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CIB Marine Bancshares, Inc. Announces 2016 Results
Jan 13, 2017
OTC Disclosure & News Service
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CIB Marine Bancshares, Inc. Announces 2016 Results
WAUKESHA, WI--(Marketwired - January 13, 2017) - 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 fourth quarter and year of 2016. Net income for the fourth quarter of 2016 was $1.4 million or $0.08 basic and $0.04 diluted earnings per share compared to a loss of $0.8 million or $0.04 basic and diluted earnings per share for the same period in 2015, and for the year ended December 31, 2016, net income was $4.4 million or $0.24 basic and $0.12 diluted earnings per share compared to a loss of $0.6 million or $0.03 basic and diluted earnings per share for the same period of 2015.
Select highlights for the quarter and year include:
Return on average assets was 0.71% for the year 2016, a substantial improvement over the (0.12%) reported for the year 2015.
Net income for subsidiary CIBM Bank was $4.6 million for the year 2016, an increase of $4.3 million from the year 2015.
Net interest income increased $1.8 million for the year 2016 compared 2015. The increase was primarily due to a $64 million dollar increase in average loans outstanding.
Non-interest income increased $5.0 million for the year 2016 compared to the same period of 2015, due primarily to mortgage activity and, to a lesser extent, gains related to assets previously charged or written down. For the quarter, net mortgage banking revenues were down $0.9 million due to seasonal factors and the increase in interest rates.
Reversal of loan losses was $0.9 million for the year ending December 31, 2016, compared to a provision for loan losses of $0.1 million for the same period in 2015. The reversal of loan losses was related to a $1.5 million structured settlement payment announced earlier in 2016 which has been received and recorded in the allowance for loan losses as a recovery of loans previously charged off.
Noninterest expenses rose for the year 2016 by $2.7 million versus the prior year, primarily due to a $2.9 million increase in compensation caused by commissions for higher loan originations offset by reductions in other areas.
Non-performing assets to total assets were 1.83% at the year-end 2016, down from 2.25% the prior year end and up from 1.32% at September 30, 2016. The increase from the prior quarter-end was due primarily to one relationship.
Net recoveries for loans previously charged off to average loans was (0.24%) for the year ending December 31, 2016, compared to (0.11%) for the same period in the prior year.
"CIB Marine completed a successful year in 2016 and is pleased to be reporting for the year an increase of 74% in the book value per share of common stock and progress in a number of strategic areas of the company," said Mr. J. Brian Chaffin, President and Chief Executive Officer of CIB Marine Bancshares, Inc. "For the year 2016 our loan portfolio grew on net 8.8% reflecting more than $100 million in new portfolio loan originations, deposits grew 8.9% and mortgage revenues grew 92%. In addition, we started our SBA lending and facility financing activities; executed a significant expense management program; and made a number of investments in information technology to enhance our services and improve product delivery, as well as fund a number of security and infrastructure measures."
Mr. Chaffin added, "Our eyes and energy are focused on 2017 and the future now. Interest rates are higher across the yield curve over the past year and Fed policy rates are forecast to increase further in 2017. During 2017 we expect a softer residential lending market due to the increase in mortgage rates, but we continue to work on expanding our mortgage lending activities more deeply through our banking markets and we are optimistic our SBA lending activities will increase over the prior year. Our traditional retail and commercial community banking activities contributed significantly to the results in 2016 and we are working towards continued development and growth of our customer relationships within the communities where we live and work."
CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates 11 banking offices and 3 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 December 31, 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 Years Ended
December 31, September 30, June 30, March 31, December 31, December 31, December 31,
2016 2016 2016 2016 2015 2016 2015
(Dollars in thousands, except share and per share data)
Selected Statement of Operations Data
Interest and dividend income $ 5,273 $ 5,286 $ 5,214 $ 5,176 $ 4,874 $ 20,949 $ 18,530
Interest expense 793 740 729 735 654 2,997 2,377
Net interest income 4,480 4,546 4,485 4,441 4,220 17,952 16,153
Provision for (reversal of) loan losses (1,101) 69 118 61 215 (853) 61
Net interest income after provision for (reversal of) loan losses 5,581 4,477 4,367 4,380 4,005 18,805 16,092
Noninterest income (1) 1,908 2,651 2,788 2,053 592 9,400 4,426
Noninterest expense 6,127 6,220 5,951 5,481 5,386 23,779 21,117
Income (loss) before income taxes 1,362 908 1,204 952 (789) 4,426 (599)
Income tax expense (5) 40 15 0 6 50 6
Net income (loss) $ 1,367 $ 868 $ 1,189 $ 952 $ (795) $ 4,376 $ (605)
Common Share Data
Basic net income (loss) per share $ 0.08 $ 0.05 $ 0.07 $ 0.05 $ (0.04) $ 0.24 $ (0.03)
Diluted net income (loss) per share 0.04 0.02 0.03 0.03 (0.04) 0.12 (0.03)
Dividend 0 0 0 0 0 0 0
Tangible book value per share (2) 1.03 1.04 0.99 0.90 0.79 1.03 0.79
Book value per share (2) 0.54 0.56 0.51 0.41 0.31 0.54 0.31
Weighted average shares outstanding - basic 18,127,892 18,127,892 18,127,892 18,127,892 18,127,892 18,127,892 18,127,892
Weighted average shares outstanding - diluted 36,082,522 35,818,022 35,631,892 35,631,892 18,127,892 35,791,952 18,127,892
Financial Condition Data
Total assets $ 653,864 $ 632,628 $ 615,708 $ 597,089 $ 571,233 $ 653,864 $ 571,233
Loans 484,255 466,057 461,859 470,424 445,050 484,255 445,050
Allowance for loan losses (8,329) (8,549) (8,219) (8,235) (8,064) (8,329) (8,064)
Investment securities 112,072 103,853 103,542 97,474 94,702 112,072 94,702
Deposits 483,097 476,428 468,377 467,334 443,571 483,097 443,571
Borrowings 96,944 81,636 72,833 57,929 58,883 96,944 58,883
Stockholders' equity 69,828 70,094 69,266 67,475 65,586 69,828 65,586
Financial Ratios and Other Data
Performance Ratios:
Net interest margin (3) 2.84% 2.95% 3.11% 3.15% 3.14% 3.01% 3.18%
Net interest spread (4) 2.70% 2.80% 2.96% 3.00% 2.98% 2.86% 3.03%
Noninterest income to average assets (5) 1.18% 1.68% 1.88% 1.42% 0.43% 1.53% 0.84%
Noninterest expense to average assets 3.79% 3.93% 4.02% 3.78% 3.89% 3.88% 4.02%
Efficiency ratio (6) 95.91% 86.42% 81.82% 84.40% 111.93% 86.94% 102.68%
Earnings (loss) on average assets (7) 0.85% 0.55% 0.80% 0.66% -0.57% 0.71% -0.12%
Earnings (loss) on average equity (8) 7.63% 4.89% 6.98% 5.75% -4.65% 6.32% -0.89%
Asset Quality Ratios:
Nonaccrual loans to loans (9) 1.41% 1.16% 0.81% 0.81% 0.70% 1.41% 0.70%
Nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing to total loans (9) 1.75% 1.58% 1.63% 1.64% 1.96% 1.75% 1.96%
Nonperforming assets, restructured loans and loans 90 days or more past due and still accruing to total assets (9) 1.83% 1.32% 1.59% 1.94% 2.25% 1.83% 2.25%
Allowance for loan losses to total loans 1.72% 1.83% 1.78% 1.75% 1.81% 1.72% 1.81%
Allowance for loan losses to nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing (9) 98.16% 116.08% 109.14% 106.74% 92.25% 98.16% 92.25%
Net charge-offs (recoveries) annualized to average loans -0.74% -0.22% 0.12% -0.10% 0.03% -0.24% -0.11%
Capital Ratios:
Total equity to total assets 10.68% 11.08% 11.25% 11.30% 11.48% 10.68% 11.48%
Total risk-based capital ratio 15.55% 15.66% 15.60% 15.19% 15.45% 15.55% 15.45%
Tier 1 risk-based capital ratio 14.29% 14.41% 14.34% 13.93% 14.20% 14.29% 14.20%
Leverage capital ratio 11.18% 11.20% 11.69% 11.72% 12.27% 11.18% 12.27%
Other Data:
Number of employees (full-time equivalent) 171 169 167 180 173 171 173
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)
December 31, September 30, June 30, March 31, December 31,
2016 2016 2016 2016 2015
(Dollars in thousands, except share data)
Assets
Cash and due from banks $ 10,291 $ 11,427 $ 9,808 $ 9,136 $ 9,170
Reverse repurchase agreements 24,275 27,560 20,313 - -
Securities available for sale 112,072 103,853 103,542 97,474 94,702
Loans held for sale 11,469 15,875 11,602 10,176 12,275
Loans 484,255 466,057 461,859 470,424 445,050
Allowance for loan losses (8,329 ) (8,549 ) (8,219 ) (8,235 ) (8,064 )
Net loans 475,926 457,508 453,640 462,189 436,986
Federal Home Loan Bank Stock 3,803 3,803 2,170 2,170 2,170
Premises and equipment, net 4,427 4,256 4,358 4,716 4,771
Accrued interest receivable 1,382 1,289 1,290 1,468 1,296
Other real estate owned, net 3,464 982 2,283 3,859 4,126
Bank owned life insurance 4,389 4,363 4,336 4,310 4,285
Goodwill and other intangible assets 221 226 232 237 243
Other assets 2,145 1,486 2,134 1,354 1,209
Total Assets $ 653,864 $ 632,628 $ 615,708 $ 597,089 $ 571,233
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing demand $ 77,154 $ 87,216 $ 82,460 $ 74,564 $ 77,580
Interest-bearing demand 33,832 29,821 31,508 32,096 33,192
Savings 176,435 169,390 175,955 175,576 162,663
Time 195,676 190,001 178,454 185,098 170,136
Total deposits 483,097 476,428 468,377 467,334 443,571
Short-term borrowings 96,944 81,636 72,833 57,929 58,883
Accrued interest payable 349 319 335 339 321
Other liabilities 3,646 4,151 4,897 4,012 2,872
Total liabilities 584,036 562,534 546,442 529,614 505,647
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 158,552 158,510 158,493 158,493 158,493
Accumulated deficit (155,212 ) (156,579 ) (157,446 ) (158,636 ) (159,588 )
Accumulated other comprehensive loss, net (2,329 ) (654 ) (598 ) (1,199 ) (2,136 )
Treasury stock 218,499 shares at cost (529 ) (529 ) (529 ) (529 ) (529 )
Total stockholders' equity 69,828 70,094 69,266 67,475 65,586
Total liabilities and stockholders' equity $ 653,864 $ 632,628 $ 615,708 $ 597,089 $ 571,233
CIB MARINE BANCSHARES, INC.
Consolidated Statements of Operations (Unaudited)
At or for the
Quarters Ended Years Ended
December 31, September 30, June 30, March 31, December 31, December 31, December 31,
2016 2016 2016 2016 2015 2016 2015
(Dollars in thousands)
Interest Income
Loans $ 4,493 $ 4,540 $ 4,635 $ 4,572 $ 4,248 $ 18,240 $ 15,972
Loans held for sale 141 153 95 83 77 472 341
Securities 563 513 478 517 546 2,071 2,206
Other investments 76 80 6 4 3 166 11
Total interest income 5,273 5,286 5,214 5,176 4,874 20,949 18,530
Interest Expense
Deposits 697 659 692 705 640 2,753 2,327
Short-term borrowings 96 81 37 30 14 244 50
Total interest expense 793 740 729 735 654 2,997 2,377
Net interest income 4,480 4,546 4,485 4,441 4,220 17,952 16,153
Provision for (reversal of) loan losses (1,101 ) 69 118 61 215 (853 ) 61
Net interest income after provision for (reversal of) loan losses 5,581 4,477 4,367 4,380 4,005 18,805 16,092
Noninterest Income
Deposit service charges 121 125 121 103 113 470 450
Other service fees 45 47 52 67 60 211 236
Mortgage Banking revenue, net 1,414 2,285 2,102 1,336 545 7,137 3,724
Other income 136 206 96 117 104 555 444
Net gains on sale of securities 0 0 0 0 0 0 13
Net gains (losses) on sale of assets and (writedowns) 192 (12 ) 417 430 (230 ) 1,027 (441 )
Total noninterest income 1,908 2,651 2,788 2,053 592 9,400 4,426
Noninterest Expense
Compensation and employee benefits 4,228 4,426 4,143 3,624 3,419 16,421 13,515
Equipment 305 277 293 273 277 1,148 1,068
Occupancy and premises 390 377 389 435 396 1,591 1,576
Data Processing 123 185 151 154 158 613 621
Federal deposit insurance 92 105 106 106 104 409 425
Professional services 156 157 213 249 228 775 942
Telephone and data communication 90 92 99 109 113 390 411
Insurance 60 60 56 54 53 230 221
Other expense 683 541 501 477 638 2,202 2,338
Total noninterest expense 6,127 6,220 5,951 5,481 5,386 23,779 21,117
Income (loss) from operations before income taxes 1,362 908 1,204 952 (789 ) 4,426 (599 )
Income tax expense (5 ) 40 15 0 6 50 6
Net income (loss) 1,367 868 1,189 952 (795 ) 4,376 (605 )
Preferred stock dividend 0 0 0 0 0 0 0
Net income (loss) allocated to common stockholders $ 1,367 $ 868 $ 1,189 $ 952 $ (795 ) $ 4,376 $ (605 )
FOR INFORMATION CONTACT:
J. Brian Chaffin
President & CEO
(217) 355-0900
brian.chaffin@cibmbank.com
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