GlobeNewswire Inc | Jul 16, 2020 11:00AM EDT

July 16, 2020

BROOKFIELD, Wis., July 16, 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 second quarter of 2020. Net income for the quarter was $1.7 million compared to $0.8 million for the same period in 2019 and, for the six months ending June 30, 2020, it was $2.5 million compared to $1.4 million for the same period in 2019.

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

-- Net income and income before taxes for the quarter and six months ended June 30th were the strongest in more than five years, excluding the deferred tax valuation adjustment made in the fourth quarter of 2017. -- CIBM Banks mortgage banking division was a significant contributor to improved earnings results. For the six months ended June 30th, net mortgage banking revenues were $6.2 million, nearly double the same period of the prior year. Lower interest rates have fueled a surge in rate-refinance loan originations, as well as strong new home purchase activity, resulting in over $200 million in loan originations the first half of the year. -- Net interest income was up $0.6 million for the first six months of 2020, compared to the same period in 2019. The primary reasons for improvement were higher average balances in loans held for sale and Paycheck Protection Program (PPP) loans, and a 54 basis point reduction in the cost of interest bearing liabilities primarily due to repricing maturing time deposits and money market rate promotions and short-term borrowings in a lower rate environment. -- COVID-19 has impacted the Company in many direct and indirect ways. During the second quarter of 2020, CIBM Bank originated around 350 loans or $43 million in government guaranteed PPP loans. In addition, COVID-19 loan payment deferrals reached 87 loans, or around $75 million in total outstanding balances. -- Provisions for loan losses were up $0.7 million during the six months ended June 30, 2020, versus the same period in 2019. The primary reason for the increase is environmental and qualitative factors related to the impact COVID-19 has had on the current economic conditions, including the sharp decline in GDP and rapid rise in unemployed persons. A significant number of government programs are acting to support businesses and household income so that the amount of problem loans has remained relatively low to date. -- 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 1.02% and 0.92%, respectively, at March June 30, 2020, down from 1.35% and 1.09%, respectively, at December 31, 2019, and 1.40% and 1.12%, respectively, at June 30, 2020. The improvements during the first six months of 2020 were related to certain loan level improvements, although credit quality is expected to deteriorate in the foreseeable future due to the economic impact of COVID-19.

Mr. J. Brian Chaffin, President and CEO of CIBM, commented, The Company has spent a significant amount of time addressing COVID-19 related issues from managing the branches for the safety of our staff and customers, to adjusting to having more than 70% of employees work from home, to working with our clients to meet their banking needs in these challenging times. The situation has forced us to adapt and make or advance plans for improvements in both our products and delivery systems, and in our operations areas. Investors can be proud of the dedication and commitment CIBM Bank employees have exhibited through this period.

Although income for the first half of the year was much improved over the same period of 2019, we remain committed to improving our longer term operating results using the process we call Project Falcon, which includes plans to improve our deposit mix, enhance efficiencies, and excel at our core services.

Mr. Chaffin continued, A Fifth Amendment to the Companys Articles of Incorporation, which would make permanent the changes that permit the Company to engage in negotiated voluntary repurchases of its Preferred Stock, was approved by our Common Shareholders in April and has now been presented to the Preferred Shareholders for their approval at a Special Meeting of Preferred Shareholders to be held on August 5, 2020. We will provide the results of that vote on our website following the meeting.

He concluded, As discussed in our June 17, 2020, press release, we have completed the third and final modified Dutch auction pursuant to the Second Amendment of our Articles of Incorporation that resulted in the repurchase of 214 shares of preferred stock for a total price of approximately $148,000 representing a $33,000 discount to the carry value of the preferred shares repurchased. We will be providing a more detailed analysis in our upcoming quarterly shareholder letter.

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 6 Months Ended June 30, March 31, December 31, September 30, June 30, June 30, June 30, 2020 2020 2019 2019 2019 2020 2019 (Dollars in thousands, except share and per share data) SelectedStatement of OperationsDataInterest anddividend $ 6,669 $ 6,636 $ 6,820 $ 7,035 $ 7,078 $ 13,305 $ 14,093 incomeInterest 1,343 1,689 2,030 2,183 2,256 3,032 4,434 expenseNet interest 5,326 4,947 4,790 4,852 4,822 10,273 9,659 incomeProvision for(reversal of) 249 202 715 327 (67 ) 451 (225 ) loan lossesNet interestincome afterprovision for 5,077 4,745 4,075 4,525 4,889 9,822 9,884 (reversal of)loan lossesNoninterest 4,489 2,642 2,249 3,835 2,710 7,131 4,072 income (1)Noninterest 7,308 6,322 6,879 7,233 6,557 13,630 12,062 expenseIncome (loss)before income 2,258 1,065 (555 ) 1,127 1,042 3,323 1,894 taxesIncome taxexpense 575 281 (180 ) 93 281 856 510 (benefit)Net income $ 1,683 $ 784 $ (375 ) $ 1,034 $ 761 $ 2,467 $ 1,384 (loss) Common Share DataBasic netincome (loss) $ 0.09 $ 0.04 $ (0.02 ) $ 0.07 $ 0.04 $ 0.13 $ 0.08 per share (2)Diluted netincome (loss) 0.05 0.02 (0.02 ) 0.04 0.02 0.08 0.04 per share (2)Dividend 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Tangible bookvalue per 3.15 3.07 2.99 3.03 2.97 3.15 2.97 share (3)Book value 2.80 2.73 2.64 2.68 2.60 2.80 2.60 per share (3)Weightedaverageshares 18,992,550 18,724,047 18,646,427 18,455,408 18,290,674 18,858,299 18,261,584 outstanding -basicWeightedaverageshares 32,402,984 32,329,698 32,329,533 32,536,354 33,083,324 32,330,877 32,950,273 outstanding -dilutedFinancialCondition DataTotal assets $ 793,151 $ 705,473 $ 703,791 $ 700,711 $ 708,270 $ 793,151 $ 708,270 Loans 535,692 513,992 513,705 508,758 513,755 535,692 513,755 Allowance for (8,483 ) (8,107 ) (8,007 ) (7,560 ) (7,251 ) (8,483 ) (7,251 ) loan lossesInvestment 113,303 120,105 120,398 120,648 124,784 113,303 124,784 securitiesDeposits 566,811 531,999 530,190 557,745 535,367 566,811 535,367 Borrowings 120,233 68,950 73,847 38,468 69,174 120,233 69,174 Stockholders' 97,347 95,841 93,404 94,082 94,035 97,347 94,035 equityFinancialRatios and Other DataPerformance Ratios:Net interest 2.96 % 3.04 % 2.86 % 2.95 % 2.89 % 3.00 % 2.91 % margin (4)Net interest 2.76 % 2.78 % 2.55 % 2.62 % 2.58 % 2.77 % 2.61 % spread (5)Noninterestincome to 2.36 % 1.51 % 1.28 % 2.19 % 1.52 % 1.95 % 1.14 % averageassets (6)Noninterestexpense to 3.86 % 3.67 % 3.88 % 4.14 % 3.72 % 3.77 % 3.43 % averageassetsEfficiency 74.61 % 83.74 % 97.57 % 83.44 % 87.45 % 78.58 % 88.26 % ratio (7)Earnings onaverage 0.89 % 0.45 % -0.21 % 0.59 % 0.43 % 0.68 % 0.39 % assets (8)Earnings onaverage 6.97 % 3.32 % -1.56 % 4.35 % 3.28 % 5.17 % 3.02 % equity (9)Asset Quality Ratios:Nonaccrualloans to 0.92 % 0.97 % 1.09 % 1.14 % 1.12 % 0.92 % 1.12 % loans (10)Nonaccrualloans,restructuredloans andloans 90 days 1.07 % 1.25 % 1.38 % 1.44 % 1.45 % 1.07 % 1.45 % or more pastdue and stillaccruing tototal loans(10)Nonperformingassets,restructuredloans andloans 90 days 1.02 % 1.24 % 1.35 % 1.40 % 1.40 % 1.02 % 1.40 % or more pastdue and stillaccruing tototal assets(10)Allowance forloan losses 1.58 % 1.58 % 1.56 % 1.49 % 1.41 % 1.58 % 1.41 % to totalloans (10)Allowance forloan lossesto nonaccrualloans,restructured 147.79 % 126.26 % 112.66 % 103.07 % 97.34 % 147.79 % 97.34 % loans andloans 90 daysor more pastdue and stillaccruing (10)Netcharge-offs(recoveries) -0.09 % 0.08 % 0.21 % 0.01 % 0.44 % -0.01 % 0.19 % annualized toaverage loans(10)Capital Ratios:Total equityto total 12.27 % 13.59 % 13.27 % 13.43 % 13.28 % 12.27 % 13.28 % assetsTotalrisk-based 15.49 % 15.36 % 15.19 % 15.18 % 15.32 % 15.49 % 15.32 % capital ratioTier 1risk-based 14.23 % 14.11 % 13.94 % 13.93 % 14.07 % 14.23 % 14.07 % capital ratioLeverage 10.82 % 11.08 % 10.71 % 10.86 % 10.64 % 10.82 % 10.64 % capital ratioOther Data: Number ofemployees 177 177 176 182 180 177 180 (full-timeequivalent)Number ofbanking 11 11 11 11 11 11 11 facilities (1) Noninterest income includes gains and losses on securities. (2) 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 third quarter of 2019 and $0.03 million for the 2nd quarter and 6 months ended June30, 2020.(3) 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.(4) Net interest margin is the ratio of net interest income to average interest-earning assets.(5) Net interest spread is the yield on average interest-earning assets less the rate on average interest-bearing liabilities.(6) Noninterest income to average assets excludes gains and losses on securities.(7) The efficiency ratio is noninterest expense divided by the sum of netinterest income plus noninterest income, excluding gains and losses on securities.(8) Earnings on average assets are net income divided by average total assets. (9) Earnings on average equity are net income divided by average stockholders' equity.(10) Excludes loans held for sale.

CIB MARINE BANCSHARES, INC. Consolidated Balance Sheets (unaudited) June 30, March 31, December 31, September 30, June 30, 2020 2020 2019 2019 2019 (Dollars in Thousands, Except Shares) Assets Cash and due from $ 9,120 $ 9,006 $ 8,970 $ 9,582 $ 8,791 banksReverse repurchase 18,117 3,622 11,196 4,083 18,347 agreementsSecurities 110,818 117,640 117,972 118,211 122,365 available for saleEquity securities 2,485 2,465 2,426 2,437 2,419 at fair valueLoans held for sale 83,997 24,988 16,928 25,347 8,450 Loans 535,692 513,992 513,705 508,758 513,755 Allowance for loan (8,483 ) (8,107 ) (8,007 ) (7,560 ) (7,251 ) lossesNet loans 527,209 505,885 505,698 501,198 506,504 Federal Home Loan 2,948 2,947 2,587 926 2,363 Bank StockPremises and 4,679 4,769 4,274 4,504 4,643 equipment, netAccrued interest 1,973 1,610 1,486 1,646 1,820 receivableDeferred tax 19,325 19,509 20,069 20,455 20,703 assets, netOther real estate 2,334 2,335 2,396 2,466 2,466 owned, netBank owned life 4,745 4,718 4,691 4,666 4,640 insuranceGoodwill and other 142 148 154 159 165 intangible assetsOther assets 5,259 5,831 4,944 5,031 4,594 Total Assets $ 793,151 $ 705,473 $ 703,791 $ 700,711 $ 708,270 Liabilities andStockholders' EquityDeposits: Noninterest-bearing $ 90,450 $ 67,459 $ 70,175 $ 63,694 $ 62,424 demandInterest-bearing 54,288 47,760 45,512 50,683 32,649 demandSavings 205,470 196,797 204,976 202,866 192,133 Time 216,603 219,983 209,527 240,502 248,161 Total deposits 566,811 531,999 530,190 557,745 535,367 Short-term 77,273 68,950 73,847 38,468 69,174 borrowingsLong-term 42,960 0 0 0 0 borrowingsAccrued interest 447 543 603 711 725 payableOther liabilities 8,313 8,140 5,747 9,705 8,969 Total liabilities 695,804 609,632 610,387 606,629 614,235 Stockholders' EquityPreferred stock, $1par value;5,000,000authorized sharesat both June 30,2020 and December31, 2019; 7% fixedrate noncumulative 37,308 37,490 37,490 37,489 39,384 perpetual issued;40,690 shares ofseries A and 3,201shares of series B;convertible; $44.1million aggregateliquidationpreferenceCommon stock, $1par value;75,000,000authorized shares;19,239,935 and18,868,329 issuedshares; 19,028,888and 18,657,282outstanding sharesat June 30, 2020and December 31,2019, respectively. 19,240 19,162 18,868 18,868 18,543 (1)

Capital surplus 161,032 160,990 161,175 161,110 160,991 Accumulated deficit (121,285 ) (122,969 ) (123,753 ) (123,377 ) (124,412 ) Accumulated othercomprehensive 1,586 1,702 158 526 63 income, netTreasury stock221,902 shares at (534 ) (534 ) (534 ) (534 ) (534 ) costTotal stockholders' 97,347 95,841 93,404 94,082 94,035 equityTotal liabilitiesand stockholders' $ 793,151 $ 705,473 $ 703,791 $ 700,711 $ 708,270 equity (1) Both issued and outstanding shares as stated here exclude 435,157 sharesand 815,395 shares of unvested restricted stock awards at June 30, 2020, and December 31, 2019, respectively.

CIB MARINE BANCSHARES, INC. Consolidated Statements of Operations (Unaudited) At or for the Quarters Ended 6 Months Ended June 30, March 31, December September June 30, June 30, June 30, 31, 30, 2020 2020 2019 2019 2019 2020 2019 (Dollars in thousands) Interest IncomeLoans $ 5,540 $ 5,703 $ 5,793 $ 5,992 $ 5,811 $ 11,243 $ 11,504 Loans held 451 119 195 152 97 570 182 for saleSecurities 661 763 764 810 868 1,424 1,672 Other 17 51 68 81 302 68 735 investmentsTotalinterest 6,669 6,636 6,820 7,035 7,078 13,305 14,093 income Interest ExpenseDeposits 1,263 1,512 1,856 2,027 1,949 2,775 3,754 Short-term 54 177 174 156 307 231 680 borrowingsLong-term 26 0 0 0 0 26 0 borrowingsTotalinterest 1,343 1,689 2,030 2,183 2,256 3,032 4,434 expenseNet interest 5,326 4,947 4,790 4,852 4,822 10,273 9,659 incomeProvision for(reversal of) 249 202 715 327 (67 ) 451 (225 ) loan lossesNet interestincome afterprovision for 5,077 4,745 4,075 4,525 4,889 9,822 9,884 (reversal of)loan losses Noninterest IncomeDepositservice 88 96 98 101 95 184 178 chargesOther service 36 20 23 30 29 56 49 feesMortgagebanking 3,990 2,177 2,112 2,936 2,148 6,167 3,126 revenue, netOther income 266 265 129 150 179 531 344 Net gains onsale ofsecurities 0 0 0 0 0 0 0 available forsaleUnrealizedgains(losses) 20 39 (11 ) 18 34 59 64 recognized onequitysecuritiesNet gains onsale of SBA 87 437 166 605 253 524 253 loansNet gains(losses) onsale of 2 (392 ) (268 ) (5 ) (28 ) (390 ) 58 assets and(writedowns)Totalnoninterest 4,489 2,642 2,249 3,835 2,710 7,131 4,072 income Noninterest ExpenseCompensationand employee 5,451 4,421 4,701 5,309 4,445 9,872 8,132 benefitsEquipment 379 363 394 335 353 742 688 Occupancy and 407 460 460 420 437 867 893 premisesData 155 164 157 165 160 319 326 ProcessingFederaldeposit 47 0 (10 ) (5 ) 66 47 148 insuranceProfessional 242 298 320 198 207 540 347 servicesTelephone anddata 67 68 81 86 83 135 161 communicationInsurance 55 54 59 70 52 109 105 Other expense 505 494 717 655 754 999 1,262 Totalnoninterest 7,308 6,322 6,879 7,233 6,557 13,630 12,062 expenseIncome(losses) fromoperations 2,258 1,065 (555 ) 1,127 1,042 3,323 1,894 before incometaxesIncome taxexpense 575 281 (180 ) 93 281 856 510 (benefit)Net income 1,683 784 (375 ) 1,034 761 2,467 1,384 (loss)Preferredstock 0 0 0 0 0 0 0 dividendDiscount fromrepurchase of 33 0 0 308 0 33 0 preferredstock Net income(loss)allocated to $ 1,716 $ 784 $ (375 ) $ 1,342 $ 761 $ 2,500 $ 1,384 commonstockholders