BROOKFIELD, Wis., July 15, 2022 (GLOBE NEWSWIRE) -- CIB Marine Bancshares, Inc. (the “Company” or “CIBM”) (OTCQX: CIBH), the holding company of CIBM Bank, announced its unaudited results of operations and financial condition for the quarter and six months ended June 30, 2022. Net income for core banking activity (i.e., deposits and portfolio loans) strengthened, however earnings declined as a result of substantially reduced mortgage banking income following the significant rise in mortgage interest rates. Net income for the quarter was $0.9 million, or $0.68 basic and $0.49 diluted earnings per share, compared to $1.4 million, or $1.08 basic and $0.63 diluted earnings per share, for the same period of 2021; and net income for the six month period was $1.8 million, or $1.38 basic and $1.00 diluted earnings per share, compared to $3.5 million, or $2.74 basic and $1.59 diluted earnings per share, for the same period in 2021.

Financial highlights for the quarter include:

  • Net interest income and margin for the quarter were $5.9 million and 3.23%, respectively, compared to $5.8 million and 3.26%, respectively, in the same period of 2021; and $11.4 million and 3.15%, respectively, for the six month period compared to $11.5 million and 3.24%, respectively, for the same period of 2021.   The six month period includes $0.3 million less PPP loan fee accretion income and $0.2 million more subordinated debt interest expense compared to the same period in 2021, revealing a stronger result for core banking activity in 2022 versus 2021. PPP loans are substantially paid down as of June 30, 2022, with remaining principal balances of $0.2 million and a negligible amount of fees left to accrete in the future.
  • Net mortgage banking revenues were down $1.5 million and $5.0 million for the quarter and six month period, respectively, compared to the same periods of 2021. The change was due to a 54% decline in loan originations for the six months ended June 30, 2022, compared to the same period of 2021, as a result of an increase of more than 150 basis points in average mortgage rates that also prompted tightening margins across the industry as mortgage producers began to compete more intensively for each mortgage. Related Mortgage Division compensation expenses were also down $0.8 million and $2.5 million for the quarter and six month period, respectively, when compared to the same periods in 2021.
  • Although nominally up from the lows reported for March 31, 2022, asset quality measures remain near cycle-best levels. As of June 30, 2022, 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 0.25% and 0.22%, respectively, compared to 0.21% and 0.14%, respectively, at December 31, 2021, and 0.29% and 0.19%, respectively, at June 30, 2021. In addition, CIBM reported no or 0.00% loans 30 days or greater past due and still accruing at June 30, 2022, compared to 0.40% on June 30, 2021; and made provisions for future loan losses of $40,000 during the second quarter of 2022 compared to a reversal of $0.3 million during in the same period of 2021.
  • Checking deposits grew by $12 million and total deposits grew by $24 million from December 31, 2021, to June 30, 2022, due to ongoing marketing activity. Short-term federal funds and US T-Bill interest rates have risen substantially since the beginning of the year and, as a result, pressure on balances is expected to increase.

Mr. J. Brian Chaffin, CIBM’s President and CEO, commented, “We continue to focus on growing and improving our core banking activities and are seeing positive outcomes, including improved net interest income composition and growth in key loan and deposit balances. Although reduced residential mortgage activity has had a large impact on our earnings in 2022 compared to the prior two years, it has also afforded us the ability to make significant progress in the implementation of a new mortgage loan operating system, which will provide a better loan origination experience for both employees and customers alike in the future.”  

He added, “Project Falcon – which we launched two years ago – also concentrates on identifying and implementing internal process improvements and efficiency-enhancing technologies that allow us to maximize our internal capacity. This is critically important as we target improved efficiencies through higher core revenues as well as improvements in our cost structure and controls.”    

Mr. Chaffin also cautioned, “With growing economic uncertainty, high inflation rates, and rising interest rates, recession risks are significant in the foreseeable future. As a result, we are both seeking business opportunities to enhance our performance in the current markets and actively managing the loan portfolio to reflect higher future credit risks.”

He concluded, “As a reminder, at our 2022 Annual Meeting, we announced plans to redeem approximately 5,830 shares of Series A preferred stock during the fourth quarter of 2022. The redemption will be pro-rata among Series A preferred stockholders and at the fixed redemption price in our Articles of Incorporation of $825 per share, for a total price of approximately $4.8 million. Further details will be provided as we near the redemption date.”

CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates ten banking offices and two 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 Ended6 Months Ended
 June 30,March 31,December 31,September 30,June 30,June 30,June 30,
  2022  2022  2021  2021  2021  2022  2021 
 (Dollars in thousands, except share and per share data)
Selected Statement of Operations Data:       
Interest and dividend income$6,411 $5,879 $6,244 $6,311 $6,239 $12,290 $12,504 
Interest expense 517  413  387  417  456  930  992 
Net interest income 5,894  5,466  5,857  5,894  5,783  11,360  11,512 
Provision for (reversal of) loan losses 40  (325) (502) (413) (300) (285) (280)
Net interest income after provision for       
(reversal of) loan losses 5,854  5,791  6,359  6,307  6,083  11,645  11,792 
Noninterest income (1) 1,660  1,705  2,718  4,072  3,135  3,365  8,281 
Noninterest expense 6,374  6,262  7,641  7,517  7,279  12,636  15,219 
Income before income taxes 1,140  1,234  1,436  2,862  1,939  2,374  4,854 
Income tax expense 251  334  336  788  558  585  1,356 
Net income$889 $900 $1,100 $2,074 $1,381 $1,789 $3,498 
        
Common Share Data:       
Basic net income per share (2)$0.68 $0.69 $1.28 $1.61 $1.08 $1.38 $2.74 
Diluted net income per share (2) 0.49  0.50  0.92  0.94  0.63  1.00  1.59 
Dividend 0.00  0.00  0.00  0.00  0.00  0.00  0.00 
Tangible book value per share (3) 53.68  54.53  57.06  55.60  54.19  53.68  54.19 
Book value per share (3) 51.22  52.07  54.55  50.58  49.16  51.22  49.16 
Weighted average shares outstanding - basic 1,307,289  1,295,573  1,287,438  1,286,536  1,282,917  1,300,164  1,275,971 
Weighted average shares outstanding - diluted 1,798,002  1,792,181  1,784,005  2,208,493  2,208,600  1,793,809  2,197,071 
Financial Condition Data:       
Total assets$774,356 $764,641 $745,393 $775,912 $753,660 $774,356 $753,660 
Loans 549,175  529,212  543,819  559,079  553,642  549,175  553,642 
Allowance for loan losses (8,010) (8,011) (8,352) (8,699) (9,165) (8,010) (9,165)
Investment securities 122,483  109,533  106,647  102,243  108,825  122,483  108,825 
Deposits 642,500  631,953  618,991  624,579  609,964  642,500  609,964 
Borrowings 37,693  36,789  27,049  34,577  29,592  37,693  29,592 
Stockholders' equity 89,111  89,931  91,780  108,984  107,051  89,111  107,051 
Financial Ratios and Other Data:       
Performance Ratios:       
Net interest margin (4) 3.23% 3.05% 3.18% 3.21% 3.26% 3.15% 3.24%
Net interest spread (5) 3.14% 2.98% 3.10% 3.12% 3.16% 3.06% 3.15%
Noninterest income to average assets (6) 0.91% 0.97% 1.43% 2.13% 1.68% 0.94% 2.24%
Noninterest expense to average assets 3.34% 3.35% 3.98% 3.92% 3.91% 3.35% 4.09%
Efficiency ratio (7) 83.52% 85.98% 88.87% 75.34% 81.69% 84.72% 76.75%
Earnings on average assets (8) 0.47% 0.48% 0.57% 1.08% 0.74% 0.47% 0.94%
Earnings on average equity (9) 3.96% 3.98% 4.47% 7.59% 5.18% 3.97% 6.62%
Asset Quality Ratios:       
Nonaccrual loans to loans (10) 0.22% 0.13% 0.14% 0.18% 0.19% 0.22% 0.19%
Nonaccrual loans, restructured loans and       
loans 90 days or more past due and still       
accruing to total loans (10) 0.28% 0.20% 0.21% 0.27% 0.32% 0.28% 0.32%
Nonperforming assets, restructured loans       
and loans 90 days or more past due and still       
accruing to total assets (10) 0.25% 0.19% 0.21% 0.25% 0.29% 0.25% 0.29%
Allowance for loan losses to total loans (10) 1.46% 1.51% 1.54% 1.56% 1.66% 1.46% 1.66%
Allowance for loan losses to nonaccrual loans,       
restructured loans and loans 90 days or       
more past due and still accruing (10) 512.48% 742.45% 726.26% 575.33% 519.26% 512.48% 519.26%
Net charge-offs (recoveries) annualized       
to average loans (10) 0.03% 0.01% -0.11% 0.04% -0.16% 0.02% -0.12%
Capital Ratios:       
Total equity to total assets 11.51% 11.76% 12.31% 14.05% 14.20% 11.51% 14.20%
Total risk-based capital ratio 16.85% 17.52% 15.53% 18.14% 18.02% 16.85% 18.02%
Tier 1 risk-based capital ratio 13.85% 14.43% 14.28% 16.89% 16.76% 13.85% 16.76%
Leverage capital ratio 10.20% 10.27% 10.22% 12.44% 12.32% 10.20% 12.32%
Other Data:       
Number of employees (full-time equivalent) 159  172  177  179  176  159  176 
Number of banking facilities 10  10  10  10  10  10  10 
        
(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 $0.5 million for the quarter ended December 31, 2021.
(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,
  2022  2022  2021  2021  2021 
 (Dollars in Thousands, Except Shares)
Assets     
Cash and due from banks$68,097 $88,605 $59,184 $69,217 $52,467 
Reverse repurchase agreements -  -  -  -  - 
Securities available for sale 120,265  107,237  104,240  99,813  106,383 
Equity securities at fair value 2,218  2,296  2,407  2,430  2,442 
Loans held for sale 7,519  9,567  9,859  18,258  13,168 
      
Loans 549,175  529,212  543,819  559,079  553,642 
Allowance for loan losses (8,010) (8,011) (8,352) (8,699) (9,165)
Net loans 541,165  521,201  535,467  550,380  544,477 
      
Federal Home Loan Bank Stock 2,897  3,140  3,140  3,140  3,140 
Premises and equipment, net 4,138  4,226  4,200  3,979  3,873 
Accrued interest receivable 1,644  1,611  1,605  1,813  1,916 
Deferred tax assets, net 16,142  15,758  14,731  15,193  15,632 
Other real estate owned, net 403  403  403  403  403 
Bank owned life insurance 6,002  5,966  5,930  5,894  4,861 
Goodwill and other intangible assets 98  103  109  115  120 
Other assets 3,768  4,528  4,118  5,277  4,778 
Total Assets$774,356 $764,641 $745,393 $775,912 $753,660 
      
Liabilities and Stockholders' Equity      
Deposits:     
Noninterest-bearing demand$129,457 $124,724 $120,479 $122,441 $121,862 
Interest-bearing demand 66,495  67,362  63,693  62,414  61,439 
Savings 287,159  294,255  289,943  287,609  266,085 
Time 159,389  145,612  144,876  152,115  160,578 
Total deposits 642,500  631,953  618,991  624,579  609,964 
Short-term borrowings 28,013  27,117  27,049  34,577  29,592 
Long-term borrowings 9,680  9,672  -  -  - 
Accrued interest payable 287  144  100  111  127 
Other liabilities 4,765  5,824  7,473  7,661  6,926 
Total liabilities 685,245  674,710  653,613  666,928  646,609 
      
Stockholders' Equity      
Preferred stock, $1 par value; 5,000,000 authorized shares at June 30, 2022 and December 31, 2021; 7% fixed rate noncumulative perpetual issued; 20,463 shares and 40,690 shares of series A and 1,610 shares and 3,201 shares of series B; convertible; $22.1 million and $43.9 million aggregate liquidation preference, respectively 18,762  18,762  18,762  37,308  37,308 
Common stock, $1 par value; 75,000,000 authorized shares; 1,323,547 and 1,306,660 issued shares; 1,309,478 and 1,292,591 outstanding shares at June 30, 2022 and December 31, 2021, respectively. (1) 1,324  1,318  1,307  1,302  1,301 
Capital surplus 180,544  180,431  180,360  179,557  179,421 
Accumulated deficit (107,108) (107,997) (108,897) (109,997) (112,071)
Accumulated other comprehensive income, net (3,877) (2,049) 782  1,348  1,626 
Treasury stock, 14,791 shares on June 30, 2022 and December 31, 2021 (2) (534) (534) (534) (534) (534)
Total stockholders' equity 89,111  89,931  91,780  108,984  107,051 
Total liabilities and stockholders' equity$774,356 $764,641 $745,393 $775,912 $753,660 
      
(1) Both issued and outstanding shares as stated here exclude 59,957 shares of unvested restricted stock awards at June 30, 2022 and 66,299 shares at December 31, 2021.
(2) Treasury stock includes 722 shares held by subsidiary bank CIBM Bank.
      


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,
  2022  2022  2021  2021  2021   2022  2021 
 (Dollars in thousands)
         
Interest Income        
Loans$5,542 $5,254 $5,572 $5,646 $5,583  $10,796 $11,107 
Loans held for sale 90  58  131  135  95   148  270 
Securities 683  537  516  509  551   1,220  1,106 
Other investments 96  30  25  21  10   126  21 
Total interest income 6,411  5,879  6,244  6,311  6,239   12,290  12,504 
         
Interest Expense        
Deposits 384  350  379  409  447   734  959 
Short-term borrowings 12  7  8  8  9   19  33 
Long-term borrowings 121  56  0  0  0   177  0 
Total interest expense 517  413  387  417  456   930  992 
Net interest income 5,894  5,466  5,857  5,894  5,783   11,360  11,512 
Provision for (reversal of) loan losses 40  (325) (502) (413) (300)  (285) (280)
Net interest income after provision for        
(reversal of) loan losses 5,854  5,791  6,359  6,307  6,083   11,645  11,792 
         
Noninterest Income        
Deposit service charges 92  88  95  97  90   180  174 
Other service fees 71  25  23  35  43   96  83 
Mortgage banking revenue, net 1,268  1,430  2,300  3,626  2,763   2,698  7,746 
Other income 141  212  185  186  280   353  472 
Net gains on sale of securities available for sale 0  0  0  0  0   0  0 
Unrealized gains (losses) recognized on equity securities (78) (112) (23) (12) 7   (190) (36)
Net gains (loss) on sale of SBA loans 126  31  120  151  0   157  0 
Net gains (losses) on sale of assets and (writedowns) 40  31  18  (11) (48)  71  (158)
Total noninterest income 1,660  1,705  2,718  4,072  3,135   3,365  8,281 
         
Noninterest Expense        
Compensation and employee benefits 4,175  4,229  5,334  5,436  5,099   8,404  11,055 
Equipment 439  442  446  390  384   881  763 
Occupancy and premises 408  422  400  395  443   830  877 
Data Processing 171  166  167  105  181   337  366 
Federal deposit insurance 51  52  51  46  47   103  95 
Professional services 284  224  353  227  328   508  581 
Telephone and data communication 60  61  67  70  56   121  116 
Insurance 74  85  72  66  64   159  132 
Other expense 712  581  751  782  677   1,293  1,234 
Total noninterest expense 6,374  6,262  7,641  7,517  7,279   12,636  15,219 
Income from operations        
before income taxes 1,140  1,234  1,436  2,862  1,939   2,374  4,854 
Income tax expense 251  334  336  788  558   585  1,356 
Net income  889  900  1,100  2,074  1,381   1,789  3,498 
Preferred stock dividend 0  0  0  0  0   0  0 
Discount from repurchase of preferred stock 0  0  546  0  0   0  0 
Net income allocated to        
 common stockholders$889 $900 $1,646 $2,074 $1,381  $1,789 $3,498 
         

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


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Source: CIB Marine Bancshares, Inc.

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