BROOKFIELD, Wis., July 16, 2020 (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 2020.  Net income for the quarter was $1.7 million compared to $0.8 million for the same period in 2019 and, for the six months ending June 30, 2020, it was $2.5 million compared to $1.4 million for the same period in 2019.

A summary of financial results for the quarter and six months ended June 30, 2020, is attached.  Select highlights include:

  • Net income and income before taxes for the quarter and six months ended June 30th were the strongest in more than five years, excluding the deferred tax valuation adjustment made in the fourth quarter of 2017.
  • CIBM Bank’s mortgage banking division was a significant contributor to improved earnings results.  For the six months ended June 30th, net mortgage banking revenues were $6.2 million, nearly double the same period of the prior year.  Lower interest rates have fueled a surge in rate-refinance loan originations, as well as strong new home purchase activity, resulting in over $200 million in loan originations the first half of the year.   
  • Net interest income was up $0.6 million for the first six months of 2020, compared to the same period in 2019.  The primary reasons for improvement were higher average balances in loans held for sale and Paycheck Protection Program (PPP) loans, and a 54 basis point reduction in the cost of interest bearing liabilities primarily due to repricing maturing time deposits and money market rate promotions and short-term borrowings in a lower rate environment. 
  • COVID-19 has impacted the Company in many direct and indirect ways.  During the second quarter of 2020, CIBM Bank originated around 350 loans or $43 million in government guaranteed PPP loans.  In addition, COVID-19 loan payment deferrals reached 87 loans, or around $75 million in total outstanding balances.
  • Provisions for loan losses were up $0.7 million during the six months ended June 30, 2020, versus the same period in 2019.  The primary reason for the increase is environmental and qualitative factors related to the impact COVID-19 has had on the current economic conditions, including the sharp decline in GDP and rapid rise in unemployed persons.  A significant number of government programs are acting to support businesses and household income so that the amount of problem loans has remained relatively low to date. 
  • Non-performing assets, restructured loans, and loans 90 days or more past due and still accruing to total assets and nonaccrual loans to total loans were 1.02% and 0.92%, respectively, at March June 30, 2020, down from 1.35% and 1.09%, respectively, at December 31, 2019, and 1.40% and 1.12%, respectively, at June 30, 2020.  The improvements during the first six months of 2020 were related to certain loan level improvements, although credit quality is expected to deteriorate in the foreseeable future due to the economic impact of COVID-19.

Mr. J. Brian Chaffin, President and CEO of CIBM, commented, “The Company has spent a significant amount of time addressing COVID-19 related issues – from managing the branches for the safety of our staff and customers, to adjusting to having more than 70% of employees work from home, to working with our clients to meet their banking needs in these challenging times.  The situation has forced us to adapt and make or advance plans for improvements in both our products and delivery systems, and in our operations areas.  Investors can be proud of the dedication and commitment CIBM Bank employees have exhibited through this period.

“Although income for the first half of the year was much improved over the same period of 2019, we remain committed to improving our longer term operating results using the process we call ‘Project Falcon’, which includes plans to improve our deposit mix, enhance efficiencies, and excel at our core services.”  

Mr. Chaffin continued, “A Fifth Amendment to the Company’s Articles of Incorporation, which would make permanent the changes that permit the Company to engage in negotiated voluntary repurchases of its Preferred Stock, was approved by our Common Shareholders in April and has now been presented to the Preferred Shareholders for their approval at a Special Meeting of Preferred Shareholders to be held on August 5, 2020.  We will provide the results of that vote on our website following the meeting.”

He concluded, “As discussed in our June 17, 2020, press release, we have completed the third and final modified Dutch auction pursuant to the Second Amendment of our Articles of Incorporation that resulted in the repurchase of 214 shares of preferred stock for a total price of approximately $148,000 representing a $33,000 discount to the carry value of the preferred shares repurchased.  We will be providing a more detailed analysis in our upcoming quarterly shareholder letter.” 

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.

   
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,  
    2020     2020     2019     2019     2019       2020     2019    
  (Dollars in thousands, except share and per share data)  
Selected Statement of Operations Data                  
Interest and dividend income $ 6,669   $ 6,636   $ 6,820   $ 7,035   $ 7,078     $ 13,305   $ 14,093    
Interest expense   1,343     1,689     2,030     2,183     2,256       3,032     4,434    
Net interest income   5,326     4,947     4,790     4,852     4,822       10,273     9,659    
Provision for (reversal of) loan losses   249     202     715     327     (67 )     451     (225 )  
Net interest income after provision for (reversal of) loan losses   5,077     4,745     4,075     4,525     4,889       9,822     9,884    
Noninterest income (1)   4,489     2,642     2,249     3,835     2,710       7,131     4,072    
Noninterest expense   7,308     6,322     6,879     7,233     6,557       13,630     12,062    
Income (loss) before income taxes   2,258     1,065     (555 )   1,127     1,042       3,323     1,894    
Income tax expense (benefit)   575     281     (180 )   93     281       856     510    
Net income (loss) $ 1,683   $ 784   $ (375 ) $ 1,034   $ 761       $ 2,467   $ 1,384    
                   
Common Share Data                  
Basic net income (loss) per share (2) $ 0.09   $ 0.04   $ (0.02 ) $ 0.07   $ 0.04     $ 0.13   $ 0.08    
Diluted net income (loss) per share (2)   0.05     0.02     (0.02 )   0.04     0.02       0.08     0.04    
Dividend   0.00     0.00     0.00     0.00     0.00       0.00     0.00    
Tangible book value per share (3)   3.15     3.07     2.99     3.03     2.97       3.15     2.97    
Book value per share (3)   2.80     2.73     2.64     2.68     2.60       2.80     2.60    
Weighted average shares outstanding – basic   18,992,550     18,724,047     18,646,427     18,455,408     18,290,674       18,858,299     18,261,584    
Weighted average shares outstanding – diluted   32,402,984     32,329,698     32,329,533     32,536,354     33,083,324       32,330,877     32,950,273    
Financial Condition Data                  
Total assets $ 793,151   $ 705,473   $ 703,791   $ 700,711   $ 708,270     $ 793,151   $ 708,270    
Loans   535,692     513,992     513,705     508,758     513,755       535,692     513,755    
Allowance for loan losses   (8,483 )   (8,107 )   (8,007 )   (7,560 )   (7,251 )     (8,483 )   (7,251 )  
Investment securities   113,303     120,105     120,398     120,648     124,784       113,303     124,784    
Deposits   566,811     531,999     530,190     557,745     535,367       566,811     535,367    
Borrowings   120,233     68,950     73,847     38,468     69,174       120,233     69,174    
Stockholders’ equity   97,347     95,841     93,404     94,082     94,035       97,347     94,035    
Financial Ratios and Other Data                  
Performance Ratios:                  
Net interest margin (4)   2.96 %   3.04 %   2.86 %   2.95 %   2.89 %     3.00 %   2.91 %  
Net interest spread (5)   2.76 %   2.78 %   2.55 %   2.62 %   2.58 %     2.77 %   2.61 %  
Noninterest income to average assets (6)   2.36 %   1.51 %   1.28 %   2.19 %   1.52 %     1.95 %   1.14 %  
Noninterest expense to average assets   3.86 %   3.67 %   3.88 %   4.14 %   3.72 %     3.77 %   3.43 %  
Efficiency ratio (7)   74.61 %   83.74 %   97.57 %   83.44 %   87.45 %     78.58 %   88.26 %  
Earnings on average assets (8)   0.89 %   0.45 %   -0.21 %   0.59 %   0.43 %     0.68 %   0.39 %  
Earnings on average equity (9)   6.97 %   3.32 %   -1.56 %   4.35 %   3.28 %     5.17 %   3.02 %  
Asset Quality Ratios:                  
Nonaccrual loans to loans (10)   0.92 %   0.97 %   1.09 %   1.14 %   1.12 %     0.92 %   1.12 %  
Nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing to total loans (10)   1.07 %   1.25 %   1.38 %   1.44 %   1.45 %     1.07 %   1.45 %  
Nonperforming assets, restructured loans and loans 90 days or more past due and still accruing to total assets (10)   1.02 %   1.24 %   1.35 %   1.40 %   1.40 %     1.02 %   1.40 %  
Allowance for loan losses to total loans (10)   1.58 %   1.58 %   1.56 %   1.49 %   1.41 %     1.58 %   1.41 %  
Allowance for loan losses to nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing (10)   147.79 %   126.26 %   112.66 %   103.07 %   97.34 %     147.79 %   97.34 %  
Net charge-offs (recoveries) annualized to average loans (10)   -0.09 %   0.08 %   0.21 %   0.01 %   0.44 %     -0.01 %   0.19 %  
Capital Ratios:                  
Total equity to total assets   12.27 %   13.59 %   13.27 %   13.43 %   13.28 %     12.27 %   13.28 %  
Total risk-based capital ratio   15.49 %   15.36 %   15.19 %   15.18 %   15.32 %     15.49 %   15.32 %  
Tier 1 risk-based capital ratio   14.23 %   14.11 %   13.94 %   13.93 %   14.07 %     14.23 %   14.07 %  
Leverage capital ratio   10.82 %   11.08 %   10.71 %   10.86 %   10.64 %     10.82 %   10.64 %  
Other Data:                  
Number of employees (full-time equivalent)   177     177     176     182     180       177     180    
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 of $0.3 million for the third quarter of 2019 and $0.03 million for the 2nd quarter and 6 months ended June 30, 2020.  
(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. Book value measures are reported inclusive of the net deferred tax assets. As presented here, shares of common outstanding excludes unvested Restricted Stock Awards.  
(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,  
    2020     2020     2019     2019     2019    
  (Dollars in Thousands, Except Shares)  
Assets            
Cash and due from banks $ 9,120   $ 9,006   $ 8,970   $ 9,582   $ 8,791    
Reverse repurchase agreements   18,117     3,622     11,196     4,083     18,347    
Securities available for sale   110,818     117,640     117,972     118,211     122,365    
Equity securities at fair value   2,485     2,465     2,426     2,437     2,419    
Loans held for sale   83,997     24,988     16,928     25,347     8,450    
             
Loans   535,692     513,992     513,705     508,758     513,755    
Allowance for loan losses   (8,483 )   (8,107 )   (8,007 )   (7,560 )   (7,251 )  
Net loans   527,209     505,885     505,698     501,198     506,504    
             
Federal Home Loan Bank Stock   2,948     2,947     2,587     926     2,363    
Premises and equipment, net   4,679     4,769     4,274     4,504     4,643    
Accrued interest receivable   1,973     1,610     1,486     1,646     1,820    
Deferred tax assets, net   19,325     19,509     20,069     20,455     20,703    
Other real estate owned, net   2,334     2,335     2,396     2,466     2,466    
Bank owned life insurance   4,745     4,718     4,691     4,666     4,640    
Goodwill and other intangible assets   142     148     154     159     165    
Other assets   5,259     5,831     4,944     5,031     4,594    
Total Assets $ 793,151   $ 705,473   $ 703,791   $ 700,711   $ 708,270    
             
Liabilities and Stockholders’ Equity            
Deposits:            
Noninterest-bearing demand $ 90,450   $ 67,459   $ 70,175   $ 63,694   $ 62,424    
Interest-bearing demand   54,288     47,760     45,512     50,683     32,649    
Savings   205,470     196,797     204,976     202,866     192,133    
Time   216,603     219,983     209,527     240,502     248,161    
Total deposits   566,811     531,999     530,190     557,745     535,367    
Short-term borrowings   77,273     68,950     73,847     38,468     69,174    
Long-term borrowings   42,960     0     0     0     0    
Accrued interest payable   447     543     603     711     725    
Other liabilities   8,313     8,140     5,747     9,705     8,969    
Total liabilities   695,804     609,632     610,387     606,629     614,235    
             
Stockholders’ Equity            
Preferred stock, $1 par value; 5,000,000 authorized shares at both June 30, 2020 and December 31, 2019; 7% fixed rate noncumulative perpetual issued; 40,690 shares of series A and 3,201 shares of series B; convertible; $44.1 million aggregate liquidation preference   37,308     37,490     37,490     37,489     39,384    
Common stock, $1 par value; 75,000,000 authorized shares; 19,239,935 and 18,868,329 issued shares; 19,028,888 and 18,657,282 outstanding shares at June 30, 2020 and December 31, 2019, respectively. (1)                                                                                                                          19,240     19,162     18,868     18,868     18,543    
Capital surplus   161,032     160,990     161,175     161,110     160,991    
Accumulated deficit   (121,285 )   (122,969 )   (123,753 )   (123,377 )   (124,412 )  
Accumulated other comprehensive income, net   1,586     1,702     158     526     63    
Treasury stock 221,902 shares at cost   (534 )   (534 )   (534 )   (534 )   (534 )  
Total stockholders’ equity   97,347     95,841     93,404     94,082     94,035    
Total liabilities and stockholders’ equity $ 793,151   $ 705,473   $ 703,791   $ 700,711   $ 708,270    
             
(1) Both issued and outstanding shares as stated here exclude 435,157 shares and 815,395 shares of unvested restricted stock awards at June 30, 2020, and December 31, 2019, respectively.  
             
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,  
    2020   2020     2019     2019     2019       2020     2019    
  (Dollars in thousands)  
                   
Interest Income                  
Loans $ 5,540 $ 5,703   $ 5,793   $ 5,992   $ 5,811     $ 11,243   $ 11,504    
Loans held for sale   451   119     195     152     97       570     182    
Securities   661   763     764     810     868       1,424     1,672    
Other investments   17   51     68     81     302       68     735    
Total interest income   6,669   6,636     6,820     7,035     7,078       13,305     14,093    
                   
Interest Expense                  
Deposits   1,263   1,512     1,856     2,027     1,949       2,775     3,754    
Short-term borrowings   54   177     174     156     307       231     680    
Long-term borrowings   26   0     0     0     0       26     0    
Total interest expense   1,343   1,689     2,030     2,183     2,256       3,032     4,434    
Net interest income   5,326   4,947     4,790     4,852     4,822       10,273     9,659    
Provision for (reversal of) loan losses   249   202     715     327     (67 )     451     (225 )  
Net interest income after provision for (reversal of) loan losses   5,077   4,745     4,075     4,525     4,889       9,822     9,884    
                   
Noninterest Income                  
Deposit service charges   88   96     98     101     95       184     178    
Other service fees   36   20     23     30     29       56     49    
Mortgage banking revenue, net   3,990   2,177     2,112     2,936     2,148       6,167     3,126    
Other income   266   265     129     150     179       531     344    
Net gains on sale of securities available for sale   0   0     0     0     0       0     0    
Unrealized gains (losses) recognized on equity securities   20   39     (11 )   18     34       59     64    
Net gains on sale of SBA loans   87   437     166     605     253       524     253    
Net gains (losses) on sale of assets and (writedowns)   2   (392 )   (268 )   (5 )   (28 )     (390 )   58    
Total noninterest income   4,489   2,642     2,249     3,835     2,710       7,131     4,072    
                   
Noninterest Expense                  
Compensation and employee benefits   5,451   4,421     4,701     5,309     4,445       9,872     8,132    
Equipment   379   363     394     335     353       742     688    
Occupancy and premises   407   460     460     420     437       867     893    
Data Processing   155   164     157     165     160       319     326    
Federal deposit insurance   47   0     (10 )   (5 )   66       47     148    
Professional services   242   298     320     198     207       540     347    
Telephone and data communication   67   68     81     86     83       135     161    
Insurance   55   54     59     70     52       109     105    
Other expense   505   494     717     655     754       999     1,262    
Total noninterest expense   7,308   6,322     6,879     7,233     6,557       13,630     12,062    
Income (losses) from operations before income taxes   2,258   1,065     (555 )   1,127     1,042       3,323     1,894    
Income tax expense (benefit)   575   281     (180 )   93     281       856     510    
Net income (loss)   1,683   784     (375 )   1,034     761       2,467     1,384    
Preferred stock dividend   0   0     0     0     0       0     0    
Discount from repurchase of preferred stock   33   0     0     308     0       33     0    
                   
Net income (loss) allocated to common stockholders $ 1,716 $ 784   $ (375 ) $ 1,342   $ 761     $ 2,500   $ 1,384    
                   



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