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CIB Marine Bancshares, Inc. Announces First Quarter 2020 Results
BROOKFIELD, Wis., April 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 first quarter of 2020. Net income for the quarter ended March 31, 2020, was $0.8 million or $0.04 basic and $0.02 diluted earnings per share, compared to $0.6 million or $0.03 basic and $0.02 diluted earnings per share for the same period of 2019. Pre-tax income for the quarter ended March 31, 2020, was $1.1 million compared to $0.9 million for the same period of 2019.
The increase in net income was the result of a few key factors:
The three major lines of revenue were up in the first quarter of 2020 versus the same period in the prior year. Lower rates generated increased mortgage volumes, which drove net mortgage banking revenues up $1.2 million over the first quarter of 2019; gains on sale of SBA 7(a) loans were up $0.4 million due to higher loan production in the first quarter; and net interest income was up $0.1 million and the net interest margin was up 10 basis points compared to the first quarter of 2019, due to a reduction in the cost of funds.
The provision for loan losses was up $0.4 million and our write-downs in other real estate owned were up $0.3 million for the three months ending March 31, 2020, versus the same period in 2019. The increase in provisions was primarily due to COVID-19 related deterioration of economic conditions in the first quarter of 2020, net of other factors. Further deterioration is also expected in the foreseeable future.
Non-interest expense was up $0.8 million for the three months ending March 31, 2020, compared to the same period of 2019, due primarily to higher compensation related to the increase in mortgage and SBA loan volumes.
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 1.24% and 0.97%, respectively, at March 31, 2020, down from 1.35% and 1.09%, respectively, at December 31, 2019, and 1.51% and 1.29%, respectively, at March 31, 2019. The improvements during the first quarter 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, “Early in January 2020, CIBM Bank embarked on a major project designed to improve its operating performance over the coming years. This project involved nearly 40% of our employees and was focused on key revenue improvement areas as well as customer experience, products, and other matters. By the end of March, CIBM Bank was deep into our COVID-19 pandemic response – spending significant time coordinating, communicating and implementing our many internal and external responses to COVID-19. Much of our time has been spent evaluating and preparing for significant changes in operations, products, and delivery due to emerging social distancing norms, shelter in home orders by states, and the many federal support programs for individuals, businesses, and the financial sector. Our investors can be proud of the dedication and commitment CIBM Bank employees have exhibited through this period.”
He added, “Income for the first quarter of 2020 was up versus the prior year and would have been stronger by nearly $1.0 million before tax, except for some COVID-19 related charges in our mortgage pipeline due to market dislocations and disruptions in the mortgage markets, and the provision for loan losses due primarily to the near-term decline in economic conditions. Economic forecasts for the future vary widely, but one thing seems to be clear: we are experiencing a historic decline in employment and private sector economic activity due to society’s response to COVID-19. We are preparing for a significant economic downturn and credit shock in our national, regional, and local economies, and it is our aim to be a source of banking strength for our clients during these times.
“By being flexible and agile in these unprecedented times, we remain a trusted advisor for our customers. In just the few months since this pandemic began, we have assisted our clients in navigating this new world so that they can benefit from assistance from both the bank and various government programs, including the approval of more than 213 100% U.S. government guaranteed SBA Paycheck Protection Program loans, totaling over $38 million; six months of principal and interest payments to be made by the SBA on SBA 7(a) loans; and internal loan deferral programs.”
He concluded, “Our shareholder meeting will proceed as scheduled on April 30, 2020. Given the current ‘stay at home’ directives, we encourage shareholders to listen to the meeting via teleconference, as outlined in the Proxy Statement.”
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.
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 3 Months Ended
March 31, December 31, September 30, June 30, March 31, March 31, March 31,
2020 2019 2019 2019 2019 2020 2019
(Dollars in thousands, except share and per share data)
Selected Statement of Operations Data
Interest and dividend income $ 6,636 $ 6,820 $ 7,035 $ 7,078 $ 7,015 $ 6,636 $ 7,015
Interest expense 1,689 2,030 2,183 2,256 2,178 1,689 2,178
Net interest income 4,947 4,790 4,852 4,822 4,837 4,947 4,837
Provision for (reversal of) loan losses 202 715 327 (67 ) (158 ) 202 (158 )
Net interest income after provision for
(reversal of) loan losses 4,745 4,075 4,525 4,889 4,995 4,745 4,995
Noninterest income (1) 2,642 2,249 3,835 2,710 1,362 2,642 1,362
Noninterest expense 6,322 6,879 7,233 6,557 5,505 6,322 5,505
Income (loss) before income taxes 1,065 (555 ) 1,127 1,042 852 1,065 852
Income tax expense (benefit) 281 (180 ) 93 281 229 281 229
Net income (loss) $ 784 $ (375 ) $ 1,034 $ 761 $ 623 $ 784 $ 623
Common Share Data
Basic net income (loss) per share (2) $ 0.04 $ (0.02 ) $ 0.07 $ 0.04 $ 0.03 $ 0.04 $ 0.03
Diluted net income (loss) per share (2) 0.02 (0.02 ) 0.04 0.02 0.02 0.02 0.02
Dividend 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Tangible book value per share (3) 3.07 2.99 3.03 2.97 2.90 3.07 2.90
Book value per share (3) 2.73 2.64 2.68 2.60 2.53 2.73 2.53
Weighted average shares outstanding - basic 18,724,047 18,646,427 18,455,408 18,290,674 18,232,169 18,724,047 18,232,169
Weighted average shares outstanding - diluted 32,329,698 32,329,533 32,536,354 33,009,983 32,815,744 32,329,698 32,815,744
Financial Condition Data
Total assets $ 705,473 $ 703,791 $ 700,711 $ 708,270 $ 702,152 $ 705,473 $ 702,152
Loans 513,992 513,705 508,758 513,755 489,273 513,992 489,273
Allowance for loan losses (8,107 ) (8,007 ) (7,560 ) (7,251 ) (7,865 ) (8,107 ) (7,865 )
Investment securities 120,105 120,398 120,648 124,784 123,500 120,105 123,500
Deposits 531,999 530,190 557,745 535,367 542,938 531,999 542,938
Borrowings 68,950 73,847 38,468 69,174 57,220 68,950 57,220
Stockholders' equity 95,841 93,404 94,082 94,035 92,507 95,841 92,507
Financial Ratios and Other Data
Performance Ratios:
Net interest margin (4) 3.04 % 2.86 % 2.95 % 2.89 % 2.94 % 3.04 % 2.94 %
Net interest spread (5) 2.78 % 2.55 % 2.62 % 2.58 % 2.64 % 2.78 % 2.64 %
Noninterest income to average assets (6) 1.51 % 1.28 % 2.19 % 1.52 % 0.76 % 1.51 % 0.76 %
Noninterest expense to average assets 3.67 % 3.88 % 4.14 % 3.72 % 3.14 % 3.67 % 3.14 %
Efficiency ratio (7) 83.74 % 97.57 % 83.44 % 87.45 % 89.24 % 83.74 % 89.24 %
Earnings on average assets (8) 0.45 % -0.21 % 0.59 % 0.43 % 0.36 % 0.45 % 0.36 %
Earnings on average equity (9) 3.32 % -1.56 % 4.35 % 3.28 % 2.76 % 3.32 % 2.76 %
Asset Quality Ratios:
Nonaccrual loans to loans (10) 0.97 % 1.09 % 1.14 % 1.12 % 1.29 % 0.97 % 1.29 %
Nonaccrual loans, restructured loans and
loans 90 days or more past due and still
accruing to total loans (10) 1.25 % 1.38 % 1.44 % 1.45 % 1.66 % 1.25 % 1.66 %
Nonperforming assets, restructured loans
and loans 90 days or more past due and still
accruing to total assets (10) 1.24 % 1.35 % 1.40 % 1.40 % 1.51 % 1.24 % 1.51 %
Allowance for loan losses to total loans (10) 1.58 % 1.56 % 1.49 % 1.41 % 1.61 % 1.58 % 1.61 %
Allowance for loan losses to nonaccrual loans,
restructured loans and loans 90 days or
more past due and still accruing (10) 126.26 % 112.66 % 103.07 % 97.34 % 96.96 % 126.26 % 96.96 %
Net charge-offs (recoveries) annualized
to average loans (10) 0.08 % 0.21 % 0.01 % 0.44 % -0.06 % 0.08 % -0.06 %
Capital Ratios:
Total equity to total assets 13.59 % 13.27 % 13.43 % 13.28 % 13.17 % 13.59 % 13.17 %
Total risk-based capital ratio 15.36 % 15.19 % 15.18 % 15.32 % 15.56 % 15.36 % 15.56 %
Tier 1 risk-based capital ratio 14.11 % 13.94 % 13.93 % 14.07 % 14.31 % 14.11 % 14.31 %
Leverage capital ratio 11.08 % 10.71 % 10.86 % 10.64 % 10.39 % 11.08 % 10.39 %
Other Data:
Number of employees (full-time equivalent) 177 176 182 180 177 177 177
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.
(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)
March 31, December 31, September 30, June 30, March 31,
2020 2019 2019 2019 2019
(Dollars in Thousands, Except Shares)
Assets
Cash and due from banks $ 9,006 $ 8,970 $ 9,582 $ 8,791 $ 8,168
Reverse repurchase agreements 3,622 11,196 4,083 18,347 42,729
Securities available for sale 117,640 117,972 118,211 122,365 121,115
Equity securities at fair value 2,465 2,426 2,437 2,419 2,385
Loans held for sale 24,988 16,928 25,347 8,450 4,467
Loans 513,992 513,705 508,758 513,755 489,273
Allowance for loan losses (8,107 ) (8,007 ) (7,560 ) (7,251 ) (7,865 )
Net loans 505,885 505,698 501,198 506,504 481,408
Federal Home Loan Bank Stock 2,947 2,587 926 2,363 2,003
Premises and equipment, net 4,769 4,274 4,504 4,643 4,538
Accrued interest receivable 1,610 1,486 1,646 1,820 1,873
Deferred tax assets, net 19,509 20,069 20,455 20,703 21,156
Other real estate owned, net 2,335 2,396 2,466 2,466 2,466
Bank owned life insurance 4,718 4,691 4,666 4,640 4,613
Goodwill and other intangible assets 148 154 159 165 171
Other assets 5,831 4,944 5,031 4,594 5,060
Total Assets $ 705,473 $ 703,791 $ 700,711 $ 708,270 $ 702,152
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing demand $ 67,459 $ 70,175 $ 63,694 $ 62,424 $ 62,553
Interest-bearing demand 47,760 45,512 50,683 32,649 32,467
Savings 196,797 204,976 202,866 192,133 188,110
Time 219,983 209,527 240,502 248,161 259,808
Total deposits 531,999 530,190 557,745 535,367 542,938
Short-term borrowings 68,950 73,847 38,468 69,174 57,220
Accrued interest payable 543 603 711 725 727
Other liabilities 8,140 5,747 9,705 8,969 8,760
Total liabilities 609,632 610,387 606,629 614,235 609,645
Stockholders' Equity
Preferred stock, $1 par value; 5,000,000 authorized shares at both March 31, 2020 and 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 37,490 37,489 39,384 39,384
Common stock, $1 par value; 75,000,000 authorized shares; 19,162,637 and 18,868,329 issued shares; 18,951,590 and 18,657,282 outstanding shares at March 31, 2020 and December 31, 2019, respectively. (1) 19,162 18,868 18,868 18,543 18,456
Capital surplus 160,990 161,175 161,110 160,991 160,930
Accumulated deficit (122,969 ) (123,753 ) (123,377 ) (124,412 ) (125,173 )
Accumulated other comprehensive income (loss), net 1,702 158 526 63 (556 )
Treasury stock 221,902 shares at cost (534 ) (534 ) (534 ) (534 ) (534 )
Total stockholders' equity 95,841 93,404 94,082 94,035 92,507
Total liabilities and stockholders' equity $ 705,473 $ 703,791 $ 700,711 $ 708,270 $ 702,152
(1) Both issued and outstanding shares as stated here exclude 521,087 shares and 815,395 shares of unvested restricted stock awards at March 31,2020 and December 31, 2019, respectively.
CIB MARINE BANCSHARES, INC.
Consolidated Statements of Operations (Unaudited)
At or for the
Quarters Ended 3 Months Ended
March 31, December 31, September 30, June 30, March 31, March 31, March 31,
2020 2019 2019 2019 2019 2020 2019
(Dollars in thousands)
Interest Income
Loans $ 5,703 $ 5,793 $ 5,992 $ 5,811 $ 5,693 $ 5,703 $ 5,693
Loans held for sale 119 195 152 97 85 119 85
Securities 763 764 810 868 804 763 804
Other investments 51 68 81 302 433 51 433
Total interest income 6,636 6,820 7,035 7,078 7,015 6,636 7,015
Interest Expense
Deposits 1,512 1,856 2,027 1,949 1,805 1,512 1,805
Short-term borrowings 177 174 156 307 373 177 373
Total interest expense 1,689 2,030 2,183 2,256 2,178 1,689 2,178
Net interest income 4,947 4,790 4,852 4,822 4,837 4,947 4,837
Provision for (reversal of) loan losses 202 715 327 (67 ) (158 ) 202 (158 )
Net interest income after provision for
(reversal of) loan losses 4,745 4,075 4,525 4,889 4,995 4,745 4,995
Noninterest Income
Deposit service charges 96 98 101 95 83 96 83
Other service fees 20 23 30 29 20 20 20
Mortgage banking revenue, net 2,177 2,112 2,936 2,148 978 2,177 978
Other income 265 129 150 179 165 265 165
Net gains on sale of securities available for sale 0 0 0 0 0 0 0
Unrealized gains (losses) recognized on equity securities 39 (11 ) 18 34 30 39 30
Net gains on sale of SBA loans 437 166 605 253 0 437 0
Net gains (losses) on sale of assets and (writedowns) (392 ) (268 ) (5 ) (28 ) 86 (392 ) 86
Total noninterest income 2,642 2,249 3,835 2,710 1,362 2,642 1,362
Noninterest Expense
Compensation and employee benefits 4,421 4,701 5,309 4,445 3,687 4,421 3,687
Equipment 363 394 335 353 335 363 335
Occupancy and premises 460 460 420 437 456 460 456
Data Processing 164 157 165 160 166 164 166
Federal deposit insurance 0 (10 ) (5 ) 66 82 0 82
Professional services 298 320 198 207 140 298 140
Telephone and data communication 68 81 86 83 78 68 78
Insurance 54 59 70 52 53 54 53
Other expense 494 717 655 754 508 494 508
Total noninterest expense 6,322 6,879 7,233 6,557 5,505 6,322 5,505
Income (losses) from operations
before income taxes 1,065 (555 ) 1,127 1,042 852 1,065 852
Income tax expense (benefit) 281 (180 ) 93 281 229 281 229
Net income (loss) 784 (375 ) 1,034 761 623 784 623
Preferred stock dividend 0 0 0 0 0 0 0
Discount from repurchase of preferred stock 0 0 308 0 0 0 0
Net income (loss) allocated to
common stockholders $ 784 $ (375 ) $ 1,342 $ 761 $ 623 $ 784 $ 623
Source: CIBM Bank
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