CIB Marine Bancshares, Inc. Announces Third Quarter 2024 Results

Rhea-AI Summary

CIB Marine Bancshares, Inc. (OTCQX: CIBH) reported its Q3 2024 results, showing improved earnings. Net income for the quarter was $1.1 million ($0.79 basic and $0.59 diluted EPS), up from $0.4 million in Q3 2023. For the nine months ended September 30, 2024, net income was $5.0 million. Key highlights include:

- Net interest income increased $0.4 million from the previous quarter
- Net interest margin improved to 2.55%
- Loan portfolio balances decreased $12 million over the quarter
- Deposits decreased $22 million for the quarter
- Non-performing assets to total assets ratio increased to 1.25%

The company plans to complete the final redemption of all remaining preferred stock on October 31, 2024. CIB Marine's President and CEO, J. Brian Chaffin, noted improvements in cost of funds and net interest margins, and highlighted the positive impact of targeted expense controls implemented in late 2023 and early 2024.

Positive

• Net income increased to $1.1 million in Q3 2024, up from $0.4 million in Q3 2023
• Net interest income rose $0.4 million from the previous quarter
• Net interest margin improved to 2.55% from 2.38% in the prior quarter
• Banking Division net income increased to $5.8 million for the nine months ended September 30, 2024
• Mortgage Division was profitable in Q3 2024
• Final redemption of all remaining preferred stock planned for October 31, 2024

Negative

• Loan portfolio balances decreased $12 million over the quarter
• Deposits decreased $22 million for the quarter
• Non-performing assets to total assets ratio increased to 1.25% from 0.90% on December 31, 2023
• Mortgage Division reported a net loss of $0.1 million for the nine months ended September 30, 2024

BROOKFIELD, Wis., Oct. 17, 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 nine months ended September 30, 2024. Earnings are up $0.7 million for the quarter when compared to the same quarter in 2023, and up by $0.6 million compared to the prior quarter in 2024, if excluding the effects of the gain on sale from the sale-leaseback transaction in the prior quarter.

Net income for the quarter was $1.1 million, or $0.79 basic and $0.59 diluted earnings per share, compared to $0.4 million, or $0.28 basic and $0.21 diluted earnings per share, for the same period of 2023. Net income for the nine months ended September 30, 2024, was $5.0 million, or $3.73 basic and $2.75 diluted earnings per share, compared to $1.8 million, or $1.34 basic and $0.98 diluted earnings per share, for the same period of 2023. Excluding the effects of the non-recurring sale-leaseback transaction gain on sale reported in the second quarter of 2024, net income for the nine-month period ended September 30, 2024, was $1.7 million, or $1.27 basic and $0.94 diluted earnings per share.

Financial highlights for the quarter include:

• Net interest income was up $0.4 million from the prior quarter and net interest margin improved to 2.55% compared to 2.38% in the prior quarter and 2.43% in the third quarter of 2023. The improvement from the prior quarter was due to a 4 basis point increase in yields on earning assets and a 5 basis point decrease in the cost of funds. Net interest income was up $0.6 million for the quarter compared to the same quarter of 2023, and down $0.6 million for the nine months ended September 30, 2024, compared to the same period of 2023, due to the rise in cost of funds versus yields on assets over those time periods.
• Loan portfolio balances decreased $12 million over the quarter and decreased $15 million since December 31, 2023, due to high loan rates and the Company’s balance sheet management strategy, with further balance declines expected in the fourth quarter of 2024. Deposits decreased $22 million for the quarter due to planned payoffs of maturing time deposits and reductions in money market savings accounts, and increased $20 million from December 31, 2023, as lower-cost deposits were generated and used to pay down Federal Home Loan Bank of Chicago (“FHLB”) borrowings.
• As of September 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 1.25% and 0.44%, respectively, compared to 0.90% and 0.50%, respectively, on December 31, 2023, and 0.49% and 0.50%, respectively, on September 30, 2023. The primary reason for the increase in the ratios over the time period is due to four credit relationships with borrowers in or related to the transportation industry, including one modified loan in compliance with the modified terms, two relationships with non-accrual loans, and one that is 90 plus days past due in the process of collection.
• Also, as of September 30, 2024, the allowance for credit losses on loans (“ACLL”) to loans was 1.27% compared to 1.27% on December 31, 2023, and 1.30% on September 30, 2023. The ACLL is impacted by third-party economic forecasts and qualitative factors. Over the course of 2023 and 2024, 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 nine months ended September 30, 2024, Banking Division net income was $5.8 million up from $2.9 million for the same period in 2023, primarily due to the sale-leaseback gain on sale and cost reduction activities in the 2024 period. The Mortgage Division was profitable for the third quarter of 2024. For the nine months ended September 30, 2024, its net loss was $0.1 million, improved from a $0.5 million loss in the same period in 2023 thanks 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 improved for the quarter as highlighted above, at a time that continues to present many challenges for both community banking and mortgage banking companies. Our cost of funds and net interest margins showed nice improvements on a trending basis recently and we are working toward continued improvement, which should be accelerated by the recent decline in the Federal Funds Target Rates by the Federal Reserve. Our targeted expense controls implemented in late 2023 and early 2024 have supported improved operating results.”

He concluded, “Our plans for a final redemption of all remaining preferred stock during the fourth quarter of 2024 continue to move ahead. Earlier today, we announced the complete and final redemption of all preferred stock will occur on October 31, 2024. Although we now have sufficient cash on hand at CIB Marine for the final redemption, we have also secured lender commitments for a term loan and a line of credit for contingency purposes. This marks a significant achievement of the Company and improves prospects for building future shareholder value.”  

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																	9 Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,					September 30,			September 30,
	2024			2024			2024			2023			2023					2024			2023
	(Dollars in thousands, except share and per share data)
Selected Statement of Operations Data:
Interest and dividend income	$	12,283		$	12,052		$	11,801		$	11,328		$	10,117				$	36,136		$	27,741
Interest expense		6,707			6,897			6,840			6,190			5,180					20,444			11,424
Net interest income		5,576			5,155			4,961			5,138			4,937					15,692			16,317
Provision for (reversal of) credit losses		(113	)		10			(28	)		135			(140	)				(131	)		(227	)
Net interest income after provision for (reversal of) credit losses		5,689			5,145			4,989			5,003			5,077					15,823			16,544
Noninterest income (1)		2,897			6,904			1,627			1,824			2,368					11,428			7,076
Noninterest expense		7,163			6,904			6,421			6,669			7,007					20,488			21,269
Income before income taxes		1,423			5,145			195			158			438					6,763			2,351
Income tax expense		347			1,361			17			1,050			59					1,725			579
Net income (loss)	$	1,076		$	3,784		$	178		$	(892	)	$	379				$	5,038		$	1,772
Common Share Data:
Basic net income (loss) per share	$	0.79		$	2.79		$	0.13		$	(0.67	)	$	0.28				$	3.73		$	1.34
Diluted net income (loss) per share		0.59			2.06			0.10			(0.67	)		0.21					2.75			0.98
Dividend		0.00			0.00			0.00			0.00			0.00					0.00			0.00
Tangible book value per share (2)		57.80			55.36			52.59			53.35			52.05					57.80			52.05
Book value per share (2)		56.06			53.61			50.84			51.58			50.28					56.06			50.28
Weighted average shares outstanding - basic		1,357,259			1,356,255			1,341,181			1,334,163			1,333,900					1,351,205			1,320,342
Weighted average shares outstanding - diluted		1,833,586			1,833,881			1,820,498			1,813,207			1,814,727					1,828,956			1,811,151
Financial Condition Data:
Total assets	$	888,283		$	901,634		$	897,595		$	899,060		$	874,247				$	888,283		$	874,247
Loans		707,310			719,129			736,019			722,084			688,446					707,310			688,446
Allowance for credit losses on loans		(8,973	)		(9,083	)		(9,087	)		(9,136	)		(8,947	)				(8,973	)		(8,947	)
Investment securities		120,349			123,814			119,300			131,529			130,476					120,349			130,476
Deposits		747,168			768,984			772,377			727,565			644,165					747,168			644,165
Borrowings		33,583			28,222			32,120			76,956			138,469					33,583			138,469
Stockholders' equity		92,358			89,008			85,091			85,075			83,313					92,358			83,313
Financial Ratios and Other Data:
Performance Ratios:
Net interest margin (3)		2.55	%		2.38	%		2.29	%		2.41	%		2.43	%				2.41	%		2.84	%
Net interest spread (4)		1.80	%		1.71	%		1.63	%		1.79	%		1.85	%				1.71	%		2.34	%
Noninterest income to average assets (5)		1.25	%		3.09	%		0.73	%		0.78	%		1.15	%				1.69	%		1.19	%
Noninterest expense to average assets		3.17	%		3.09	%		2.87	%		3.00	%		3.31	%				3.04	%		3.55	%
Efficiency ratio (6)		85.32	%		57.19	%		97.20	%		97.13	%		95.06	%				75.67	%		90.66	%
Earnings (loss) on average assets (7)		0.48	%		1.69	%		0.08	%		-0.40	%		0.18	%				0.75	%		0.30	%
Earnings (loss) on average equity (8)		4.71	%		17.92	%		0.84	%		-4.21	%		1.78	%				7.74	%		2.82	%
Asset Quality Ratios:
Nonaccrual loans to loans (9)		0.44	%		0.47	%		0.48	%		0.50	%		0.50	%				0.44	%		0.50	%
Nonaccrual loans, modified loans to borrowers experiencing financial difficulty, loans 90 days or more past due and still accruing to total loans		1.54	%		1.38	%		1.04	%		1.07	%		0.56	%				1.54	%		0.56	%
Nonaccrual loans, modified loans to borrowers experiencing financial difficulty, loans 90 days or more past due and still accruing to total assets		1.25	%		1.14	%		0.89	%		0.90	%		0.49	%				1.25	%		0.49	%
Allowance for credit losses on loans to total loans (9)		1.27	%		1.26	%		1.23	%		1.27	%		1.30	%				1.27	%		1.30	%
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)		82.53	%		91.24	%		118.77	%		118.59	%		231.01	%				82.53	%		231.01	%
Net charge-offs (recoveries) annualized to average loans (9)		-0.01	%		0.03	%		0.03	%		0.01	%		-0.01	%				0.02	%		-0.01	%
Capital Ratios:
Total equity to total assets		10.40	%		9.87	%		9.48	%		9.46	%		9.53	%				10.40	%		9.53	%
Total risk-based capital ratio		14.54	%		13.90	%		13.07	%		13.24	%		13.58	%				14.54	%		13.58	%
Tier 1 risk-based capital ratio		11.89	%		11.27	%		10.48	%		10.62	%		10.91	%				11.89	%		10.91	%
Leverage capital ratio		9.30	%		8.93	%		8.50	%		8.62	%		8.93	%				9.30	%		8.93	%
Other Data:
Number of employees (full-time equivalent)		170			172			177			193			194					170			194
Number of banking facilities		9			9			9			9			9					9			9
(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)
	September 30,			June 30,			March 31,			December 31,			September 30,
	2024			2024			2024			2023			2023
	(Dollars in Thousands, Except Shares)
Assets
Cash and due from banks	$	13,814		$	10,690		$	7,727		$	9,491		$	9,203
Reverse repurchase agreements		-			-			-			-			-
Securities available for sale		118,145			121,687			117,160			129,370			128,413
Equity securities at fair value		2,204			2,127			2,140			2,159			2,063
Loans held for sale		19,472			17,897			8,048			9,209			15,011
Loans		707,310			719,129			736,019			722,084			688,446
Allowance for credit losses on loans		(8,973	)		(9,083	)		(9,087	)		(9,136	)		(8,947	)
Net loans		698,337			710,046			726,932			712,948			679,499
Federal Home Loan Bank Stock		2,238			2,238			2,328			2,709			4,645
Premises and equipment, net		1,526			1,569			3,550			3,602			3,675
Accrued interest receivable		2,926			3,230			3,271			2,983			2,748
Deferred tax assets, net		12,796			14,840			14,849			14,753			16,815
Other real estate owned, net		211			283			375			375			375
Bank owned life insurance		6,388			6,340			6,291			6,247			6,204
Goodwill and other intangible assets		64			64			64			64			70
Other assets		10,162			10,623			4,860			5,150			5,526
Total assets	$	888,283		$	901,634		$	897,595		$	899,060		$	874,247
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing demand	$	95,471		$	95,457		$	87,621		$	89,025		$	88,674
Interest-bearing demand		90,095			86,728			92,092			90,232			73,086
Savings		234,969			244,595			261,998			256,059			254,211
Time		326,633			342,204			330,666			292,249			228,194
Total deposits		747,168			768,984			772,377			727,565			644,165
Short-term borrowings		23,829			18,477			22,383			67,227			128,748
Long-term borrowings		9,754			9,745			9,737			9,729			9,721
Accrued interest payable		2,101			2,145			1,982			1,883			1,491
Other liabilities		13,073			13,275			6,025			7,581			6,809
Total liabilities		795,925			812,626			812,504			813,985			790,934
Stockholders' Equity
Preferred stock, $1 par value; 5,000,000 authorized shares at both September 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; 1,372,642 and 1,349,392 issued shares; 1,358,573 and 1,335,323 outstanding shares at September 30, 2024 and December 31, 2023, respectively. (1)		1,372			1,372			1,369			1,349			1,349
Capital surplus		181,603			181,486			181,380			181,282			181,144
Accumulated deficit		(100,297	)		(101,373	)		(105,157	)		(105,335	)		(104,443	)
Accumulated other comprehensive income (loss), net		(3,592	)		(5,749	)		(5,773	)		(5,493	)		(8,009	)
Treasury stock, 14,791 shares on September 30, 2024 and December 31, 2023 (2)		(534	)		(534	)		(534	)		(534	)		(534	)
Total stockholders' equity		92,358			89,008			85,091			85,075			83,313
Total liabilities and stockholders' equity	$	888,283		$	901,634		$	897,595		$	899,060		$	874,247
(1) Both issued and outstanding shares as stated here exclude 46,437 shares and 48,308 shares of unvested restricted stock awards at September 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																9 Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,				September 30,			September 30,
	2024			2024			2024			2023			2023				2024			2023
	(Dollars in thousands)
Interest Income
Loans	$	10,573		$	10,582		$	10,394		$	9,752		$	8,718			$	31,549		$	23,781
Loans held for sale		300			213			142			200			227				655			466
Securities		1,183			1,217			1,231			1,330			1,132				3,631			3,148
Other investments		227			40			34			46			40				301			346
Total interest income		12,283			12,052			11,801			11,328			10,117				36,136			27,741
Interest Expense
Deposits		6,354			6,466			6,227			5,071			3,918				19,047			9,358
Short-term borrowings		232			310			493			998			1,141				1,035			1,704
Long-term borrowings		121			121			120			121			121				362			362
Total interest expense		6,707			6,897			6,840			6,190			5,180				20,444			11,424
Net interest income		5,576			5,155			4,961			5,138			4,937				15,692			16,317
Provision for (reversal of) credit losses		(113	)		10			(28	)		135			(140	)			(131	)		(227	)
Net interest income after provision for (reversal of) credit losses		5,689			5,145			4,989			5,003			5,077				15,823			16,544
Noninterest Income
Deposit service charges		63			67			66			74			101				196			256
Other service fees		(5	)		1			(5	)		3			6				(9	)		33
Mortgage banking revenue, net		2,264			2,166			1,209			1,397			1,984				5,639			4,628
Other income		150			273			163			165			132				586			413
Net gains on sale of securities available for sale		0			0			0			0			0				0			0
Unrealized gains (losses) recognized on equity securities		78			(14	)		(18	)		96			(66	)			46			(66	)
Net gains (loss) on sale of SBA loans		420			0			202			0			0				622			151
Net gains on sale of assets and (writedowns)		(73	)		4,411			10			89			211				4,348			1,661
Total noninterest income		2,897			6,904			1,627			1,824			2,368				11,428			7,076
Noninterest Expense
Compensation and employee benefits		4,852			4,700			4,289			4,369			4,631				13,841			14,282
Equipment		504			457			462			493			484				1,423			1,463
Occupancy and premises		495			391			436			415			490				1,322			1,332
Data Processing		243			208			212			224			245				663			665
Federal deposit insurance		182			219			199			170			123				600			360
Professional services		254			219			199			243			271				672			866
Telephone and data communication		51			51			56			66			57				158			174
Insurance		78			80			81			79			82				239			238
Other expense		504			579			487			610			624				1,570			1,889
Total noninterest expense		7,163			6,904			6,421			6,669			7,007				20,488			21,269
Income from operations before income taxes		1,423			5,145			195			158			438				6,763			2,351
Income tax expense		347			1,361			17			1,050			59				1,725			579
Net (loss) income		1,076			3,784			178			(892	)		379				5,038			1,772
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	$	1,076		$	3,784		$	178		$	(892	)	$	379			$	5,038		$	1,772

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 Q3 2024?

CIB Marine Bancshares (CIBH) reported a net income of $1.1 million for Q3 2024.

How did CIBH's Q3 2024 earnings compare to Q3 2023?

CIBH's Q3 2024 earnings of $1.1 million were up from $0.4 million in Q3 2023, showing a significant improvement.

What was CIBH's net interest margin in Q3 2024?

CIBH's net interest margin improved to 2.55% in Q3 2024, up from 2.38% in the previous quarter.

When does CIBH plan to complete the final redemption of its preferred stock?

CIBH plans to complete the final redemption of all remaining preferred stock on October 31, 2024.

How did CIBH's loan portfolio and deposits change in Q3 2024?

CIBH's loan portfolio balances decreased by $12 million and deposits decreased by $22 million in Q3 2024.