Central Illinois Bank to close office in Decatur, Peoria

Central Illinois Bank to close office in Decatur, Peoria

CHAMPAIGN – Central Illinois Bank will close its office in Decatur and one of its offices in Peoria later this year as part of a cost-cutting move, its parent company announced this week.

The company, CIB Marine Bancshares, also reported a net loss of $2.9 million for the quarter that ended June 30. That was down sharply from the same quarter a year earlier, when the company reported a net loss of $10.3 million.

For shareholders, the most recent quarter's results amounted to a net loss of 16 cents per share, compared with a net loss of 57 cents per share a year earlier.

In a letter to shareholders, CEO John P. Hickey Jr. stated the company has "significant work ahead of us to reach some of our ultimate goals of returning CIB Marine to profitability and improving asset quality."

Though the company has made progress in paring down losses, it still needs to reduce problem loans, manage expenses and improve net interest margins, he said in an interview Thursday.

Hickey said the closing of the Decatur branch and the office on Grand Prairie Drive in Peoria will occur in the fourth quarter of this year. The Peoria office was not performing well relative to others in that market, and the Decatur office didn't see much loan demand, he said.

Champaign-based Central Illinois Bank would still have an office on North Sheridan Road in Peoria, as well as an East Peoria office.

It would also have eight other offices: two in Champaign and one each in Urbana, Danville, Monticello, Sidney, Bloomington and Arrowsmith.

Although Central Illinois Bank is the name CIBM Bank uses for its Illinois offices, the bank is known as Marine Bank in Wisconsin, Indianapolis and Scottsdale, Ariz. It is not related to Marine Bank, Springfield, which has an office in southwest Champaign.

Total assets for CIB Marine Bancshares stood at $657 million on June 30, down from $710 million on Dec. 31, 2009.

The decrease in assets reflected lower loan and securities balances and a reduction in higher-cost funding sources, the company said.

The company's capital ratios are much improved: a leverage capital ratio of 12.5 percent, up from 1.54 percent a year earlier; and a total risk-based capital ratio of 16.98 percent, up from 3.94 percent a year ago.

The number of full-time equivalent employees as of June 30 was 163, down from 172 a year earlier.

Hickey said he notified CIB Marine's board of directors of his intent to retire as CEO in late 2010 or early 2011, and continue as chairman.

"The company has a board-approved succession plan it intends to follow upon my retirement and regulatory approval of my successor," Hickey said in the letter.

Hickey, however, said he would not disclose the successor until regulators approve the choice.

This week, Charles Ponicki was appointed president of CIBM Bank and the holding company and as director of the bank. He will continue as chief credit officer for a while.

Also this week, Patrick Straka became chief financial officer of the bank and holding company after serving as chief investment officer the past 11 years – a role in which he will continue to serve.

Though CIB Marine has indicated interest in the past in seeking a merger partner, Hickey said the company is "currently not in discussions" with any parties.