CIB Marine Bancshares, Inc. Announces First Quarter 2024 Results
BROOKFIELD, Wis., April 19, 2024 (GLOBE NEWSWIRE) -- CIB Marine Bancshares, Inc. (the “Company” or “CIB Marine”) (OTCQX: CIBH), the holding company of CIBM Bank (the “Bank”), announced its unaudited results of operations and financial condition for the quarter and three months ended March 31, 2024. During the quarter, CIBM Bank’s loan portfolio growth slowed to $14 million and deposits grew $45 million, allowing the Bank to reduce borrowings by $45 million, improve its liquidity profile, and control cost of funds. The Mortgage Division improved its operating results versus the first quarter of 2023, but did have an operating loss as a result of the severe production environment created by higher interest rates and lack of housing supply.Income before tax was $0.2 million for the first quarter of 2024, nominally higher than the fourth quarter of 2023. Net income was $0.2 million for the first quarter of 2024 or $0.13 basic and $0.10 diluted net income per share, compared to a loss of $0.9 million during the fourth quarter of 2023 or $0.67 basic and $0.67 diluted net loss per share. Net income for the first quarter of 2023 was $0.2 million or $0.17 basic or $0.13 diluted net income per share*. *
Financial highlights for the quarter include:
· CIBM Bank’s loan portfolio balances increased $14 million, primarily from funding prior commercial real estate construction loans and other new commercial segment loans. This is down from $33 million of growth in the fourth quarter of 2023. Loan portfolio growth is expected to continue to decline due to higher loan rates and balance sheet management. Deposits increased by $45 million, primarily in time deposits and money market accounts, as lower-cost fundings were used to reduce higher-cost short term borrowings from the Federal Home Loan Bank of Chicago (“FHLB”). This helped to control some of the cost of funds pressures for the period and improved the Bank’s liquidity profile as the loan to deposit ratio declined from 98% at December 31, 2023, to 94% at March 31, 2024, and borrowing availability with the FHLB increased.
· As of March 31, 2024, non-performing assets, modified loans to borrowers experiencing financial difficulty, and loans 90 days or more past due and still accruing to total assets and nonaccrual loans to total loans ratios were 0.89% and 0.48%, respectively, compared to 0.90% and 0.50%, respectively, on December 31, 2023, and 0.14% and 0.08%, respectively, on March 31, 2023. Also, as of March 31, 2024, the allowance for credit losses on loans (“ACLL”) to loans was 1.23% compared to an ACLL of 1.27% on December 31, 2023, and 1.51% on March 31, 2023. The ACLL qualitative factors, including in the assessment of the ACLL, include economic forecasts obtained from third parties. Over the course of 2023 and the first quarter of 2024, gross domestic product and unemployment forecasts have improved with declining recession risk resulting in a lower ACLL to loans ratio.
· Net interest margin was down 12 basis points from the prior quarter as the increase in the cost of funds was more than the increase in the yields on earning assets. Although progress was made in controlling the cost of funds by reducing our high-cost borrowings and replacing them with lower cost deposits, this progress was offset by certain other deposit relationship cost increases and higher cost renewals of time deposits. Net interest income was down $0.2 million from the fourth quarter of 2023 and down $0.9 million from the first quarter of 2023.
· For the quarter ended March 31, 2024, Banking Division net income was $0.8 million, down $0.2 million from the same period in 2023, and Mortgage Division net loss was $0.3 million, improved by $0.2 million due to prior cost saving actions and certain new hire costs in 2023, despite the continued market challenges. The remaining $0.3 million net loss was from parent company sub-debt and administration expenses.
Reflecting on the quarter, Mr. J. Brian Chaffin, CIB Marine’s President and CEO, commented, “We have had some real successes this past quarter in a number of areas. Our solid deposit growth has resulted in an improved liquidity profile and, based on current forecasts, we believe it will lead to improved net interest margins in the future. Our targeted cost controls from last year are in place and have offset some of the decline in revenues.
“In this environment of constrained revenues, we continue to use balance sheet management to improve capital ratios in support of future preferred stock redemptions. Under this strategy, we expect slow – possibly even negative – loan growth in the foreseeable future, as well as possible asset sales, such as the sale of $2.7 million SBA 7(a) guaranteed loans for a gain of $0.2 million that we completed in the first quarter.
“In addition, due to continued challenges in mortgage banking largely originating from a shortfall in housing supply and high interest rates, and after evaluating many options, we significantly reduced ongoing operating costs for future periods with reductions of operations and less productive sales staff, and adjusted certain fees and compensation arrangements at the end of the first quarter of 2024 to improve the range of potential outcomes to include a profitable year in the Mortgage Division.”
He concluded, “We plan on covering a number of important topics related to our operating results and capital plans for our shareholders in more detail at the Annual Shareholder Meeting scheduled for Thursday, April 25^th. We encourage shareholders to visit our website for additional details regarding our virtual shareholder meeting, and to review the meeting materials.”
CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates nine banking offices in Illinois, Wisconsin, and Indiana, and has mortgage loan officers and/or offices in nine states. 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* *3 Months Ended* *March 31,* *December 31,* *September* *June 30,* *March 31,* *March 31,* *March 31,* *2024* *2023* *30, 2023* *2023* *2023* *2024* *2023* *(Dollars in thousands, except share and per share data)*
*Selected Statement of Operations Data:*
Interest and dividend income $ 11,801 $ 11,328 $ 10,117 $ 9,152 $ 8,472 $ 11,801 $ 8,472
Interest expense 6,840 6,190 5,180 3,643 2,601 6,840 2,601
Net interest income 4,961 5,138 4,937 5,509 5,871 4,961 5,871
Provision for (reversal of) credit losses (28 ) 135 (140 ) (246 ) 159 (28 ) 159
Net interest income after provision for (reversal of) credit losses 4,989 5,003 5,077 5,755 5,712 4,989 5,712
Noninterest income (1) 1,627 1,824 2,368 3,298 1,410 1,627 1,410
Noninterest expense 6,421 6,669 7,007 7,457 6,805 6,421 6,805
Income before income taxes 195 158 438 1,596 317 195 317
Income tax expense 17 1,050 59 431 89 17 89
Net income (loss) $ 178 $ (892 ) $ 379 $ 1,165 $ 228 $ 178 $ 228
*Common Share Data:*
Basic net income (loss) per share $ 0.13 $ (0.67 ) $ 0.28 $ 0.88 $ 0.17 $ 0.13 $ 0.17
Diluted net income (loss) per share 0.10 (0.67 ) 0.21 0.64 0.13 0.10 0.13
Dividend 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Tangible book value per share (2) 52.59 53.35 52.05 52.47 53.28 52.59 53.28
Book value per share (2) 50.84 51.58 50.28 50.70 51.48 50.84 51.48
Weighted average shares outstanding - basic 1,341,181 1,334,163 1,333,889 1,318,460 1,308,603 1,341,181 1,308,603
Weighted average shares outstanding - diluted 1,820,498 1,813,207 1,814,716 1,815,593 1,803,218 1,820,498 1,803,218
*Financial Condition Data:*
Total assets $ 897,595 $ 899,060 $ 874,247 $ 819,521 $ 787,244 $ 897,595 $ 787,244
Loans 736,019 722,084 688,446 647,823 608,492 736,019 608,492
Allowance for credit losses on loans (9,087 ) (9,136 ) (8,947 ) (8,999 ) (9,193 ) (9,087 ) (9,193 )
Investment securities 119,300 131,529 130,476 114,661 126,001 119,300 126,001
Deposits 772,377 727,565 644,165 613,808 632,339 772,377 632,339
Borrowings 32,120 76,956 138,469 113,950 65,173 32,120 65,173
Stockholders' equity 85,091 85,075 83,313 83,876 83,615 85,091 83,615
*Financial Ratios and Other Data:*
Performance Ratios:
Net interest margin (3) 2.29 % 2.41 % 2.43 % 2.90 % 3.22 % 2.29 % 3.22 %
Net interest spread (4) 1.63 % 1.79 % 1.85 % 2.42 % 2.82 % 1.63 % 2.82 %
Noninterest income to average assets (5) 0.73 % 0.78 % 1.15 % 1.68 % 0.72 % 0.73 % 0.72 %
Noninterest expense to average assets 2.87 % 3.00 % 3.31 % 3.77 % 3.58 % 2.87 % 3.58 %
Efficiency ratio (6) 97.20 % 97.13 % 95.06 % 84.35 % 93.90 % 97.20 % 93.90 %
Earnings on average assets (7) 0.08 % -0.40 % 0.18 % 0.59 % 0.12 % 0.08 % 0.12 %
Earnings on average equity (8) 0.84 % -4.21 % 1.78 % 5.53 % 1.11 % 0.84 % 1.11 %
*Asset Quality Ratios:*
Nonaccrual loans to loans (9) 0.48 % 0.50 % 0.50 % 0.02 % 0.08 % 0.48 % 0.08 %
Nonaccrual loans, modified loans to borrowers experiencing financial difficulty, loans 90 days or more past due and still accruing to total loans 1.04 % 1.07 % 0.56 % 0.11 % 0.12 % 1.04 % 0.12 %
Nonaccrual loans, modified loans to borrowers experiencing financial difficulty, loans 90 days or more past due and still accruing to total assets 0.89 % 0.90 % 0.49 % 0.13 % 0.14 % 0.89 % 0.14 %
Allowance for credit losses on loans to total loans (9) 1.23 % 1.27 % 1.30 % 1.39 % 1.51 % 1.23 % 1.51 %
Allowance for credit losses on loans to nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing (9) 118.77 % 118.59 % 231.01 % 1283.74 % 1262.77 % 118.77 % 1262.77 %
Net charge-offs (recoveries) annualized to average loans (9) 0.03 % 0.01 % -0.01 % -0.02 % -0.02 % 0.03 % -0.02 %
*Capital Ratios:*
Total equity to total assets 9.48 % 9.46 % 9.53 % 10.23 % 10.62 % 9.48 % 10.62 %
Total risk-based capital ratio 13.07 % 13.24 % 13.58 % 14.31 % 14.84 % 13.07 % 14.84 %
Tier 1 risk-based capital ratio 10.48 % 10.62 % 10.91 % 11.54 % 11.99 % 10.48 % 11.99 %
Leverage capital ratio 8.50 % 8.62 % 8.93 % 9.43 % 9.56 % 8.50 % 9.56 %
*Other Data:*
Number of employees (full-time equivalent) 177 193 194 206 202 177 202
Number of banking facilities 9 9 9 10 10 9 10
[(1) Noninterest income includes gains and losses on securities.]
[(2) 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.]
[(3) Net interest margin is the ratio of net interest income to average interest-earning assets.]
[(4) Net interest spread is the yield on average interest-earning assets less the rate on average interest-bearing liabilities.]
[(5) Noninterest income to average assets excludes gains and losses on securities.]
[(6) The efficiency ratio is noninterest expense divided by the sum of net interest income plus noninterest income, excluding gains and losses on securities.]
[(7) Earnings on average assets are net income divided by average total assets.]
[(8) Earnings on average equity are net income divided by average stockholders' equity.]
[(9) Excludes loans held for sale.]
*CIB MARINE BANCSHARES, INC.*
*Consolidated Balance Sheets (unaudited)* *March 31,* *December 31,* *September 30,* *June 30,* *March 31,* *2024* *2023* *2023* *2023* *2023* *(Dollars in Thousands, Except Shares)*
*Assets*
Cash and due from banks $ 7,727 $ 9,491 $ 9,203 $ 14,444 $ 16,490
Reverse repurchase agreements - - - - -
Securities available for sale 117,160 129,370 128,413 112,532 123,838
Equity securities at fair value 2,140 2,159 2,063 2,129 2,163
Loans held for sale 8,048 9,209 15,011 14,726 10,848
Loans 736,019 722,084 688,446 647,823 608,492
Allowance for credit losses on loans (9,087 ) (9,136 ) (8,947 ) (8,999 ) (9,193 )
Net loans 726,932 712,948 679,499 638,824 599,299
Federal Home Loan Bank Stock 2,328 2,709 4,645 2,818 1,897
Premises and equipment, net 3,550 3,602 3,675 3,879 3,969
Accrued interest receivable 3,271 2,983 2,748 2,036 2,118
Deferred tax assets, net 14,849 14,753 16,815 16,790 16,464
Other real estate owned, net 375 375 375 375 375
Bank owned life insurance 6,291 6,247 6,204 6,160 6,119
Goodwill and other intangible assets 64 64 70 76 81
Other assets 4,860 5,150 5,526 4,732 3,583
Total assets $ 897,595 $ 899,060 $ 874,247 $ 819,521 $ 787,244
*Liabilities and Stockholders' Equity*
Deposits:
Noninterest-bearing demand $ 87,621 $ 89,025 $ 88,674 $ 93,487 $ 94,700
Interest-bearing demand 92,092 90,232 73,086 82,484 93,388
Savings 261,998 256,059 254,211 247,339 259,907
Time 330,666 292,249 228,194 190,498 184,344
Total deposits 772,377 727,565 644,165 613,808 632,339
Short-term borrowings 22,383 67,227 128,748 104,238 55,469
Long-term borrowings 9,737 9,729 9,721 9,712 9,704
Accrued interest payable 1,982 1,883 1,491 963 557
Other liabilities 6,025 7,581 6,809 6,924 5,560
Total liabilities 812,504 813,985 790,934 735,645 703,629
*Stockholders' Equity*
Preferred stock, $1 par value; 5,000,000 authorized shares at both March 31, 2024 and December 31, 2023; 7% fixed rate noncumulative perpetual issued; 14,633 shares of series A and 1,610 shares of series B; convertible; $16.2 million aggregate liquidation preference 13,806 13,806 13,806 13,806 13,806
Common stock, $1 par value; 75,000,000 authorized shares; 1,368,987 and 1,349,392 issued shares; 1,354,918 and 1,335,323 outstanding shares at March 31, 2024 and December 31, 2023, respectively. (1) 1,369 1,349 1,349 1,349 1,324
Capital surplus 181,380 181,282 181,144 181,050 180,903
Accumulated deficit (105,157 ) (105,335 ) (104,443 ) (104,822 ) (105,987 )
Accumulated other comprehensive income, net (5,773 ) (5,493 ) (8,009 ) (6,973 ) (5,897 )
Treasury stock, 14,791 shares on March 31, 2024 and December 31, 2023 (2) (534 ) (534 ) (534 ) (534 ) (534 )
Total stockholders' equity 85,091 85,075 83,313 83,876 83,615
Total liabilities and stockholders' equity $ 897,595 $ 899,060 $ 874,247 $ 819,521 $ 787,244
[(1) Both issued and outstanding shares as stated here exclude 51,018 shares and 48,308 shares of unvested restricted stock awards at March 31, 2024 and December 31, 2023, respectively.]
[(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* *3 Months Ended* *March 31,* *December* *September* *June 30,* *March 31,* *March 31,* *March 31,* *2024* *31, 2023* *30, 2023* *2023* *2023* *2024* *2023* *(Dollars in thousands)*
*Interest Income*
Loans $ 10,394 $ 9,752 $ 8,718 $ 7,942 $ 7,121 $ 10,394 $ 7,121
Loans held for sale 142 200 227 155 84 142 84
Securities 1,231 1,330 1,132 985 1,031 1,231 1,031
Other investments 34 46 40 70 236 34 236
Total interest income 11,801 11,328 10,117 9,152 8,472 11,801 8,472
*Interest Expense*
Deposits 6,227 5,071 3,918 3,076 2,364 6,227 2,364
Short-term borrowings 493 998 1,141 445 118 493 118
Long-term borrowings 120 121 121 122 119 120 119
Total interest expense 6,840 6,190 5,180 3,643 2,601 6,840 2,601
Net interest income 4,961 5,138 4,937 5,509 5,871 4,961 5,871
Provision for (reversal of) credit losses (28 ) 135 (140 ) (246 ) 159 (28 ) 159
Net interest income after provision for (reversal of) credit losses 4,989 5,003 5,077 5,755 5,712 4,989 5,712
*Noninterest Income*
Deposit service charges 66 74 101 76 79 66 79
Other service fees (5 ) 3 6 11 16 (5 ) 16
Mortgage banking revenue, net 1,209 1,397 1,984 1,636 1,008 1,209 1,008
Other income 163 165 132 171 110 163 110
Net gains on sale of securities available for sale
Unrealized gains (losses) recognized on equity securities (18 ) 96 (66 ) (34 ) 34 (18 ) 34
Net gains (loss) on sale of SBA loans 202 151 202 151
Net gains (losses) on sale of assets and (writedowns) 10 89 211 1,438 12 10 12
Total noninterest income 1,627 1,824 2,368 3,298 1,410 1,627 1,410
*Noninterest Expense*
Compensation and employee benefits 4,289 4,369 4,631 5,101 4,550 4,289 4,550
Equipment 462 493 484 504 475 462 475
Occupancy and premises 436 415 490 404 438 436 438
Data Processing 212 224 245 221 199 212 199
Federal deposit insurance 199 170 123 150 87 199 87
Professional services 199 243 271 317 278 199 278
Telephone and data communication 56 66 57 56 61 56 61
Insurance 81 79 82 68 88 81 88
Other expense 487 610 624 636 629 487 629
Total noninterest expense 6,421 6,669 7,007 7,457 6,805 6,421 6,805
Income from operations before income taxes 195 158 438 1,596 317 195 317
Income tax expense 17 1,050 59 431 89 17 89
*Net (loss) income* 178 (892 ) 379 1,165 228 178 228
Preferred stock dividend
Discount from repurchase of preferred stock
*Net income (loss) allocated to common stockholders* $ 178 $ (892 ) $ 379 $ 1,165 $ 228 $ 178 $ 228
FOR INFORMATION CONTACT:
J. Brian Chaffin, President & CEO
(217) 355-0900
brian.chaffin@cibmbank.com