CIB Marine Bancshares, Inc. Announces 2018 Third Quarter Results

BROOKFIELD, Wis., Oct. 11, 2018 — 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 third quarter of 2018.  Pre-tax net income for the quarter was $1.2 million, the same as the third quarter in 2017, and for the nine months ending September 30, 2018, it was $3.3 million compared to $3.1 million for the same period in 2018.

A summary of financial results for the quarter and nine months ended September 30, 2018, is attached.  Selected highlights include:

  • Pre-tax net income for subsidiary CIBM Bank was $1.7 million for the quarter compared to $1.3 million for the same period in 2017, and $4.2 million for the nine months ending September 30, 2018, compared to $3.6 million for the same period in 2017.  The Company saw improved business activity across all of our major lines of business.
  • The net interest margin was reported at 3.10% for the nine months ending September 30, 2018, compared to 3.06% for the same period in 2017.  Net interest income was up $0.5 million year to date compared to the same period of 2017, due to higher average earning asset balances and a higher net interest margin.  The 2.97% net interest margin for the quarter ended September 30, 2018, was 10 basis points lower than in the same period of 2017 due primarily to a $22 million increase in average balances of reverse repurchase agreements, which added net interest income but lowered the net interest margin due to its lower spread.
  • Non-interest income improved $1.1 million for the nine months ending September 30, 2018, compared to the same period in 2017, largely reflecting higher gains on the sale of SBA loans and net mortgage banking revenues. 
  • Non-interest expenses were higher by $1.9 million for the nine months ending September 30, 2018, compared to the same period in 2017, due primarily to higher compensation and professional fees.  The latter is due mostly to expenses related to the amendment to the Articles of Incorporation that occurred earlier this year and activities associated with the repurchase of preferred shares by the Company. 
  • Non-performing assets to total assets was 1.11% at September 30, 2018, compared to 1.13% at December 31, 2017, and 1.49% at September 30,  2017, reflecting lower non-accrual loans and other real estate owned.
  • Book and tangible book value per share of common stock improved to $2.34 and $2.71, respectively, for September 30, 2018, compared to $2.04 and $2.53 at December 31, 2017. 
  • During 2018, the carry value of preferred stock has declined $11.6 million due to repurchases of preferred stock resulting in $1.8 million being transferred to additional paid in capital through September 30, 2018.  Whereas most of the repurchase transactions have cash settled, a liability has been established for those not yet settled but expect to be in the future. 

J. Brian Chaffin, CIB Marine’s President and CEO, commented, “The third quarter results reflect improvements in all of our major business areas.  We had a strong production quarter for our commercial loan portfolio with outstanding balances rising $19 million over the last 3 months, and our SBA and residential loan production are both up year to date and had solid third quarters.” 

Mr. Chaffin added, “Although rising interest rates and the related increased business activity in the economy have been welcome, it has created other kinds of challenges – as banking industry loan growth has increased the competition for new deposits coupled with higher short term interest rates has caused funding costs to rise.  At the same time, asset quality ratios continue to reflect a strong economy with low unemployment and generally higher asset prices in real estate and equity.  Coupled with a solid loan loss reserve at 1.62%, we have had lower provisions to loan loss reserves year to date.  We are also happy to report that after September 30, 2018, the company received a $1.0 million recovery on a loan that was charged-off more than five years ago.  This event is not reflected in the results for the third quarter and will be reported in our fourth quarter financial results.”

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CIB Marine Bancshares, Inc. owns and operates CIBM Bank, an Illinois chartered commercial bank, headquartered in Champaign, Illinois, which operates as “Marine Bank” in its Indiana and Wisconsin markets; “Central Illinois Bank” in its central Illinois market; and “Avenue Bank” in its Chicagoland market.  The Avenue Mortgage Division of the bank, headquartered in Naperville, Illinois, serves all CIBM Bank markets.  CIBM Bank operates eleven banking branches and nine mortgage lending offices. 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 [email protected]  

 
CIB MARINE BANCSHARES, INC.
Selected Unaudited Consolidated Financial Data
         
 At or for the 
 Quarters Ended 9 Months Ended
 September 30,June 30,March 31,December 31,September 30, September 30,September 30,
  2018  2018  2018  2017  2017   2018  2017 
 (Dollars in thousands, except share and per share data)
Selected Statement of Operations Data        
Interest and dividend income$  6,798 $  6,387 $  6,009 $  6,177 $  6,056  $  19,194 $  17,350 
Interest expense 1,767  1,406  1,185  1,121  1,140   4,358  3,005 
Net interest income 5,031  4,981  4,824  5,056  4,916   14,836  14,345 
Provision for (reversal of) loan losses (13) 149  (126) (218) 149   10  424 
Net interest income after provision for        
(reversal of) loan losses 5,044  4,832  4,950  5,274  4,767   14,826  13,921 
Noninterest income (1) 3,063  2,968  1,832  2,015  2,257   7,863  6,715 
Noninterest expense 6,871  6,737  5,824  6,070  5,865   19,432  17,545 
Income before income taxes 1,236  1,063  958  1,219  1,159   3,257  3,091 
Income tax expense (benefit) 345  241  289  (22,689) 25   875  45 
Net income $  891 $  822 $  669 $  23,908 $  1,134 #$  2,382 $  3,046 
         
Common Share Data        
Basic net income per share (2)$  0.14 $  0.05 $  0.04 $  1.32 $  0.06  $  0.23 $  0.17 
Diluted net income per share (2) 0.07  0.02  0.02  0.65  0.03   0.12  0.08 
Tangible book value per share (3) 2.71  2.58  2.54  2.53  1.23   2.71  1.23 
Book value per share (3) 2.34  2.10  2.06  2.04  0.75   2.34  0.75 
Financial Condition Data        
Total assets$  723,733 $  694,812 $  663,580 $  662,394 $  640,340  $  723,733 $  640,340 
Loans 507,677  488,762  472,746  483,611  490,089   507,677  490,089 
Allowance for loan losses (8,217) (8,055) (7,331) (7,701) (7,905)  (8,217) (7,905)
Investment securities 118,345  119,571  115,596  114,801  112,670   118,345  112,670 
Deposits 523,729  517,452  484,258  478,633  479,285   523,729  479,285 
Borrowings 104,357  76,427  79,227  84,217  84,903   104,357  84,903 
Stockholders’ equity 88,993  97,313  97,407  97,066  73,556   88,993  73,556 
Financial Ratios and Other Data        
Performance Ratios:        
Net interest margin (4) 2.97% 3.15% 3.20% 3.25% 3.07%  3.10% 3.06%
Net interest spread (5) 2.72% 2.92% 3.00% 3.05% 2.88%  2.87% 2.89%
Noninterest income to average assets (6) 1.72% 1.77% 1.15% 1.26% 1.37%  1.56% 1.39%
Noninterest expense to average assets 3.82% 3.99% 3.63% 3.79% 3.55%  3.82% 3.64%
Efficiency ratio (7) 84.63% 84.56% 87.28% 85.84% 81.76%  85.38% 83.31%
Earnings on average assets (8) 0.50% 0.49% 0.42% 14.93% 0.69%  0.47% 0.63%
Earnings on average equity (9) 3.77% 3.36% 2.78% 124.19% 6.11%  3.30% 5.65%
Asset Quality Ratios:        
Nonaccrual loans to loans (10) 0.73% 0.53% 0.19% 0.69% 0.99%  0.73% 0.99%
Nonaccrual loans, restructured loans and         
 loans 90 days or more past due and still        
 accruing to total loans (10) 1.09% 0.82% 0.53% 1.02% 1.30%  1.09% 1.30%
Nonperforming assets, restructured loans         
and loans 90 days or more past due and still        
accruing to total assets (10) 1.11% 0.94% 0.85% 1.13% 1.49%  1.11% 1.49%
Allowance for loan losses to total loans 1.62% 1.65% 1.55% 1.59% 1.61%  1.62% 1.61%
Allowance for loan losses to nonaccrual loans,         
restructured loans and loans 90 days or         
more past due and still accruing (10) 148.99% 200.97% 294.77% 156.68% 124.21%  148.99% 124.21%
Net charge-offs (recoveries) annualized         
to average loans -0.14% -0.48% 0.21% -0.01% -0.08%  -0.14% -0.08%
Capital Ratios:        
Total equity to total assets 12.30% 14.01% 14.68% 14.65% 11.49%  12.30% 11.49%
Total risk-based capital ratio 14.39% 16.40% 16.90% 16.62% 16.05%  14.39% 16.05%
Tier 1 risk-based capital ratio 13.14% 15.14% 15.64% 15.36% 14.80%  13.14% 14.80%
Leverage capital ratio 9.87% 11.70% 12.15% 12.39% 11.41%  9.87% 11.41%
Other Data:        
Number of employees (full-time equivalent) 188  184  184  183  179   188  179 
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.  This difference was $1.8 million and $1.7 million for the nine months and three month periods ending September 30, 2018.
(3) 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. 
(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 common equity.
(10) Excludes loans held for sale.

 

CIB MARINE BANCSHARES, INC.
Summary Consolidated Balance Sheets (Unaudited)
       
 September 30, June 30, March 31, December 31,September 30,    
  2018  2018 2018  2017  2017   
 (Dollars in thousands)   
Assets        
Cash and due from banks$  10,055 $  9,752$  10,829 $  14,371 $  9,569   
Reverse repurchase agreements   45,076    28,403   23,032    5,449    10,289   
Securities available for sale   118,345    119,571   115,596    114,801    112,670   
Loans Held for Sale   8,145    15,407   6,689    11,070    7,164   
Loans   499,460    480,707   465,415    475,910    482,184   
All other assets   42,652    40,972   42,019    40,793    18,464   
Total Assets$  723,733 $  694,812$  663,580 $  662,394 $  640,340   
         
Liabilities and Stockholders’ Equity         
Deposits$  523,729 $  517,452$  484,258 $  478,633 $  479,285   
Short-term borrowings   104,357    76,427   79,227    84,217    84,903   
All other liabilities   6,654    3,620   2,688    2,478    2,596   
Total liabilities   634,740    597,499   566,173    565,328    566,784   
         
Stockholders’ Equity         
Total stockholders’ equity   88,993    97,313   97,407    97,066    73,556   
Total liabilities and stockholders’ equity $  723,733 $  694,812$  663,580 $  662,394 $  640,340   
         
 
CIB MARINE BANCSHARES, INC.
Summary Consolidated Statements of Operations (Unaudited)
         
 At or for the 
 Quarters Ended 9 Months Ended
 September 30,June 30,March 31,December 31,September 30, September 30,September 30,
  2018  2018 2018  2017  2017  2018 2017
 (Dollars in thousands)
Interest Income$  6,798 $  6,387$  6,009 $  6,177 $  6,056 $  19,194$  17,350
Interest Expense 1,767  1,406 1,185  1,121  1,140  4,358 3,005
Net interest income 5,031  4,981 4,824  5,056  4,916  14,836 14,345
Provision for (reversal of) loan losses (13) 149 (126) (218) 149  10 424
Net interest income after provision for         
(reversal of) loan losses 5,044  4,832 4,950  5,274  4,767  14,826 13,921
Noninterest Income 3,063  2,968 1,832  2,015  2,257  7,863 6,715
Compensation and employee benefits 4,514  4,682 4,056  4,015  4,099  13,252 12,137
Occupancy and premises 729  759 728  722  706  2,216 2,086
Other expenses 1,628  1,296 1,040  1,333  1,060  3,964 3,322
Total noninterest expense 6,871  6,737 5,824  6,070  5,865  19,432 17,545
Income from operations         
before income taxes 1,236  1,063 958  1,219  1,159  3,257 3,091
Income tax expense (benefit) 345  241 289  (22,689) 25  875 45
Net income  891  822 669  23,908  1,134  2,382 3,046
Preferred stock dividend 0  0 0  0  0  0 0
Net income allocated to        
 common stockholders$  891 $  822$  669 $  23,908 $  1,134 $  2,382$  3,046
         

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