CIB Marine Bancshares, Inc. Announces 2018 Third Quarter Results

BROOKFIELD, Wis., Oct. 11, 2018 (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 2018.  Pre-tax net income for the quarter was $1.2 million, the same as the third quarter in 2017, and for the nine months ending September 30, 2018, it was $3.3 million compared to $3.1 million for the same period in 2018.

A summary of financial results for the quarter and nine months ended September 30, 2018, is attached.  Selected highlights include:

  • Pre-tax net income for subsidiary CIBM Bank was $1.7 million for the quarter compared to $1.3 million for the same period in 2017, and $4.2 million for the nine months ending September 30, 2018, compared to $3.6 million for the same period in 2017.  The Company saw improved business activity across all of our major lines of business.
  • The net interest margin was reported at 3.10% for the nine months ending September 30, 2018, compared to 3.06% for the same period in 2017.  Net interest income was up $0.5 million year to date compared to the same period of 2017, due to higher average earning asset balances and a higher net interest margin.  The 2.97% net interest margin for the quarter ended September 30, 2018, was 10 basis points lower than in the same period of 2017 due primarily to a $22 million increase in average balances of reverse repurchase agreements, which added net interest income but lowered the net interest margin due to its lower spread.
  • Non-interest income improved $1.1 million for the nine months ending September 30, 2018, compared to the same period in 2017, largely reflecting higher gains on the sale of SBA loans and net mortgage banking revenues. 
  • Non-interest expenses were higher by $1.9 million for the nine months ending September 30, 2018, compared to the same period in 2017, due primarily to higher compensation and professional fees.  The latter is due mostly to expenses related to the amendment to the Articles of Incorporation that occurred earlier this year and activities associated with the repurchase of preferred shares by the Company. 
  • Non-performing assets to total assets was 1.11% at September 30, 2018, compared to 1.13% at December 31, 2017, and 1.49% at September 30,  2017, reflecting lower non-accrual loans and other real estate owned.
  • Book and tangible book value per share of common stock improved to $2.34 and $2.71, respectively, for September 30, 2018, compared to $2.04 and $2.53 at December 31, 2017. 
  • During 2018, the carry value of preferred stock has declined $11.6 million due to repurchases of preferred stock resulting in $1.8 million being transferred to additional paid in capital through September 30, 2018.  Whereas most of the repurchase transactions have cash settled, a liability has been established for those not yet settled but expect to be in the future. 

J. Brian Chaffin, CIB Marine's President and CEO, commented, "The third quarter results reflect improvements in all of our major business areas.  We had a strong production quarter for our commercial loan portfolio with outstanding balances rising $19 million over the last 3 months, and our SBA and residential loan production are both up year to date and had solid third quarters." 

Mr. Chaffin added, "Although rising interest rates and the related increased business activity in the economy have been welcome, it has created other kinds of challenges - as banking industry loan growth has increased the competition for new deposits coupled with higher short term interest rates has caused funding costs to rise.  At the same time, asset quality ratios continue to reflect a strong economy with low unemployment and generally higher asset prices in real estate and equity.  Coupled with a solid loan loss reserve at 1.62%, we have had lower provisions to loan loss reserves year to date.  We are also happy to report that after September 30, 2018, the company received a $1.0 million recovery on a loan that was charged-off more than five years ago.  This event is not reflected in the results for the third quarter and will be reported in our fourth quarter financial results."

CIB Marine Bancshares, Inc. owns and operates CIBM Bank, an Illinois chartered commercial bank, headquartered in Champaign, Illinois, which operates as "Marine Bank" in its Indiana and Wisconsin markets; "Central Illinois Bank" in its central Illinois market; and "Avenue Bank" in its Chicagoland market.  The Avenue Mortgage Division of the bank, headquartered in Naperville, Illinois, serves all CIBM Bank markets.  CIBM Bank operates eleven banking branches and nine mortgage lending offices. 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 Ended   9 Months Ended
  September 30, June 30, March 31, December 31, September 30,   September 30, September 30,
    2018     2018     2018     2017     2017       2018     2017  
  (Dollars in thousands, except share and per share data)
Selected Statement of Operations Data                
Interest and dividend income $   6,798   $   6,387   $   6,009   $   6,177   $   6,056     $   19,194   $   17,350  
Interest expense   1,767     1,406     1,185     1,121     1,140       4,358     3,005  
Net interest income   5,031     4,981     4,824     5,056     4,916       14,836     14,345  
Provision for (reversal of) loan losses   (13 )   149     (126 )   (218 )   149       10     424  
Net interest income after provision for                
(reversal of) loan losses   5,044     4,832     4,950     5,274     4,767       14,826     13,921  
Noninterest income (1)   3,063     2,968     1,832     2,015     2,257       7,863     6,715  
Noninterest expense   6,871     6,737     5,824     6,070     5,865       19,432     17,545  
Income before income taxes   1,236     1,063     958     1,219     1,159       3,257     3,091  
Income tax expense (benefit)   345     241     289     (22,689 )   25       875     45  
Net income  $   891   $   822   $   669   $   23,908   $   1,134   # $   2,382   $   3,046  
                 
Common Share Data                
Basic net income per share (2) $   0.14   $   0.05   $   0.04   $   1.32   $   0.06     $   0.23   $   0.17  
Diluted net income per share (2)   0.07     0.02     0.02     0.65     0.03       0.12     0.08  
Tangible book value per share (3)   2.71     2.58     2.54     2.53     1.23       2.71     1.23  
Book value per share (3)   2.34     2.10     2.06     2.04     0.75       2.34     0.75  
Financial Condition Data                
Total assets $   723,733   $   694,812   $   663,580   $   662,394   $   640,340     $   723,733   $   640,340  
Loans   507,677     488,762     472,746     483,611     490,089       507,677     490,089  
Allowance for loan losses   (8,217 )   (8,055 )   (7,331 )   (7,701 )   (7,905 )     (8,217 )   (7,905 )
Investment securities   118,345     119,571     115,596     114,801     112,670       118,345     112,670  
Deposits   523,729     517,452     484,258     478,633     479,285       523,729     479,285  
Borrowings   104,357     76,427     79,227     84,217     84,903       104,357     84,903  
Stockholders' equity   88,993     97,313     97,407     97,066     73,556       88,993     73,556  
Financial Ratios and Other Data                
Performance Ratios:                
Net interest margin (4)   2.97 %   3.15 %   3.20 %   3.25 %   3.07 %     3.10 %   3.06 %
Net interest spread (5)   2.72 %   2.92 %   3.00 %   3.05 %   2.88 %     2.87 %   2.89 %
Noninterest income to average assets (6)   1.72 %   1.77 %   1.15 %   1.26 %   1.37 %     1.56 %   1.39 %
Noninterest expense to average assets   3.82 %   3.99 %   3.63 %   3.79 %   3.55 %     3.82 %   3.64 %
Efficiency ratio (7)   84.63 %   84.56 %   87.28 %   85.84 %   81.76 %     85.38 %   83.31 %
Earnings on average assets (8)   0.50 %   0.49 %   0.42 %   14.93 %   0.69 %     0.47 %   0.63 %
Earnings on average equity (9)   3.77 %   3.36 %   2.78 %   124.19 %   6.11 %     3.30 %   5.65 %
Asset Quality Ratios:                
Nonaccrual loans to loans (10)   0.73 %   0.53 %   0.19 %   0.69 %   0.99 %     0.73 %   0.99 %
Nonaccrual loans, restructured loans and                 
 loans 90 days or more past due and still                
 accruing to total loans (10)   1.09 %   0.82 %   0.53 %   1.02 %   1.30 %     1.09 %   1.30 %
Nonperforming assets, restructured loans                 
and loans 90 days or more past due and still                
accruing to total assets (10)   1.11 %   0.94 %   0.85 %   1.13 %   1.49 %     1.11 %   1.49 %
Allowance for loan losses to total loans   1.62 %   1.65 %   1.55 %   1.59 %   1.61 %     1.62 %   1.61 %
Allowance for loan losses to nonaccrual loans,                 
restructured loans and loans 90 days or                 
more past due and still accruing (10)   148.99 %   200.97 %   294.77 %   156.68 %   124.21 %     148.99 %   124.21 %
Net charge-offs (recoveries) annualized                 
to average loans   -0.14 %   -0.48 %   0.21 %   -0.01 %   -0.08 %     -0.14 %   -0.08 %
Capital Ratios:                
Total equity to total assets   12.30 %   14.01 %   14.68 %   14.65 %   11.49 %     12.30 %   11.49 %
Total risk-based capital ratio   14.39 %   16.40 %   16.90 %   16.62 %   16.05 %     14.39 %   16.05 %
Tier 1 risk-based capital ratio   13.14 %   15.14 %   15.64 %   15.36 %   14.80 %     13.14 %   14.80 %
Leverage capital ratio   9.87 %   11.70 %   12.15 %   12.39 %   11.41 %     9.87 %   11.41 %
Other Data:                
Number of employees (full-time equivalent)   188     184     184     183     179       188     179  
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.  This difference was $1.8 million and $1.7 million for the nine months and three month periods ending September 30, 2018.
(3) 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. 
(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 common equity.
(10) Excludes loans held for sale.

 

CIB MARINE BANCSHARES, INC.
Summary Consolidated Balance Sheets (Unaudited)
             
  September 30,  June 30,  March 31,  December 31, September 30,       
    2018     2018   2018     2017     2017      
  (Dollars in thousands)      
Assets                
Cash and due from banks $   10,055   $   9,752 $   10,829   $   14,371   $   9,569      
Reverse repurchase agreements     45,076       28,403     23,032       5,449       10,289      
Securities available for sale     118,345       119,571     115,596       114,801       112,670      
Loans Held for Sale     8,145       15,407     6,689       11,070       7,164      
Loans     499,460       480,707     465,415       475,910       482,184      
All other assets     42,652       40,972     42,019       40,793       18,464      
Total Assets $   723,733   $   694,812 $   663,580   $   662,394   $   640,340      
                 
Liabilities and Stockholders' Equity                 
Deposits $   523,729   $   517,452 $   484,258   $   478,633   $   479,285      
Short-term borrowings     104,357       76,427     79,227       84,217       84,903      
All other liabilities     6,654       3,620     2,688       2,478       2,596      
Total liabilities     634,740       597,499     566,173       565,328       566,784      
                 
Stockholders' Equity                 
Total stockholders' equity     88,993       97,313     97,407       97,066       73,556      
Total liabilities and stockholders' equity  $   723,733   $   694,812 $   663,580   $   662,394   $   640,340      
                 
 
CIB MARINE BANCSHARES, INC.
Summary Consolidated Statements of Operations (Unaudited)
                 
  At or for the 
  Quarters Ended   9 Months Ended
  September 30, June 30, March 31, December 31, September 30,   September 30, September 30,
    2018     2018   2018     2017     2017     2018   2017
  (Dollars in thousands)
Interest Income $   6,798   $   6,387 $   6,009   $   6,177   $   6,056   $   19,194 $   17,350
Interest Expense   1,767     1,406   1,185     1,121     1,140     4,358   3,005
Net interest income   5,031     4,981   4,824     5,056     4,916     14,836   14,345
Provision for (reversal of) loan losses   (13 )   149   (126 )   (218 )   149     10   424
Net interest income after provision for                 
(reversal of) loan losses   5,044     4,832   4,950     5,274     4,767     14,826   13,921
Noninterest Income   3,063     2,968   1,832     2,015     2,257     7,863   6,715
Compensation and employee benefits   4,514     4,682   4,056     4,015     4,099     13,252   12,137
Occupancy and premises   729     759   728     722     706     2,216   2,086
Other expenses   1,628     1,296   1,040     1,333     1,060     3,964   3,322
Total noninterest expense   6,871     6,737   5,824     6,070     5,865     19,432   17,545
Income from operations                 
before income taxes   1,236     1,063   958     1,219     1,159     3,257   3,091
Income tax expense (benefit)   345     241   289     (22,689 )   25     875   45
Net income    891     822   669     23,908     1,134     2,382   3,046
Preferred stock dividend   0     0   0     0     0     0   0
Net income allocated to                
 common stockholders $   891   $   822 $   669   $   23,908   $   1,134   $   2,382 $   3,046
                 

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