CIB Marine Bancshares, Inc. · OTC:CIBH
CIB Marine Bancshares — Shareholder Meeting (September 2021)
39 slides from CIB Marine Bancshares's shareholder meeting presentation, Sep 24, 2021
Slide 1: Annual Shareholder Meeting
ANNUAL SHAREHOLDER MEETING September 24, 2021 Previous Close (September 23, 2021) S&P 500 Index INX $4,438.00 Dow Jones Industrial Average Index INDU $34,764.82 KBW Regional Banking Total Return Index KRXTR $203.78 CIB Marine Bancshares, Inc. CIBH $28.75 Source: Bloomberg L.P. This presentation has
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 Retired Partner of Ernst & Young, LLP President & CEO of J. Brian Chaffin CIB Marine Bancshares & CIBM Bank Gina M. Cocking CEO & Managing Director of Colonnade Advisors, LLC JoAnn M. Cotter Retired partner of Wipfli LLP Chairman of the Boards of Mark A. Elste CIB
Slide 5: Farewell to Charles Baker
Charles Baker Director 2008 - 2021 The Board of Directors offers its gratitude and a fond farewell to Mr. Baker after more than a decade of invaluable service to the Company and its shareholders. 5
Slide 6: Board Committee Leadership
BOARD COMMITTEE LEADERSHIP Audit Trust Chairman: Gary Longman Chairman: Charles Mires Vice Chairman: Mark Henderson Compensation Nominating Chairman: Ron Rhoades Chairman: Ron Rhoades New Business Lines Investment Advisory Chairman: Gina Cocking Chairman: Mark Elste 6
Slide 7: Crowe LLP, Godfrey & Kahn, Computershare
CROWE LLP • Chris Camp & Brian Sterwald GODFREY & KAHN • Patrick Murphy COMPUTERSHARE • Andrew Waford 7
Slide 8: Executive Management Team
EXECUTIVE 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 Administrative Officer & General Counsel of Daniel J. Rasmussen CIB Marine Bancshares & CIBM Bank Chief Credit Officer
Slide 9: Proposal I: Election of Directors
PROPOSAL I: ELECTION OF DIRECTORS Nominated Directors Mark A. Elste Mark D. Henderson Charles D. Mires Ronald E. Rhoades Elected directors will serve until 2024. 9
Slide 10: Proposal II: Second Amended and Restated Articles of Incorporation
PROPOSAL II: SECOND AMENDED AND RESTATED ARTICLES OF INCORPORATION Vote Results* For: 97.75% Against: 1.73% Abstain: 0.52% * Voting percentages are as of 5:00pm (Central), September 23, 2021, and do not include votes cast subsequently or at the Annual Meeting of Shareholders. Final voting results wi
Slide 11: Proposal III: Ratification of Independent Registered Public Accounting Firm
PROPOSAL III: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Crowe LLP 11
Slide 12: Management's Presentation to Shareholders
MANAGEMENT’S PRESENTATION TO SHAREHOLDERS J. Brian Chaffin President & CEO Any year-to-date (YTD) information provided herein is as of June 30, 2021. 12
Slide 13: Redemption Plan
REDEMPTION PLAN • Initial Redemption: $18 million of Series A and B, pro-rata prior to December 31, 2021. • Term: 4 years to redeem remainder after Initial Redemption. • Redemption Price: $825 per share if within Term. • Mandatory Call: All repurchases will be executed as a series of mandatory redem
Slide 14: Pro Forma Book Value & Capital Ratios Upon Initial Redemption
PROFORMA BOOK VALUE & CAPITAL RATIOS UPON INITIAL REDEMPTION June 30, 2021 ProForma Tangible Book Value per Share Common (basic) $54.14 $54.56 Tangible Book Value per Share Common (diluted) $32.76 $40.10 EPS for YTD through June 30 (basic)(1) $2.74 $3.17 EPS for YTD through June 30 (diluted)(1) $1.5
Slide 15: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS YTD YTD (dollars in millions) 2021(1) 2020(1) FY 2020 FY 2019 Net Income $3.5 $2.5 $8.2 $2.0 ROAA(2) 0.94% 0.68% 1.09% 0.29% Net Interest Income $11.5 $10.3 $22.2 $19.3 Net Interest Margin 3.24% 3.00% 3.11% 2.91% Provision for (reversal of) ($0.3) $0.5 $1.1 $0.8 Loan Losses
Slide 16: Revenue Growth
REVENUE GROWTH PRIMARY BANKING REVENUES (000s) $50,000 $40,000 $30,000 $20,000 $10,000 $0 2016 2017 2018 2019 2020 2021 YTD Net interest income Deposit service charges Other service fees Mortgage banking revenue, net Other income SBA 7(a) gains on sale 16
Slide 17: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN • Net interest income improved by $2.9 million and net interest margin by 22 basis points in 2020 from 2019. • Improvements were due to: • Higher average loans included PPP and loans held for sale • A 75 basis point improvement in cost of interest bearing liabilities N
Slide 18: Compensation Growth
COMPENSATION GROWTH • Total compensation represents a substantial majority of total expenses each year. • Changes in total compensation have been primarily focused on performance-based compensation over the past 5 years (commissions, bonus, and other incentive rewards). • Average annual growth in to
Slide 19: Mortgage Banking
MORTGAGE BANKING CIBM MORTAGE, LOAN ORIGINATIONS CIBM MORTGAGE, NET INCOME (000s) (000s) $600,000 $6,000 $400,000 $4,000 $200,000 $2,000 $0 $0 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 YTD YTD Purchase Money Refinance 19
Slide 20: Commercial Loan Originations
COMMERCIAL LOAN ORIGINATIONS $100,000,000 225% 199% 200% $80,000,000 175% $60,000,000 150% $40,000,000 126% 118% 125% 100% $20,000,000 100% 85% $0 75% 2017 2018 2019 2020 2021 YTD Originations Actual to Budget Excluding PPP loans. 20
Slide 21: Loan Portfolio Segments & Geographic Distribution
LOAN PORTFOLIO SEGMENTS & GEOGRAPHIC DISTRIBUTION LOAN GEOGRAPHIC DISTRIBUTION (000s) LOAN PORTFOLIO (000s) $600,000 $200,000 $160,000 $400,000 $120,000 $200,000 $80,000 $40,000 $0 $0 Illinois Wisconsin Indiana Other 2016 2017 2018 2019 2020 2021 YTD Commercial & Industrial Commercial Real Estate Co
Slide 22: Government Guaranteed Lending
GOVERNMENT GUARANTEED LENDING SBA 7A LOANS (000s) $1,741 2021 $30,000 $1,800 PPP Lending 2020 (YTD) $1,500 Loans Originated (millions) $43.4 $63.0 $1,109 $20,000 $1,024 $1,200 Loans Outstanding (millions) $31.9 $25.9 Number of Loans Originated 347 529 $900 $524 Gross Fees Received (millions) $1.6 $2
Slide 23: Retail Division
RETAIL DIVISION DEPOSITS BY MARKET (000s) ELECTRONIC BANKING CLIENTS 4,000 $350,000 Time Deposits $300,000 Savings 3,000 Checking $250,000 $200,000 2,000 $150,000 1,000 $100,000 $50,000 0 $0 2017 2018 2019 2020 2021 YTD Illinois Wisconsin Indiana Other Branches per state: 7 2 1 Online Banking Mobile
Slide 24: Credit Administration
CREDIT ADMINISTRATION NON-PERFORMING ASSETS / TOTAL NONACCRUAL LOANS / TOTAL LOANS ASSETS 2.00% 2.00% 1.67% 1.45% 1.34% 1.35% 1.26% 1.13% 1.09% 1.00% 1.00% 0.69% 0.54% 0.23% 0.29% 0.19% 0.00% 0.00% 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 YTD YTD • Note: NonAccrual Loans/Total Loa
Slide 25: Credit Administration
CREDIT ADMINISTRATION NET CHARGE OFFS TO AVERAGE LOAN CLASSIFICATION / TOTAL LOANS LOANS 0.50% 3.5% 3.0% 0.15% 0.25% 2.5% 0.02% 2.0% 0.00% 1.5% -0.01% -0.02% 1.0% -0.12% -0.25% 0.5% -0.29% 0.0% 2015 2016 2017 2018 2019 2020 2021 -0.50% YTD 2016 2017 2018 2019 2020 2021 Special Mention Substandard-Ac
Slide 26: Paul C. Melnick
Paul C. Melnick CIBM Employee: 1999 - Present Chief Credit Officer: 2010 - 2020 The Board of Directors thanks Mr. Paul Melnick for his decades of service to the Company and its shareholders, most recently as CIB Marine’s Chief Credit Officer. His dedicated and disciplined approach to credit administ
Slide 27: Welcome Scott Winkel and Dawn DeRidder
Scott C. Winkel Dawn M. DeRidder Chief Credit Officer Director of Government Guaranteed Lending CIB Marine welcomes Mr. Scott C. Winkel and Ms. Dawn M. DeRidder to the family. With more than 60 years of banking experience between Mr. Winkel and Ms. DeRidder, both bring a wealth of knowledge and year
Slide 28: Project Falcon
PROJECT FALCON Strategy: Improve ongoing level and quality of earnings. Business Goal: Generate consistent earnings performance to peer median levels or above. Team Name Focus Deposit Acquisition Improve cost of funds by improving mix of non-interest bearing deposits. Yield Improvement Improve yield
Slide 29: COVID-19 Emergency Response & Current Status
COVID-19 EMERGENCY RESPONSE & CURRENT STATUS • Remote banking solutions were enhanced in following areas: • Online Banking • CIBM Bank mobile app • iTalk telephone banking • Digital Signatures • In-person branching severely limited in 2020; currently all branches are open for full service. • Most op
Slide 30: First Half 2021 Results
FIRST HALF 2021 RESULTS YTD YTD (dollars in millions) 2021(1) 2020(1) FY 2020 FY 2019 Net Income $3.5 $2.5 $8.2 $2.0 ROAA(2) 0.94% 0.68% 1.09% 0.29% Net Interest Income $11.5 $10.3 $22.2 $19.3 Net Interest Margin 3.24% 3.00% 3.11% 2.91% Provision for (reversal of) ($0.3) $0.5 $1.1 $0.8 Loan Losses N
Slide 31: Moving Forward in 2021
MOVING FORWARD IN 2021 • Execute the Initial Redemption of preferred shares; • Upgrade CIBH to OTCQX from OTCQB; • Move Project Falcon revenue and cost projects forward; • Maintain cautious allowance for credit positions; and • Manage the effects of economic, social, and fiscal policy outcomes. 31
Slide 32: 2020 Results and 2021 Guidance
2020 RESULTS AND 2021 GUIDANCE (dollars in millions, except per share data) 2020 Actual (1) 2021 Guidance Net Income $8.2 $5.4 - $6.9 Total Assets $751 $710 - $730 ROAA 1.09% 0.72%-0.93% EPS (excluding Initial Redemption) - Basic $6.51 $4.18 - $5.42 - Diluted $3.79 $2.43 - $3.15 EPS (including Initi
Slide 33: Chairman's Presentation to Shareholders
CHAIRMAN’S PRESENTATION TO SHAREHOLDERS Mark A. Elste Chairman of the Board of Directors 33
Slide 34: Stock Performance
STOCK PERFORMANCE $100 Investment in CIBH and KRXTR 12/31/2015 - 9/10/2021 CIBH KRXTR 10 per. Mov. Avg. (CIBH) 10 per. Mov. Avg. (KRXTR) $500 $250 $0 12/31/15 09/30/16 06/30/17 03/31/18 12/31/18 09/30/19 06/30/20 03/31/21 CIBH CIBH KRXTR KRXTR 5 per. Mov. Avg. (CIBH) 5 per. Mov. Avg. (CIBH) 12/31/20
Slide 35: Stock Performance
STOCK PERFORMANCE Volume Weighted Ending Price Traded Stock Average Price Average Annual Total Return Since Period per Share(1) Volume YTD(1) 12/31/2009(2) 12/31/2015(2) 12/31/2017(2) 12/31/2009 $1.65 57,531 $2.31 12/31/2010 $1.28 125,221 $3.51 -23% 12/31/2011 $2.70 149,595 $1.79 28% 12/31/2012 $3.0
Slide 36: Book Value
BOOK VALUE 2021 2020 2019 2018 2017 2016 (YTD) Tangible Book Value $54.14 $52.28 $44.86 $42.35 $37.88 $15.14 Tangible Book Value $41.98 $39.42 $28.71 $24.72 $19.21 $15.14 Excluding DTA Tangible Book Value $33.81 $32.52 $27.84 $25.68 $20.85 $9.27 Post Pref. Series B Conversion 36
Slide 37: Shareholders' Questions
YW \ cib marine BANCSHARES INC SHAREHOLDERS’ QUESTIONS
Slide 38: Director & Management Stock Ownership
DIRECTOR & MANAGEMENT STOCK OWNERSHIP Shares Held % of Outstanding Directors & Executive Management: 108,318 8.42% Directors and all management*: 160,271 12.46% as of 06/30/21 * Includes restricted stock and stock owned outright, but may not include shares owned by management that are held in nomine
Slide 39: CIB Marine Bancshares Inc
YX cio marine BANCSHARES INC
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