CIB Marine Bancshares, Inc. Announces 2017 Third Q

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Posted On: 10/10/2017 6:00:29 PM

Posted By: News Desk 2018

CIB Marine Bancshares, Inc. Announces 2017 Third Quarter Results

WAUKESHA, Wis., Oct. 10, 2017 (GLOBE NEWSWIRE) -- 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 2017. Net income for the quarter was $1.1 million, or $0.06 basic earnings per share and $0.03 diluted earnings per share, and for the nine months ending September 30, 2017, $3.0 million, or $0.17 basic and $0.08 diluted earnings per share.

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

Return on average assets was 0.69% for the quarter and 0.63% for the nine months ending September 30, 2017, compared to 0.55% and 0.67% for the same periods in 2016.
Book and tangible book value per share of common stock improved to $0.75 and $1.23, respectively, for September 30, 2017, compared to $0.56 and $1.04 from one year prior.
Net income for subsidiary CIBM Bank was $1.3 million for the quarter and $3.6 million for the nine month period ending September 30, 2017, compared to net income of $1.0 million and $3.1 million for the same periods of 2016; reflecting improved performance.
Net interest income of $4.9 million for the quarter is an increase of $0.4 million from the same quarter of 2016, and net interest income of $14.3 million for the nine months ending September 30, 2017, is an increase of $0.9 million from the same period of 2016. The growth primarily reflects $40 million of higher average interest-earning asset balances in 2017.
Noninterest income of $2.3 million for the quarter is a decrease of $0.4 million from the same quarter of 2016 and noninterest income of $6.7 million for the nine months ending September 30, 2017, is a decrease of $0.8 million from the same period of 2016. The results primarily reflect lower net mortgage banking revenue this year due to reduced refinancing activity.
In addition, during 2017, year to date noninterest income reflects gains on sale of SBA loans at $0.8 million compared to $0.1 million during the same period of 2016; and during 2017 year to date net gain on sale of assets and write-downs related to collection activities have been nominal but were $0.9 million in the 2016 year to date period. This reflects improved earnings related to core business activities.
Non-performing assets to total assets fell to 1.49% at September 30, 2017, from 1.67% at December 31, 2016, due to lower non-accrual loans.
Non-accrual loans to total loans declined to 0.99% at September 30, 2017, from 1.26% at December 31, 2016, due to collection related activity.

J. Brian Chaffin, CIB Marine’s President and CEO, commented, “We are pleased with the positive impact increased earning assets and net interest income have had on our operating results. The growth and development of our SBA lending business has added some additional noninterest income that has more than offset the softer revenues from our residential lending business this year, in part caused by higher interest rates. At the same time, our noninterest expenses year to date are approximately $0.1 million lower than last year.”

Mr. Chaffin added, “One of CIB Marine’s key initiatives in 2017 has been increased involvement in our communities. We have committed substantial resources to support local business and residential housing credit needs through the addition of new programs, products and key staff. We look forward to further growth in this area as we continue to be a force for positive change in the social and economic vitality of the communities we live and work in.”

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 September 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															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
		2017			2017			2017			2016			2016			2017			2016

	(Dollars in thousands, except share and per share data)
Selected Statement of Operations Data
Interest and dividend income	$	6,056		$	5,732		$	5,562		$	5,273		$	5,286		$	17,350		$	15,676
Interest expense		1,140			973			892			793			740			3,005			2,204
Net interest income		4,916			4,759			4,670			4,480			4,546			14,345			13,472
Provision for (reversal of) loan losses		149			47			228			(796	)		69			424			248
Net interest income after provision for
(reversal of) loan losses		4,767			4,712			4,442			5,276			4,477			13,921			13,224
Noninterest income (1)		2,257			2,611			1,847			1,908			2,651			6,715			7,492
Noninterest expense		5,865			6,279			5,401			6,127			6,220			17,545			17,652
Income before income taxes		1,159			1,044			888			1,057			908			3,091			3,064
Income tax expense		25			20			0			(5	)		40			45			55
Net income	$	1,134		$	1,024		$	888		$	1,062		$	868		$	3,046		$	3,009

Common Share Data
Basic net income per share	$	0.06		$	0.06		$	0.05		$	0.06		$	0.05		$	0.17		$	0.17
Diluted net income per share		0.03			0.03			0.02			0.03			0.02			0.08			0.08
Dividend		0			0			0			0			0			0			0
Tangible book value per share (2)		1.23			1.16			1.08			1.01			1.04			1.23			1.04
Book value per share (2)		0.75			0.68			0.60			0.53			0.56			0.75			0.56
Weighted average shares outstanding - basic		18,161,989			18,153,029			18,127,892			18,127,892			18,127,892			18,145,505			18,127,892
Weighted average shares outstanding - diluted		36,512,804			36,516,207			36,193,353			36,082,522			35,818,022			36,407,957			35,694,388
Financial Condition Data
Total assets	$	640,340		$	650,051		$	631,160		$	653,559		$	632,628		$	640,340		$	632,628
Loans		490,089			488,289			483,501			483,518			466,057			490,089			466,057
Allowance for loan losses		(7,905	)		(7,653	)		(7,567	)		(7,592	)		(8,549	)		(7,905	)		(8,549	)
Investment securities		112,670			111,160			111,745			112,072			103,853			112,670			103,853
Deposits		479,285			493,364			497,144			483,097			476,428			479,285			476,428
Borrowings		84,903			82,025			60,837			96,944			81,636			84,903			81,636
Stockholders' equity		73,556			72,279			70,819			69,523			70,094			73,556			70,094
Financial Ratios and Other Data
Performance Ratios:
Net interest margin (3)		3.07%			3.09%			3.02%			2.84%			2.95%			3.06%			3.07%
Net interest spread (4)		2.88%			2.92%			2.87%			2.70%			2.80%			2.89%			2.92%
Noninterest income to average assets (5)		1.37%			1.65%			1.16%			1.18%			1.68%			1.39%			1.66%
Noninterest expense to average assets		3.55%			3.96%			3.40%			3.79%			3.93%			3.64%			3.91%
Efficiency ratio (6)		81.76%			85.20%			82.88%			95.91%			86.42%			83.31%			84.20%
Earnings on average assets (7)		0.69%			0.65%			0.56%			0.66%			0.55%			0.63%			0.67%
Earnings on average equity (8)		6.11%			5.71%			5.10%			5.93%			4.89%			5.65%			5.86%
Asset Quality Ratios:
Nonaccrual loans to loans (9)		0.99%			0.99%			1.32%			1.26%			1.16%			0.99%			1.16%
Nonaccrual loans, restructured loans and
loans 90 days or more past due and still
accruing to total loans (9)		1.30%			1.36%			1.65%			1.60%			1.58%			1.30%			1.58%
Nonperforming assets, restructured loans
and loans 90 days or more past due and still
accruing to total assets (9)		1.49%			1.51%			1.77%			1.67%			1.32%			1.49%			1.32%
Allowance for loan losses to total loans		1.61%			1.57%			1.57%			1.57%			1.83%			1.61%			1.83%
Allowance for loan losses to nonaccrual loans,
restructured loans and loans 90 days or
more past due and still accruing (9)		124.21%			72.81%			94.67%			97.99%			116.08%			124.21%			116.08%
Net charge-offs (recoveries) annualized
to average loans		-0.08%			-0.03%			0.21%			0.14%			-0.22%			0.03%			-0.07%
Capital Ratios:
Total equity to total assets		11.49%			11.12%			11.02%			10.64%			11.08%			11.49%			11.08%
Total risk-based capital ratio		16.05%			15.93%			15.90%			15.40%			15.69%			16.05%			15.69%
Tier 1 risk-based capital ratio		14.43%			14.68%			14.65%			14.15%			14.43%			14.43%			14.43%
Leverage capital ratio		11.41%			11.56%			11.21%			11.14%			11.20%			11.41%			11.20%
Other Data:
Number of employees (full-time equivalent)		179			181			181			171			169			179			169
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,
		2017			2017			2017			2016			2016
	(Dollars in thousands, except share data)
Assets
Cash and due from banks	$	9,569		$	10,462		$	12,773		$	10,291		$	11,427
Reverse repurchase agreements		10,289			20,440			11,019			24,275			27,560
Securities available for sale		112,670			111,160			111,745			112,072			103,853
Loans held for sale		7,164			9,166			2,448			11,469			15,875

Loans		490,089			488,289			483,501			483,518			466,057
Allowance for loan losses		(7,905	)		(7,653	)		(7,567	)		(7,592	)		(8,549	)
Net loans		482,184			480,636			475,934			475,926			457,508

Federal Home Loan Bank Stock		3,128			2,948			2,070			3,803			3,803
Premises and equipment, net		4,371			4,309			4,369			4,427			4,256
Accrued interest receivable		1,507			1,386			1,377			1,382			1,289
Other real estate owned, net		3,153			3,153			3,153			3,159			982
Bank owned life insurance		4,468			4,441			4,414			4,389			4,363
Goodwill and other intangible assets		204			209			215			221			226
Other assets		1,633			1,741			1,643			2,145			1,486
Total Assets	$	640,340		$	650,051		$	631,160		$	653,559		$	632,628

Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing demand	$	72,875		$	79,888		$	76,088		$	77,154		$	87,216
Interest-bearing demand		31,756			31,961			33,027			33,832			29,821
Savings		174,174			183,608			192,175			176,435			169,390
Time		200,480			197,907			195,854			195,676			190,001
Total deposits		479,285			493,364			497,144			483,097			476,428
Short-term borrowings		84,903			82,025			60,837			96,944			81,636
Accrued interest payable		404			358			327			349			319
Other liabilities		2,192			2,025			2,033			3,646			4,151
Total liabilities		566,784			577,772			560,341			584,036			562,534

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			18,384			18,346			18,346			18,346
Capital surplus		158,713			158,640			158,602			158,552			158,510
Accumulated deficit		(152,471	)		(153,605	)		(154,629	)		(155,517	)		(156,579	)
Accumulated other comprehensive loss, net		(1,537	)		(1,611	)		(1,971	)		(2,329	)		(654	)
Treasury stock 221,902 shares at cost		(533	)		(529	)		(529	)		(529	)		(529	)
Total stockholders' equity		73,556			72,279			70,819			69,523			70,094
Total liabilities and stockholders' equity	$	640,340		$	650,051		$	631,160		$	653,559		$	632,628

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,
		2017		2017		2017		2016			2016			2017		2016

	(Dollars in thousands)

Interest Income
Loans	$	5,188	$	4,997	$	4,826	$	4,493		$	4,540		$	15,011	$	13,747
Loans held for sale		104		79		46		141			153			229		331
Securities		640		598		611		563			513			1,849		1,508
Other investments		124		58		79		76			80			261		90
Total interest income		6,056		5,732		5,562		5,273			5,286			17,350		15,676

Interest Expense
Deposits		871		817		749		697			659			2,437		2,056
Short-term borrowings		269		156		143		96			81			568		148
Total interest expense		1,140		973		892		793			740			3,005		2,204
Net interest income		4,916		4,759		4,670		4,480			4,546			14,345		13,472
Provision for (reversal of) loan losses		149		47		228		(796	)		69			424		248
Net interest income after provision for
(reversal of) loan losses		4,767		4,712		4,442		5,276			4,477			13,921		13,224

Noninterest Income
Deposit service charges		132		129		113		121			125			374		349
Other service fees		45		54		46		45			47			145		166
Mortgage Banking revenue, net		1,821		2,027		1,142		1,414			2,285			4,990		5,723
Other income		127		127		97		136			206			351		419
Net gains on sale of securities		0		0		0		0			0			0		0
Net gains (losses) on sale of assets
and (writedowns)		132		274		449		192			(12	)		855		835
Total noninterest income		2,257		2,611		1,847		1,908			2,651			6,715		7,492

Noninterest Expense
Compensation and employee benefits		4,099		4,333		3,705		4,228			4,426			12,137		12,193
Equipment		320		319		290		305			277			929		843
Occupancy and premises		386		381		390		390			377			1,157		1,201
Data Processing		168		136		140		123			185			444		490
Federal deposit insurance		55		81		87		92			105			223		317
Professional services		158		130		200		156			157			488		619
Telephone and data communication		87		88		81		90			92			256		300
Insurance		60		96		59		60			60			215		170
Other expense		532		715		449		683			541			1,696		1,519
Total noninterest expense		5,865		6,279		5,401		6,127			6,220			17,545		17,652
Income from operations
before income taxes		1,159		1,044		888		1,057			908			3,091		3,064
Income tax expense		25		20		0		(5	)		40			45		55
Net income		1,134		1,024		888		1,062			868			3,046		3,009
Preferred stock dividend		0		0		0		0			0			0		0
Net income allocated to
common stockholders	$	1,134	$	1,024	$	888	$	1,062		$	868		$	3,046	$	3,009

FOR INFORMATION CONTACT: J. Brian Chaffin, President & CEO (217) 355-0900 brian.chaffin@cibmbank.com

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