CIB Marine Bancshares, Inc. Announces First Quarter 2021 Results

Rhea-AI Summary

CIB Marine Bancshares, Inc. (OTCQB: CIBH) reported a net income of $2.1 million for Q1 2021, up from $0.8 million in the same quarter last year. Basic earnings per share increased to $1.67 from $0.63. Tangible book value rose 15.7% year-on-year to $53.25 per share. Mortgage banking revenues improved by $2.8 million due to a $63 million boost in residential mortgage loans driven by lower interest rates. Non-performing assets declined to 0.52%. The bank originated $18 million in new PPP loans in Q1 2021, reflecting strong income and a return on average assets of 1.14%.

Positive

• Net income increased to $2.1 million, up from $0.8 million year-on-year.
• Earnings per share rose to $1.67 from $0.63.
• Tangible book value increased 15.7% year-on-year to $53.25.
• Net mortgage banking revenues increased by $2.8 million.
• Non-performing assets decreased to 0.52% from 1.24% year-on-year.
• Deposits grew by $44 million due to effective marketing and federal policies.

Negative

• Compensation expenses rose by $1.5 million from the previous year.
• Caution about future credit quality in higher risk segments due to the pandemic.

BROOKFIELD, Wis., April 12, 2021 (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 first quarter of 2021. Net income for the quarter ended March 31, 2021, was $2.1 million or $1.67 basic and $0.97 diluted earnings per share, compared to $0.8 million or $0.63 basic and $0.36 diluted earnings per share for the same period of 2020.

Financial highlights for the quarter include:

• Tangible book value attributable to the common stock increased to $53.25 per share outstanding at March 31, 2021 compared to $52.28 at December 31, 2020, and $46.05 at March 31, 2020, reflecting a 15.7% year-on-year increase.
• Net mortgage banking revenues were up $2.8 million for the quarter versus the same period of 2020, reflecting a $63 million increase in residential mortgage loans for the period, due primarily to refinance activity driven by lower interest rates. Compensation expenses increased $1.5 million compared to the same period in 2020, largely related to mortgage lending compensation.
• When compared to the first quarter of 2020, first quarter 2021 net interest income was up $0.8 million; net interest margin was up 19 basis points to 3.23%, reflecting an 89 basis point improvement in the cost of interest bearing liabilities compared to a 55 basis point decline in interest earning asset yields; and average interest earning assets were up $65 million, primarily in commercial segment loans and residential loans held for sale.
  
• 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 0.52% and 0.23%, respectively, at March 31, 2021, compared to 0.54% and 0.23%, respectively, at December 31, 2020, and down from 1.24% and 0.97%, respectively, at March 31, 2020. Recent measures continue to be near this credit cycle’s best.
• During the first quarter, CIBM Bank originated $18 million in new Paycheck Protection Plan (PPP) loans and received SBA forgiveness funding to close $19 million in PPP loans originated in 2020.
• Deposits for checking, savings, and money market accounts grew by $44 million during the quarter, reflecting federal fiscal and monetary policies (e.g., low interest rates) and marketing activity results.

Mr. J. Brian Chaffin, CIB Marine’s President and CEO, commented, “We are pleased with another quarter of strong income and a return on average assets of 1.14% due to continued strength in mortgage lending activity and solid progress in the net interest margin. We typically see a seasonal uptick in purchase money mortgage activity in the warmer months, and we expect that to be countered by reduced refinance activity as a result of the recent increase in long term interest rates.

“Our balance sheet has grown since year-end as a result of (a) surging checking and money market account balances due, in part, to federal economic stimulus policies and programs and (b) steady commercial loan production, which has replaced residential loan balances as refinanced mortgages are sold. While the banking industry as a whole performed better than many experts predicted over the past year, and CIBM performed even better than the peer, particularly with regard to credit metrics, we remain cautious about future credit quality in higher risk segments of the loan portfolio due to the lingering impact of the pandemic,” he concluded.

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.

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

 

CIB MARINE BANCSHARES, INC.
Selected Unaudited Consolidated Financial Data
	At or for the
	Quarters Ended																3 Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,				March 31,			March 31,
		2021			2020			2020			2020			2020				2021			2020
	(Dollars in thousands, except share and per share data)
Selected Statement of Operations Data:
Interest and dividend income	$	6,265		$	6,489		$	7,202		$	6,669		$	6,636			$	6,265		$	6,636
Interest expense		536			765			1,017			1,343			1,689				536			1,689
Net interest income		5,729			5,724			6,185			5,326			4,947				5,729			4,947
Provision for loan losses		20			101			501			249			202				20			202
Net interest income after provision for
loan losses		5,709			5,623			5,684			5,077			4,745				5,709			4,745
Noninterest income (1)		5,146			6,566			8,104			4,489			2,642				5,146			2,642
Noninterest expense		7,940			9,317			9,056			7,308			6,322				7,940			6,322
Income before income taxes		2,915			2,872			4,732			2,258			1,065				2,915			1,065
Income tax expense		798			565			1,322			575			281				798			281
Net income	$	2,117		$	2,307		$	3,410		$	1,683		$	784			$	2,117		$	784
Common Share Data (2):
Basic net income per share (3)	$	1.67		$	1.82		$	2.69		$	1.36		$	0.63			$	1.67		$	0.63
Diluted net income per share (3)		0.97			1.06			1.56			0.79			0.36				0.98			0.36
Dividend		0.00			0.00			0.00			0.00			0.00				0.00			0.00
Tangible book value per share (4)		53.25			52.28			50.35			47.25			46.05				53.25			46.05
Book value per share (4)		48.21			47.19			45.27			42.00			40.95				48.21			40.95
Weighted average shares outstanding - basic		1,268,947			1,267,584			1,267,582			1,266,174			1,248,275				1,268,947			1,248,275
Weighted average shares outstanding - diluted		2,185,433			2,181,142			2,181,868			2,160,201			2,155,315				2,185,433			2,155,315
Financial Condition Data:
Total assets	$	752,715		$	750,982		$	793,604		$	793,151		$	705,473			$	752,715		$	705,473
Loans		540,206			539,227			546,351			535,692			513,992				540,206			513,992
Allowance for loan losses		(9,253	)		(9,122	)		(9,037	)		(8,483	)		(8,107	)			(9,253	)		(8,107	)
Investment securities		112,400			108,492			107,351			113,303			120,105				112,400			120,105
Deposits		608,433			586,373			593,370			566,811			531,999				608,433			531,999
Borrowings		30,736			51,310			87,994			120,233			68,950				30,736			68,950
Stockholders' equity		105,593			103,704			101,271			97,347			95,841				105,593			95,841
Financial Ratios and Other Data:
Performance Ratios:
Net interest margin (5)		3.23	%		3.14	%		3.30	%		2.96	%		3.04	%			3.23	%		3.04	%
Net interest spread (6)		3.13	%		3.01	%		3.16	%		2.76	%		2.78	%			3.13	%		2.78	%
Noninterest income to average assets (7)		2.79	%		3.43	%		4.12	%		2.36	%		1.51	%			2.79	%		1.51	%
Noninterest expense to average assets		4.27	%		4.86	%		4.60	%		3.86	%		3.67	%			4.27	%		3.67	%
Efficiency ratio (8)		72.72	%		75.77	%		63.38	%		74.61	%		83.74	%			72.72	%		83.74	%
Earnings on average assets (9)		1.14	%		1.20	%		1.73	%		0.89	%		0.45	%			1.14	%		0.45	%
Earnings on average equity (10)		8.10	%		8.83	%		13.51	%		6.97	%		3.32	%			8.10	%		3.32	%
Asset Quality Ratios:
Nonaccrual loans to loans (11)		0.23	%		0.23	%		0.32	%		0.92	%		0.97	%			0.23	%		0.97	%
Nonaccrual loans, restructured loans and
loans 90 days or more past due and still
accruing to total loans (11)		0.37	%		0.40	%		0.49	%		1.07	%		1.25	%			0.37	%		1.25	%
Nonperforming assets, restructured loans
and loans 90 days or more past due and still
accruing to total assets (11)		0.52	%		0.54	%		0.60	%		1.02	%		1.24	%			0.52	%		1.24	%
Allowance for loan losses to total loans (11)		1.71	%		1.69	%		1.65	%		1.58	%		1.58	%			1.71	%		1.58	%
Allowance for loan losses to nonaccrual loans,
restructured loans and loans 90 days or
more past due and still accruing (11)		459.21	%		421.14	%		338.59	%		147.79	%		126.26	%			459.21	%		126.26	%
Net charge-offs (recoveries) annualized
to average loans (11)		-0.08	%		0.01	%		-0.04	%		-0.09	%		0.08	%			-0.01	%		0.15	%
Capital Ratios:
Total equity to total assets		14.03	%		13.81	%		12.76	%		12.27	%		13.59	%			14.03	%		13.59	%
Total risk-based capital ratio		18.15	%		17.44	%		16.13	%		15.49	%		15.36	%			18.15	%		15.36	%
Tier 1 risk-based capital ratio		16.89	%		16.19	%		14.87	%		14.23	%		14.11	%			16.89	%		14.11	%
Leverage capital ratio		11.88	%		11.46	%		11.20	%		10.82	%		11.08	%			11.88	%		11.08	%
Other Data:
Number of employees (full-time equivalent)		179			176			176			177			177				179			177
Number of banking facilities		10			11			11			11			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 1:15 reverse split to allow for comparability between the pre- and post- reverse split 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 $0.03 million for the 2nd quarter and 12 months ended 2020.
(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)
	March 31,			December 31,			September 30,			June 30,			March 31,
		2021			2020			2020			2020			2020
	(Dollars in Thousands, Except Shares)
Assets
Cash and due from banks	$	51,691		$	29,927		$	30,544		$	9,120		$	9,006
Reverse repurchase agreements		-			-			8,208			18,117			3,622
Securities available for sale		109,965			106,014			104,866			110,818			117,640
Equity securities at fair value		2,435			2,478			2,485			2,485			2,465
Loans held for sale		18,136			42,977			67,496			83,997			24,988
Loans		540,206			539,227			546,351			535,692			513,992
Allowance for loan losses		(9,253	)		(9,122	)		(9,037	)		(8,483	)		(8,107	)
Net loans		530,953			530,105			537,314			527,209			505,885
Federal Home Loan Bank Stock		3,140			3,140			3,140			2,948			2,947
Premises and equipment, net		4,476			4,682			4,667			4,679			4,769
Accrued interest receivable		1,983			2,050			2,075			1,973			1,610
Deferred tax assets, net		16,417			16,292			18,547			19,325			19,509
Other real estate owned, net		1,875			1,875			2,103			2,334			2,335
Bank owned life insurance		4,831			4,802			4,774			4,745			4,718
Goodwill and other intangible assets		126			131			137			142			148
Other assets		6,687			6,509			7,248			5,259			5,831
Total Assets	$	752,715		$	750,982		$	793,604		$	793,151		$	705,473
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing demand	$	109,466		$	92,544		$	91,134		$	90,450		$	67,459
Interest-bearing demand		63,033			59,679			61,262			54,288			47,760
Savings		268,026			243,888			225,724			205,470			196,797
Time		167,908			190,262			215,250			216,603			219,983
Total deposits		608,433			586,373			593,370			566,811			531,999
Short-term borrowings		30,736			51,310			54,052			77,273			68,950
Long-term borrowings		-			-			33,942			42,960			-
Accrued interest payable		140			246			398			447			543
Other liabilities		7,813			9,349			10,571			8,313			8,140
Total liabilities		647,122			647,278			692,333			695,804			609,632
Stockholders' Equity
Preferred stock, $1 par value; 5,000,000 authorized shares at both March 31, 2021 and December 31, 2020; 7% fixed rate noncumulative perpetual issued; 40,690 shares of series A and 3,201 shares of series B; convertible; $43.9 million aggregate liquidation preference		37,308			37,308			37,308			37,308			37,490
Common stock, $1 par value; 75,000,000 authorized shares; 1,294,665 and 1,282,385 issued shares; 1,280,596 and 1,268,316 outstanding shares at March 31, 2021 and December 31, 2020, respectively. (1)(2)		1,295			1,282			1,282			19,240			19,162
Capital surplus (2)		179,291			179,188			179,090			161,032			160,990
Accumulated deficit		(113,452	)		(115,569	)		(117,875	)		(121,285	)		(122,969	)
Accumulated other comprehensive income, net		1,685			2,029			2,000			1,586			1,702
Treasury stock, 14,791 shares on March 31, 2021 and December 31, 2020 and 221,902 shares prior at cost (2)		(534	)		(534	)		(534	)		(534	)		(534	)
Total stockholders' equity		105,593			103,704			101,271			97,347			95,841
Total liabilities and stockholders' equity	$	752,715		$	750,982		$	793,604		$	793,151		$	705,473
(1) Both issued and outstanding shares as stated here exclude 75,146 shares of unvested restricted stock awards at March 31, 2021 and 59,842 at December 31, 2020.
(2) Effective September 14, 2020, the Company executed a reverse stock split of 1 share for every 15 shares outstanding. Fractional shares were remitted cash at the then-current market value of $15.75 per share.

CIB MARINE BANCSHARES, INC.
Consolidated Statements of Operations (Unaudited)
	At or for the
	Quarters Ended																3 Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,				March 31,			March 31,
		2021			2020			2020			2020			2020				2021			2020
	(Dollars in thousands)
Interest Income
Loans	$	5,524		$	5,577		$	6,054		$	5,540		$	5,703			$	5,524		$	5,703
Loans held for sale		175			331			537			451			119				175			119
Securities		555			564			573			661			763				555			763
Other investments		11			17			38			17			51				11			51
Total interest income		6,265			6,489			7,202			6,669			6,636				6,265			6,636
Interest Expense
Deposits		512			735			942			1,263			1,512				512			1,512
Short-term borrowings		24			30			38			54			177				24			177
Long-term borrowings		0			0			37			26			0				0			0
Total interest expense		536			765			1,017			1,343			1,689				536			1,689
Net interest income		5,729			5,724			6,185			5,326			4,947				5,729			4,947
Provision for loan losses		20			101			501			249			202				20			202
Net interest income after provision for
loan losses		5,709			5,623			5,684			5,077			4,745				5,709			4,745
Noninterest Income
Deposit service charges		84			91			89			88			96				84			96
Other service fees		40			37			36			36			20				40			20
Mortgage banking revenue, net		4,983			6,387			7,741			3,990			2,177				4,983			2,177
Other income		192			165			226			266			265				192			265
Net gains on sale of securities available for sale		0			0			0			0			0				0			0
Unrealized gains (losses) recognized on equity securities		(43	)		(6	)		0			20			39				(43	)		39
Net gains (loss) on sale of SBA loans		0			55			(55	)		87			437				0			437
Net gains (losses) on sale of assets and (writedowns)		(110	)		(163	)		67			2			(392	)			(110	)		(392	)
Total noninterest income		5,146			6,566			8,104			4,489			2,642				5,146			2,642
Noninterest Expense
Compensation and employee benefits		5,956			7,015			7,329			5,451			4,421				5,956			4,421
Equipment		379			402			352			379			363				379			363
Occupancy and premises		434			452			390			407			460				434			460
Data Processing		185			178			177			155			164				185			164
Federal deposit insurance		48			49			48			47			0				48			0
Professional services		253			322			162			242			298				253			298
Telephone and data communication		60			82			71			67			68				60			68
Insurance		68			62			58			55			54				68			54
Other expense		557			755			469			505			494				557			494
Total noninterest expense		7,940			9,317			9,056			7,308			6,322				7,940			6,322
Income from operations
before income taxes		2,915			2,872			4,732			2,258			1,065				2,915			1,065
Income tax expense		798			565			1,322			575			281				798			281
Net income		2,117			2,307			3,410			1,683			784				2,117			784
Preferred stock dividend		0			0			0			0			0				0			0
Discount from repurchase of preferred stock		0			0			33			0			0				0			0
Net income allocated to
common stockholders	$	2,117		$	2,307		$	3,443		$	1,683		$	784			$	2,117		$	784

 

FAQ

What were CIB Marine Bancshares' financial results for Q1 2021?

CIB Marine Bancshares reported a net income of $2.1 million and earnings per share of $1.67 for Q1 2021.

How did CIB Marine's tangible book value change?

Tangible book value increased to $53.25 per share, reflecting a 15.7% year-on-year growth.

What contributed to the rise in net mortgage banking revenues for CIBH?

Net mortgage banking revenues increased by $2.8 million due to a $63 million rise in residential mortgage loans from refinancing activity.

What was the status of non-performing assets for CIBH in Q1 2021?

Non-performing assets were reported at 0.52%, down from 1.24% a year prior.

What is the outlook for CIB Marine's loan portfolio?

CIB Marine remains cautious about future credit quality in higher risk segments of the loan portfolio due to lingering pandemic effects.

What changes were observed in CIB Marine's deposits?

Deposits grew by $44 million during the quarter, influenced by federal economic stimulus and effective marketing.