			140			270			623			290				347			456
Telephone and data communication		83			78			86			78			79				161			157
Insurance		52			53			47			60			63				105			124
Other expense		754			508			776			632			654				1,262			1,186
Total noninterest expense		6,557			5,505			6,415			6,871			6,737				12,062			12,561
Income from operations
before income taxes		1,042			852			1,271			1,236			1,063				1,894			2,021
Income tax expense		281			229			313			345			241				510			530
Net income		761			623			958			891			822				1,384			1,491
Preferred stock dividend		0			0			0			0			0				0			0
Discount from repurchase of preferred shares		0			0			0			1,703			105				0			105
Net income allocated to
common stockholders	$	761		$	623		$	958		$	2,594		$	927			$	1,384		$	1,596

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