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CIB Marine Bancshares, Inc. Announces Third Quarter 2022 Results

CIBH

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
brian.chaffin@cibmbank.com



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