News hit at the closing bell.
CIB Marine Bancshares, Inc. Announces 2019 Results
BROOKFIELD, Wis., Jan. 24, 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 fourth quarter and year-end 2019. Net income for the year ended December 31, 2019, was $2.0 million or $0.13 basic and $0.07 diluted earnings per share, compared to $3.3 million or $0.28 basic and $0.15 diluted earnings per share for the same period of 2018.
Lower income for the year was the result of a few key factors:
The provision for loan losses was $0.8 million in 2019 compared to a $1.2 million reversal of provision in 2018. Although credit quality measures overall were improved, as highlighted below, impairments on a few loans resulted in a provision to loan losses of $0.7 million during the fourth quarter of 2019 compared to a reversal of $1.2 million for the same period of 2018.
Total gains on the sale of SBA 7(a) loans for the year 2019 declined by $1.1 million compared to 2018 due to a $6 million decline in loans originated for sale and lower premiums on loans sold. The decline reflects the broader industry experience for the year.
Cost of interest bearing liabilities increased 38 basis points from 2018 to 2019 as deposit pricing pressure for time deposits and money market accounts began building in the latter half of 2018 and continued into 2019. As a result, the net interest margin declined by 14 basis points and net interest income declined by $0.5 million in 2019 compared to 2018.
Some highlights of 2019 included:
Mortgage division income before tax increased by $1.0 million for the full year compared to 2018, the result of an increase of approximately $55 million in residential loans originated for sale.
Tangible book value per share and stated book value per share at December 31, 2019, were $2.99 and $2.64 per share of common stock, respectively, reflecting increases of $0.17 and $0.19 versus the prior year-end. The increases were due primarily to $2.0 million in net income; a $1.4 million improvement in accumulated other comprehensive income; and a $0.3 million discount to the carry value of the preferred stock repurchased in 2019, which was accretive to the common shareholders.
Although the cost of interest bearing liabilities was higher overall for the year, it declined by 13 basis points during the fourth quarter as renewing 12-month time deposits and money market accounts with one-year introductory rates were repriced in a lower rate environment.
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 was 1.35% and 1.09%, respectively, at December 31, 2019, compared to 1.45% and 1.34%, respectively, at December 31, 2018.
Mr. J. Brian Chaffin, President and CEO of CIBM, commented, “Although we showed solid results in a number of areas where goals and budgets were met or exceeded – including our corporate banking and mortgage divisions – the higher loan loss provisions resulting from a few loans, higher cost of funds, and lower SBA originations were setbacks in 2019 that resulted in lower than expected overall operating results. In the fourth quarter of 2019, management, working with the Board of Directors, commenced a targeted improvement process with objectives to drive better results in the future. This process is directed at cost of funds, product mix and margins, cost controls and other matters related to the company’s culture, brand, and customer experience.”
Regarding preferred stock repurchases, he stated, “We settled our outstanding preferred stock repurchases during the fourth quarter of 2019 and early 2020. This included the repurchase of 2,229 shares of preferred stock as part of the second of three planned modified Dutch auctions, and 4,923 preferred shares that were subject to repurchase pursuant to a negotiated repurchase agreement entered into in 2018. The total purchase price was $5.1 million. CIB Marine did not issue any new capital or debt to pay for the repurchases and no longer has any outstanding liabilities in its balance sheet for agreements to repurchase stock. Total repurchased shares to date amount to approximately 26% of the 60,000 shares of preferred stock originally issued in 2009 and the shares repurchased to date included 1,159 shares of Series B preferred stock, effectively terminating conversion rights equal to 4.6 million shares of common stock.
“CIB Marine plans to hold the third and final modified Dutch auction during the first half of 2020. More information will be forthcoming,” he concluded.
CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates eleven banking offices and four 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.
FOR INFORMATION CONTACT:
J. Brian Chaffin, President & CEO
(217) 355-0900
brian.chaffin@cibmbank.com
CIB MARINE BANCSHARES, INC.
Selected Unaudited Consolidated Financial Data
At or for the
Quarters Ended 12 Months Ended
December 31, September 30, June 30, March 31, December 31, December 31, December 31,
2019 2019 2019 2019 2018 2019 2018
(Dollars in thousands, except share and per share data)
Selected Statement of Operations Data
Interest and dividend income $ 6,820 $ 7,035 $ 7,078 $ 7,015 $ 7,009 $ 27,948 $ 26,203
Interest expense 2,030 2,183 2,256 2,178 2,064 8,647 6,422
Net interest income 4,790 4,852 4,822 4,837 4,945 19,301 19,781
Provision for (reversal of) loan losses 715 327 (67 ) (158 ) (1,195 ) 817 (1,185 )
Net interest income after provision for
(reversal of) loan losses 4,075 4,525 4,889 4,995 6,140 18,484 20,966
Noninterest income (1) 2,249 3,835 2,710 1,362 1,546 10,156 9,409
Noninterest expense 6,879 7,233 6,557 5,505 6,415 26,174 25,847
Income (loss) before income taxes (555 ) 1,127 1,042 852 1,271 2,466 4,528
Income tax expense (benefit) (180 ) 93 281 229 313 423 1,188
Net income (loss) $ (375 ) $ 1,034 $ 761 $ 623 $ 958 $ 2,043 $ 3,340
Common Share Data
Basic net income (loss) per share (2) $ (0.02 ) $ 0.07 $ 0.04 $ 0.03 $ 0.05 $ 0.13 $ 0.28
Diluted net income (loss) per share (2) (0.02 ) 0.04 0.02 0.02 0.03 0.07 0.15
Dividend 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Tangible book value per share (3) 2.99 3.03 2.97 2.90 2.82 2.99 2.82
Book value per share (3) 2.64 2.68 2.60 2.53 2.45 2.64 2.45
Weighted average shares outstanding - basic 18,646,427 18,455,408 18,290,674 18,232,169 18,232,169 18,406,663 18,209,096
Weighted average shares outstanding - diluted 32,329,533 32,536,354 33,009,983 32,815,744 32,757,855 32,711,639 35,139,642
Financial Condition Data
Total assets $ 703,791 $ 700,711 $ 708,270 $ 702,152 $ 721,259 $ 703,791 $ 721,259
Loans 513,705 508,758 513,755 489,273 491,337 513,705 491,337
Allowance for loan losses (8,007 ) (7,560 ) (7,251 ) (7,865 ) (7,947 ) (8,007 ) (7,947 )
Investment securities 120,398 120,648 124,784 123,500 121,281 120,398 121,281
Deposits 530,190 557,745 535,367 542,938 536,931 530,190 536,931
Borrowings 73,847 38,468 69,174 57,220 86,710 73,847 86,710
Stockholders' equity 93,404 94,082 94,035 92,507 91,035 93,404 91,035
Financial Ratios and Other Data
Performance Ratios:
Net interest margin (4) 2.86 % 2.95 % 2.89 % 2.94 % 2.89 % 2.91 % 3.05 %
Net interest spread (5) 2.55 % 2.62 % 2.58 % 2.64 % 2.62 % 2.60 % 2.80 %
Noninterest income to average assets (6) 1.28 % 2.19 % 1.52 % 0.76 % 0.84 % 1.43 % 1.37 %
Noninterest expense to average assets 3.88 % 4.14 % 3.72 % 3.14 % 3.54 % 3.72 % 3.75 %
Efficiency ratio (7) 97.57 % 83.44 % 87.45 % 89.24 % 99.18 % 89.07 % 88.44 %
Earnings on average assets (8) -0.21 % 0.59 % 0.43 % 0.36 % 0.53 % 0.29 % 0.48 %
Earnings on average equity (9) -1.56 % 4.35 % 3.28 % 2.76 % 4.23 % 2.18 % 3.52 %
Asset Quality Ratios:
Nonaccrual loans to loans (10) 1.09 % 1.14 % 1.12 % 1.29 % 1.34 % 1.09 % 1.34 %
Nonaccrual loans, restructured loans and
loans 90 days or more past due and still
accruing to total loans (10) 1.38 % 1.44 % 1.45 % 1.66 % 1.62 % 1.38 % 1.62 %
Nonperforming assets, restructured loans
and loans 90 days or more past due and still
accruing to total assets (10) 1.35 % 1.40 % 1.40 % 1.51 % 1.45 % 1.35 % 1.45 %
Allowance for loan losses to total loans (10) 1.56 % 1.49 % 1.41 % 1.61 % 1.62 % 1.56 % 1.62 %
Allowance for loan losses to nonaccrual loans,
restructured loans and loans 90 days or
more past due and still accruing (10) 112.66 % 103.07 % 97.34 % 96.96 % 99.72 % 112.66 % 99.72 %
Net charge-offs (recoveries) annualized
to average loans (10) 0.21 % 0.01 % 0.44 % (0.06 %) (0.74 %) 0.15 % -0.29 %
Capital Ratios:
Total equity to total assets 13.27 % 13.43 % 13.28 % 13.17 % 12.62 % 13.27 % 12.62 %
Total risk-based capital ratio 15.19 % 15.18 % 15.32 % 15.56 % 15.34 % 15.19 % 15.34 %
Tier 1 risk-based capital ratio 13.94 % 13.93 % 14.07 % 14.31 % 14.09 % 13.94 % 14.09 %
Leverage capital ratio 10.71 % 10.86 % 10.64 % 10.39 % 10.10 % 10.71 % 10.10 %
Other Data:
Number of employees (full-time equivalent) 176 182 180 177 183 176 183
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 twelve months ended December 31, 2019, and $1.8 million for the twelve months ended December 31, 2018.
(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)
December 31, September 30, June 30, March 31, December 31,
2019 2019 2019 2019 2018
(Dollars in Thousands, Except Shares)
Assets
Cash and due from banks $ 8,970 $ 9,582 $ 8,791 $ 8,168 $ 13,037
Reverse repurchase agreements 11,196 4,083 18,347 42,729 58,662
Securities available for sale 117,972 118,211 122,365 121,115 118,926
Equity securities at fair value 2,426 2,437 2,419 2,385 2,355
Loans held for sale 16,928 25,347 8,450 4,467 4,632
Loans 513,705 508,758 513,755 489,273 491,337
Allowance for loan losses (8,007 ) (7,560 ) (7,251 ) (7,865 ) (7,947 )
Net loans 505,698 501,198 506,504 481,408 483,390
Federal Home Loan Bank Stock 2,587 926 2,363 2,003 3,172
Premises and equipment, net 4,274 4,504 4,643 4,538 4,498
Accrued interest receivable 1,486 1,646 1,820 1,873 1,570
Deferred tax assets, net 20,069 20,455 20,703 21,156 21,422
Other real estate owned, net 2,396 2,466 2,466 2,466 2,486
Bank owned life insurance 4,691 4,666 4,640 4,613 4,590
Goodwill and other intangible assets 154 159 165 171 176
Other assets (1) 4,944 5,031 4,594 5,060 2,343
Total Assets $ 703,791 $ 700,711 $ 708,270 $ 702,152 $ 721,259
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing demand $ 70,175 $ 63,694 $ 62,424 $ 62,553 $ 63,507
Interest-bearing demand 45,512 50,683 32,649 32,467 33,660
Savings 204,976 202,866 192,133 188,110 181,432
Time 209,527 240,502 248,161 259,808 258,332
Total deposits 530,190 557,745 535,367 542,938 536,931
Short-term borrowings 73,847 38,468 69,174 57,220 86,710
Accrued interest payable 603 711 725 727 710
Other liabilities (1) 5,747 9,705 8,969 8,760 5,873
Total liabilities 610,387 606,629 614,235 609,645 630,224
Stockholders' Equity
Preferred stock, $1 par value; 5,000,000 authorized shares at December 31, 2019; 7% fixed rate noncumulative perpetual issued; 40,888 shares of series A and 3,217 shares of series B; convertible; $44.1 million aggregate liquidation preference 37,490 37,489 39,384 39,384 39,384
Common stock, $1 par value; 75,000,000 authorized shares; 18,868,329 and 18,455,610 issued shares; 18,657,282 and 18,244,563 outstanding shares at December 31, 2019 and 2018, respectively. (2) 18,868 18,868 18,543 18,456 18,456
Capital surplus 161,175 161,110 160,991 160,930 160,815
Accumulated deficit (123,753 ) (123,377 ) (124,412 ) (125,173 ) (125,796 )
Accumulated other comprehensive income (loss), net 158 526 63 (556 ) (1,290 )
Treasury stock 221,902 shares at cost (534 ) (534 ) (534 ) (534 ) (534 )
Total stockholders' equity 93,404 94,082 94,035 92,507 91,035
Total liabilities and stockholders' equity $ 703,791 $ 700,711 $ 708,270 $ 702,152 $ 721,259
(1) The adoption of the new lease accounting standards effective January 1, 2019, resulted in $2.8 million of operating lease right-of-use assets being recorded in other assets, net and a corresponding liability in other liabilities.
(2) Both issued and outstanding shares as stated here exclude 815,395 shares and 1,005,915 shares of unvested restricted stock awards at December 31,2019 and 2018, respectively.
CIB MARINE BANCSHARES, INC.
Consolidated Statements of Operations (Unaudited)
At or for the
Quarters Ended 12 Months Ended
December 31, September 30, June 30, March 31, December 31, December 31, December 31,
2019 2019 2019 2019 2018 2019 2018
(Dollars in thousands)
Interest Income
Loans $ 5,793 $ 5,992 $ 5,811 $ 5,693 $ 5,686 $ 23,289 $ 21,821
Loans held for sale 195 152 97 85 86 529 388
Securities 764 810 868 804 828 3,246 3,043
Other investments 68 81 302 433 409 884 951
Total interest income 6,820 7,035 7,078 7,015 7,009 27,948 26,203
Interest Expense
Deposits 1,856 2,027 1,949 1,805 1,547 7,637 4,876
Short-term borrowings 174 156 307 373 517 1,010 1,546
Total interest expense 2,030 2,183 2,256 2,178 2,064 8,647 6,422
Net interest income 4,790 4,852 4,822 4,837 4,945 19,301 19,781
Provision for (reversal of) loan losses 715 327 (67 ) (158 ) (1,195 ) 817 (1,185 )
Net interest income after provision for
(reversal of) loan losses 4,075 4,525 4,889 4,995 6,140 18,484 20,966
Noninterest Income
Deposit service charges 98 101 95 83 79 377 405
Other service fees 23 30 29 20 31 102 135
Mortgage banking revenue, net 2,112 2,936 2,148 978 1,057 8,174 6,346
Other income 129 150 179 165 143 623 601
Net gains on sale of securities available for sale 0 0 0 0 0 0 15
Unrealized gains (losses) recognized on equity securities (11 ) 18 34 30 23 71 (52 )
Net gains (losses) on sale of assets and (writedowns) (102 ) 600 225 86 213 809 1,959
Total noninterest income 2,249 3,835 2,710 1,362 1,546 10,156 9,409
Noninterest Expense
Compensation and employee benefits 4,701 5,309 4,445 3,687 4,206 18,142 17,458
Equipment 394 335 353 335 364 1,417 1,363
Occupancy and premises 460 420 437 456 423 1,773 1,640
Data Processing 157 165 160 166 169 648 669
Federal deposit insurance (10 ) (5 ) 66 82 74 133 222
Professional services 320 198 207 140 270 865 1,349
Telephone and data communication 81 86 83 78 86 328 321
Insurance 59 70 52 53 47 234 231
Other expense 717 655 754 508 776 2,634 2,594
Total noninterest expense 6,879 7,233 6,557 5,505 6,415 26,174 25,847
Income (losses) from operations
before income taxes (555 ) 1,127 1,042 852 1,271 2,466 4,528
Income tax expense (benefit) (180 ) 93 281 229 313 423 1,188
Net income (loss) (375 ) 1,034 761 623 958 2,043 3,340
Preferred stock dividend 0 0 0 0 0 0 0
Discount from repurchase of preferred stock 0 308 0 0 0 308 1,808
Net income (loss) allocated to
common stockholders $ (375 ) $ 1,342 $ 761 $ 623 $ 958 $ 2,351 $ 5,148
Source: CIBM Bank
© 2020 GlobeNewswire, Inc.
