CHAMPAIGN – Central Illinois Bank's parent company reported its first annual profit in seven years this week.
But the profit came largely as the result of a one-time gain related to the extinguishment of debt. The parent company, Wisconsin-based CIB Marine Bancshares, reported net income of $13.7 million for 2009, thanks to a $54.5 million gain related to completion of a prepackaged plan of reorganization. The last year CIB Marine reported an annual profit was in 2002.
Even so, the company had an operating loss of $40.8 million in 2009, and that was blamed on "adverse" economic and real estate market conditions.
That operating loss was larger than that of previous years. In 2008, the operating loss was $34.4 million, and in 2007, it was $13.8 million.
For shareholders, net income amounted to 75 cents a share, compared with a net loss of $1.88 a share in 2008.
John Hickey Jr., chairman and CEO of the company, said by completing the reorganization, the company eliminated $107.2 million of indebtedness, as well as $8.9 million of annual interest expense.
He also said the company's capital ratios "significantly improved" as a result of the reorganization.
In a letter to shareholders, Hickey said his predecessor, Stanley Calderon, had resigned from the boards of CIB Marine and its bank to take a senior management position in banking.
CIB Marine Bancshares is the holding company for CIBM Bank, which operates as Central Illinois Bank in Illinois and as Marine Bank in the Milwaukee, Indianapolis and Scottsdale, Ariz., areas.
The bank, which had $696 million in assets as of Dec. 31, has 17 offices in Illinois, Wisconsin, Indiana and Arizona. At the end of 2009, it had 176 employees, 153 of them full-time.
The company's annual report released this week showed that commercial real estate loans and commercial real estate construction loans together accounted for 62.6 percent of CIB Marine's gross loans.
The report stated that 8.1 percent of the commercial real estate loans were categorized as non-performing, while 49.6 percent of the construction and development loans were deemed non-performing. That term is often applied to loans where principal and interest payments have not been made for 90 days.