GlobeNewswire Inc | Oct 13, 2020 05:01AM EDT

October 13, 2020

BROOKFIELD, Wis., Oct. 13, 2020 (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 third quarter of 2020. Net income for the quarter was $3.4 million compared to $1.0 million for the same period in 2019 and, for the nine months ending September 30, 2020, it was $5.9 million compared to $2.4 million for the same period in 2019.

A summary of financial results for the quarter and nine months ended September 30, 2020, is attached. Select highlights include:

-- The return on average assets and efficiency ratio year to date were 1.05% and 72%, respectively, compared to 0.46% and 86%, respectively, for the same period in 2019. -- CIBM Banks Mortgage Banking Division was a significant contributor to improved quarter and year to date earnings results. Driven by refinance activity due to lower interest rates, net mortgage banking revenues and loan originations for the nine months ended September 30, 2020, were $13.9 million and $418 million, respectively, compared to $6.1 million and $226 million, respectively, for the same period of the prior year. -- Compensation expense was up 28% in the Company for the nine months ended September 30, 2020, primarily due to the increase in mortgage division compensation as a result of the significant increase in production. Compensation at the mortgage division represents 52% of the total compensation in the Company year to date; excluding the mortgage division, the Companys compensation year to date is up less than 2% compared to the same period last year. -- Net interest income was up $1.9 million for the first nine months of 2020, compared to the same period in 2019. The primary reasons for the increase include: (i) higher average balances in loans held for sale and Paycheck Protection Program (PPP) loans, (ii) a 68 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. -- In addition to providing the impetus for lower interest rates, COVID-19 and the related Lockdown Recession have affected the Company in many ways. Year to date, CIBM Bank has originated approximately 350 government guaranteed PPP loans, with balances in excess of $43 million. As a result, CIBM Bank has received and deferred $1.5 million in fees from the SBA to be fully recognized in earnings when the loans are repaid or granted forgiveness with repayment by the government. To date, the Company has prepared PPP forgiveness applications totaling $7 million in principal balances and $0.2 million in related deferred origination fees; we expect receipt of proceeds during the fourth quarter. In addition, there were 90 loans totaling $74 million with COVID-19 loan payment deferrals as of September 30, 2020. -- Provisions for loan losses were $1.0 million for the nine months ended September 30, 2020, compared to $0.1 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 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 0.60% and 0.32%, respectively; compared to 1.35% and 1.09%, respectively, at December 31, 2019; and 1.40% and 1.14%, respectively, at September 30, 2020. The improvements during the first nine months of 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, commented, We are happy to report very strong earnings for the first three quarters of 2020. Given the challenges that many banks have faced this year, the efforts of our staff to deliver these results is outstanding. From the logistical and technological aspects of servicing our customers and managing bank and mortgage operations remotely, to implementing the significant number of new government economic and industry level assistance programs, to the bank-wide initiatives to improve earnings and efficiency, investors can be proud of the dedication and commitment of the entire CIBM Bank team.

Record levels of mortgage banking activity at the Company have contributed to our financial success this year, and we have seen improvements in our funding composition and cost of funds thanks to the lower rate environment and our Project Falcon initiatives related to deposit generation and operating efficiencies. Despite the strong results thus far in 2020, he cautioned, we expect to see credit deterioration continue in the industry on whole and in portions of CIBM Banks portfolio in the quarters ahead. To address the Lockdown Recessions impact on credit risk, CIBM Bank has established higher loan loss provisions this year, with the possibility of further increases in the quarters to come.

In closing he added, We are also pleased to highlight the successful 1-for-15 reverse split of our common stock, effective September 14, 2020. Combined with a pending future upgrade for the Companys common stock from the OTCQB to OTCQX market during the fourth quarter, this should assist in improving the marketplace for the common stock.

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 9 Months Ended September 30, June 30, March 31, December 31, September 30, September 30, September 30, 2020 2020 2020 2019 2019 2020 2019 (Dollars in thousands, except share and per share data)SelectedStatement of OperationsData:Interest anddividend $ 7,202 $ 6,669 $ 6,636 $ 6,820 $ 7,035 $ 20,507 $ 21,128 incomeInterest 1,017 1,343 1,689 2,030 2,183 4,049 6,617 expenseNet interest 6,185 5,326 4,947 4,790 4,852 16,458 14,511 incomeProvision for 501 249 202 715 327 952 102 loan lossesNet interestincome after provision forloan losses 5,684 5,077 4,745 4,075 4,525 15,506 14,409 Noninterest 8,104 4,489 2,642 2,249 3,835 15,235 7,907 income (1)Noninterest 9,056 7,308 6,322 6,879 7,233 22,686 19,295 expenseIncome (loss)before income 4,732 2,258 1,065 (555 ) 1,127 8,055 3,021 taxesIncome taxexpense 1,322 575 281 (180 ) 93 2,178 603 (benefit)Net income $ 3,410 $ 1,683 $ 784 $ (375 ) $ 1,034 $ 5,877 $ 2,418 (loss) Common Share Data (2):Basic netincome (loss) $ 2.69 $ 1.36 $ 0.63 $ (0.30 ) $ 1.09 $ 4.69 $ 2.23 per share (3)Diluted netincome (loss) 1.56 0.79 0.36 (0.30 ) 0.62 2.73 1.25 per share (3)Dividend 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Tangible bookvalue per 50.35 47.25 46.05 44.85 45.40 50.35 45.40 share (4)Book value 45.27 42.00 40.95 39.60 40.20 45.27 40.20 per share (4)Weightedaverageshares 1,267,582 1,266,170 1,248,270 1,243,095 1,230,361 1,260,499 1,218,737 outstanding -basicWeightedaverageshares 2,181,868 2,160,199 2,155,313 2,155,302 2,169,090 2,163,850 2,189,033 outstanding -dilutedFinancialCondition Data:Total assets $ 793,604 $ 793,151 $ 705,473 $ 703,791 $ 700,711 $ 793,604 $ 700,711 Loans 546,351 535,692 513,992 513,705 508,758 546,351 508,758 Allowance for (9,037 ) (8,483 ) (8,107 ) (8,007 ) (7,560 ) (9,037 ) (7,560 )loan lossesInvestment 107,351 113,303 120,105 120,398 120,648 107,351 120,648 securitiesDeposits 593,370 566,811 531,999 530,190 557,745 593,370 557,745 Borrowings 87,994 120,233 68,950 73,847 38,468 87,994 38,468 Stockholders' 101,271 97,347 95,841 93,404 94,082 101,271 94,082 equityFinancialRatios and Other Data:Performance Ratios:Net interest 3.30 % 2.96 % 3.04 % 2.86 % 2.95 % 3.10 % 2.93 %margin (5)Net interest 3.16 % 2.76 % 2.78 % 2.55 % 2.62 % 2.90 % 2.61 %spread (6)Noninterestincome to 4.12 % 2.36 % 1.51 % 1.28 % 2.19 % 2.72 % 1.49 %averageassets (7)Noninterestexpense to 4.60 % 3.86 % 3.67 % 3.88 % 4.14 % 4.06 % 3.67 %averageassetsEfficiency 63.38 % 74.61 % 83.74 % 97.57 % 83.44 % 71.71 % 86.39 %ratio (8)Earnings onaverage 1.73 % 0.89 % 0.45 % -0.21 % 0.59 % 1.05 % 0.46 %assets (9)Earnings onaverage 13.51 % 6.97 % 3.32 % -1.56 % 4.35 % 8.05 % 3.48 %equity (10)Asset Quality Ratios:Nonaccrualloans to 0.32 % 0.92 % 0.97 % 1.09 % 1.14 % 0.32 % 1.14 %loans (11)Nonaccrualloans, restructuredloans andloans 90 daysor more past due and stillaccruing tototal loans 0.49 % 1.07 % 1.25 % 1.38 % 1.44 % 0.49 % 1.44 %(11)Nonperformingassets, restructuredloansand loans 90days or more past due andstillaccruing tototal assets 0.60 % 1.02 % 1.24 % 1.35 % 1.40 % 0.60 % 1.40 %(11)Allowance forloan losses 1.65 % 1.58 % 1.58 % 1.56 % 1.49 % 1.65 % 1.49 %to totalloans (11)Allowance forloan losses to nonaccrualloans,restructuredloans and loans 90 daysormore past dueand still 338.59 % 147.79 % 126.26 % 112.66 % 103.07 % 338.59 % 103.07 %accruing (11)Netcharge-offs (recoveries)annualizedto average -0.04 % -0.09 % 0.08 % 0.21 % 0.01 % -0.02 % 0.13 %loans (11)Capital Ratios:Total equityto total 12.76 % 12.27 % 13.59 % 13.27 % 13.43 % 12.76 % 13.43 %assetsTotalrisk-based 15.91 % 15.49 % 15.36 % 15.19 % 15.18 % 15.91 % 15.18 %capital ratioTier 1risk-based 14.65 % 14.23 % 14.11 % 13.94 % 13.93 % 14.65 % 13.93 %capital ratioLeverage 11.20 % 10.82 % 11.08 % 10.71 % 10.86 % 11.20 % 10.86 %capital ratioOther Data: Number ofemployees 176 177 177 176 182 176 182 (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 the 1share per 15 share reverse split to allow for comparability between the pre andpost 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 9 months ended 2019 and $0.03 million for the 2nd quarter and 9months ended September 30, 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) September 30, June 30, March 31, December 31, September 30, 2020 2020 2020 2019 2019 (Dollars in Thousands, Except Shares)Assets Cash and due from $ 30,544 $ 9,120 $ 9,006 $ 8,970 $ 9,582 banksReverse repurchase 8,208 18,117 3,622 11,196 4,083 agreementsSecurities 104,866 110,818 117,640 117,972 118,211 available for saleEquity securities 2,485 2,485 2,465 2,426 2,437 at fair valueLoans held for sale 67,496 83,997 24,988 16,928 25,347 Loans 546,351 535,692 513,992 513,705 508,758 Allowance for loan (9,037 ) (8,483 ) (8,107 ) (8,007 ) (7,560 )lossesNet loans 537,314 527,209 505,885 505,698 501,198 Federal Home Loan 3,140 2,948 2,947 2,587 926 Bank StockPremises and 4,667 4,679 4,769 4,274 4,504 equipment, netAccrued interest 2,075 1,973 1,610 1,486 1,646 receivableDeferred tax 18,547 19,325 19,509 20,069 20,455 assets, netOther real estate 2,103 2,334 2,335 2,396 2,466 owned, netBank owned life 4,774 4,745 4,718 4,691 4,666 insuranceGoodwill and other 137 142 148 154 159 intangible assetsOther assets 7,248 5,259 5,831 4,944 5,031 Total Assets $ 793,604 $ 793,151 $ 705,473 $ 703,791 $ 700,711 Liabilities andStockholders' EquityDeposits: Noninterest-bearing $ 91,134 $ 90,450 $ 67,459 $ 70,175 $ 63,694 demandInterest-bearing 61,262 54,288 47,760 45,512 50,683 demandSavings 225,724 205,470 196,797 204,976 202,866 Time 215,250 216,603 219,983 209,527 240,502 Total deposits 593,370 566,811 531,999 530,190 557,745 Short-term 54,052 77,273 68,950 73,847 38,468 borrowingsLong-term 33,942 42,960 0 0 0 borrowingsAccrued interest 398 447 543 603 711 payableOther liabilities 10,571 8,313 8,140 5,747 9,705 Total liabilities 692,333 695,804 609,632 610,387 606,629 Stockholders' EquityPreferred stock, $1par value;5,000,000authorized sharesat both September30, 2020 andDecember 31, 2019;7% fixed ratenoncumulative 37,308 37,308 37,490 37,490 37,489 perpetual issued;40,690 shares ofseries A and 3,201shares of series B;convertible; $44.1million aggregateliquidationpreferenceCommon stock, $1par value;75,000,000authorized shares;1,282,362 and18,868,329 issuedshares; 1,268,293 1,282 19,240 19,162 18,868 18,868 and 18,657,282outstanding sharesat September 30,2020 and December31, 2019,respectively. (1)(2)Capital surplus 179,090 161,032 160,990 161,175 161,110 Accumulated deficit (117,875 ) (121,285 ) (122,969 ) (123,753 ) (123,377 )Accumulated othercomprehensive 2,000 1,586 1,702 158 526 income, netTreasury stock,14,791 shares onSeptember 30, 2020 (534 ) (534 ) (534 ) (534 ) (534 )and 221,902 sharesprior at cost (2)Total stockholders' 101,271 97,347 95,841 93,404 94,082 equityTotal liabilitiesand stockholders' $ 793,604 $ 793,151 $ 705,473 $ 703,791 $ 700,711 equity (1) Both issued and outstanding shares as stated here exclude 60,570 shares ofunvested restricted stock awards at September 30, 2020, and 815,395 shares ofunvested restricted stock awards at December 31, 2019.(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 current per share market value of $15.75.

CIB MARINE BANCSHARES, INC.Consolidated Statements of Operations (Unaudited) At or for the Quarters Ended 9 Months Ended September June 30, March 31, December September September September 30, 31, 30, 30, 30, 2020 2020 2020 2019 2019 2020 2019 (Dollars in thousands) Interest IncomeLoans $ 6,054 $ 5,540 $ 5,703 $ 5,793 $ 5,992 $ 17,297 $ 17,496Loans held 537 451 119 195 152 1,107 334for saleSecurities 573 661 763 764 810 1,997 2,482Other 38 17 51 68 81 106 816investmentsTotalinterest 7,202 6,669 6,636 6,820 7,035 20,507 21,128income Interest ExpenseDeposits 942 1,263 1,512 1,856 2,027 3,717 5,781Short-term 38 54 177 174 156 269 836borrowingsLong-term 37 26 0 0 0 63 0borrowingsTotalinterest 1,017 1,343 1,689 2,030 2,183 4,049 6,617expenseNet interest 6,185 5,326 4,947 4,790 4,852 16,458 14,511incomeProvision for(reversal of) 501 249 202 715 327 952 102loan lossesNet interestincome after provision for(reversal of) 5,684 5,077 4,745 4,075 4,525 15,506 14,409loan losses Noninterest IncomeDepositservice 89 88 96 98 101 273 279chargesOther service 36 36 20 23 30 92 79feesMortgagebanking 7,741 3,990 2,177 2,112 2,936 13,908 6,062revenue, netOther income 226 266 265 129 150 757 494Net gains onsale ofsecurities 0 0 0 0 0 0 0available forsaleUnrealizedgains(losses) 0 20 39 (11 ) 18 59 82recognized onequitysecuritiesNet gains onsale of SBA (55 ) 87 437 166 605 469 858loansNet gains(losses) onsale of 67 2 (392 ) (268 ) (5 ) (323 ) 53assets and(writedowns)Totalnoninterest 8,104 4,489 2,642 2,249 3,835 15,235 7,907income Noninterest ExpenseCompensationand employee 7,329 5,451 4,421 4,701 5,309 17,201 13,441benefitsEquipment 352 379 363 394 335 1,094 1,023Occupancy and 390 407 460 460 420 1,257 1,313premisesData 177 155 164 157 165 496 491ProcessingFederaldeposit 48 47 0 (10 ) (5 ) 95 143insuranceProfessional 162 242 298 320 198 702 545servicesTelephone anddata 71 67 68 81 86 206 247communicationInsurance 58 55 54 59 70 167 175Other expense 469 505 494 717 655 1,468 1,917Totalnoninterest 9,056 7,308 6,322 6,879 7,233 22,686 19,295expenseIncome(losses) from operationsbefore income 4,732 2,258 1,065 (555 ) 1,127 8,055 3,021taxesIncome taxexpense 1,322 575 281 (180 ) 93 2,178 603(benefit)Net income 3,410 1,683 784 (375 ) 1,034 5,877 2,418(loss)Preferredstock 0 0 0 0 0 0 0dividendDiscount fromrepurchase of 0 33 0 0 308 33 308preferredstockNet income(loss) allocated tocommon $ 3,410 $ 1,716 $ 784 $ (375 ) $ 1,342 $ 5,910 $ 2,726stockholders