CIB Marine Bancshares, Inc. Announces Second Quarter 2024 Results

Rhea-AI Summary

CIB Marine Bancshares, Inc. (OTCQX: CIBH) announced its Q2 2024 results, reporting net income of $3.8 million, or $2.79 basic and $2.06 diluted earnings per share. This marks a significant increase from $1.2 million in Q2 2023. The company completed a sale-leaseback transaction with a gross purchase price of $6.6 million, resulting in a net gain of $4.5 million. Excluding this non-recurring gain, net income was $0.5 million for the quarter.

Key highlights include:

• Net interest income increased $0.2 million from the previous quarter
• Mortgage Division earned $0.2 million
• Loan portfolio balances decreased $17 million over the quarter
• Deposits decreased $3 million for the quarter but increased $42 million from December 31, 2023
• The loan to deposit ratio improved from 98% to 92%

Positive

• Net income increased to $3.8 million in Q2 2024, up from $1.2 million in Q2 2023
• Completed sale-leaseback transaction with $4.5 million net gain
• Net interest income up $0.2 million from previous quarter
• Net interest margin improved by 9 basis points
• Mortgage Division earned $0.2 million, improving from a loss in the previous year
• Loan to deposit ratio improved from 98% to 92%
• FHLB borrowings reduced to zero, improving liquidity profile

Negative

• Loan portfolio balances decreased $17 million over the quarter
• Deposits decreased $3 million for the quarter
• Non-performing assets and modified loans ratios increased compared to December 31, 2023
• Net interest income down $0.4 million compared to Q2 2023
• Excluding non-recurring gain, net income was only $0.5 million for the quarter

BROOKFIELD, Wis., July 16, 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 six months ended June 30, 2024. During the quarter, net interest income increased $0.2 million from the prior quarter, the Mortgage Division earned $0.2 million, and CIBM Bank completed a sale-leaseback transaction with a gross purchase price of $6.6 million and a net gain on sale of $4.5 million.

Net income for the quarter was $3.8 million, or $2.79 basic and $2.06 diluted earnings per share, compared to $1.2 million, or $0.88 basic and $0.64 diluted earnings per share, for the same period of 2023. Net income for the six months ended June 30, 2024, was $4.0 million, or $2.94 basic and $2.17 diluted earnings per share, compared to $1.4 million, or $1.06 basic and $0.77 diluted earnings per share, for the same period of 2023. Excluding the effects of the non-recurring sale-leaseback transaction gain on sale, net income was $0.5 million, or $0.34 basic and $0.25 diluted earnings per share, for the quarter and $0.6 million, or $0.8 basic and $0.35 diluted earnings per share, for the six-month period.

Financial highlights for the quarter include:

• The Bank completed a sale-leaseback transaction with a gross purchase price of $6.6 million for the office real estate used by CIBM Bank’s Bloomington, Champaign, and Urbana, Illinois, branches. The transaction resulted in a net gain on sale of $4.5 million and $3.3 million net of tax. The sale of the real estate to a third party will not impact banking services, which will continue at each branch under a 15-year lease.
• Compared to the prior quarter, net interest income was up $0.2 million and net interest margin was up 9 basis points as the 12 basis point increase in average yields on earning assets outpaced a subdued 3 basis point increase in the cost of funds. Net interest income was down $0.4 million for the quarter ended June 30, 2024, and down $1.3 million for the six months ended June 30, 2024, compared to the same periods of 2023, due to the rise in cost of funds versus yields on assets over those time periods.
• Loan portfolio balances decreased $17 million over the quarter and decreased $3 million since December 31, 2023, due to higher loan rates and the Company’s balance sheet management strategy, with further balance declines likely in the future. Deposits decreased $3 million for the quarter and increased $42 million from December 31, 2023, as lower-cost fundings were used to reduce higher-cost brokered deposits and short-term borrowings from the Federal Home Loan Bank of Chicago (“FHLB”). Cost of funds pressures were diminished for the quarter as FHLB borrowings were reduced to zero and the Bank’s liquidity profile continued to improve as the loan to deposit ratio declined from 98% at December 31, 2023, to 92% at June 30, 2024.
• As of June 30, 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 1.14% and 0.47%, respectively, compared to 0.90% and 0.50%, respectively, on December 31, 2023, and 0.13% and 0.02%, respectively, on June 30, 2023. The primary reason for the increase in the ratios over the time period is due to four credit relationships with borrowers in the transportation industry, including two added during the second quarter of 2024.
• Also, as of June 30, 2024, the allowance for credit losses on loans (“ACLL”) to loans was 1.26% compared to an allowance for loan and lease losses of 1.27% on December 31, 2023, and 1.39% on June 30, 2023. The ACLL depends on third-party economic forecasts and qualitative factors. Over the course of 2023 and the second quarter of 2024, those forecasts for gross domestic product and unemployment have generally improved while certain qualitative factors related to loan performance have trended up, resulting in a lower ACLL to loans ratio.
• For the six months ended June 30, 2024, Banking Division net income was $4.6 million, up from $2.3 million in the same period in 2023. Mortgage Division net loss was $0.2 million, improved from a $0.5 million loss in the same period in 2023 due to cost saving actions and despite production being down due to housing market challenges.

Mr. J. Brian Chaffin, CIB Marine’s President and CEO, commented, “Operating results from our Banking and Mortgage Divisions have improved from quarter to quarter as highlighted above, although it continues to be a challenging environment for both areas. Attentive management of our cost of funds and liability structure has led to improved net interest margins from the prior quarter and we are working toward continued improvement. Our targeted expense controls set in motion in late 2023 and early 2024 have supported improved operating results.”

He concluded, “We are pleased to report on the outcome of our sale-leaseback transaction. Along with balance sheet management and improving operating results, this is an important step forward in meeting our goal of redeeming the preferred stock.”

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 ten 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																	6 Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,					June 30,			June 30,
	2024			2024			2023			2023			2023					2024			2023
	(Dollars in thousands, except share and per share data)
Selected Statement of Operations Data:
Interest and dividend income	$	12,052		$	11,801		$	11,328		$	10,117		$	9,152				$	23,853		$	17,624
Interest expense		6,897			6,840			6,190			5,180			3,643					13,737			6,244
Net interest income		5,155			4,961			5,138			4,937			5,509					10,116			11,380
Provision for (reversal of) credit losses		10			(28	)		135			(140	)		(246	)				(18	)		(87	)
Net interest income after provision for (reversal of) credit losses		5,145			4,989			5,003			5,077			5,755					10,134			11,467
Noninterest income (1)		6,904			1,627			1,824			2,368			3,298					8,531			4,708
Noninterest expense		6,904			6,421			6,669			7,007			7,457					13,325			14,262
Income before income taxes		5,145			195			158			438			1,596					5,340			1,913
Income tax expense		1,361			17			1,050			59			431					1,378			520
Net income (loss)	$	3,784		$	178		$	(892	)	$	379		$	1,165				$	3,962		$	1,393
Common Share Data:
Basic net income (loss) per share	$	2.79		$	0.13		$	(0.67	)	$	0.28		$	0.88				$	2.94		$	1.06
Diluted net income (loss) per share		2.06			0.10			(0.67	)		0.21			0.64					2.17			0.77
Dividend		0.00			0.00			0.00			0.00			0.00					0.00			0.00
Tangible book value per share (2)		55.36			52.59			53.35			52.05			52.47					55.36			52.47
Book value per share (2)		53.61			50.84			51.58			50.28			50.70					53.61			50.70
Weighted average shares outstanding - basic		1,356,255			1,341,181			1,334,163			1,333,889			1,318,470					1,348,440			1,313,564
Weighted average shares outstanding - diluted		1,833,881			1,820,498			1,813,207			1,814,716			1,815,604					1,826,911			1,809,445
Financial Condition Data:
Total assets	$	901,634		$	897,595		$	899,060		$	874,247		$	819,521				$	901,634		$	819,521
Loans		719,129			736,019			722,084			688,446			647,823					719,129			647,823
Allowance for credit losses on loans		(9,083	)		(9,087	)		(9,136	)		(8,947	)		(8,999	)				(9,083	)		(8,999	)
Investment securities		123,814			119,300			131,529			130,476			114,661					123,814			114,661
Deposits		768,984			772,377			727,565			644,165			613,808					768,984			613,808
Borrowings		28,222			32,120			76,956			138,469			113,950					28,222			113,950
Stockholders' equity		89,008			85,091			85,075			83,313			83,876					89,008			83,876
Financial Ratios and Other Data:
Performance Ratios:
Net interest margin (3)		2.38	%		2.29	%		2.41	%		2.43	%		2.90	%				2.34	%		3.06	%
Net interest spread (4)		1.71	%		1.63	%		1.79	%		1.85	%		2.42	%				1.67	%		2.62	%
Noninterest income to average assets (5)		3.09	%		0.73	%		0.78	%		1.15	%		1.68	%				1.91	%		1.21	%
Noninterest expense to average assets		3.09	%		2.87	%		3.00	%		3.31	%		3.77	%				2.98	%		3.68	%
Efficiency ratio (6)		57.19	%		97.20	%		97.13	%		95.06	%		84.35	%				71.34	%		88.65	%
Earnings (loss) on average assets (7)		1.69	%		0.08	%		-0.40	%		0.18	%		0.59	%				0.88	%		0.36	%
Earnings (loss) on average equity (8)		17.92	%		0.84	%		-4.21	%		1.78	%		5.53	%				9.38	%		3.35	%
Asset Quality Ratios:
Nonaccrual loans to loans (9)		0.47	%		0.48	%		0.50	%		0.50	%		0.02	%				0.47	%		0.02	%
Nonaccrual loans, modified loans to borrowers experiencing financial difficulty, loans 90 days or more past due and still accruing to total loans		1.38	%		1.04	%		1.07	%		0.56	%		0.11	%				1.38	%		0.11	%
Nonaccrual loans, modified loans to borrowers experiencing financial difficulty, loans 90 days or more past due and still accruing to total assets		1.14	%		0.89	%		0.90	%		0.49	%		0.13	%				1.14	%		0.13	%
Allowance for credit losses on loans to total loans (9)		1.26	%		1.23	%		1.27	%		1.30	%		1.39	%				1.26	%		1.39	%
Allowance for credit losses on loans to nonaccrual loans, modified loans to borrowers experiencing financial difficulty loans and loans 90 days or more past due and still accruing (9)		91.24	%		118.77	%		118.59	%		231.01	%		1283.74	%				91.24	%		1283.74	%
Net charge-offs (recoveries) annualized to average loans (9)		0.03	%		0.03	%		0.01	%		-0.01	%		-0.02	%				0.03	%		-0.02	%
Capital Ratios:
Total equity to total assets		9.87	%		9.48	%		9.46	%		9.53	%		10.23	%				9.87	%		10.23	%
Total risk-based capital ratio		13.90	%		13.07	%		13.24	%		13.58	%		14.25	%				13.90	%		14.25	%
Tier 1 risk-based capital ratio		11.27	%		10.48	%		10.62	%		10.91	%		11.49	%				11.27	%		11.49	%
Leverage capital ratio		8.93	%		8.50	%		8.62	%		8.93	%		9.43	%				8.93	%		9.43	%
Other Data:
Number of employees (full-time equivalent)		172			177			193			194			206					172			206
Number of banking facilities		9			9			9			9			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)
	June 30,			March 31,			December 31,			September 30,			June 30,
	2024			2024			2023			2023			2023
	(Dollars in Thousands, Except Shares)
Assets
Cash and due from banks	$	10,690		$	7,727		$	9,491		$	9,203		$	14,444
Reverse repurchase agreements		-			-			-			-			-
Securities available for sale		121,687			117,160			129,370			128,413			112,532
Equity securities at fair value		2,127			2,140			2,159			2,063			2,129
Loans held for sale		17,897			8,048			9,209			15,011			14,726
Loans		719,129			736,019			722,084			688,446			647,823
Allowance for credit losses on loans		(9,083	)		(9,087	)		(9,136	)		(8,947	)		(8,999	)
Net loans		710,046			726,932			712,948			679,499			638,824
Federal Home Loan Bank Stock		2,238			2,328			2,709			4,645			2,818
Premises and equipment, net		1,569			3,550			3,602			3,675			3,879
Accrued interest receivable		3,230			3,271			2,983			2,748			2,036
Deferred tax assets, net		14,840			14,849			14,753			16,815			16,790
Other real estate owned, net		283			375			375			375			375
Bank owned life insurance		6,340			6,291			6,247			6,204			6,160
Goodwill and other intangible assets		64			64			64			70			76
Other assets		10,623			4,860			5,150			5,526			4,732
Total assets	$	901,634		$	897,595		$	899,060		$	874,247		$	819,521
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing demand	$	95,457		$	87,621		$	89,025		$	88,674		$	93,487
Interest-bearing demand		86,728			92,092			90,232			73,086			82,484
Savings		244,595			261,998			256,059			254,211			247,339
Time		342,204			330,666			292,249			228,194			190,498
Total deposits		768,984			772,377			727,565			644,165			613,808
Short-term borrowings		18,477			22,383			67,227			128,748			104,238
Long-term borrowings		9,745			9,737			9,729			9,721			9,712
Accrued interest payable		2,145			1,982			1,883			1,491			963
Other liabilities		13,275			6,025			7,581			6,809			6,924
Total liabilities		812,626			812,504			813,985			790,934			735,645
Stockholders' Equity
Preferred stock, $1 par value; 5,000,000 authorized shares at both June 30, 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; 1,372,053 and 1,349,392 issued shares; 1,357,984 and 1,335,323 outstanding shares at June 30, 2024 and December 31, 2023, respectively. (1)		1,372			1,369			1,349			1,349			1,349
Capital surplus		181,486			181,380			181,282			181,144			181,050
Accumulated deficit		(101,373	)		(105,157	)		(105,335	)		(104,443	)		(104,822	)
Accumulated other comprehensive income, net		(5,749	)		(5,773	)		(5,493	)		(8,009	)		(6,973	)
Treasury stock, 14,791 shares on June 30, 2024 and December 31, 2023 (2)		(534	)		(534	)		(534	)		(534	)		(534	)
Total stockholders' equity		89,008			85,091			85,075			83,313			83,876
Total liabilities and stockholders' equity	$	901,634		$	897,595		$	899,060		$	874,247		$	819,521
(1) Both issued and outstanding shares as stated here exclude 47,321 shares and 48,308 shares of unvested restricted stock awards at June 30, 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																6 Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,				June 30,			June 30,
	2024			2024			2023			2023			2023				2024			2023
	(Dollars in thousands)
Interest Income
Loans	$	10,582		$	10,394		$	9,752		$	8,718		$	7,942			$	20,976		$	15,063
Loans held for sale		213			142			200			227			155				355			239
Securities		1,217			1,231			1,330			1,132			985				2,448			2,016
Other investments		40			34			46			40			70				74			306
Total interest income		12,052			11,801			11,328			10,117			9,152				23,853			17,624
Interest Expense
Deposits		6,466			6,227			5,071			3,918			3,076				12,693			5,440
Short-term borrowings		310			493			998			1,141			445				803			563
Long-term borrowings		121			120			121			121			122				241			241
Total interest expense		6,897			6,840			6,190			5,180			3,643				13,737			6,244
Net interest income		5,155			4,961			5,138			4,937			5,509				10,116			11,380
Provision for (reversal of) credit losses		10			(28	)		135			(140	)		(246	)			(18	)		(87	)
Net interest income after provision for (reversal of) credit losses		5,145			4,989			5,003			5,077			5,755				10,134			11,467
Noninterest Income
Deposit service charges		67			66			74			101			76				133			155
Other service fees		1			(5	)		3			6			11				(4	)		27
Mortgage banking revenue, net		2,166			1,209			1,397			1,984			1,636				3,375			2,644
Other income		273			163			165			132			171				436			281
Net gains on sale of securities available for sale		0			0			0			0			0				0			0
Unrealized gains (losses) recognized on equity securities		(14	)		(18	)		96			(66	)		(34	)			(32	)		0
Net gains (loss) on sale of SBA loans		0			202			0			0			0				202			151
Net gains on sale of assets and (writedowns)		4,411			10			89			211			1,438				4,421			1,450
Total noninterest income		6,904			1,627			1,824			2,368			3,298				8,531			4,708
Noninterest Expense
Compensation and employee benefits		4,700			4,289			4,369			4,631			5,101				8,989			9,651
Equipment		457			462			493			484			504				919			979
Occupancy and premises		391			436			415			490			404				827			842
Data Processing		208			212			224			245			221				420			420
Federal deposit insurance		219			199			170			123			150				418			237
Professional services		219			199			243			271			317				418			595
Telephone and data communication		51			56			66			57			56				107			117
Insurance		80			81			79			82			68				161			156
Other expense		579			487			610			624			636				1,066			1,265
Total noninterest expense		6,904			6,421			6,669			7,007			7,457				13,325			14,262
Income from operations before income taxes		5,145			195			158			438			1,596				5,340			1,913
Income tax expense		1,361			17			1,050			59			431				1,378			520
Net (loss) income		3,784			178			(892	)		379			1,165				3,962			1,393
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	$	3,784		$	178		$	(892	)	$	379		$	1,165			$	3,962		$	1,393

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

FAQ

What was CIB Marine Bancshares' (CIBH) net income for Q2 2024?

CIB Marine Bancshares (CIBH) reported a net income of $3.8 million for Q2 2024, or $2.79 basic and $2.06 diluted earnings per share.

How did CIBH's Q2 2024 results compare to the same period in 2023?

CIBH's Q2 2024 net income of $3.8 million was significantly higher than the $1.2 million reported for the same period in 2023.

What was the impact of the sale-leaseback transaction on CIBH's Q2 2024 results?

The sale-leaseback transaction resulted in a net gain of $4.5 million. Excluding this non-recurring gain, CIBH's net income for Q2 2024 was $0.5 million.

How did CIBH's loan portfolio and deposits change in Q2 2024?

CIBH's loan portfolio balances decreased by $17 million over the quarter, while deposits decreased by $3 million for the quarter but increased by $42 million from December 31, 2023.