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 25th. 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,SeptemberJune 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,DecemberSeptemberJune 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 0  0  0  0  0   0  0 
Unrealized gains (losses) recognized on equity securities (18) 96  (66) (34) 34   (18) 34 
Net gains (loss) on sale of SBA loans 202  0  0  0  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 0  0  0  0  0   0  0 
Discount from repurchase of preferred stock 0  0  0  0  0   0  0 
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