CIB Marine Bancshares, Inc. Announces 2020 Results

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BROOKFIELD, Wis., Jan. 22, 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 fourth quarter and full year of 2020. Strong mortgage operations and higher net interest income resulted in net income of $2.3 million for the quarter ending December 31, 2020, compared to a loss of $0.4 million for the same period in 2019 and, for the twelve months ending December 31, 2020, net income of $8.2 million compared to $2.0 million for the same period in 2019. Income before taxes for 2020 was $10.9 million compared to $2.5 million for 2019.

A summary of financial results for the quarter and twelve months ended December 31, 2020, is attached. Select highlights include:

  • The tangible book value for the common stock increased 16.6% over the course of 2020 from $44.85 per share at December 31, 2019, to $52.28 per share at December 31, 2020, primarily the result of higher earnings, with improved unrealized net gains on securities and discounts on repurchased preferred stock contributing as well.
  • The return on average assets and efficiency ratio for the year 2020 were 1.09% and 73% respectively, compared to 0.29% and 89%, respectively, for the same period in 2019.
  • Net mortgage banking revenue was up 148% from $8.2 million during 2019 to $20.3 million in 2020. Lower interest rates supported a surge in mortgage originations in 2020 resulting in $600 million in residential loans – almost double the $330 million in residential loans originated in 2019. Further, 65% of 2020 residential loan originations were refinance loans, compared to 47% of 2019 originations.
  • Net interest income was up 15% in 2020 from $19.3 million during 2019 to $22.2 million in 2020. The primary reasons for the increase include: (i) higher average balances in loans held for sale and Paycheck Protection Program (PPP) loans, (ii) a 75 basis point reduction in the cost of interest bearing liabilities due to the lower interest rate environment, and (iii) the collection of principal plus interest on a large non-performing commercial real estate loan.
  • Expenses were up $5.8 million, from $26.2 million in 2019 to $32.0 million in 2020, primarily as a result of a $5.6 million increase in compensation in the Mortgage Banking Division due to higher mortgage loan production that created a $12.9 million increase in division revenues. Mortgage Division compensation counted for 54% of total compensation in 2020, compared to 41% in 2019. On a combined basis, all other expenses excluding compensation were down $0.2 million for 2020 compared to 2019, primarily the result of lower travel and entertainment and collection expenses.
  • COVID-19 and the related “Lockdown Recession” resulted in significant volumes of new types of banking activity. CIBM Bank originated approximately 350 government guaranteed PPP loans, totaling $43 million, in 2020. At December 31, 2020, PPP loan balances were paid down to $32 million, primarily by the Small Business Administration (SBA) as a result of loan forgiveness applications filed for borrowers. On average, such forgiveness applications represent 99% of the original loan balance per loan. In 2020, PPP loan fees received from the SBA and deferred were $1.6 million, with $0.8 million accreted into interest income due to level yield accretion over the original weighted average term (approximately two years) and accelerations as a result of $11 million in early payoffs related to loan forgiveness payments, and the remaining $0.8 million in outstanding deferred fees to be recorded into future income. Net of related deferred costs, original and accreted net deferred fees were $1.1 million and $0.6 million, respectively, with a remaining $0.5 million of net deferred fees to be recorded in future income. As of December 31, 2020, there were an additional $9 million in PPP loan forgiveness applications being processed, with the majority of the remaining PPP loan forgiveness applications expected to be received in the first half of 2021.
  • As of December 31, 2020, there were $24.5 million in outstanding loan balances from 31 loans granted a COVID-19 loan payment still in an active deferral period, representing 5% of total outstanding loan portfolio balances. Of the loans with active COVID-19 loan payment deferrals, 37% are from the hospitality industry, 15% are from the recreation and entertainment industry, 8% of the balances are from 1-4 family mortgage loans, and the remainder from a mix of other industries harmed by COVID-19 lockdowns.
  • Provisions for loan losses were $1.1 million for the twelve months ended December 31, 2020, compared to $0.8 million for the same period of 2019. The primary reason for the increase is environmental and qualitative factors as well as certain borrower credit deterioration primarily from those industries hardest hit by COVID-19 and the related Lockdown Recession (i.e., restaurants and hospitality).
  • 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 0.54% and 0.23%, respectively; compared to 1.35% and 1.09%, respectively, at December 31, 2019. The improvements during 2020 were due to certain loan level improvements including a successful large commercial real estate loan collection.

Mr. J. Brian Chaffin, President and CEO of CIBM, commended his team's work stating, “Our 2020 results are largely attributable to our staff's ability to quickly respond to the rapidly changing set of circumstances in 2020 – from nearly doubling mortgage loan production in response to a dramatic increase in demand; to implementing an effective PPP loan program to ensure access to funding for small businesses in our communities; to quickly executing a variety of strategies in response to the lower rate environment in order to reduce the Company's cost of funds by more than many of our peers; to commercial loan production in excess of pre-COVID19 goals. The Board of Directors and I are extremely proud of the way our team members, both front line and back office, came together to organize, plan, and effectively execute on many different operating fronts as our world seemed to change on a daily basis.”

Looking forward to 2021, he added, “We are focused on meeting the needs of our communities through participation in emerging government economic support plans such as the new PPP program, as well as continuing our “Project Falcon” initiatives geared toward new deposit generation and operating efficiencies. In addition, we will continue to monitor developments at the state and federal level, mindful of the economic uncertainties related to the pandemic and their potential effect on credit quality, as well as new regulations and higher taxes that may be in the offing for 2021 and the years ahead, with possible adverse impact to our clients and banking operations.”

Mr. Chaffin also announced, “Our Chief Credit Officer, Paul Melnick, has announced his intent to retire in 2021 and his successor, Mr. Scott Winkel, assumed the duties of Chief Credit Officer, effective January 1, 2021. As part of our transition plan, Paul will continue assisting the bank as the Director of Special Assets, where he will focus on problem loan work-outs and coordinate a smooth transition of the Credit Administration function.” Mr. Chaffin continued, “Scott joined CIBM Bank in 2020 with more than 25 years of banking and credit administration experience. We are delighted to welcome him to our executive management team and fortunate to have someone with his knowledge and familiarity with our banking markets on board. Over the next six months, Scott and Paul will be working closely to ensure long-term, consistent performance and maintain our strong credit culture.”

CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates eleven 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

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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,
    2020     2020     2020     2020     2019       2020     2019  
  (Dollars in thousands, except share and per share data)
Selected Statement of Operations Data:                
Interest and dividend income $ 6,489   $ 7,202   $ 6,669   $ 6,636   $ 6,820     $ 26,996   $ 27,948  
Interest expense   765     1,017     1,343     1,689     2,030       4,814     8,647  
Net interest income   5,724     6,185     5,326     4,947     4,790       22,182     19,301  
Provision for loan losses   101     501     249     202     715       1,053     817  
Net interest income after provision for                
loan losses   5,623     5,684     5,077     4,745     4,075       21,129     18,484  
Noninterest income (1)   6,566     8,104     4,489     2,642     2,249       21,801     10,156  
Noninterest expense   9,317     9,056     7,308     6,322     6,879       32,003     26,174  
Income (loss) before income taxes   2,872     4,732     2,258     1,065     (555 )     10,927     2,466  
Income tax expense (benefit)   565     1,322     575     281     (180 )     2,743     423  
Net income (loss) $ 2,307   $ 3,410   $ 1,683   $ 784   $ (375 )   $ 8,184   $ 2,043  
                 
Common Share Data (2):                
Basic net income (loss) per share (3) $ 1.82   $ 2.69   $ 1.36   $ 0.63   $ (0.30 )   $ 6.51   $ 1.92  
Diluted net income (loss) per share (3)   1.06     1.56     0.79     0.36     (0.30 )     3.79     1.08  
Dividend   0.00     0.00     0.00     0.00     0.00       0.00     0.00  
Tangible book value per share (4)   52.28     50.35     47.25     46.05     44.86       52.28     44.86  
Book value per share (4)   47.19     45.27     42.00     40.95     39.66       47.19     39.66  
Weighted average shares outstanding – basic   1,267,582     1,267,582     1,266,174     1,248,270     1,243,095       1,262,277     1,227,111  
Weighted average shares outstanding – diluted   2,181,140     2,181,868     2,160,201     2,155,313     2,155,302       2,167,730     2,180,776  
Financial Condition Data:                
Total assets $ 750,982   $ 793,604   $ 793,151   $ 705,473   $ 703,791     $ 750,982   $ 703,791  
Loans   539,227     546,351     535,692     513,992     513,705       539,227     513,705  
Allowance for loan losses   (9,122 )   (9,037 )   (8,483 )   (8,107 )   (8,007 )     (9,122 )   (8,007 )
Investment securities   108,492     107,351     113,303     120,105     120,398       108,492     120,398  
Deposits   586,373     593,370     566,811     531,999     530,190       586,373     530,190  
Borrowings   51,310     87,994     120,233     68,950     73,847       51,310     73,847  
Stockholders' equity   103,704     101,271     97,347     95,841     93,404       103,704     93,404  
Financial Ratios and Other Data:                
Performance Ratios:                
Net interest margin (5)   3.14 %   3.30 %   2.96 %   3.04 %   2.86 %     3.11 %   2.91 %
Net interest spread (6)

Full story available on Benzinga.com

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