SOURCE: CIB Marine Bancshares, Inc.

CIB Marine Bancshares, Inc.

July 12, 2017 17:00 ET

CIB Marine Bancshares, Inc. Announces 2017 Second Quarter Results

WAUKESHA, WI--(Marketwired - July 12, 2017) - CIB Marine Bancshares, Inc. (the "Company" or "CIBM") (OTCQB: CIBH), the holding company of CIBM Bank (the "Bank"), today announces its results of operations and financial condition for the second quarter of 2017. Net income for the quarter was $1.0 million, or $0.06 basic earnings per share and $0.03 diluted earnings per share, and for the six months ending June 30, 2017, $1.9 million, or $0.11 basic and $0.05 diluted earnings per share.

A summary of financial results for the quarter is attached. Select highlights include:

  • Return on average assets was 0.65% for the quarter and 0.60% for the six months ending June 30, 2017, compared to 0.80% and 0.73% for the same periods in 2016.
  • Book and tangible book value per share of common stock are reported at $0.68 and $1.16, respectively, for June 30, 2017, compared to $0.51 and $0.99 from one year prior.
  • Net income for subsidiary CIBM Bank was $1.2 million for the quarter and $2.3 million for the six month period ending June 30, 2017, compared to net income of $1.4 million and $2.1 million for the same periods of 2016; reflecting stronger year to date results.
  • Net interest income of $4.8 million for the quarter is an increase of $0.3 million from the same quarter of 2016, and net interest income of $9.4 million for the six months ending June 30, 2017, is an increase of $0.5 million from the same period of 2016. The growth primarily reflects higher earning asset balances.
  • Noninterest income of $2.6 million for the quarter is a decrease of $0.2 million from the same quarter of 2016 and noninterest income of $4.5 million for the six months ending June 30, 2017, is a decrease of $0.4 million from the same period of 2016. The results reflect lower net mortgage banking revenue this year due to reduced refinancing activity and the prior year's net gain on sale of assets and write-downs related to collection activities which was $0.8 million in the 2016 year to date period.
  • During the first six months of 2017, gains on sale of SBA loans have been $0.7 million compared to $0.1 million in the same period of 2016.
  • Non-performing assets to total assets reported at 2.10% at June 30, 2017, compared to 1.67% at December 31, 2016, reflecting higher other real estate owned related to one relationship offset in part by lower non-accrual loans.
  • Non-accrual loans to total loans reported at 0.99% at June 30, 2017, compared to 1.26% at December 31, 2016, as a result of the collection of a larger construction and development loan.

J. Brian Chaffin, CIB Marine's President and CEO, commented, "CIB Marine's second quarter improvement over the first quarter of 2017 reflects the higher level of earning assets and improved quality of our non-interest income with more coming from our core business activities as opposed to collection activities. Thirteen of the last fourteen quarters have been profitable at CIBM Bank, and this marks the sixth consecutive quarter of profits. Although loan growth has slowed this year so far, our net interest margin has improved from 2.84% as reported in the fourth quarter of 2016 to 3.09% in the second quarter of 2017. Our balance sheet repricing structure, including interest rate swaps hedging certain fixed rate commercial real estate loans, has responded well to the three Fed rate hikes between December of last year and June of this year."

Mr. Chaffin added, "Improved gains on sale of SBA loans are a continued sign of progress in the development of our new Government Guaranteed Lending Division. At Avenue Mortgage, loan volumes have picked up from the first quarter but still lag behind last year due to the market slow-down in refinancing activity caused by higher interest rates. However, home purchase loans have picked up recently and our new lenders in central Illinois are gaining some traction."

Mr. Chaffin concluded, "We are very proud of the level of commercial lending we do within our communities to support local job creation and retention, as well as our growth in mortgage lending which supports local home ownership and property maintenance. Over the last several years, we have consistently been in the top quartile among peer banks in the loan to deposit ratio and our loan growth has exceeded the median peer level. Improved financial results have allowed us to make significant investments in the form of securities purchased that support affordable housing and small businesses, as well as provide both financial and professional service support for a variety of non-profit community service organizations within our markets. Community lending is an area of focus for our organization. It presents certain challenges in the current market environment, but we have committed substantial resources to continue growing and improving this area of the bank in order to meet the needs of our communities."

CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates 11 banking offices in Illinois, Wisconsin, and Indiana and 4 separate 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.

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 period ended June 30, 2017 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   Six Months Ended  
   June 30,  March 31,  December 31,  September 30,  June 30,   June 30,  June 30,  
   2017  2017  2016  2016  2016   2017  2016  
   (Dollars in thousands, except share and per share data)  
Selected Statement of Operations Data                               
Interest and dividend income  $5,732  $5,562  $5,273  $5,286  $5,214   $11,294  $10,390  
Interest expense   973   892   793   740   729    1,865   1,464  
 Net interest income   4,759   4,670   4,480   4,546   4,485    9,429   8,926  
Provision for (reversal of) loan losses   47   228   (796 ) 69   118    275   179  
 Net interest income after provision for (reversal of) loan losses   
4,712
  
4,442
  
5,276
  
4,477
  
4,367
   
9,154
  
8,747
 
Noninterest income (1)   2,611   1,847   1,908   2,651   2,788    4,458   4,841  
Noninterest expense   6,279   5,401   6,127   6,220   5,951    11,680   11,432  
 Income before income taxes   1,044   888   1,057   908   1,204    1,932   2,156  
Income tax expense   20   0   (5 ) 40   15    20   15  
 Net income  $1,024  $888  $1,062  $868  $1,189   $1,912  $2,141  
                                
Common Share Data                               
 Basic net income (loss) per share  $0.06  $0.05  $0.06  $0.05  $0.07   $0.11  $0.12  
 Diluted net income (loss) per share   0.03   0.02   0.03   0.02   0.03    0.05   0.06  
 Dividend   0   0   0   0   0    0   0  
 Tangible book value per share (2)   1.16   1.08   1.01   1.04   0.99    1.16   0.99  
 Book value per share (2)   0.68   0.60   0.53   0.56   0.51    0.68   0.51  
 Weighted average shares outstanding - basic   18,153,029   18,127,892   18,127,892   18,127,892   18,127,892    18,140,530   18,127,892  
 Weighted average shares outstanding - diluted   36,516,207   36,193,353   36,082,522   35,818,022   35,631,892    36,355,672   35,631,892  
Financial Condition Data                               
 Total assets  $650,051  $631,160  $653,559  $632,628  $615,708   $650,051  $615,708  
 Loans   488,289   483,501   483,518   466,057   461,859    488,289   461,859  
 Allowance for loan losses   (7,653 ) (7,567 ) (7,592 ) (8,549 ) (8,219 )  (7,653 ) (8,219 )
 Investment securities   111,160   111,745   112,072   103,853   103,542    111,160   103,542  
 Deposits   493,364   497,144   483,097   476,428   468,377    493,364   468,377  
 Borrowings   82,025   60,837   96,944   81,636   72,833    82,025   72,833  
 Stockholders' equity   72,279   70,819   69,523   70,094   69,266    72,279   69,266  
Financial Ratios and Other Data                               
 Performance Ratios:                               
  Net interest margin (3)   3.09 % 3.02 % 2.84 % 2.95 % 3.11 %  3.06 % 3.13 %
  Net interest spread (4)   2.92 % 2.87 % 2.70 % 2.80 % 2.96 %  2.89 % 2.98 %
  Noninterest income to average assets (5)   1.65 % 1.16 % 1.18 % 1.68 % 1.88 %  1.40 % 1.65 %
  Noninterest expense to average assets   3.96 % 3.40 % 3.79 % 3.93 % 4.02 %  3.68 % 3.90 %
  Efficiency ratio (6)   85.20 % 82.88 % 95.91 % 86.42 % 81.82 %  84.11 % 83.04 %
  Earnings (loss) on average assets (7)   0.65 % 0.56 % 0.66 % 0.55 % 0.80 %  0.60 % 0.73 %
  Earnings (loss) on average equity (8)   5.71 % 5.10 % 5.93 % 4.89 % 6.98 %  5.41 % 6.37 %
Asset Quality Ratios:                               
 Nonaccrual loans to loans (9)   0.99 % 1.32 % 1.26 % 1.16 % 0.81 %  0.99 % 0.81 %
 Nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing to total loans (9)   

2.15
% 

1.65
% 

1.60
% 

1.58
% 

1.63
%  

2.15
% 

1.63
%
 Nonperforming assets, restructured loans and loans 90 days or more past due and still accruing to total assets (9)   

2.10
% 

1.77
% 

1.67
% 

1.32
% 

1.59
%  

2.10
% 

1.59
%
 Allowance for loan losses to total loans   1.57 % 1.57 % 1.57 % 1.83 % 1.78 %  1.57 % 1.78 %
 Allowance for loan losses to nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing (9)   

72.81
% 

94.67
% 

97.99
% 

116.08
% 

109.14
%  

72.81
% 

109.14
%
 Net charge-offs (recoveries) annualized to average loans   -0.03 % 0.21 % 0.14 % -0.22 % 0.12 %  0.09 % 0.01 %
Capital Ratios:                               
 Total equity to total assets   11.12 % 11.02 % 10.64 % 11.08 % 11.25 %  11.12 % 11.25 %
 Total risk-based capital ratio   15.92 % 15.90 % 15.40 % 15.66 % 15.60 %  15.92 % 15.60 %
 Tier 1 risk-based capital ratio   14.66 % 14.65 % 14.15 % 14.41 % 14.34 %  14.66 % 14.34 %
 Leverage capital ratio   11.56 % 11.21 % 11.14 % 11.20 % 11.69 %  11.56 % 11.69 %
Other Data:                               
 Number of employees (full-time equivalent)   181   181   171   169   167    181   167  
 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,  
   2017  2017  2016  2016  2016  
   (Dollars in thousands, except share data)  
Assets                      
Cash and due from banks  $10,462  $12,773  $10,291  $11,427  $9,808  
Reverse repurchase agreements   20,440   11,019   24,275   27,560   20,313  
Securities available for sale   111,160   111,745   112,072   103,853   103,542  
Loans held for sale   9,166   2,448   11,469   15,875   11,602  
                       
Loans   488,289   483,501   483,518   466,057   461,859  
Allowance for loan losses   (7,653 ) (7,567 ) (7,592 ) (8,549 ) (8,219 )
 Net loans   480,636   475,934   475,926   457,508   453,640  
                       
Federal Home Loan Bank Stock   2,948   2,070   3,803   3,803   2,170  
Premises and equipment, net   4,309   4,369   4,427   4,256   4,358  
Accrued interest receivable   1,386   1,377   1,382   1,289   1,290  
Other real estate owned, net   3,153   3,153   3,159   982   2,283  
Bank owned life insurance   4,441   4,414   4,389   4,363   4,336  
Goodwill and other intangible assets   209   215   221   226   232  
Other assets   1,741   1,643   2,145   1,486   2,134  
  Total Assets  $650,051  $631,160  $653,559  $632,628  $615,708  
                       
Liabilities and Stockholders' Equity                      
Deposits:                      
 Noninterest-bearing demand  $79,888  $76,088  $77,154  $87,216  $82,460  
 Interest-bearing demand   31,961   33,027   33,832   29,821   31,508  
 Savings   183,608   192,175   176,435   169,390   175,955  
 Time   197,907   195,854   195,676   190,001   178,454  
  Total deposits   493,364   497,144   483,097   476,428   468,377  
Short-term borrowings   82,025   60,837   96,944   81,636   72,833  
Accrued interest payable   358   327   349   319   335  
Other liabilities   2,025   2,033   3,646   4,151   4,897  
  Total liabilities   577,772   560,341   584,036   562,534   546,442  
                       
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; 18,383,891 issued shares; 18,172,844 outstanding shares   
18,384
  
18,346
  
18,346
  
18,346
  
18,346
 
Capital surplus   158,640   158,602   158,552   158,510   158,493  
Accumulated deficit   (153,605 ) (154,629 ) (155,517 ) (156,579 ) (157,446 )
Accumulated other comprehensive loss, net   (1,611 ) (1,971 ) (2,329 ) (654 ) (598 )
Treasury stock 218,499 shares at cost   (529 ) (529 ) (529 ) (529 ) (529 )
  Total stockholders' equity   72,279   70,819   69,523   70,094   69,266  
  Total liabilities and stockholders' equity  $650,051  $631,160  $653,559  $632,628  $615,708  
 
 
 
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,
   2017  2017  2016   2016   2016  2017  2016
   (Dollars in thousands)
                               
Interest Income                              
Loans  $4,997  $4,826  $4,493   $4,540   $4,635  $9,823  $9,207
Loans held for sale   79   46   141    153    95   125   178
Securities   598   611   563    513    478   1,209   995
Other investments   58   79   76    80    6   137   10
 Total interest income   5,732   5,562   5,273    5,286    5,214   11,294   10,390
                               
Interest Expense                              
Deposits   817   749   697    659    692   1,566   1,397
Short-term borrowings   156   143   96    81    37   299   67
 Total interest expense   973   892   793    740    729   1,865   1,464
 Net interest income   4,759   4,670   4,480    4,546    4,485   9,429   8,926
Provision for (reversal of) loan losses   47   228   (796 )  69    118   275   179
 Net interest income after provision for (reversal of) loan losses   4,712   4,442   5,276    4,477    4,367   9,154   8,747
                               
Noninterest Income                              
Deposit service charges   129   113   121    125    121   242   224
Other service fees   54   46   45    47    52   100   119
Mortgage Banking revenue, net   2,027   1,142   1,414    2,285    2,102   3,169   3,438
Other income   127   97   136    206    96   224   213
Net gains on sale of securities   0   0   0    0    0   0   0
Net gains (losses) on sale of assets and (writedowns)   274   449   192    (12 )  417   723   847
 Total noninterest income   2,611   1,847   1,908    2,651    2,788   4,458   4,841
                               
Noninterest Expense                              
Compensation and employee benefits   4,333   3,705   4,228    4,426    4,143   8,038   7,767
Equipment   319   290   305    277    293   609   566
Occupancy and premises   381   390   390    377    389   771   824
Data Processing   136   140   123    185    151   276   305
Federal deposit insurance   81   87   92    105    106   168   212
Professional services   130   200   156    157    213   330   462
Telephone and data communication   88   81   90    92    99   169   208
Insurance   96   59   60    60    56   155   110
Other expense   715   449   683    541    501   1,164   978
 Total noninterest expense   6,279   5,401   6,127    6,220    5,951   11,680   11,432
Income from operations                              
before income taxes   1,044   888   1,057    908    1,204   1,932   2,156
Income tax expense   20   0   (5 )  40    15   20   15
 Net income   1,024   888   1,062    868    1,189   1,912   2,141
Preferred stock dividend   0   0   0    0    0   0   0
  Net income allocated to common stockholders  $1,024  $888  $1,062   $868   $1,189  $1,912  $2,141
                          
                          

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