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CST: 18/06/2019 13:56:07   

CIB Marine Bancshares, Inc. Announces First Quarter 2019 Results

66 Days ago

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 25th 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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