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CIB Marine Bancshares, Inc. Announces Third Quarter 2019 Results

/EIN News/ -- BROOKFIELD, Wis., Oct. 11, 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 third quarter of 2019.  Income before taxes for the quarter was $1.1 million compared to $1.2 million for the same period in 2018, and for the nine months ending September 30, 2019, it was $3.0 million compared to $3.3 million for the same period in 2018.

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

  • Tangible book value per share and stated book value per share at September 30, 2019, were $3.03 and $2.68 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 nine months ended September 30, 2019, improved net accumulated other comprehensive income (loss) due to improved available for sale security fair values as a result of lower market interest rates, and discounts to the repurchase of preferred stock in the third quarter. 
  • Income before taxes for subsidiary CIBM Bank was $1.2 million for the quarter compared to $1.7 million for the same period in 2018, and $3.3 million for the nine months ended September 30, 2019, compared to $4.2 million for the same period in 2018.  Comparing the two nine-month periods, there was a decline in net interest income of $0.4 million due primarily to rising cost of funds and a reduction in SBA reverse repo balances, a decline in non-interest income of $0.2 million due to lower SBA gains on sale as a result of lower origination volumes in part offset by stronger mortgage banking revenues, an increase in provision to allowance for loan losses of $0.1 million and an increase in non-interest expenses by $0.3 million lead by higher compensation, collection and occupancy and premise expenses.
  • Non-performing assets, restructured loans, and loans 90 days or more past due and still accruing to total assets was 1.40% at September 30, 2019, versus 1.45% at December 31, 2018, and 1.11% at September 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 1.49% at September 30, 2019, versus 1.62% at December 31, 2018, and 1.62% at September 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 SBA and Mortgage Divisions’ net revenues were up $0.4 million and $0.8 million, respectively, from second quarter of 2019 due to stronger loan production from both.  Notably, the Mortgage Division has had stronger production and higher earnings on that production during 2019 versus the year prior.  This can be attributed to solid purchase money and elevated refinance activity on lower mortgage rates so far this year and a number of new lender hires.”

He added, “Our net interest margin improved by 6 basis points from the prior quarter and printed the best result since the third quarter of 2018.  We are encouraged that the cost of funds has begun to turn lower and we expect the decline to pick up in the two quarters ahead as we expect a significant amount of maturing time deposits originated near the peak of the rate cycle last year and early this year to reprice at lower rates.

“Finally, during the third quarter, we approved and accepted the repurchase of 2,229 shares of preferred stock as part of the second of three planned preferred stock modified Dutch auctions held pursuant to our 2018 amendments to the Articles of Incorporation.  The total price for the shares was $1.6 million, resulting in a discount of $0.3 million to the $1.9 million carrying value of the preferred stock shares.  The discount was transferred to paid-in capital for common stock during the third quarter.  As a reminder, a $3.5 million liability currently exists for the purchase of 4,923 preferred shares, which CIBM anticipates settling 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   9 Months Ended
  September 30, June 30, March 31, December 31, September 30,
    September 30, September 30,
    2019     2019     2019     2018     2018       2019     2018  
  (Dollars in thousands, except share and per share data)
Selected Statement of Operations Data                
Interest and dividend income $ 7,035   $ 7,078   $ 7,015   $ 7,009   $ 6,798     $ 21,128   $ 19,194  
Interest expense   2,183     2,256     2,178     2,064     1,767       6,617     4,358  
Net interest income   4,852     4,822     4,837     4,945     5,031       14,511     14,836  
Provision for (reversal of) loan losses   327     (67 )   (158 )   (1,195 )   (13 )     102     10  
Net interest income after provision for                
(reversal of) loan losses   4,525     4,889     4,995     6,140     5,044       14,409     14,826  
Noninterest income (1)   3,835     2,710     1,362     1,546     3,063       7,907     7,863  
Noninterest expense   7,233     6,557     5,505     6,415     6,871       19,295     19,432  
Income before income taxes   1,127     1,042     852     1,271     1,236       3,021     3,257  
Income tax expense   93     281     229     313     345       603     875  
Net income $ 1,034   $ 761   $ 623   $ 958   $ 891       $ 2,418   $ 2,382  
                 
Common Share Data                
Basic net income per share (2) $ 0.07   $ 0.04   $ 0.03   $ 0.05   $ 0.14     $ 0.15   $ 0.23  
Diluted net income per share (2)   0.04     0.02     0.02     0.03     0.07       0.08     0.12  
Dividend   0.00     0.00     0.00     0.00     0.00       0.00     0.00  
Tangible book value per share (3)   3.03     2.97     2.90     2.82     2.71       3.03     2.71  
Book value per share (3)   2.68     2.60     2.53     2.45     2.34       2.68     2.34  
Weighted average shares outstanding - basic   18,455,408     18,290,674     18,232,169     18,232,169     18,232,169       18,281,049     18,201,320  
Weighted average shares outstanding - diluted   32,536,354     33,009,983     32,815,744     32,757,855     34,589,375       32,835,500     35,958,705  
Financial Condition Data                
Total assets $ 700,711   $ 708,270   $ 702,152   $ 721,259   $ 723,733     $ 700,711   $ 723,733  
Loans   508,758     513,755     489,273     491,337     507,677       508,758     507,677  
Allowance for loan losses   (7,560 )   (7,251 )   (7,865 )   (7,947 )   (8,217 )     (7,560 )   (8,217 )
Investment securities   120,648     124,784     123,500     121,281     118,345       120,648     118,345  
Deposits   557,745     535,367     542,938     536,931     523,729       557,745     523,729  
Borrowings   38,468     69,174     57,220     86,710     104,357       38,468     104,357  
Stockholders' equity   94,082     94,035     92,507     91,035     88,993       94,082     88,993  
Financial Ratios and Other Data                
Performance Ratios:                
Net interest margin (4)   2.95 %   2.89 %   2.94 %   2.89 %   2.97 %     2.93 %   3.10 %
Net interest spread (5)   2.62 %   2.58 %   2.64 %   2.62 %   2.72 %     2.61 %   2.87 %
Noninterest income to average assets (6)   2.19 %   1.52 %   0.76 %   0.84 %   1.72 %     1.49 %   1.56 %
Noninterest expense to average assets   4.14 %   3.72 %   3.14 %   3.54 %   3.82 %     3.67 %   3.82 %
Efficiency ratio (7)   83.44 %   87.45 %   89.24 %   99.18 %   84.63 %     86.39 %   85.38 %
Earnings on average assets (8)   0.59 %   0.43 %   0.36 %   0.53 %   0.50 %     0.46 %   0.47 %
Earnings on average equity (9)   4.35 %   3.28 %   2.76 %   4.23 %   3.77 %     3.48 %   3.30 %
Asset Quality Ratios:                
Nonaccrual loans to loans (10)   1.14 %   1.12 %   1.29 %   1.34 %   0.73 %     1.14 %   0.73 %
Nonaccrual loans, restructured loans and                
 loans 90 days or more past due and still                
 accruing to total loans (10)   1.44 %   1.45 %   1.66 %   1.62 %   1.09 %     1.44 %   1.09 %
Nonperforming assets, restructured loans                
and loans 90 days or more past due and still                
accruing to total assets (10)   1.40 %   1.40 %   1.51 %   1.45 %   1.11 %     1.40 %   1.11 %
Allowance for loan losses to total loans (10)   1.49 %   1.41 %   1.61 %   1.62 %   1.62 %     1.49 %   1.62 %
Allowance for loan losses to nonaccrual loans,                
restructured loans and loans 90 days or                
more past due and still accruing (10)   103.07 %   97.34 %   96.96 %   99.72 %   148.99 %     103.07 %   148.99 %
Net charge-offs (recoveries) annualized                
to average loans (10)   0.01 %   0.44 %   (0.06 %)   (0.74 %)   (0.14 %)     0.13 %   -0.14 %
Capital Ratios:                
Total equity to total assets   13.43 %   13.28 %   13.17 %   12.62 %   12.30 %     13.43 %   12.30 %
Total risk-based capital ratio   15.20 %   15.32 %   15.56 %   15.34 %   14.43 %     15.20 %   14.43 %
Tier 1 risk-based capital ratio   13.95 %   14.07 %   14.31 %   14.09 %   13.18 %     13.95 %   13.18 %
Leverage capital ratio   10.86 %   10.64 %   10.39 %   10.10 %   9.90 %     10.86 %   9.90 %
Other Data:                
Number of employees (full-time equivalent)   182     180     177     183     188       182     188  
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 of $0.3 million for the third quarter and nine months ended September 30, 2019, $0.1 million for the second quarter of 2018, $1.7 million for the third quarter of 2018, and $1.8 million for the nine months ended September 30, 2018.
(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 918,665 shares of common stock at September 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)
           
  September 30, June 30, March 31, December 31, September 30,
    2019     2019     2019     2018     2018  
  (Dollars in Thousands, Except Shares)
Assets          
Cash and due from banks $ 9,582   $ 8,791   $ 8,168   $ 13,037   $ 10,055  
Reverse repurchase agreements   4,083     18,347     42,729     58,662     45,076  
Securities available for sale   118,211     122,365     121,115     118,926     116,013  
Equity securities at fair value   2,437     2,419     2,385     2,355     2,332  
Loans held for sale   25,347     8,450     4,467     4,632     8,145  
           
Loans   508,758     513,755     489,273     491,337     507,677  
Allowance for loan losses   (7,560 )   (7,251 )   (7,865 )   (7,947 )   (8,217 )
Net loans   501,198     506,504     481,408     483,390     499,460  
           
Federal Home Loan Bank Stock   926     2,363     2,003     3,172     3,870  
Premises and equipment, net (1)   7,083     7,386     7,220     4,498     4,409  
Accrued interest receivable   1,646     1,820     1,873     1,570     1,858  
Deferred tax assets, net   20,455     20,703     21,156     21,422     22,410  
Other real estate owned, net   2,466     2,466     2,466     2,486     2,494  
Bank owned life insurance   4,666     4,640     4,613     4,590     4,565  
Goodwill and other intangible assets   159     165     171     176     181  
Other assets   2,452     1,851     2,378     2,343     2,865  
Total Assets $ 700,711   $ 708,270   $ 702,152   $ 721,259   $ 723,733  
           
Liabilities and Stockholders' Equity          
Deposits:          
Noninterest-bearing demand $ 63,694   $ 62,424   $ 62,553   $ 63,507   $ 69,165  
Interest-bearing demand   50,683     32,649     32,467     33,660     33,701  
Savings   202,866     192,133     188,110     181,432     164,603  
Time   240,502     248,161     259,808     258,332     256,260  
Total deposits   557,745     535,367     542,938     536,931     523,729  
Short-term borrowings   38,468     69,174     57,220     86,710     104,357  
Accrued interest payable   711     725     727     710     694  
Other liabilities   9,705     8,969     8,760     5,873     5,960  
Total liabilities   606,629     614,235     609,645     630,224     634,740  
           
Stockholders' Equity          
Preferred stock, $1 par value; 5,000,000          
authorized shares at September 30, 2019; 7% fixed rate noncumulative perpetual issued;
40,888 shares of series A and 3,217 shares of series B; convertible; $44.1 million aggregate liquidation preference
  37,489     39,384     39,384     39,384     39,384  
Common stock, $1 par value; 75,000,000          
authorized shares; 18,868,329 issued shares; 18,646,427 outstanding shares (2)   18,868     18,543     18,456     18,456     18,454  
Capital surplus   161,110     160,991     160,930     160,815     160,716  
Accumulated deficit   (123,377 )   (124,412 )   (125,173 )   (125,796 )   (126,754 )
Accumulated other comprehensive income (loss), net   526     63     (556 )   (1,290 )   (2,273 )
Treasury stock 221,902 shares at cost   (534 )   (534 )   (534 )   (534 )   (534 )
Total stockholders' equity   94,082     94,035     92,507     91,035     88,993  
Total liabilities and stockholders' equity $ 700,711   $ 708,270   $ 702,152   $ 721,259   $ 723,733  
           
(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.
(2) Both issued and outstanding shares as stated here exclude 918,665 shares of unvested restricted stock awards.
           



CIB MARINE BANCSHARES, INC.
Consolidated Statements of Operations (Unaudited)
                 
  At or for the
  Quarters Ended   9 Months Ended
  September 30, June 30, March 31, December 31, September 30,
  September 30, September 30,
    2019     2019     2019     2018     2018       2019   2018  
  (Dollars in thousands)
                 
Interest Income                
Loans $ 5,992   $ 5,811   $ 5,693   $ 5,686   $ 5,638     $ 17,496 $ 16,135  
Loans held for sale   152     97     85     86     112       334   302  
Securities   810     868     804     828     720       2,482   2,215  
Other investments   81     302     433     409     328       816   542  
Total interest income   7,035     7,078     7,015     7,009     6,798       21,128   19,194  
                 
Interest Expense                
Deposits   2,027     1,949     1,805     1,547     1,343       5,781   3,329  
Short-term borrowings   156     307     373     517     424       836   1,029  
Total interest expense   2,183     2,256     2,178     2,064     1,767       6,617   4,358  
Net interest income   4,852     4,822     4,837     4,945     5,031       14,511   14,836  
Provision for (reversal of) loan losses   327     (67 )   (158 )   (1,195 )   (13 )     102   10  
Net interest income after provision for                
(reversal of) loan losses   4,525     4,889     4,995     6,140     5,044       14,409   14,826  
                 
Noninterest Income                
Deposit service charges   101     95     83     79     105       279   326  
Other service fees   30     29     20     31     30       79   104  
Mortgage Banking revenue, net   2,936     2,148     978     1,057     1,760       6,062   5,289  
Other income   150     179     165     143     173       494   458  
Net gains (losses) on sale of securities available for sale   0     0     0     0     (7 )     0   15  
Unrealized gains (losses) recognized on equity securities   18     34     30     23     (18 )     82   (75 )
Net gains on sale of assets   600     225     86     213     1,020       911   1,746  
Total noninterest income   3,835     2,710     1,362     1,546     3,063       7,907   7,863  
                 
Noninterest Expense                
Compensation and employee benefits   5,309     4,445     3,687     4,206     4,514       13,441   13,252  
Equipment   335     353     335     364     351       1,023   999  
Occupancy and premises   420     437     456     423     378       1,313   1,217  
Data Processing   165     160     166     169     184       491   500  
Federal deposit insurance   (5 )   66     82     74     51       143   148  
Professional services   198     207     140     270     623       545   1,079  
Telephone and data communication   86     83     78     86     78       247   235  
Insurance   70     52     53     47     60       175   184  
Other expense   655     754     508     776     632       1,917   1,818  
Total noninterest expense   7,233     6,557     5,505     6,415     6,871       19,295   19,432  
Income from operations                
before income taxes   1,127     1,042     852     1,271     1,236       3,021   3,257  
Income tax expense   93     281     229     313     345       603   875  
Net income   1,034     761     623     958     891       2,418   2,382  
Preferred stock dividend   0     0     0     0     0       0   0  
Discount from repurchase of preferred shares   308     0     0     0     1,703       308   1,808  
Net income allocated to                
 common stockholders $ 1,342   $ 761   $ 623   $ 958   $ 2,594     $ 2,726 $ 4,190  
                 

 

 

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