SOURCE: CIB Marine Bancshares, Inc.

CIB Marine Bancshares, Inc.

July 14, 2016 18:00 ET

CIB Marine Bancshares, Inc. Announces 2016 Second Quarter Results

WAUKESHA, WI --(Marketwired - July 14, 2016) - CIB Marine Bancshares, Inc. (the "Company" or "CIBM") (OTCQB: CIBH), the holding company of CIBM Bank, announced its results of operations and financial condition for the second quarter of 2016. Net income for the quarter was $1.2 million or $0.07 basic earnings per share, and for the six months ending June 30, 2016, $2.1 million or $0.12 per share. Earnings per share on a diluted basis for the same quarter and six month period were $0.03 and $0.06, respectively. This reflects a substantial increase over the prior year's results for the same periods.

Select highlights for the quarter include:

  • Return on average assets was 0.80% for the second quarter of 2016 and 0.73% for the six months ending June 30, 2016, compared to -0.11% and -0.05% for the same periods in 2015.
  • Net income for subsidiary CIBM Bank was $1.4 million for the second quarter and $2.1 million for the six months ending June 30, 2016; compared to $0.1 million and $0.3 million for the same periods of 2015, respectively.
  • Due primarily to an increase in average loan balances, net interest income increased $0.5 million for the second quarter and $1.1 million for the six months ending June 30, 2016, relative to the same periods of 2015.
  • Non-interest income increased $1.4 million for the second quarter and $2.0 million for the six months ending June 30, 2016, relative to the same periods of 2015. Year-to-date results compared to the same period of 2015 reflect a $1.1 million improvement in net mortgage banking revenues and $1.0 million in net gains/(losses) on sale of assets and write-downs, comprised primarily of gains on sale of other real estate owned.
  • Non-performing assets to total assets continued its decline to 1.59%, compared to 2.25% from year-end 2015 and 2.83% from the same quarter-end of 2015.
  • By the end of the second quarter of 2016, our actions for expense reductions announced in February 2016 were substantially complete. The second half of 2016 will more directly reflect the full amount of the $1.1 million per annum expense reductions.

"CIB Marine is reporting an even stronger second quarter than the first with substantial revenue improvements and relatively limited increases in expenses. Results reflect continued improvement in the critical areas we identified in our strategic goals," said Mr. J. Brian Chaffin, President and Chief Executive Officer of CIB Marine Bancshares, Inc. "Whereas the first quarter was dominated by stronger loan growth, the second quarter has started to reflect improved results from our mortgage banking division and our initiative to originate and sell the government guaranteed portion of SBA loans. In addition, CIB Marine began funding a SBA asset financing facility and increased its investment security holdings."

The Company also announced that it recently agreed to settle claims related to asset purchase transactions in 2006 and 2007. CIB Marine will receive approximately $1.3 million net of costs in a structured settlement, the majority of which is expected to be received in the second half of 2016. To date, none of the structured settlement has been received or recorded. As the payments are received, CIB Marine will record them as a loan loss recovery, which may result in a credit provision (i.e., a reversal of loan losses) in those future reporting periods thereby potentially increasing CIB Marine's net income by an amount up to the recovery.

Mr. Chaffin added, "As we look forward, we are focused on fulfilling our mission and growing our client relationship-based banking businesses along our corporate, mortgage and retail lines; at the same time further developing our SBA lending business and other related complementary banking and trust services as we leverage our geographic footprint and operations."

CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates 11 banking 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, 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   Six Months Ended  
  June 30,  March 31,  December 31,   September 30,  June 30,   June 30,   June 30,  
  2016  2016  2015   2015  2015   2016   2015  
  (Dollars in thousands, except share and per share data)  
Selected Statement of Operations Data                         
Interest and dividend income $5,214  $5,176  $4,874   $4,657  $4,539   $10,390   $8,999  
Interest expense  729   735   654    595   557    1,464    1,128  
 Net interest income  4,485   4,441   4,220    4,062   3,982    8,926    7,871  
Provision for (reversal of) loan losses  118   61   215    (337 ) 97    179    183  
 Net interest income after provision for (reversal of) loan losses  
4,367
  
4,380
  
4,005
   
4,399
  
3,885
   
8,747
   
7,688
 
Noninterest income (1)  2,788   2,053   592    1,022   1,436    4,841    2,812  
Noninterest expense  5,951   5,481   5,386    5,114   5,464    11,432    10,617  
 Income (loss) before income taxes  1,204   952   (789 )  307   (143 )  2,156    (117 )
Income tax expense  15   0   6    0   0    15    0  
 Net income (loss) $1,189  $952  $(795 ) $307  $(143 ) $2,141   $(117 )
                                 
Common Share Data                                
 Basic net income (loss) per share $0.07  $0.05  $(0.04 ) $0.02  $(0.01 ) $0.12   $(0.01 )
 Diluted net income (loss) per share  0.03   0.03   (0.04 )  0.01   (0.01 )  0.06    (0.01 )
 Dividend  0   0   0    0   0    0    0  
 Tangible book value per share (2)  0.99   0.90   0.79    0.90   0.89    0.99    0.89  
 Book value per share (2)  0.51   0.41   0.31    0.42   0.41    0.51    0.41  
 Weighted average shares outstanding - basic  18,127,892   18,127,892   18,127,892    18,127,892   18,127,892    18,127,892    18,127,892  
 Weighted average shares outstanding - diluted  35,631,892   35,631,892   18,127,892    35,631,892   18,127,892    35,631,892    18,127,892  
Financial Condition Data                                
 Total assets $615,708  $597,089  $571,233   $531,744  $525,513   $615,708   $525,513  
 Loans  461,859   470,424   445,050    414,643   394,319    461,859    394,319  
 Allowance for loan losses  (8,219 ) (8,235 ) (8,064 )  (7,883 ) (7,670 )  (8,219 )  (7,670 )
 Investment securities  103,542   97,474   94,702    92,674   90,912    103,542    90,912  
 Deposits  468,377   467,334   443,571    415,185   402,858    468,377    402,858  
 Borrowings  72,833   57,929   58,883    45,396   52,288    72,833    52,288  
 Stockholders' equity  69,266   67,475   65,586    67,616   67,466    69,266    67,466  
Financial Ratios and Other Data                                
 Performance Ratios:                                
  Net interest margin (3)  3.11 % 3.15 % 3.14 %  3.18 % 3.18 %  3.13 %  3.20 %
  Net interest spread (4)  2.96 % 3.00 % 2.98 %  3.03 % 3.03 %  2.98 %  3.05 %
  Noninterest income to average assets (5)  1.88 % 1.42 % 0.43 %  0.77 % 1.11 %  1.65 %  1.10 %
  Noninterest expense to average assets  4.02 % 3.78 % 3.89 %  3.87 % 4.22 %  3.90 %  4.17 %
  Efficiency ratio (6)  81.82 % 84.40 % 111.93 %  100.59 % 100.85 %  83.04 %  99.50 %
  Earnings (loss) on average assets (7)  0.80 % 0.66 % -0.57 %  0.23 % -0.11 %  0.73 %  -0.05 %
  Earnings (loss) on average equity (8)  6.98 % 5.75 % -4.65 %  1.79 % -0.84 %  6.37 %  -0.34 %
Asset Quality Ratios:                                
 Nonaccrual loans to loans (9)  0.81 % 0.81 % 0.70 %  0.75 % 1.39 %  0.81 %  1.39 %
 Nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing to total loans (9)  

1.63
% 

1.64
% 

1.96
%  

1.68
% 

2.44
%  

1.63
%  

2.44
%
 Nonperforming assets, restructured loans and loans 90 days or more past due and still accruing to total assets (9)  

1.59
% 

1.94
% 

2.25
%  

2.20
% 

2.83
%  

1.59
%  

2.83
%
 Allowance for loan losses to total loans  1.78 % 1.75 % 1.81 %  1.90 % 1.95 %  1.78 %  1.95 %
 Allowance for loan losses to nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing (9)  

109.14
% 

106.74
% 

92.25
%  

113.03
% 

79.70
%  

109.14
%  

79.70
%
 Net charge-offs (recoveries) annualized to average loans  
0.12
% 
-0.10
% 
0.03
%  
-0.54
% 
0.01
%  
0.01
%  
0.04
%
Capital Ratios:                                
 Total equity to total assets  11.25 % 11.30 % 11.48 %  12.72 % 12.84 %  11.25 %  12.84 %
 Total risk-based capital ratio  15.59 % 15.19 % 15.45 %  16.57 % 16.86 %  15.59 %  16.86 %
 Tier 1 risk-based capital ratio  14.34 % 13.93 % 14.20 %  15.31 % 15.60 %  14.34 %  15.60 %
 Leverage capital ratio  11.69 % 11.72 % 12.27 %  13.01 % 13.09 %  11.69 %  13.09 %
Other Data:                                
 Number of employees (full-time equivalent)  167   180   173    159   158    167    158  
 Number of banking facilities  11   11   11    11   11    11    11  
(1)Noninterest income includes gains and losses on securities.
(2)Tangible book value per share is the shareholder 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 shareholder equity less the liquidation preference of the preferred stock, divided by the total shares of common outstanding.
(3)Net interest margin is the ratio of net interest income to average interest-earning assets.
(4)Net interest spread is the yield on average interest-earning assets less the rate on average interest-bearing liabilities.
(5)Noninterest income to average assets excludes gains and losses on securities.
(6)The efficiency ratio is noninterest expense divided by the sum of net interest income plus noninterest income, excluding gains and losses on securities.
(7)Earnings on average assets are net income divided by average total assets.
(8)Earnings on average equity are net income divided by average common equity.
(9)Excludes loans held for sale.
 
CIB MARINE BANCSHARES, INC.
Consolidated Balance Sheets (unaudited)
                
   June 30,  March 31,  December 31,  September 30,  June 30,
   2016  2016  2015  2015  2015
   (Dollars in thousands, except share data)
Assets               
Cash and due from banks  $9,808   $9,136   $9,170   $8,037   $9,407  
Reverse repurchase agreements  $20,313   $-   $-   $-   $-  
Securities available for sale   103,542    97,474    94,702    92,674    90,912  
Loans held for sale   11,602    10,176    12,275    5,157    18,440  
                           
Loans   461,859    470,424    445,050    414,643    394,319  
Allowance for loan losses   (8,219 )  (8,235 )  (8,064 )  (7,883 )  (7,670 )
 Net loans   453,640    462,189    436,986    406,760    386,649  
                           
Federal Home Loan Bank Stock   2,170    2,170    2,170    2,170    2,170  
Premises and equipment, net   4,358    4,716    4,771    4,830    4,826  
Accrued interest receivable   1,290    1,468    1,296    1,471    1,245  
Other real estate owned, net   2,283    3,859    4,126    4,698    5,229  
Bank owned life insurance   4,336    4,310    4,285    4,259    4,234  
Goodwill and other intangible assets   232    237    243    248    254  
Other assets   2,134    1,354    1,209    1,440    2,147  
  Total Assets  $615,708   $597,089   $571,233   $531,744   $525,513  
                           
Liabilities and Stockholders' Equity                          
Deposits:                          
 Noninterest-bearing demand  $82,460   $74,564   $77,580   $70,644   $74,514  
 Interest-bearing demand   31,508    32,096    33,192    30,320    29,909  
 Savings   175,955    175,576    162,663    153,134    155,364  
 Time   178,454    185,098    170,136    161,087    143,071  
  Total deposits   468,377    467,334    443,571    415,185    402,858  
Short-term borrowings   72,833    57,929    58,883    45,396    52,288  
Accrued interest payable   335    339    321    305    272  
Other liabilities   4,897    4,012    2,872    3,242    2,629  
  Total liabilities   546,442    529,614    505,647    464,128    458,047  
                           
Stockholders' Equity                          
Preferred stock, $1 par value; 5,000,000 authorized shares; 7% fixed rate noncumulative perpetual issued-55,624 shares of series A and 4,376 shares of series B; convertible; aggregate liquidation preference- $60,000   51,000    51,000    51,000    51,000    51,000  
Common stock, $1 par value; 50,000,000 authorized shares; 18,346,391 issued shares; 18,135,344 outstanding shares   
18,346
   
18,346
   
18,346
   
18,346
   
18,346
 
Capital surplus   158,493    158,493    158,493    158,493    158,493  
Accumulated deficit   (157,446 )  (158,636 )  (159,588 )  (158,793 )  (159,100 )
Accumulated other comprehensive loss, net   (598 )  (1,199 )  (2,136 )  (901 )  (744 )
Treasury stock 218,499 shares at cost   (529 )  (529 )  (529 )  (529 )  (529 )
  Total stockholders' equity   69,266    67,475    65,586    67,616    67,466  
  Total liabilities and stockholders' equity  $615,708   $597,089   $571,233   $531,744   $525,513  
 
CIB MARINE BANCSHARES, INC.
Consolidated Statements of Operations (Unaudited)
                      
   At or for the
   Quarters Ended  Six Months Ended
   June 30,  March 31,  December 31,  September 30,  June 30,  June 30,  June 30,
   2016  2016  2015  2015  2015  2016  2015
   (Dollars in thousands)
                      
Interest Income                                 
Loans  $4,635  $4,572  $4,248   $4,044   $3,850   $9,207  $7,680  
Loans held for sale   95   83   77    58    134    178   206  
Securities   478   517   546    553    552    995   1,107  
Other investments   6   4   3    2    3    10   6  
 Total interest income   5,214   5,176   4,874    4,657    4,539    10,390   8,999  
                                  
Interest Expense                                 
Deposits   692   705   640    583    542    1,397   1,104  
Short-term borrowings   37   30   14    12    15    67   24  
 Total interest expense   729   735   654    595    557    1,464   1,128  
 Net interest income   4,485   4,441   4,220    4,062    3,982    8,926   7,871  
Provision for (reversal of) loan losses   118   61   215    (337 )  97    179   183  
 Net interest income after provision for (reversal of) loan losses for (reversal of) loan losses   4,367   4,380   4,005    4,399    3,885    8,747   7,688  
                                  
Noninterest Income                                 
Deposit service charges   121   103   113    119    110    224   218  
Other service fees   52   67   60    73    54    119   103  
Mortgage Banking revenue, net   2,102   1,336   545    805    1,253    3,438   2,374  
Other income   96   117   104    102    50    213   238  
Net gains on sale of securities   0   0   0    0    0    0   13  
Net gains (losses) on sale of assets and (writedowns)   417   430   (230 )  (77 )  (31 )  847   (134 )
 Total noninterest income   2,788   2,053   592    1,022    1,436    4,841   2,812  
                                  
Noninterest Expense                                 
Compensation and employee benefits   4,143   3,624   3,419    3,195    3,443    7,767   6,901  
Equipment   293   273   277    262    261    566   529  
Occupancy and premises   389   435   396    404    376    824   776  
Data Processing   151   154   158    173    144    305   290  
Federal deposit insurance   106   106   104    110    106    212   211  
Professional services   213   249   228    277    284    462   437  
Telephone and data communication   99   109   113    86    103    208   212  
Insurance   56   54   53    55    56    110   113  
Other expense   501   477   638    552    691    978   1,148  
 Total noninterest expense   5,951   5,481   5,386    5,114    5,464    11,432   10,617  
Income (loss) from operations before income taxes   1,204   952   (789 )  307    (143 )  2,156   (117 )
Income tax expense   15   0   6    0    0    15   0  
 Net income (loss)   1,189   952   (795 )  307    (143 )  2,141   (117 )
Preferred stock dividend   0   0   0    0    0    0   0  
  Net income (loss) allocated to common stockholders  $1,189  $952  $(795 ) $307   $(143 ) $2,141  $(117 )

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