GlobeNewswire Inc | Jan 22, 2021 05:00AM EST

January 22, 2021

BROOKFIELD, Wis., Jan. 22, 2021 (GLOBE NEWSWIRE) -- CIB Marine Bancshares, Inc. (the Company or CIBM) (OTCQB: CIBH), the holding company of CIBM Bank, announced its unaudited results of operations and financial condition for the fourth quarter and full year of 2020. Strong mortgage operations and higher net interest income resulted in net income of $2.3 million for the quarter ending December 31, 2020, compared to a loss of $0.4 million for the same period in 2019 and, for the twelve months ending December 31, 2020, net income of $8.2 million compared to $2.0 million for the same period in 2019. Income before taxes for 2020 was $10.9 million compared to $2.5 million for 2019.

A summary of financial results for the quarter and twelve months ended December 31, 2020, is attached. Select highlights include:

-- The tangible book value for the common stock increased 16.6% over the course of 2020 from $44.85 per share at December 31, 2019, to $52.28 per share at December 31, 2020, primarily the result of higher earnings, with improved unrealized net gains on securities and discounts on repurchased preferred stock contributing as well. -- The return on average assets and efficiency ratio for the year 2020 were 1.09% and 73% respectively, compared to 0.29% and 89%, respectively, for the same period in 2019. -- Net mortgage banking revenue was up 148% from $8.2 million during 2019 to $20.3 million in 2020. Lower interest rates supported a surge in mortgage originations in 2020 resulting in $600 million in residential loans almost double the $330 million in residential loans originated in 2019. Further, 65% of 2020 residential loan originations were refinance loans, compared to 47% of 2019 originations. -- Net interest income was up 15% in 2020 from $19.3 million during 2019 to $22.2 million in 2020. The primary reasons for the increase include: (i) higher average balances in loans held for sale and Paycheck Protection Program (PPP) loans, (ii) a 75 basis point reduction in the cost of interest bearing liabilities due to the lower interest rate environment, and (iii) the collection of principal plus interest on a large non-performing commercial real estate loan. -- Expenses were up $5.8 million, from $26.2 million in 2019 to $32.0 million in 2020, primarily as a result of a $5.6 million increase in compensation in the Mortgage Banking Division due to higher mortgage loan production that created a $12.9 million increase in division revenues. Mortgage Division compensation counted for 54% of total compensation in 2020, compared to 41% in 2019. On a combined basis, all other expenses excluding compensation were down $0.2 million for 2020 compared to 2019, primarily the result of lower travel and entertainment and collection expenses. -- COVID-19 and the related Lockdown Recession resulted in significant volumes of new types of banking activity. CIBM Bank originated approximately 350 government guaranteed PPP loans, totaling $43 million, in 2020. At December 31, 2020, PPP loan balances were paid down to $32 million, primarily by the Small Business Administration (SBA) as a result of loan forgiveness applications filed for borrowers. On average, such forgiveness applications represent 99% of the original loan balance per loan. In 2020, PPP loan fees received from the SBA and deferred were $1.6 million, with $0.8 million accreted into interest income due to level yield accretion over the original weighted average term (approximately two years) and accelerations as a result of $11 million in early payoffs related to loan forgiveness payments, and the remaining $0.8 million in outstanding deferred fees to be recorded into future income. Net of related deferred costs, original and accreted net deferred fees were $1.1 million and $0.6 million, respectively, with a remaining $0.5 million of net deferred fees to be recorded in future income. As of December 31, 2020, there were an additional $9 million in PPP loan forgiveness applications being processed, with the majority of the remaining PPP loan forgiveness applications expected to be received in the first half of 2021. -- As of December 31, 2020, there were $24.5 million in outstanding loan balances from 31 loans granted a COVID-19 loan payment still in an active deferral period, representing 5% of total outstanding loan portfolio balances. Of the loans with active COVID-19 loan payment deferrals, 37% are from the hospitality industry, 15% are from the recreation and entertainment industry, 8% of the balances are from 1-4 family mortgage loans, and the remainder from a mix of other industries harmed by COVID-19 lockdowns. -- Provisions for loan losses were $1.1 million for the twelve months ended December 31, 2020, compared to $0.8 million for the same period of 2019. The primary reason for the increase is environmental and qualitative factors as well as certain borrower credit deterioration primarily from those industries hardest hit by COVID-19 and the related Lockdown Recession (i.e., restaurants and hospitality). -- Non-performing assets, restructured loans, and loans 90 days or more past due and still accruing to total assets and nonaccrual loans to total loans were 0.54% and 0.23%, respectively; compared to 1.35% and 1.09%, respectively, at December 31, 2019. The improvements during 2020 were due to certain loan level improvements including a successful large commercial real estate loan collection.

Mr. J. Brian Chaffin, President and CEO of CIBM, commended his teams work stating, Our 2020 results are largely attributable to our staffs ability to quickly respond to the rapidly changing set of circumstances in 2020 - from nearly doubling mortgage loan production in response to a dramatic increase in demand; to implementing an effective PPP loan program to ensure access to funding for small businesses in our communities; to quickly executing a variety of strategies in response to the lower rate environment in order to reduce the Companys cost of funds by more than many of our peers; to commercial loan production in excess of pre-COVID19 goals. The Board of Directors and I are extremely proud of the way our team members, both front line and back office, came together to organize, plan, and effectively execute on many different operating fronts as our world seemed to change on a daily basis.

Looking forward to 2021, he added, We are focused on meeting the needs of our communities through participation in emerging government economic support plans such as the new PPP program, as well as continuing our Project Falcon initiatives geared toward new deposit generation and operating efficiencies. In addition, we will continue to monitor developments at the state and federal level, mindful of the economic uncertainties related to the pandemic and their potential effect on credit quality, as well as new regulations and higher taxes that may be in the offing for 2021 and the years ahead, with possible adverse impact to our clients and banking operations.

Mr. Chaffin also announced, Our Chief Credit Officer, Paul Melnick, has announced his intent to retire in 2021 and his successor, Mr. Scott Winkel, assumed the duties of Chief Credit Officer, effective January 1, 2021. As part of our transition plan, Paul will continue assisting the bank as the Director of Special Assets, where he will focus on problem loan work-outs and coordinate a smooth transition of the Credit Administration function. Mr. Chaffin continued,Scott joined CIBM Bank in 2020 with more than 25 years of banking and credit administration experience. We are delighted to welcome him to our executive management team and fortunate to have someone with his knowledge and familiarity with our banking markets on board. Over the next six months, Scott and Paul will be working closely to ensure long-term, consistent performance and maintain our strong credit culture.

CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates eleven banking offices and five mortgage loan offices in Illinois, Wisconsin and Indiana. More information on the Company is available at www.cibmarine.com, including recent shareholder letters, links to regulatory financial reports, and audited financial statements.

FORWARD-LOOKING STATEMENTSCIB Marine has made statements in this release that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. CIB Marine intends these forward-looking statements to be subject to the safe harbor created thereby and is including this statement to avail itself of the safe harbor. Forward-looking statements are identified generally by statements containing words and phrases such as may, project, are confident, should be, intend, predict, believe, plan, expect, estimate, anticipate and similar expressions. These forward-looking statements reflect CIB Marines current views with respect to future events and financial performance that are subject to many uncertainties and factors relating to CIB Marines operations and the business environment, which could change at any time.

There are inherent difficulties in predicting factors that may affect the accuracy of forward-looking statements.

Stockholders should note that many factors, some of which are discussed elsewhere in this Earnings Release and in the documents that are incorporated by reference, could affect the future financial results of CIB Marine and could cause those results to differ materially from those expressed in forward-looking statements contained or incorporated by reference in this document. These factors, many of which are beyond CIB Marines control, include but are not limited to:

-- operating, legal, execution, credit, market, security (including cyber), and regulatory risks; -- economic, political, and competitive forces affecting CIB Marines banking business; -- the impact on net interest income and securities values from changes in monetary policy and general economic and political conditions; and -- the risk that CIB Marines analyses of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful.

These factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. Forward-looking statements speak only as of the date they are made. CIB Marine undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Forward-looking statements are subject to significant risks and uncertainties and CIB Marines actual results may differ materially from the results discussed in forward-looking statements.

FOR INFORMATION CONTACT:J. Brian Chaffin, President & CEO(217) 355-0900brian.chaffin@cibmbank.com

CIB MARINE BANCSHARES, INC.Selected Unaudited Consolidated Financial Data At or for the Quarters Ended 12 Months Ended December 31, September 30, June 30, March 31, December 31, December 31, December 31, 2020 2020 2020 2020 2019 2020 2019 (Dollars in thousands, except share and per share data)SelectedStatement of OperationsData:Interest anddividend $ 6,489 $ 7,202 $ 6,669 $ 6,636 $ 6,820 $ 26,996 $ 27,948 incomeInterest 765 1,017 1,343 1,689 2,030 4,814 8,647 expenseNet interest 5,724 6,185 5,326 4,947 4,790 22,182 19,301 incomeProvision for 101 501 249 202 715 1,053 817 loan lossesNet interestincome after provision forloan losses 5,623 5,684 5,077 4,745 4,075 21,129 18,484 Noninterest 6,566 8,104 4,489 2,642 2,249 21,801 10,156 income (1)Noninterest 9,317 9,056 7,308 6,322 6,879 32,003 26,174 expenseIncome (loss)before income 2,872 4,732 2,258 1,065 (555 ) 10,927 2,466 taxesIncome taxexpense 565 1,322 575 281 (180 ) 2,743 423 (benefit)Net income $ 2,307 $ 3,410 $ 1,683 $ 784 $ (375 ) $ 8,184 $ 2,043 (loss) Common Share Data (2):Basic netincome (loss) $ 1.82 $ 2.69 $ 1.36 $ 0.63 $ (0.30 ) $ 6.51 $ 1.92 per share (3)Diluted netincome (loss) 1.06 1.56 0.79 0.36 (0.30 ) 3.79 1.08 per share (3)Dividend 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Tangible bookvalue per 52.28 50.35 47.25 46.05 44.86 52.28 44.86 share (4)Book value 47.19 45.27 42.00 40.95 39.66 47.19 39.66 per share (4)Weightedaverageshares 1,267,582 1,267,582 1,266,174 1,248,270 1,243,095 1,262,277 1,227,111 outstanding -basicWeightedaverageshares 2,181,140 2,181,868 2,160,201 2,155,313 2,155,302 2,167,730 2,180,776 outstanding -dilutedFinancialCondition Data:Total assets $ 750,982 $ 793,604 $ 793,151 $ 705,473 $ 703,791 $ 750,982 $ 703,791 Loans 539,227 546,351 535,692 513,992 513,705 539,227 513,705 Allowance for (9,122 ) (9,037 ) (8,483 ) (8,107 ) (8,007 ) (9,122 ) (8,007 )loan lossesInvestment 108,492 107,351 113,303 120,105 120,398 108,492 120,398 securitiesDeposits 586,373 593,370 566,811 531,999 530,190 586,373 530,190 Borrowings 51,310 87,994 120,233 68,950 73,847 51,310 73,847 Stockholders' 103,704 101,271 97,347 95,841 93,404 103,704 93,404 equityFinancialRatios and Other Data:Performance Ratios:Net interest 3.14 % 3.30 % 2.96 % 3.04 % 2.86 % 3.11 % 2.91 %margin (5)Net interest 3.01 % 3.16 % 2.76 % 2.78 % 2.55 % 2.93 % 2.60 %spread (6)Noninterestincome to 3.43 % 4.12 % 2.36 % 1.51 % 1.28 % 2.90 % 1.43 %averageassets (7)Noninterestexpense to 4.86 % 4.60 % 3.86 % 3.67 % 3.88 % 4.26 % 3.72 %averageassetsEfficiency 75.77 % 63.38 % 74.61 % 83.74 % 97.57 % 72.85 % 89.07 %ratio (8)Earnings(loss) on 1.20 % 1.73 % 0.89 % 0.45 % -0.21 % 1.09 % 0.29 %averageassets (9)Earnings(loss) on 8.83 % 13.51 % 6.97 % 3.32 % -1.56 % 8.26 % 2.18 %averageequity (10)Asset Quality Ratios:Nonaccrualloans to 0.23 % 0.32 % 0.92 % 0.97 % 1.09 % 0.23 % 1.09 %loans (11)Nonaccrualloans, restructuredloans andloans 90days or more past due andstillaccruing tototal loans 0.40 % 0.49 % 1.07 % 1.25 % 1.38 % 0.40 % 1.38 %(11)Nonperformingassets, restructuredloansand loans 90days or more past due andstillaccruing tototal assets 0.54 % 0.60 % 1.02 % 1.24 % 1.35 % 0.54 % 1.35 %(11)Allowance forloan losses 1.69 % 1.65 % 1.58 % 1.58 % 1.56 % 1.69 % 1.56 %to totalloans (11)Allowance forloan losses to nonaccrualloans,restructuredloans and loans 90 daysormore past dueand still 421.14 % 338.59 % 147.79 % 126.26 % 112.66 % 421.14 % 112.66 %accruing (11)Netcharge-offs (recoveries)annualizedto average 0.01 % -0.04 % -0.09 % 0.08 % 0.21 % -0.01 % 0.15 %loans (11)Capital Ratios:Total equityto total 13.81 % 12.76 % 12.27 % 13.59 % 13.27 % 13.81 % 13.27 %assetsTotalrisk-based 17.44 % 16.13 % 15.49 % 15.36 % 15.19 % 17.44 % 15.19 %capital ratioTier 1risk-based 16.19 % 14.87 % 14.23 % 14.11 % 13.94 % 16.19 % 13.94 %capital ratioLeverage 11.46 % 11.20 % 10.82 % 11.08 % 10.71 % 11.46 % 10.71 %capital ratioOther Data: Number ofemployees 176 176 177 177 176 176 176 (full-timeequivalent)Number ofbanking 11 11 11 11 11 11 11 facilities (1) Noninterest income includes gains and losses on securities.(2) Common share data prior to September 14, 2020, is adjusted to reflect the1:15 reverse split to allow for comparability between the pre- and post-reverse split periods.(3) Net income available to common stockholders in the calculation of earningsper share includes the difference between the carrying amount less theconsideration paid for redeemed preferred stock of $0.3 million for the thirdquarter and 12 months ended 2019 and $0.03 million for the 2nd quarter and 12months ended 2020.(4) Tangible book value per share is the stockholder equity less the carryvalue of the preferred stock and less the goodwill and intangible assets,divided by the total shares of common outstanding. Book value per share is thestockholder equity less the liquidation preference of the preferred stock,divided by the total shares of common outstanding. Book value measures arereported inclusive of the net deferred tax assets. As presented here, shares ofcommon outstanding excludes unvested restricted stock awards.(5) Net interest margin is the ratio of net interest income to averageinterest-earning assets.(6) Net interest spread is the yield on average interest-earning assets lessthe rate on average interest-bearing liabilities.(7) Noninterest income to average assets excludes gains and losses onsecurities.(8) The efficiency ratio is noninterest expense divided by the sum of netinterest income plus noninterest income, excluding gains and losses onsecurities.(9) Earnings on average assets are net income divided by average total assets.(10) Earnings on average equity are net income divided by average stockholders'equity.(11) Excludes loans held for sale.

CIB MARINE BANCSHARES, INC.Consolidated Balance Sheets (unaudited) December 31, September 30, June 30, March 31, December 31, 2020 2020 2020 2020 2019 (Dollars in Thousands, Except Shares)Assets Cash and due from $ 29,927 $ 30,544 $ 9,120 $ 9,006 $ 8,970 banksReverse repurchase - 8,208 18,117 3,622 11,196 agreementsSecurities 106,014 104,866 110,818 117,640 117,972 available for saleEquity securities 2,478 2,485 2,485 2,465 2,426 at fair valueLoans held for sale 42,977 67,496 83,997 24,988 16,928 Loans 539,227 546,351 535,692 513,992 513,705 Allowance for loan (9,122 ) (9,037 ) (8,483 ) (8,107 ) (8,007 )lossesNet loans 530,105 537,314 527,209 505,885 505,698 Federal Home Loan 3,140 3,140 2,948 2,947 2,587 Bank StockPremises and 4,682 4,667 4,679 4,769 4,274 equipment, netAccrued interest 2,050 2,075 1,973 1,610 1,486 receivableDeferred tax 16,292 18,547 19,325 19,509 20,069 assets, netOther real estate 1,875 2,103 2,334 2,335 2,396 owned, netBank owned life 4,802 4,774 4,745 4,718 4,691 insuranceGoodwill and other 131 137 142 148 154 intangible assetsOther assets 6,509 7,248 5,259 5,831 4,944 Total Assets $ 750,982 $ 793,604 $ 793,151 $ 705,473 $ 703,791 Liabilities andStockholders' EquityDeposits: Noninterest-bearing $ 92,544 $ 91,134 $ 90,450 $ 67,459 $ 70,175 demandInterest-bearing 59,679 61,262 54,288 47,760 45,512 demandSavings 243,888 225,724 205,470 196,797 204,976 Time 190,262 215,250 216,603 219,983 209,527 Total deposits 586,373 593,370 566,811 531,999 530,190 Short-term 51,310 54,052 77,273 68,950 73,847 borrowingsLong-term - 33,942 42,960 - - borrowingsAccrued interest 246 398 447 543 603 payableOther liabilities 9,349 10,571 8,313 8,140 5,747 Total liabilities 647,278 692,333 695,804 609,632 610,387 Stockholders' EquityPreferred stock, $1par value;5,000,000authorized sharesat both December31, 2020 andDecember 31, 2019;7% fixed ratenoncumulative 37,308 37,308 37,308 37,490 37,490 perpetual issued;40,690 shares ofseries A and 3,201shares of series B;convertible; $43.9million aggregateliquidationpreferenceCommon stock, $1par value;75,000,000authorized shares;1,282,362 and18,868,329 issuedshares; 1,268,293 1,282 1,282 19,240 19,162 18,868 and 18,657,282outstanding sharesat December 31,2020 and December31, 2019,respectively. (1)(2)Capital surplus (2) 179,188 179,090 161,032 160,990 161,175 Accumulated deficit (115,569 ) (117,875 ) (121,285 ) (122,969 ) (123,753 )Accumulated othercomprehensive 2,029 2,000 1,586 1,702 158 income, netTreasury stock,14,791 shares onDecember 31, 2020 (534 ) (534 ) (534 ) (534 ) (534 )and 221,902 sharesprior at cost (2)Total stockholders' 103,704 101,271 97,347 95,841 93,404 equityTotal liabilitiesand stockholders' $ 750,982 $ 793,604 $ 793,151 $ 705,473 $ 703,791 equity (1) Both issued and outstanding shares as stated here exclude 59,842 shares and815,395 shares of unvested restricted stock awards at December 31, 2020 and2019, respectively.(2) Effective September 14, 2020, the Company executed a reverse stock split of1 share for every 15 shares outstanding. Fractional shares were remitted cashat the then-current market value of $15.75 per share.

CIB MARINE BANCSHARES, INC.Consolidated Statements of Operations (Unaudited) At or for the Quarters Ended 12 Months Ended December September June 30, March 31, December December 31, December 31, 31, 30, 31, 2020 2020 2020 2020 2019 2020 2019 (Dollars in thousands) Interest IncomeLoans $ 5,577 $ 6,054 $ 5,540 $ 5,703 $ 5,793 $ 22,874 $ 23,289 Loans held 331 537 451 119 195 1,438 529 for saleSecurities 564 573 661 763 764 2,561 3,246 Other 17 38 17 51 68 123 884 investmentsTotalinterest 6,489 7,202 6,669 6,636 6,820 26,996 27,948 income Interest ExpenseDeposits 735 942 1,263 1,512 1,856 4,452 7,637 Short-term 30 38 54 177 174 299 1,010 borrowingsLong-term 0 37 26 0 0 63 0 borrowingsTotalinterest 765 1,017 1,343 1,689 2,030 4,814 8,647 expenseNet interest 5,724 6,185 5,326 4,947 4,790 22,182 19,301 incomeProvision for 101 501 249 202 715 1,053 817 loan lossesNet interestincome after provision forloan losses 5,623 5,684 5,077 4,745 4,075 21,129 18,484 Noninterest IncomeDepositservice 91 89 88 96 98 364 377 chargesOther service 37 36 36 20 23 129 102 feesMortgagebanking 6,387 7,741 3,990 2,177 2,112 20,295 8,174 revenue, netOther income 165 226 266 265 129 922 623 Net gains onsale ofsecurities 0 0 0 0 0 0 0 available forsaleUnrealizedgains(losses) (6 ) 0 20 39 (11 ) 53 71 recognized onequitysecuritiesNet gains(loss) on 55 (55 ) 87 437 166 524 1,024 sale of SBAloansNet gains(losses) onsale of (163 ) 67 2 (392 ) (268 ) (486 ) (215 )assets and(writedowns)Totalnoninterest 6,566 8,104 4,489 2,642 2,249 21,801 10,156 income Noninterest ExpenseCompensationand employee 7,015 7,329 5,451 4,421 4,701 24,216 18,142 benefitsEquipment 402 352 379 363 394 1,496 1,417 Occupancy and 452 390 407 460 460 1,709 1,773 premisesData 178 177 155 164 157 674 648 ProcessingFederaldeposit 49 48 47 0 (10 ) 144 133 insuranceProfessional 322 162 242 298 320 1,024 865 servicesTelephone anddata 82 71 67 68 81 288 328 communicationInsurance 62 58 55 54 59 229 234 Other expense 755 469 505 494 717 2,223 2,634 Totalnoninterest 9,317 9,056 7,308 6,322 6,879 32,003 26,174 expenseIncome(losses) from operationsbefore income 2,872 4,732 2,258 1,065 (555 ) 10,927 2,466 taxesIncome taxexpense 565 1,322 575 281 (180 ) 2,743 423 (benefit)Net income 2,307 3,410 1,683 784 (375 ) 8,184 2,043 (loss)Preferredstock 0 0 0 0 0 0 0 dividendDiscount fromrepurchase of 0 0 33 0 0 33 308 preferredstockNet income(loss) allocated tocommon $ 2,307 $ 3,410 $ 1,716 $ 784 $ (375 ) $ 8,217 $ 2,351 stockholders