Central Illinois Bank's parent smaller, healthier
CHAMPAIGN — Central Illinois Bank's parent company is a smaller but healthier organization than it was a year ago, according to its quarterly report.
CIB Marine Bancshares on Friday reported net income of $941,000 for the quarter that ended June 30, up from a net loss of $1,491,000 for the same quarter a year ago.
The turnaround stemmed partly from a $2.73 million reversal of provisions for loan losses.
That reversal was made possible by the result of recoveries in purchased home equity loans and commercial real estate loans, CEO Chuck Ponicki said in a letter to shareholders.
In the letter, Ponicki said he expected Friday's report to be the last of the company's filings with the Securities and Exchange Commission. In May, CIB Marine announced plans to deregister its common stock.
The quarterly report showed CIB Marine continued to shrink over the last year. As of June 30, its total assets stood at $494 million, down from $556 million a year earlier.
The company has nine Central Illinois Bank branches, but recently announced plans to close its East Peoria office. That will leave two branches in Champaign and one each in Urbana, Sidney, Monticello, Danville, Bloomington and Peoria.
The company also has four Marine Bank branches — three in the Milwaukee area and one in the Indianapolis area. CIB Marine has no affiliation with the Marine Bank offices in Champaign, which are part of Springfield-based Marine Bank.
Besides turning a profit in the second quarter, CIB Marine also managed to cut its nonperforming assets to only 4.03 percent of total assets — down from 7.66 percent a year earlier.
At the same time, the company was able to increase its capital ratios from a year earlier. The ratios are well above the minimums set by federal regulators for well-capitalized banks.
In the letter to shareholders, Ponicki said CIB Marine is "making steady progress in resolving problem assets" and recovering money related to previously charged-off loans.
"These actions were the major reasons we were able to report a profit this quarter," he stated.
He added a few cautionary comments, noting that:
— Net interest margins continue to shrink, a factor that will "present challenges for the remainder of the year."
— It won't be easy to continue to improve asset quality.
"We are wary of our ability to make progress along the same trends experienced over the past few years due to the slowdown in national and local economies," he said.
During the most recent quarter, CIB Marine had a $1 million loss in non-interest income — the result of a decision to sell off $11.2 million in non-investment-grade, non-agency, mortgage-backed securities.