BROOKFIELD, Wis. - CIB Marine Bancshares, Inc. (OTCQX: CIBH), the parent company of CIBM Bank, has announced the redemption of all its outstanding preferred stock, effective October 31, 2024. The move will see the full redemption of approximately 14,633 Series A Preferred shares and 1,610 Series B Preferred shares at a price of $825 per share. This price is below the balance sheet carrying value and the liquidation preference value, which are $850 and $1,000 per share, respectively.
The $13.4 million required for the redemption will be sourced from cash on hand following distributions from CIBM Bank and CIB Marine Capital, LLC, as well as a portion of the $10 million subordinated debt offering completed in early 2022. Shareholders of record will receive documentation regarding the redemption from Computershare Trust Company, N.A., the company's redemption agent, on or around today.
J. Brian Chaffin, President and CEO of CIB Marine, described the redemption as a significant achievement for both the company and its shareholders. He highlighted that the transaction will increase liquidity for the remaining preferred shares and benefit common shareholders by eliminating the potentially dilutive convertible Series B shares.
Mark Elste, Chairman of the Board of Directors, also commented on the redemption, stating that it simplifies the company's capital structure to only common stock with full voting rights and opens up opportunities for building shareholder value.
CIB Marine Bancshares, Inc. oversees banking operations across nine offices in Illinois, Wisconsin, and Indiana, and has mortgage loan officers in ten states. The company has emphasized that this redemption has been a focus of the Board and management for over four years.
The information provided in this article is based on a press release statement from CIB Marine Bancshares, Inc. It should be noted that forward-looking statements are subject to various risks and uncertainties, and actual results could differ materially from those projected.
InvestingPro Insights
CIB Marine Bancshares, Inc.'s recent decision to redeem all outstanding preferred stock aligns with several key financial metrics and trends highlighted by InvestingPro. The company's strong financial position is reflected in its profitability over the last twelve months, as noted in one of the InvestingPro Tips. This profitability likely contributed to the company's ability to fund the $13.4 million redemption from cash on hand and existing resources.
The redemption strategy also appears to be part of a broader effort to enhance shareholder value. InvestingPro data shows that CIB Marine is trading at a low Price / Book multiple of 0.39, suggesting the stock may be undervalued relative to its assets. This move to simplify the capital structure by eliminating preferred shares could potentially lead to a re-evaluation of the company's market value.
Additionally, CIB Marine has demonstrated strong recent performance, with InvestingPro reporting a 15.42% price total return over the last three months. This positive momentum, combined with the strategic redemption of preferred shares, may contribute to increased investor interest in the company's common stock.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips for CIB Marine Bancshares, providing deeper insights into the company's financial health and market position.
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