CIB Marine Bancshares, Inc. Announces 2019 Results

BROOKFIELD, Wis., Jan. 24, 2020 (GLOBE NEWSWIRE) -- CIB Marine Bancshares, Inc. (the “Company” or “CIBM”) (OTCQB: CIBH), the holding company of CIBM Bank, announced its unaudited results of operations and financial condition for the fourth quarter and year-end 2019.  Net income for the year ended December 31, 2019, was $2.0 million or $0.13 basic and $0.07 diluted earnings per share, compared to $3.3 million or $0.28 basic and $0.15 diluted earnings per share for the same period of 2018. 

Lower income for the year was the result of a few key factors:

• The provision for loan losses was $0.8 million in 2019 compared to a $1.2 million reversal of provision in 2018.  Although credit quality measures overall were improved, as highlighted below, impairments on a few loans resulted in a provision to loan losses of $0.7 million during the fourth quarter of 2019 compared to a reversal of $1.2 million for the same period of 2018. 
• Total gains on the sale of SBA 7(a) loans for the year 2019 declined by $1.1 million compared to 2018 due to a $6 million decline in loans originated for sale and lower premiums on loans sold.  The decline reflects the broader industry experience for the year.
• Cost of interest bearing liabilities increased 38 basis points from 2018 to 2019 as deposit pricing pressure for time deposits and money market accounts began building in the latter half of 2018 and continued into 2019.  As a result, the net interest margin declined by 14 basis points and net interest income declined by $0.5 million in 2019 compared to 2018.

Some highlights of 2019 included:

• Mortgage division income before tax increased by $1.0 million for the full year compared to 2018, the result of an increase of approximately $55 million in residential loans originated for sale.
• Tangible book value per share and stated book value per share at December 31, 2019, were $2.99 and $2.64 per share of common stock, respectively, reflecting increases of $0.17 and $0.19 versus the prior year-end.  The increases were due primarily to $2.0 million in net income; a $1.4 million improvement in accumulated other comprehensive income; and a $0.3 million discount to the carry value of the preferred stock repurchased in 2019, which was accretive to the common shareholders.
• Although the cost of interest bearing liabilities was higher overall for the year, it declined by 13 basis points during the fourth quarter as renewing 12-month time deposits and money market accounts with one-year introductory rates were repriced in a lower rate environment.  
• 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 was 1.35% and 1.09%, respectively, at December 31, 2019, compared to 1.45% and 1.34%, respectively, at December 31, 2018.

Mr. J. Brian Chaffin, President and CEO of CIBM, commented, “Although we showed solid results in a number of areas where goals and budgets were met or exceeded – including our corporate banking and mortgage divisions – the higher loan loss provisions resulting from a few loans, higher cost of funds, and lower SBA originations were setbacks in 2019 that resulted in lower than expected overall operating results.  In the fourth quarter of 2019, management, working with the Board of Directors, commenced a targeted improvement process with objectives to drive better results in the future.  This process is directed at cost of funds, product mix and margins, cost controls and other matters related to the company’s culture, brand, and customer experience.”

Regarding preferred stock repurchases, he stated, “We settled our outstanding preferred stock repurchases during the fourth quarter of 2019 and early 2020.  This included the repurchase of 2,229 shares of preferred stock as part of the second of three planned modified Dutch auctions, and 4,923 preferred shares that were subject to repurchase pursuant to a negotiated repurchase agreement entered into in 2018.  The total purchase price was $5.1 million.  CIB Marine did not issue any new capital or debt to pay for the repurchases and no longer has any outstanding liabilities in its balance sheet for agreements to repurchase stock. Total repurchased shares to date amount to approximately 26% of the 60,000 shares of preferred stock originally issued in 2009 and the shares repurchased to date included 1,159 shares of Series B preferred stock, effectively terminating conversion rights equal to 4.6 million shares of common stock.

“CIB Marine plans to hold the third and final modified Dutch auction during the first half of 2020.  More information will be forthcoming,” he concluded.

CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates eleven banking offices and four 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.

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