CIB Marine Bancshares, Inc. Announces 2021 Results

Rhea-AI Summary

CIB Marine Bancshares, Inc. reported its unaudited financial results for 2021, showing a net income of $6.7 million, down from $8.2 million in 2020. Key highlights include a 9.1% increase in tangible book value to $57.06 per share, driven by earnings and the repurchase of preferred stock. Net interest income rose to $23.3 million, aided by a significant increase in commercial loan originations and net recoveries from previous loan losses. The bank's mortgage division closed approximately $440 million in loans, reflecting strong performance amid rising interest rates.

Positive

• Net income of $6.7 million for 2021, supported by strong loan originations.
• Tangible book value increased to $57.06 per share, a 9.1% rise.
• Net interest income climbed to $23.3 million, a $1.1 million increase from 2020.
• Reduction in non-performing assets, with past-due loans at 0.21%.

Negative

• Net income decreased from $8.2 million in 2020 to $6.7 million in 2021.
• Return on average assets (ROAA) declined to 0.88% from 1.09% in 2020.
• Mortgage banking revenues fell to $13.7 million, down from $20.3 million in 2020.

BROOKFIELD, Wis., Jan. 19, 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 fourth quarter and full year ended December 31, 2021. Improvements in net interest income, strong commercial loan originations, and net recoveries of prior loan losses partially offset lower overall refinance mortgage lending from the prior year, and resulted in net income of $6.7 million for the twelve months ended December 31, 2021, compared to $8.2 million for the same period in 2020. Net income allocated to common shareholders was $7.2 million for the year compared to $8.2 million for the year 2020, with the $0.5 million improvement attributable to the discount to the carrying value for preferred shares repurchased during 2021.

Financial highlights include:

• Common stock tangible book value increased to $57.06 per share outstanding at December 31, 2021, compared to $52.28 at December 31, 2020, reflecting a 9.1% increase due primarily to earnings and the discount to the carrying value of repurchased preferred stock, off-set in part by a decline in accumulated other comprehensive income due to an increase in interest rates.
• Return on average assets (ROAA) was 0.88% for the year compared to 1.09% for the same period 2020. For the Company’s subsidiary, CIBM Bank, ROAA was 1.01% for the year compared to 1.21% for the same period in 2020. The primary difference between the consolidated company and the bank in 2021 was due to ongoing holding company expenses, including additional expenses related to the activities that culminated in the shareholder approved plan to repurchase all outstanding preferred stock over a period of approximately four years and the repurchase of nearly 50% of outstanding preferred stock during the fourth quarter of 2021.
• Net interest income for the year ended December 31, 2021, totaled $23.3 million, up $1.1 million from the same period in 2020. The increase was due to a $0.4 million increase in accreted deferred Paycheck Protection Program (PPP) fees net of costs, a $10 million increase in average earning assets, and a 52 basis point decline in interest bearing liabilities compared to a 32 basis point decline in the yield on interest earning assets. As a result, the net interest margin in 2021 improved 11 basis points to 3.22.   
• Net recoveries of loans previously charged off totaling $0.4 million, combined with improved loan portfolio asset quality and environmental factors, contributed to a $1.2 million reversal of provision for loan losses for the year 2021 compared to provisions of $1.1 million in 2020.
• 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 0.21% and 0.14%, respectively, at December 31, 2021, down from 0.54% and 0.23%, respectively, at December 31, 2020. Improvements are related, in part, to collection related activity and federal monetary policy and fiscal support measures for businesses and households.
• CIBM Bank’s Mortgage Division had another solid year with loan closings of approximately $440 million – the division’s second highest level of closings following 2020’s record year of approximately $600 million – and net mortgage banking revenues of $13.7 million compared to $20.3 million in 2020. Stronger purchase money originations partially offset lower refinance lending due to higher mortgage rates and refinance burnout.
• During 2020 and 2021, CIBM Bank originated $63 million in PPP loans. As of December 31, 2021, PPP loan balances were paid down to approximately $8 million with substantially all pay downs resulting from 100% loan forgiveness funding from the SBA. Accreted PPP fees net of costs was $1.0 million in 2021, up $0.4 million from 2020, with remaining deferred fees of $0.3 million at December 31, 2021.
• High levels of balance sheet liquidity, in part reflected by cash and due from bank balances of $59 million, were supported by robust deposit level growth, with checking account deposits up $32 million and savings and money market account deposits up $46 million, since year-end 2020. The increases reflect ongoing marketing activity and general market liquidity conditions bolstered by federal fiscal and monetary policies (e.g., low interest rates and liquidity support programs).

Mr. J. Brian Chaffin, CIB Marine’s President and CEO, commented, “2021 saw strong results in commercial and residential mortgage lending activity, continued growth in checking and money market balances, and improvement in our SBA 7(a) and 504 origination activity. In addition, improvements to the asset quality of the portfolio and continued economic growth has allowed the Bank to begin to cautiously unwind the significant build up in the allowance for loan losses experienced by CIB Marine and its peers in 2020. We continue to closely monitor the impact of the latest surge in COVID infections.”     

Mr. Chaffin added, “We have witnessed the yield curve move up significantly, reflecting the fixed income market’s pricing for three to four Fed funds rate increases in 2022 and beyond. We are aware that the high levels of checking and money market balances seen across the industry over the last two years are vulnerable to rising rates. Despite the potential for a reversal of this deposit balance trend, CIBM Bank continues to emphasize developing new checking and money market account relationships, which is a focus of our strategic plan.”

He concluded, “Once again, we want to thank our shareholders for their support during 2021, particularly as it relates to their approval of our Amended and Restated Articles of Incorporation, which paved the way for the implementation of our preferred stock redemption plan. Through this plan, we repurchased nearly 50%, or $18 million, of all outstanding preferred stock during the fourth quarter. The purchase was at a discount of $0.5 million to the carrying value, or $0.42 per outstanding share of common stock at the time, and further reduced the dilution that would occur upon the conversion of the Series B preferred shares to common shares (which may occur only in certain, limited circumstances) from 40% to 24% of the total issued and outstanding common shares on a pro-forma, fully-diluted basis.”   

CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates ten banking offices and five 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																12 Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,				December 31,			December 31,
	2021			2021			2021			2021			2020				2021			2020
	(Dollars in thousands, except share and per share data)
Selected Statement of Operations Data:
Interest and dividend income	$	6,244		$	6,311		$	6,239		$	6,265		$	6,489			$	25,059		$	26,996
Interest expense		387			417			456			536			765				1,796			4,814
Net interest income		5,857			5,894			5,783			5,729			5,724				23,263			22,182
Provision for (reversal of) loan losses		(502	)		(413	)		(300	)		20			101				(1,195	)		1,053
Net interest income after provision for
(reversal of) loan losses		6,359			6,307			6,083			5,709			5,623				24,458			21,129
Noninterest income (1)		2,718			4,072			3,135			5,146			6,566				15,071			21,801
Noninterest expense		7,641			7,517			7,279			7,940			9,317				30,377			32,003
Income before income taxes		1,436			2,862			1,939			2,915			2,872				9,152			10,927
Income tax expense		336			788			558			798			565				2,480			2,743
Net income	$	1,100		$	2,074		$	1,381		$	2,117		$	2,307			$	6,672		$	8,184
Common Share Data: (2)
Basic net income per share (3)	$	1.28		$	1.61		$	1.08		$	1.67		$	1.82			$	5.64		$	6.51
Diluted net income per share (3)		0.92			0.94			0.63			0.97			1.06				4.06			3.79
Dividend		0.00			0.00			0.00			0.00			0.00				0.00			0.00
Tangible book value per share (4)		57.06			55.60			54.19			53.25			52.28				57.06			52.28
Book value per share (4)		54.55			50.58			49.16			48.21			47.19				54.55			47.19
Weighted average shares outstanding - basic		1,287,438			1,286,536			1,282,917			1,268,947			1,267,584				1,280,259			1,262,279
Weighted average shares outstanding - diluted		1,784,005			2,208,493			2,208,600			2,185,433			2,181,142				1,778,294			2,167,731
Financial Condition Data:
Total assets	$	745,393		$	775,912		$	753,660		$	752,715		$	750,982			$	745,393		$	750,982
Loans		543,819			559,079			553,642			540,206			539,227				543,819			539,227
Allowance for loan losses		(8,352	)		(8,699	)		(9,165	)		(9,253	)		(9,122	)			(8,352	)		(9,122	)
Investment securities		106,647			102,243			108,825			112,400			108,492				106,647			108,492
Deposits		618,991			624,579			609,964			608,433			586,373				618,991			586,373
Borrowings		27,049			34,577			29,592			30,736			51,310				27,049			51,310
Stockholders' equity		91,780			108,984			107,051			105,593			103,704				91,780			103,704
Financial Ratios and Other Data:
Performance Ratios:
Net interest margin (5)		3.18	%		3.21	%		3.26	%		3.23	%		3.14	%			3.22	%		3.11	%
Net interest spread (6)		3.10	%		3.12	%		3.16	%		3.13	%		3.01	%			3.13	%		2.93	%
Noninterest income to average assets (7)		1.43	%		2.13	%		1.68	%		2.79	%		3.43	%			2.00	%		2.90	%
Noninterest expense to average assets		3.98	%		3.92	%		3.91	%		4.27	%		4.86	%			4.02	%		4.26	%
Efficiency ratio (8)		88.87	%		75.34	%		81.69	%		72.72	%		75.77	%			79.10	%		72.85	%
Earnings on average assets (9)		0.57	%		1.08	%		0.74	%		1.14	%		1.20	%			0.88	%		1.09	%
Earnings on average equity (10)		4.47	%		7.59	%		5.18	%		8.10	%		8.83	%			6.37	%		8.26	%
Asset Quality Ratios:
Nonaccrual loans to loans (11)		0.14	%		0.18	%		0.19	%		0.23	%		0.23	%			0.14	%		0.23	%
Nonaccrual loans, restructured loans and
loans 90 days or more past due and still
accruing to total loans (11)		0.21	%		0.27	%		0.32	%		0.37	%		0.40	%			0.21	%		0.40	%
Nonperforming assets, restructured loans
and loans 90 days or more past due and still
accruing to total assets (11)		0.21	%		0.25	%		0.29	%		0.52	%		0.54	%			0.21	%		0.54	%
Allowance for loan losses to total loans (11)		1.54	%		1.56	%		1.66	%		1.71	%		1.69	%			1.54	%		1.69	%
Allowance for loan losses to nonaccrual loans,
restructured loans and loans 90 days or
more past due and still accruing (11)		726.26	%		575.33	%		519.26	%		459.21	%		421.14	%			726.26	%		421.14	%
Net charge-offs (recoveries) annualized
to average loans (11)		-0.11	%		0.04	%		-0.16	%		-0.08	%		0.01	%			-0.08	%		0.15	%
Capital Ratios:
Total equity to total assets		12.31	%		14.05	%		14.20	%		14.03	%		13.81	%			12.31	%		13.81	%
Total risk-based capital ratio		15.53	%		18.14	%		18.02	%		18.15	%		17.44	%			15.53	%		17.44	%
Tier 1 risk-based capital ratio		14.28	%		16.89	%		16.76	%		16.89	%		16.19	%			14.28	%		16.19	%
Leverage capital ratio		10.22	%		12.44	%		12.32	%		11.88	%		11.46	%			10.22	%		11.46	%
Other Data:
Number of employees (full-time equivalent)		177			179			176			179			176				177			176
Number of banking facilities		10			10			10			10			11				10			11
(1) Noninterest income includes gains and losses on securities.
(2) Common share data prior to September 14, 2020, is adjusted to reflect the 1-for-15 reverse split to allow for comparability between the pre- and post-reverse splite periods.
(3) 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 and $0.03 million for the 12 months ended December 31, 2021 and 2020, respectively.
(4) 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.
(5) Net interest margin is the ratio of net interest income to average interest-earning assets.
(6) Net interest spread is the yield on average interest-earning assets less the rate on average interest-bearing liabilities.
(7) Noninterest income to average assets excludes gains and losses on securities.
(8) The efficiency ratio is noninterest expense divided by the sum of net interest income plus noninterest income, excluding gains and losses on securities.
(9) Earnings on average assets are net income divided by average total assets.
(10) Earnings on average equity are net income divided by average stockholders' equity.
(11) Excludes loans held for sale.

CIB MARINE BANCSHARES, INC.
Consolidated Balance Sheets (unaudited)
	December 31,			September 30,			June 30,			March 31,			December 31,
	2021			2021			2021			2021			2020
	(Dollars in Thousands, Except Shares)
Assets
Cash and due from banks	$	59,184		$	69,217		$	52,467		$	51,691		$	29,927
Reverse repurchase agreements		-			-			-			-			-
Securities available for sale		104,240			99,813			106,383			109,965			106,014
Equity securities at fair value		2,407			2,430			2,442			2,435			2,478
Loans held for sale		9,859			18,258			13,168			18,136			42,977
Loans		543,819			559,079			553,642			540,206			539,227
Allowance for loan losses		(8,352	)		(8,699	)		(9,165	)		(9,253	)		(9,122	)
Net loans		535,467			550,380			544,477			530,953			530,105
Federal Home Loan Bank Stock		3,140			3,140			3,140			3,140			3,140
Premises and equipment, net		4,200			3,979			3,873			4,476			4,682
Accrued interest receivable		1,605			1,813			1,916			1,983			2,050
Deferred tax assets, net		14,731			15,193			15,632			16,417			16,292
Other real estate owned, net		403			403			403			1,875			1,875
Bank owned life insurance		5,930			5,894			4,861			4,831			4,802
Goodwill and other intangible assets		109			115			120			126			131
Other assets		4,118			5,277			4,778			6,687			6,509
Total Assets	$	745,393		$	775,912		$	753,660		$	752,715		$	750,982
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing demand	$	120,479		$	122,441		$	121,862		$	109,466		$	92,544
Interest-bearing demand		63,693			62,414			61,439			63,033			59,679
Savings		289,943			287,609			266,085			268,026			243,888
Time		144,876			152,115			160,578			167,908			190,262
Total deposits		618,991			624,579			609,964			608,433			586,373
Short-term borrowings		27,049			34,577			29,592			30,736			51,310
Long-term borrowings		-			-			-			-			-
Accrued interest payable		100			111			127			140			246
Other liabilities		7,473			7,661			6,926			7,813			9,349
Total liabilities		653,613			666,928			646,609			647,122			647,278
Stockholders' Equity
Preferred stock, $1 par value; 5,000,000 authorized shares at December 31, 2021 and December 31, 2020; 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			37,308			37,308			37,308			37,308
Common stock, $1 par value; 75,000,000 authorized shares; 1,306,660 and 1,282,385 issued shares; 1,292,591 and 1,268,316 outstanding shares at December 31, 2021 and December 31, 2020, respectively. (1)		1,307			1,302			1,301			1,295			1,282
Capital surplus		180,360			179,557			179,421			179,291			179,188
Accumulated deficit		(108,897	)		(109,997	)		(112,071	)		(113,452	)		(115,569	)
Accumulated other comprehensive income, net		782			1,348			1,626			1,685			2,029
Treasury stock, 14,791 shares on December 31, 2021 and December 31, 2020		(534	)		(534	)		(534	)		(534	)		(534	)
Total stockholders' equity		91,780			108,984			107,051			105,593			103,704
Total liabilities and stockholders' equity	$	745,393		$	775,912		$	753,660		$	752,715		$	750,982
(1) Both issued and outstanding shares as stated here exclude 66,299 shares of unvested restricted stock awards at December 31, 2021 and 59,842 shares at December 31, 2020. Treasury shares include 722 shares held by subsidiary bank CIBM Bank.

CIB MARINE BANCSHARES, INC.
Consolidated Statements of Operations (Unaudited)
	At or for the
	Quarters Ended																12 Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,				December 31,			December 31,
	2021			2021			2021			2021			2020				2021			2020
	(Dollars in thousands)
Interest Income
Loans	$	5,572		$	5,646		$	5,583		$	5,524		$	5,577			$	22,325		$	22,874
Loans held for sale		131			135			95			175			331				536			1,438
Securities		516			509			551			555			564				2,131			2,561
Other investments		25			21			10			11			17				67			123
Total interest income		6,244			6,311			6,239			6,265			6,489				25,059			26,996
Interest Expense
Deposits		379			409			447			512			735				1,747			4,452
Short-term borrowings		8			8			9			24			30				49			299
Long-term borrowings		0			0			0			0			0				0			63
Total interest expense		387			417			456			536			765				1,796			4,814
Net interest income		5,857			5,894			5,783			5,729			5,724				23,263			22,182
Provision for (reversal of) loan losses		(502	)		(413	)		(300	)		20			101				(1,195	)		1,053
Net interest income after provision for
(reversal of) loan losses		6,359			6,307			6,083			5,709			5,623				24,458			21,129
Noninterest Income
Deposit service charges		95			97			90			84			91				366			364
Other service fees		23			35			43			40			37				141			129
Mortgage banking revenue, net		2,300			3,626			2,763			4,983			6,387				13,672			20,295
Other income		185			186			280			192			165				843			922
Net gains on sale of securities available for sale		0			0			0			0			0				0			0
Unrealized gains (losses) recognized on equity securities		(23	)		(12	)		7			(43	)		(6	)			(71	)		53
Net gains (loss) on sale of SBA loans		120			151			0			0			55				271			524
Net gains (losses) on sale of assets and (writedowns)		18			(11	)		(48	)		(110	)		(163	)			(151	)		(486	)
Total noninterest income		2,718			4,072			3,135			5,146			6,566				15,071			21,801
Noninterest Expense
Compensation and employee benefits		5,334			5,436			5,099			5,956			7,015				21,825			24,216
Equipment		446			390			384			379			402				1,599			1,496
Occupancy and premises		400			395			443			434			452				1,672			1,709
Data Processing		167			105			181			185			178				638			674
Federal deposit insurance		51			46			47			48			49				192			144
Professional services		353			227			328			253			322				1,161			1,024
Telephone and data communication		67			70			56			60			82				253			288
Insurance		72			66			64			68			62				270			229
Other expense		751			782			677			557			755				2,767			2,223
Total noninterest expense		7,641			7,517			7,279			7,940			9,317				30,377			32,003
Income from operations
before income taxes		1,436			2,862			1,939			2,915			2,872				9,152			10,927
Income tax expense		336			788			558			798			565				2,480			2,743
Net income		1,100			2,074			1,381			2,117			2,307				6,672			8,184
Preferred stock dividend		0			0			0			0			0				0			0
Discount from repurchase of preferred stock		546			0			0			0			0				546			33
Net income allocated to
common stockholders	$	1,646		$	2,074		$	1,381		$	2,117		$	2,307			$	7,218		$	8,217

 

FOR INFORMATION CONTACT:
J. Brian Chaffin, President & CEO
(217) 355-0900
brian.chaffin@cibmbank.com

 

FAQ

What were the financial results for CIBH in 2021?

CIB Marine Bancshares reported a net income of $6.7 million for 2021, down from $8.2 million in 2020.

How did tangible book value change for CIB Marine in 2021?

The tangible book value increased to $57.06 per share, reflecting a 9.1% growth.

What was the net interest income for CIBM in 2021?

The net interest income for the year was $23.3 million, an increase of $1.1 million from the previous year.

What was the status of non-performing assets for CIBH at the end of 2021?

Non-performing assets were at 0.21% of total assets, improved from 0.54% in 2020.

What challenges did CIB Marine face in 2021?

CIB Marine experienced a decline in net income and mortgage banking revenues due to higher interest rates.