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CST: 24/08/2019 22:11:24   

CIB Marine Bancshares, Inc. Announces Second Quarter 2019 Results

36 Days ago

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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