CIB Marine Bancshares, Inc. · OTC:CIBH
CIB Marine Bancshares — Shareholder Meeting (May 2017)
33 slides from CIB Marine Bancshares's shareholder meeting presentation, May 25, 2017
Slide 1: Annual Shareholder Meeting
Celebrating our 30th Anniversary! ANNUAL SHAREHOLDER MEETING May 25, 2017 Previous Close (May 24, 2017) S&P 500 Index INX $2,404.39 Dow Jones Industrial Average Index INDU $21,012.42 KBW Regional Banking Total Return Index KRXTR $157.93 CIB Marine Bancshares, Inc. CIBH $1.45 Source: Bloomberg L.P.
Slide 2: Call to Order
CALL TO ORDER Mark A. Elste Chairman of the Board of Directors 2
Slide 3: Forward Looking Statements
FORWARD LOOKING STATEMENTS CIB Marine has made statements during today’s presentation 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 crea
Slide 4: Board of Directors
BOARD OF DIRECTORS Charles E. Baker, CPA Retired Partner of Ernst & Young, LLP Willard Bunn III Managing Director of Colonnade Advisors, LLC President & CEO of J. Brian Chaffin CIB Marine Bancshares & CIBM Bank Chairman of the Boards of Mark A. Elste CIB Marine Bancshares, Inc. and CIBM Bank Chief I
Slide 5: Crowe Horwath LLP, Godfrey & Kahn, Computershare
CROWE HORWATH LLP • Brian Sterwald GODFREY & KAHN • Patrick Murphy COMPUTERSHARE • Andrew Waford 5
Slide 6: Management Team
MANAGEMENT TEAM President & CEO of J. Brian Chaffin CIB Marine Bancshares & CIBM Bank Chief Financial Officer of Patrick J. Straka CIB Marine Bancshares & CIBM Bank Chief Credit Officer of Paul C. Melnick CIB Marine Bancshares & CIBM Bank Chief Administrative Officer & General Counsel of Daniel J. R
Slide 7: Proposal I: Election of Directors
PROPOSAL I: ELECTION OF DIRECTORS Nominated Directors: Willard Bunn III Gary L. Longman Steven C. Palmitier Elected directors will serve until 2020. 7
Slide 8: Proposal II: Amendment to Articles of Incorporation
PROPOSAL II: AMENDMENT TO ARTICLES OF INCORPORATION Vote Results* For: 93.15% Against: 6.36% Abstain: 0.49% *Voting percentages are as of 5:00PM (Central), May 24, 2017, and do not include votes cast subsequently or at the Annual Meeting of Shareholders. Final voting results will be published at www
Slide 9: Proposal III: Non-Binding Proposal Regarding a Net Operating Loss Rights Plan
PROPOSAL III: NON-BINDING PROPOSAL REGARDING A NET OPERATING LOSS RIGHTS PLAN Vote Results* For: 83.99% Against: 15.00% Abstain: 1.01% *Voting percentages are as of 5:00PM (Central), May 24, 2017, and do not include votes cast subsequently or at the Annual Meeting of Shareholders. Final voting resul
Slide 10: Proposal IV: Ratification of Independent Registered Public Accounting Firm
PROPOSAL IV: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Crowe Horwath LLP Vote Results* For: 98.01% Against: 1.68% Abstain: 0.31% *Voting percentages are as of 5:00PM (Central), May 24, 2017, and do not include votes cast subsequently or at the Annual Meeting of Shareholders. Fina
Slide 11: Management Presentation to Shareholders
MANAGEMENT PRESENTATION TO SHAREHOLDERS J. Brian Chaffin President & CEO 11
Slide 12: Expense Savings Plan
EXPENSE SAVINGS PLAN • Two office closure savings – $180,000 per annum • 2016: Nominal; 2017: $180,000 • Reduction in positions & FTE – $0.8 million per annum • 2016: $0.6 million; 2017: $0.8 million • Excluding the Mortgage Banking Division, total salary & benefits at CIBM Bank was down $0.5 millio
Slide 13: Revenue Growth Strategies
REVENUE GROWTH STRATEGIES • Expand Mortgage Banking Division • Continue growth in Corporate Banking Division • Retail sales development • Add Government Guaranteed Lending Division to grow SBA loans • Add Trust Division 13
Slide 14: Revenue Strategies: Mortgage Banking
REVENUE STRATEGIES • Mortgage Banking – 2016 • Added 20 lenders at the end of 2015 • Added FHA Direct Endorsement authority • Net mortgage banking revenue increased $3.4 million • Rollout of Affordable Loan Program – 2017 • Pivot from a strong refinance market to a purchase money market • Develop Ce
Slide 15: Revenue Strategies: Corporate Banking
REVENUE STRATEGIES (CONT’D) • Corporate Banking Commercial Segment Loan Geographic – 2016 Distribution (000s) • $75 million new loans in $140,000 Commercial Division $120,000 $100,000 • Portfolio diversified $80,000 across all markets $60,000 $40,000 • Strong Treasury $20,000 Management services $0
Slide 16: Revenue Strategies: Retail Banking
REVENUE STRATEGIES (CONT’D) • Retail Banking – 2016 • Total deposits grew 6.1% in Retail Division • Improved customer relationship capabilities • Business development resource focus – 2017 • E-Banking Services • New sales tools 16
Slide 17: Revenue Strategies: Government Guaranteed Lending
REVENUE STRATEGIES (CONT’D) • Government Guaranteed lending – 2016 • Off the ground with Joe Arie • Modest overhead; existing credit culture; higher dollar/lower volume of loans • Sold $0.8 million – 2017 • Sold $3.7 million in first quarter • $0.4 million in gains on sale • Added experienced underw
Slide 18: Revenue Strategies: SBA Reverse Repo
REVENUE STRATEGIES (CONT’D) • SBA Reverse Repo – 2016 • Started in 2nd quarter • Collateral backed by the U.S. government – 2017 • Stabilize capacity • Expand to Trust Division 18
Slide 19: Revenue Strategies: Trust Division
REVENUE STRATEGIES (CONT’D) • Trust Division – Received Certificate of Authority in 2016 – Develop sources and product – Focus product on: • SBA Reverse Repo for clients • Shareholders services (e.g., sweeps to money market mutual funds) 19
Slide 20: Credit Administration
CREDIT ADMINISTRATION • Loan portfolio reflects improved diversification in real estate sector – Still strong in Loan Geographic Distribution (000s) commercial, but more $250,000 balance with 1st lien $200,000 purchase and refi $150,000 residential $100,000 $50,000 – Loans are $0 geographically C&I
Slide 21: Credit Administration
CREDIT ADMINISTRATION Non-Performing Assets and • Credit quality has improved over Restructured Loans / Total Assets & Non-Accrual Loans / 8% the longer term 5.93% Loans 6% 4.48% – Non-performing asset ratio is down 2.94% 2.80% 4% more than 4% over the past 5 years 2.25% 1.67% 1.26% 1.16% 1.06% 0.70
Slide 22: Community Development
COMMUNITY DEVELOPMENT • Joanne Blaesing appointed as Director of Community Development • Commitment to “Service, Solutions and Integrity” in every market where we live and work • Roll out and traction of Affordable Loan Program in 2016 • Volunteerism; financial education; and community investment 22
Slide 23: 2016 Results Summary
2016 RESULTS SUMMARY • Outlook provided at 2015 shareholder meeting was $2.6 to $3.8 million • Actual results were $4.1 million; an increase of $4.7 million from prior year • Revenue growth – Net interest income up $1.8 million – Non-interest income up $5.0 million – Controlled costs • Primary expen
Slide 24: Q1 2017 Results Summary
Q1 2017 RESULTS SUMMARY • Net income $0.9 million – Earnings quality improved $0.6 million compared to the first quarter of 2016 (net of provision for loan losses and net gains from sale of OREO and other write-downs) • Revenue Growth – Net interest income up $0.9 million annualized compared to the
Slide 25: 2017 Earnings Outlook
2017 EARNINGS OUTLOOK • Prior outlook still reasonable – Earnings of $3.1 to $4.5 million • Key elements – Continue commercial lending growth – Modest growth in core deposits – Maintain net interest margins – Growth in SBA lending activities – Successful pivot to purchase money residential market –
Slide 26: Chairman's Presentation
CHAIRMAN’S PRESENTATION Mark A. Elste 26
Slide 27: Stock Performance
STOCK PERFORMANCE Traded Volume Average Annual Average Annual Ending Stock Weighted Total Return Total Return Price per Volume Average Price Since Since Period Share (1) YTD YTD (1) 12/31/2009 (2) 12/31/2010 (2) 12/31/2009 $0.11 862,997 $0.15 12/31/2010 $0.09 1,878,293 $0.23 -23% 12/31/2011 $0.18 2,
Slide 28: $100 Investment in CIBH and KRXTR
$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 12/30/2009 3/30/2010 6/30/2010 9/30/2010 12/31/2010 CIBH KRXTR 3/31/2011 Linear (CIBH) 6/30/2011 Linear (KRXTR) 9/30/2011 12/31/2011 3/31/2012 6/30/2012 9/30/2012 12/31/2012 3/31/2013 6/30/2013 9/30/2013 12/31/2013 3/31/2014 6/30/2014 9/30/2014 12/31/2014
Slide 29: Improved Liquidity for Common Stock
IMPROVED LIQUIDITY FOR COMMON STOCK Days Traded 200 Days Traded 150 100 50 0 2004 2006 2008 2010 2012 2014 2016 CIBH Traded Volume on OTC-QB 3,000,000 2,000,000 1,000,000 0 2014 2015 2016 Volume Linear (Volume) 29
Slide 30: TARP Preferred Stock Sales
TARP PREFERRED STOCK SALES Troubled Asset Relief Program Transactions Report – Investment Programs Sale results for preferred stock (1) Count: 14 Price per $1,000 of Percent of Price per Statistics Liquidation Preference Liquidation Preference Average $612.40 61% Median $635.98 64% (1) Preferred Sto
Slide 31: Preferred Stock Repurchase Program Scenario Analysis
PREFERRED STOCK REPURCHASE PROGRAM SCENARIO ANALYSIS REPURCHASE SCENARIO AT 70% OF LIQUIDATION PREFERENCE End of Year 2016 2017 2018 2019 2020 2021 2022 2023 Cash Used for $6 $3 $3 $3 $3 $3 $3 Repurchase (in millions) Total Shares of Series A 8,571 4,286 4,286 4,286 4,286 4,286 4,286 Repurchased Tan
Slide 32: Shareholders' Questions & Comments
SHAREHOLDERS’ QUESTIONS & COMMENTS 32
Slide 33: Slide 33
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