A day after reporting its fifth consecutive annual loss, CIB Marine Bancshares Inc. in Pewaukee, Wis., revealed in a Securities and Exchange Commission filing Wednesday that it has been trying to sell itself since November.
The $1 billion-asset, three-bank holding company said that it has hired an investment banker, and it is clearly motivated to sell.
However, "executing such a strategy in the current economic and banking environment is expected to be challenging," CIB said in a letter to shareholders filed with the SEC.
In its annual report, CIB said it lost $13.8 million for the year. For 2003 through 2007, it reported a total net loss of $190 million.
One reason the company is eager to sell is that it is under pressure to pay accrued and unpaid interest on $61.9 million of trust-preferred securities issued from 2000 through 2002. At yearend CIB owed $30.3 million on the securities, and that figure is expected to reach $39.7 million by the end of this year.
CIB cannot defer the interest beyond February of next year, and because of an agreement with the Federal Reserve Board, it cannot use existing cash to pay the debt.
In the SEC filing, the company disclosed that "an unrelated entity" (which it did not name) has signed a letter of intent, but not a definitive agreement, to acquire the majority of the assets of its $125 million-asset Citrus Bank in Vero Beach, Fla. The deal would transfer $20 million of capital to the holding company, the filing said.
In addition, CIB is asking regulators for permission to transfer capital from its other subsidiaries — the $409 million-asset Marine Bank in Wauwatosa, Wis., which would contribute $7.5 million to the parent, and the $472 million-asset Central Illinois Bank in Champaign, which would contribute $17.5 million. However, current market conditions may preclude those transfers, the company said.
CIB said it also would consider consolidating all its charters into one, selling branches, and pursuing opportunities with lenders or private-equity investors to refinance the trust-preferred securities.
