United States

CIB Marine Bancshares, Inc. Announces Third Quarter 2022 Results

BROOKFIELD, Wis., Oct. 14, 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 nine months ended September 30, 2022. Continued strong net interest income supported increased earnings over the prior quarter, however, third quarter earnings are down compared to the same period in 2021 due to substantially reduced mortgage banking income in the rapidly changing interest rate environment. Net income for the quarter was $1.0 million, or $0.78 basic and $0.57 diluted earnings per share, compared to $2.1 million, or $1.61 basic and $0.94 diluted earnings per share, for the same period of 2021; and net income for the nine-month period was $2.8 million, or $2.16 basic and $1.57 diluted earnings per share, compared to $5.6 million, or $4.36 basic and $2.53 diluted earnings per share, for the same period in 2021.

Financial highlights for the quarter include:

  • Net interest income and margin were $6.4 million and 3.45%, respectively, compared to $5.9 million and 3.21%, respectively, in the same period of 2021; and $17.8 million and 3.25%, respectively, for the nine-month period compared to $17.4 million and 3.23%, respectively, for the same period of 2021. The nine-month period in 2022 has $0.6 million less PPP loan fee accretion income and $0.3 million more subordinated debt interest expense compared to the same period in 2021. Improvements reflect higher earning assets, asset yield increases outpacing liability cost increases, and growth in non-interest bearing checking accounts. All remaining PPP loans were fully repaid in the third quarter of 2022.
  • Net mortgage banking revenues were down $2.5 million and $7.5 million for the quarter and nine-month period, respectively, compared to the same periods of 2021. The change was due to a 54% decline in loan originations for the nine months ended September 30, 2022, compared to the same period of 2021, as a result of a substantial increase in residential mortgage rates and the dramatic competitive tightening of pricing margins across the industry.
  • As of September 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 0.18% and 0.13%, respectively, compared to 0.21% and 0.14%, respectively, on December 31, 2021, and 0.25% and 0.18%, respectively, on September 30, 2021.
  • Over the longer-term, improving deposit mix is crucial to our success in managing consistently higher net interest margins. Since December 31, 2021, the Fed has increased their target fed funds rate by 300 basis points putting pressure on deposit mix over the shorter term. Over the year, time deposit balances have increased $20 million, money market accounts have decreased by $37 million, and combined interest and non-interest bearing checking accounts have increased by $30 million.

Mr. J. Brian Chaffin, CIBM’s President and CEO, commented, “Despite declining real gross domestic product, rapidly rising interest rates, and declining asset prices, we have been able to improve our core banking operating revenues with solid lending and deposit activity while maintaining strong asset quality measures. Although residential lending and related earnings have receded dramatically this year, we are positioned for longer-term success as the marketplace continues to consolidate.”  

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 Ended   9 Months Ended
  September 30, June 30, March 31, December 31, September 30,
  September 30, September 30,
  2022 2022 2022 2021 2021   2022 2021
  (Dollars in thousands, except share and per share data)
Selected Statement of Operations Data:                
Interest and dividend income $ 7,234   $ 6,411   $ 5,879   $ 6,244   $ 6,311     $ 19,524   $ 18,815  
Interest expense   823     517     413     387     417       1,753     1,409  
Net interest income   6,411     5,894     5,466     5,857     5,894       17,771     17,406  
Provision for (reversal of) loan losses   34     40     (325 )   (502 )   (413 )     (251 )   (693 )
Net interest income after provision for                
(reversal of) loan losses   6,377     5,854     5,791     6,359     6,307       18,022     18,099  
Noninterest income (1)   1,313     1,660     1,705     2,718     4,072       4,678     12,353  
Noninterest expense   6,311     6,374     6,262     7,641     7,517       18,947     22,736  
Income before income taxes   1,379     1,140     1,234     1,436     2,862       3,753     7,716  
Income tax expense   352     251     334     336     788       937     2,144  
Net income $ 1,027   $ 889   $ 900   $ 1,100   $ 2,074     $ 2,816   $ 5,572  
                 
Common Share Data:                
Basic net income per share (2) $ 0.78   $ 0.68   $ 0.69   $ 1.28   $ 1.61     $ 2.16   $ 4.36  
Diluted net income per share (2)   0.57     0.49     0.50     0.92     0.94       1.57     2.53  
Dividend   0.00     0.00     0.00     0.00     0.00       0.00     0.00  
Tangible book value per share (3)   52.24     53.68     54.53     57.06     55.60       52.24     55.60  
Book value per share (3)   49.78     51.22     52.07     54.55     50.58       49.78     50.58  
Weighted average shares outstanding – basic   1,308,752     1,307,289     1,295,573     1,287,438     1,286,536       1,302,872     1,278,818  
Weighted average shares outstanding – diluted   1,797,721     1,798,002     1,792,181     1,784,005     2,208,493       1,794,941     2,200,867  
Financial Condition Data:                
Total assets $ 762,965   $ 774,356   $ 764,641   $ 745,393   $ 775,912     $ 762,965   $ 775,912  
Loans   564,841     549,175     529,212     543,819     559,079       564,841     559,079  
Allowance for loan losses   (8,061 )   (8,010 )   (8,011 )   (8,352 )   (8,699 )     (8,061 )   (8,699 )
Investment securities   127,954     122,483     109,533     106,647     102,243       127,954     102,243  
Deposits   633,234     642,500     631,953     618,991     624,579       633,234     624,579  
Borrowings   37,168     37,693     36,789     27,049     34,577       37,168     34,577  
Stockholders’ equity   87,228     89,111     89,931     91,780     108,984       87,228     108,984  
Financial Ratios and Other Data:                
Performance Ratios:                
Net interest margin (4)   3.45 %   3.23 %   3.05 %   3.18 %   3.21 %     3.25 %   3.23 %
Net interest spread (5)   3.29 %   3.14 %   2.98 %   3.10 %   3.12 %     3.13 %   3.14 %
Noninterest income to average assets (6)   0.72 %   0.91 %   0.97 %   1.43 %   2.13 %     0.87 %   2.20 %
Noninterest expense to average assets   3.24 %   3.34 %   3.35 %   3.98 %   3.92 %     3.31 %   4.03 %
Efficiency ratio (7)   80.73 %   83.52 %   85.98 %   88.87 %   75.34 %     83.35 %   76.28 %
Earnings on average assets (8)   0.53 %   0.47 %   0.48 %   0.57 %   1.08 %     0.49 %   0.99 %
Earnings on average equity (9)   4.52 %   3.96 %   3.98 %   4.47 %   7.59 %     4.15 %   6.95 %
Asset Quality Ratios:                
Nonaccrual loans to loans (10)   0.13 %   0.22 %   0.13 %   0.14 %   0.18 %     0.13 %   0.18 %
Nonaccrual loans, restructured loans and                
loans 90 days or more past due and still                
accruing to total loans (10)   0.17 %   0.28 %   0.20 %   0.21 %   0.27 %     0.17 %   0.27 %
Nonperforming assets, restructured loans                
and loans 90 days or more past due and still                
accruing to total assets (10)   0.18 %   0.25 %   0.19 %   0.21 %   0.25 %     0.18 %   0.25 %
Allowance for loan losses to total loans (10)   1.43 %   1.46 %   1.51 %   1.54 %   1.56 %     1.43 %   1.56 %
Allowance for loan losses to nonaccrual loans,                
restructured loans and loans 90 days or                
more past due and still accruing (10)   852.11 %   512.48 %   742.45 %   726.26 %   575.33 %     852.11 %   575.33 %
Net charge-offs (recoveries) annualized                
to average loans (10)   -0.01 %   0.03 %   0.01 %   -0.11 %   0.04 %     0.01 %   -0.07 %
Capital Ratios:                
Total equity to total assets   11.43 %   11.51 %   11.76 %   12.31 %   14.05 %     11.43 %   14.05 %
Total risk-based capital ratio   16.42 %   16.85 %   17.52 %   15.53 %   18.14 %     16.42 %   18.14 %
Tier 1 risk-based capital ratio   13.48 %   13.85 %   14.43 %   14.28 %   16.89 %     13.48 %   16.89 %
Leverage capital ratio   10.16 %   10.20 %   10.27 %   10.22 %   12.44 %     10.16 %   12.44 %
Other Data:                
Number of employees (full-time equivalent)   166     159     172     177     179       166     179  
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)
           
  September 30, June 30, March 31, December 31, September 30,
  2022 2022 2022 2021 2021
  (Dollars in Thousands, Except Shares)
Assets          
Cash and due from banks $ 36,454   $ 68,097   $ 88,605   $ 59,184   $ 69,217  
Reverse repurchase agreements                    
Securities available for sale   125,830     120,265     107,237     104,240     99,813  
Equity securities at fair value   2,124     2,218     2,296     2,407     2,430  
Loans held for sale   6,471     7,519     9,567     9,859     18,258  
           
Loans   564,841     549,175     529,212     543,819     559,079  
Allowance for loan losses   (8,061 )   (8,010 )   (8,011 )   (8,352 )   (8,699 )
Net loans   556,780     541,165     521,201     535,467     550,380  
           
Federal Home Loan Bank Stock   1,897     2,897     3,140     3,140     3,140  
Premises and equipment, net   4,159     4,138     4,226     4,200     3,979  
Accrued interest receivable   1,807     1,644     1,611     1,605     1,813  
Deferred tax assets, net   16,977     16,142     15,758     14,731     15,193  
Other real estate owned, net   403     403     403     403     403  
Bank owned life insurance   6,040     6,002     5,966     5,930     5,894  
Goodwill and other intangible assets   92     98     103     109     115  
Other assets   3,931     3,768     4,528     4,118     5,277  
Total Assets $ 762,965   $ 774,356   $ 764,641   $ 745,393   $ 775,912  
           
Liabilities and Stockholders’ Equity          
Deposits:          
Noninterest-bearing demand $ 134,765   $ 129,457   $ 124,724   $ 120,479   $ 122,441  
Interest-bearing demand   79,306     66,495     67,362     63,693     62,414  
Savings   254,146     287,159     294,255     289,943     287,609  
Time   165,017     159,389     145,612     144,876     152,115  
Total deposits   633,234     642,500     631,953     618,991     624,579  
Short-term borrowings   27,480     28,013     27,117     27,049     34,577  
Long-term borrowings   9,688     9,680     9,672          
Accrued interest payable   227     287     144     100     111  
Other liabilities   5,108     4,765     5,824     7,473     7,661  
Total liabilities   675,737     685,245     674,710     653,613     666,928  
           
Stockholders’ Equity          
Preferred stock, $1 par value; 5,000,000 authorized shares at September 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     18,762     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 September 30, 2022 and December 31, 2021, respectively. (1)   1,324     1,324     1,318     1,307     1,302  
Capital surplus   180,664     180,544     180,431     180,360     179,557  
Accumulated deficit   (106,081 )   (107,108 )   (107,997 )   (108,897 )   (109,997 )
Accumulated other comprehensive income, net   (6,907 )   (3,877 )   (2,049 )   782     1,348  
Treasury stock, 14,791 shares on September 30, 2022 and December 31, 2021 (2)   (534 )   (534 )   (534 )   (534 )   (534 )
Total stockholders’ equity   87,228     89,111     89,931     91,780     108,984  
Total liabilities and stockholders’ equity $ 762,965   $ 774,356   $ 764,641   $ 745,393   $ 775,912  
           
(1) Both issued and outstanding shares as stated here exclude 59,676 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   9 Months Ended
  September 30, June 30, March 31, December 31, September 30,
  September 30, September 30,
  2022 2022 2022 2021 2021   2022 2021
  (Dollars in thousands)
                 
Interest Income                
Loans $ 6,029   $ 5,542   $ 5,254   $ 5,572   $ 5,646     $ 16,825   $ 16,753  
Loans held for sale   96     90     58     131     135       244     405  
Securities   826     683     537     516     509       2,046     1,615  
Other investments   283     96     30     25     21       409     42  
Total interest income   7,234     6,411     5,879     6,244     6,311       19,524     18,815  
                 
Interest Expense                
Deposits   662     384     350     379     409       1,396     1,368  
Short-term borrowings   40     12     7     8     8       59     41  
Long-term borrowings   121     121     56     0     0       298     0  
Total interest expense   823     517     413     387     417       1,753     1,409  
Net interest income   6,411     5,894     5,466     5,857     5,894       17,771     17,406  
Provision for (reversal of) loan losses   34     40     (325 )   (502 )   (413 )     (251 )   (693 )
Net interest income after provision for                
(reversal of) loan losses   6,377     5,854     5,791     6,359     6,307       18,022     18,099  
                 
Noninterest Income                
Deposit service charges   86     92     88     95     97       266     271  
Other service fees   18     71     25     23     35       114     118  
Mortgage banking revenue, net   1,126     1,268     1,430     2,300     3,626       3,824     11,372  
Other income   147     141     212     185     186       500     658  
Net gains on sale of securities available for sale   0     0     0     0     0       0     0  
Unrealized gains (losses) recognized on equity securities   (93 )   (78 )   (112 )   (23 )   (12 )     (283 )   (48 )
Net gains (loss) on sale of SBA loans   0     126     31     120     151       157     151  
Net gains (losses) on sale of assets and (writedowns)   29     40     31     18     (11 )     100     (169 )
Total noninterest income   1,313     1,660     1,705     2,718     4,072       4,678     12,353  
                 
Noninterest Expense                
Compensation and employee benefits   4,240     4,175     4,229     5,334     5,436       12,644     16,491  
Equipment   396     439     442     446     390       1,277     1,153  
Occupancy and premises   390     408     422     400     395       1,220     1,272  
Data Processing   205     171     166     167     105       542     471  
Federal deposit insurance   58     51     52     51     46       161     141  
Professional services   244     284     224     353     227       752     808  
Telephone and data communication   61     60     61     67     70       182     186  
Insurance   74     74     85     72     66       233     198  
Other expense   643     712     581     751     782       1,936     2,016  
Total noninterest expense   6,311     6,374     6,262     7,641     7,517       18,947     22,736  
Income from operations                
before income taxes   1,379     1,140     1,234     1,436     2,862       3,753     7,716  
Income tax expense   352     251     334     336     788       937     2,144  
Net income   1,027     889     900     1,100     2,074       2,816     5,572  
Preferred stock dividend   0     0     0     0     0       0     0  
Discount from repurchase of preferred stock   0     0     0     546     0       0     0  
Net income allocated to                
 common stockholders $ 1,027   $ 889   $ 900   $ 1,646   $ 2,074     $ 2,816   $ 5,572  
                 

 

FOR INFORMATION CONTACT:
J. Brian Chaffin, President & CEO
(217) 355-0900
[email protected]

 

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