SOURCE: CIB Marine Bancshares, Inc.

CIB Marine Bancshares, Inc.

October 13, 2016 16:00 ET

CIB Marine Bancshares, Inc. Announces 2016 Third Quarter Results

WAUKESHA, WI--(Marketwired - October 13, 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 third quarter of 2016. Net income for the quarter was $0.9 million or $0.05 basic earnings per share, and for the nine months ending September 30, 2016, $3.0 million or $0.17 per share. Earnings per share on a diluted basis for the same quarter and nine month period were $0.02 and $0.08, respectively. This reflects a substantial increase over the prior year's results for the same periods as shown in the included financial information.

Select highlights for the quarter include:

  • Return on average assets was 0.55% for the third quarter of 2016 and 0.67% for the nine months ending September 30, 2016, showing a substantial improvement over the 0.23% and 0.05% reported for the same periods in 2015.
  • Net income for subsidiary CIBM Bank was $1.0 million for the third quarter and $3.1 million for the nine months ending September 30, 2016; compared to $0.6 million and $0.9 million for the same periods of 2015.
  • The growing and diversified loan portfolio has been the main driver of CIBM's net interest income growth as it has increased $0.5 million for the third quarter and $1.5 million for the nine months ending September 30, 2016, relative to the same periods of 2015.
  • Non-interest income increased $1.6 million for the third quarter and $3.7 million for the nine months ending September 30, 2016, relative to the same periods of 2015, due primarily to mortgage activity.
  • In addition to the growing revenues, our expense management activities discussed in prior earnings releases and shareholder letters have played a role in this outcome as well. The primary source of noninterest expense growth has been from higher commissions related to mortgage production.
  • Although net recoveries from prior charge-offs annualized to average loans has been fairly strong this past quarter and year to date, the approximately $1.3 million (net of costs) structured settlement payment announced earlier this year has not yet been received or recorded.
  • Non-performing assets to total assets continued its decline to 1.32% from 1.59% the prior quarter, 2.25% at the year-end 2015, and 2.20% at the same quarter-end of 2015.

"CIB Marine is pleased to be reporting year-on-year earnings improvements, continued growth in revenues and key accomplishments in executing some expense reductions," said Mr. J. Brian Chaffin, President and Chief Executive Officer of CIB Marine Bancshares, Inc. "Our third quarter saw growth in all of our key production units with especially strong results coming out of our mortgage banking division. In addition, we have received our first full quarter's results from the SBA financing facility discussed in the prior quarter, this facility is reported under reverse repurchase agreements in the balance sheet and other investments in the income statement."

Mr. Chaffin added, "We continue to focus on fulfilling our mission and growing our client relationship-based banking businesses along our corporate, mortgage and retail lines. We have made several new hires in our retail banking division recently, and Joe Arie joined our management team in the third quarter to develop our SBA lending business. Joe has a long history in SBA lending management and participation in various roles with key SBA trade organizations. In addition, CIBM successfully implemented a new customer relationship management system this past quarter -- this will assist in better meeting our customers' financial service needs and coordinate those efforts internally across our divisions and geographies."

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.

Notice that Preferred Dividend has not been declared: Pursuant to Sections 5.4(e)(v) and 5.5(e)(v) of the Company's Articles of Incorporation, notice is hereby given that the Board of Directors of the Company has not declared a dividend on its Series A Preferred Stock or its Series B Convertible Preferred Stock for the quarter ended September 30, 2016, and, accordingly, no dividend will be paid to preferred shareholders for such Dividend Period.

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   Nine Months Ended  
  September 30,  June 30,  March 31,  December 31,   September 30,   September 30,   September 30,  
  2016  2016  2016  2015   2015   2016   2015  
  (Dollars in thousands, except share and per share data)  
Selected Statement of Operations Data                         
Interest and dividend income $5,286  $5,214  $5,176  $4,874   $4,657   $15,676   $13,656  
Interest expense  740   729   735   654    595    2,204    1,723  
 Net interest income  4,546   4,485   4,441   4,220    4,062    13,472    11,933  
Provision for (reversal of) loan losses  69   118   61   215    (337 )  248    (154 )
 Net interest income after provision for (reversal of) loan losses  4,477   4,367   4,380   4,005    4,399    13,224    12,087  
Noninterest income (1)  2,651   2,788   2,053   592    1,022    7,492    3,834  
Noninterest expense  6,220   5,951   5,481   5,386    5,114    17,652    15,731  
 Income (loss) before income taxes  908   1,204   952   (789 )  307    3,064    190  
Income tax expense  40   15   0   6    0    55    0  
 Net income (loss) $868  $1,189  $952  $(795 ) $307   $3,009   $190  
                                 
Common Share Data                                
 Basic net income (loss) per share $0.05  $0.07  $0.05  $(0.04 ) $0.02   $0.17   $0.01  
 Diluted net income (loss) per share  0.02   0.03   0.03   (0.04 )  0.01    0.08    0.01  
 Dividend  0   0   0   0    0    0    0  
 Tangible book value per share (2)  1.04   0.99   0.90   0.79    0.90    1.04    0.90  
 Book value per share (2)  0.56   0.51   0.41   0.31    0.42    0.56    0.42  
 Weighted average shares outstanding - basic  18,127,892   18,127,892   18,17,892   18,127,892    18,127,92    18,127,892    18,127,892  
 Weighted average shares outstanding - diluted  35,818,022   35,631,892   35,631,892   18,127,892    35,631,892    35,694,388    35,631,892  
Financial Condition Data                                
 Total assets $632,628  $615,708  $597,089  $571,233   $531,744   $632,628   $531,744  
 Loans  466,057   461,859   470,424   445,050    414,643    466,057    414,643  
 Allowance for loan losses  (8,549 ) (8,219 ) (8,235 ) (8,064 )  (7,883 )  (8,549 )  (7,883 )
 Investment securities  103,853   103,542   97,474   94,702    92,674    103,853    92,674  
 Deposits  476,428   468,377   467,334   443,571    415,185    476,428    415,185  
 Borrowings  81,636   72,833   57,929   58,883    45,396    81,636    45,396  
 Stockholders' equity  70,094   69,266   67,475   65,586    67,616    70,094    67,616  
Financial Ratios and Other Data                                
 Performance Ratios:                                
  Net interest margin (3)  2.95 % 3.11 % 3.15 % 3.14 %  3.18 %  3.07 %  3.19 %
  Net interest spread (4)  2.80 % 2.96 % 3.00 % 2.98 %  3.03 %  2.92 %  3.04 %
  Noninterest income to average assets (5)  1.68 % 1.88 % 1.42 % 0.43 %  0.77 %  1.66 %  0.99 %
  Noninterest expense to average assets  3.93 % 4.02 % 3.78 % 3.89 %  3.87 %  3.91 %  4.07 %
  Efficiency ratio (6)  86.42 % 81.82 % 84.40 % 111.93 %  100.59 %  84.20 %  99.85 %
  Earnings (loss) on average assets (7)  0.55 % 0.80 % 0.66 % -0.57 %  0.23 %  0.67 %  0.05 %
  Earnings (loss) on average equity (8)  4.89 % 6.98 % 5.75 % -4.65 %  1.79 %  5.86 %  0.37 %
Asset Quality Ratios:                                
 Nonaccrual loans to loans (9)  1.16 % 0.81 % 0.81 % 0.70 %  0.75 %  1.16 %  0.75 %
 Nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing to total loans (9)  1.58 % 1.63 % 1.64 % 1.96 %  1.68 %  1.58 %  1.68 %
 Nonperforming assets, restructured loans and loans 90 days or more past due and still accruing to total assets (9)  1.32 % 1.59 % 1.94 % 2.25 %  2.20 %  1.32 %  2.20 %
 Allowance for loan losses to total loans  1.83 % 1.78 % 1.75 % 1.81 %  1.90 %  1.83 %  1.90 %
 Allowance for loan losses to nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing (9)  116.08 % 109.14 % 106.74 % 92.25 %  113.03 %  116.08 %  113.03 %
 Net charge-offs (recoveries) annualized to average loans  -0.22 % 0.12 % -0.10 % 0.03 %  -0.54 %  -0.07 %  -0.16 %
Capital Ratios:                                
 Total equity to total assets  11.08 % 11.25 % 11.30 % 11.48 %  12.72 %  11.08 %  12.72 %
 Total risk-based capital ratio  15.66 % 15.60 % 15.19 % 15.45 %  16.57 %  15.66 %  16.57 %
 Tier 1 risk-based capital ratio  14.41 % 14.34 % 13.93 % 14.20 %  15.31 %  14.41 %  15.31 %
 Leverage capital ratio  11.20 % 11.69 % 11.72 % 12.27 %  13.01 %  11.20 %  13.01 %
Other Data:                                
 Number of employees (full-time equivalent)  169   167   180   173    159    169    159  
 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)
              
  September 30,  June 30,  March 31,  December 31, September 30,
  2016  2016  2016  2015 2015
  (Dollars in thousands, except share data)
Assets             
Cash and due from banks $11,427   $9,808   $9,136   $9,170  $8,037  
Reverse repurchase agreements  27,560    20,313    -    -   -  
Securities available for sale  103,853    103,542    97,474    94,702   92,674  
Loans held for sale  15,875    11,602    10,176    12,275   5,157  
                         
Loans  466,057    461,859    470,424    445,050   414,643  
Allowance for loan losses  (8,549 )  (8,219 )  (8,235 )  (8,064 ) (7,883 )
  Net loans  457,508    453,640    462,189    436,986   406,760  
                         
Federal Home Loan Bank Stock  3,803    2,170    2,170    2,170   2,170  
Premises and equipment, net  4,256    4,358    4,716    4,771   4,830  
Accrued interest receivable  1,289    1,290    1,468    1,296   1,471  
Other real estate owned, net  982    2,283    3,859    4,126   4,698  
Bank owned life insurance  4,363    4,336    4,310    4,285   4,259  
Goodwill and other intangible assets  226    232    237    243   248  
Other assets  1,486    2,134    1,354    1,209   1,440  
  Total Assets $632,628   $615,708   $597,089   $571,233  $531,744  
                         
Liabilities and Stockholders' Equity                        
Deposits:                        
 Noninterest-bearing demand $87,216   $82,460   $74,564   $77,580  $70,644  
 Interest-bearing demand  29,821    31,508    32,096    33,192   30,320  
 Savings  169,390    175,955    175,576    162,663   153,134  
 Time  190,001    178,454    185,098    170,136   161,087  
  Total deposits  476,428    468,377    467,334    443,571   415,185  
Short-term borrowings  81,636    72,833    57,929    58,883   45,396  
Accrued interest payable  319    335    339    321   305  
Other liabilities  4,151    4,897    4,012    2,872   3,242  
  Total liabilities  562,534    546,442    529,614    505,647   464,128  
                         
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  158,510    158,493    158,493    158,493   158,493  
Accumulated deficit  (156,579 )  (157,446 )  (158,636 )  (159,588 ) (158,793 )
Accumulated other comprehensive loss, net  (654 )  (598 )  (1,199 )  (2,136 ) (901 )
Treasury stock 218,499 shares at cost  (529 )  (529 )  (529 )  (529 ) (529 )
  Total stockholders' equity  70,094    69,266    67,475    65,586   67,616  
  Total liabilities and stockholders' equity $632,628   $615,708   $597,089   $571,233  $531,744  
                   
                   
CIB MARINE BANCSHARES, INC.
Consolidated Statements of Operations (Unaudited)
                     
  At or for the
  Quarters Ended  Nine Months Ended
  September 30,  June 30,  March 31,  December 31,  September 30,  September 30,  September 30,
  2016  2016  2016  2015  2015  2016  2015
  (Dollars in thousands)
                                 
Interest Income                                
Loans $4,540   $4,635  $4,572  $4,248   $4,044   $13,747  $11,724  
Loans held for sale  153    95   83   77    58    331   264  
Securities  513    478   517   546    553    1,508   1,660  
Other investments  80    6   4   3    2    90   8  
 Total interest income  5,286    5,214   5,176   4,874    4,657    15,676   13,656  
                                 
Interest Expense                                
Deposits  659    692   705   640    583    2,056   1,687  
Short-term borrowings  81    37   30   14    12    148   36  
 Total interest expense  740    729   735   654    595    2,204   1,723  
 Net interest income  4,546    4,485   4,441   4,220    4,062    13,472   11,933  
Provision for (reversal of) loan losses  69    118   61   215    (337 )  248   (154 )
 Net interest income after provision for (reversal of) loan losses  4,477    4,367   4,380   4,005    4,399    13,224   12,087  
                                 
Noninterest Income                                
Deposit service charges  125    121   103   113    119    349   337  
Other service fees  47    52   67   60    73    166   176  
Mortgage Banking revenue, net  2,285    2,102   1,336   545    805    5,723   3,179  
Other income  206    96   117   104    102    419   340  
Net gains on sale of securities  0    0   0   0    0    0   13  
Net gains (losses) on sale of assets and (writedowns)  (12 )  417   430   (230 )  (77 )  835   (211 )
 Total noninterest income  2,651    2,788   2,053   592    1,022    7,492   3,834  
                                 
Noninterest Expense                                
Compensation and employee benefits  4,426    4,143   3,624   3,419    3,195    12,193   10,096  
Equipment  277    293   273   277    262    843   791  
Occupancy and premises  377    389   435   396    404    1,201   1,180  
Data Processing  185    151   154   158    173    490   463  
Federal deposit insurance  105    106   106   104    110    317   321  
Professional services  157    213   249   228    277    619   714  
Telephone and data communication  92    99   109   113    86    300   298  
Insurance  60    56   54   53    55    170   168  
Other expense  541    501   477   638    552    1,519   1,700  
 Total noninterest expense  6,220    5,951   5,481   5,386    5,114    17,652   15,731  
Income (loss) from operations before income taxes  908    1,204   952   (789 )  307    3,064   190  
Income tax expense  40    15   0   6    0    55   0  
 Net income (loss)  868    1,189   952   (795 )  307    3,009   190  
Preferred stock dividend  0    0   0   0    0    0   0  
 Net income (loss) allocated to common stockholders $868   $1,189  $952  $(795 ) $307   $3,009  $190  

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