GlobeNewswire Inc | Oct 12, 2021 05:00AM EDT

October 12, 2021

BROOKFIELD, Wis., Oct. 12, 2021 (GLOBE NEWSWIRE) -- CIB Marine Bancshares, Inc. (the Company or CIBM) (OTCQX: CIBH), the holding company of CIBM Bank, announced its unaudited results of operations and financial condition for the nine months and quarter ended September 30, 2021. Net income for the nine months was $5.6 million compared to $5.9 million for the same period in 2020; and $2.1 million for the quarter compared to $3.4 million for the same quarter the prior year, which included record quarterly operating results for the Banks Mortgage Banking Division due to the significant mortgage refinance activity related to lower interest rates in 2020.

Financial highlights include:

-- Return on average assets was 0.99% for the nine-month period, compared to 1.05% for the same period in 2020; and 1.08% for the quarter compared to 1.73% for the same quarter in 2020. -- Common stock tangible book value increased to $56.14 per share outstanding at September 30, 2021, compared to $52.28 at December 31, 2020, and $50.35 at September 30, 2020, reflecting a 12-month increase of 11.5%. -- Net interest income for the nine months and the quarter increased by $0.9 million and decreased by $0.3 million, respectively, compared to the same periods in 2020. The primary reason for the improvement is a 61 basis point decline in the cost of interest bearing liabilities over the respective time period, while the yield on interest earning assets declined by only 37 basis points. The change in the cost of interest bearing liabilities is primarily due to repricing products and accounts in a lower rate environment and a shift in balances from higher-rate time deposits to lower-rate money market and non-interest bearing checking accounts. The increase in net interest income combined with slower asset yield declines due to the relatively high percentage of fixed rate earning assets, resulted in a 3.23% net interest margin for the nine month period, which is up 13 basis points from September 30, 2020.

-- Loan portfolio asset quality and environmental factors contributed to a $0.7 million reversal of loan loss provisions during the nine-month period in 2021 compared to provisions of $1.0 million for the same period in 2020, for a difference of $1.6 million between the two periods. -- At the same time, there was a $2.9 million decrease in non-interest income during the nine-month period compared to the same period in 2020. Mortgage banking operating results remain strong with elevated earnings, although not as high as the same period in 2020 due, in part, to a significantly lower level of rate refinance activity as rates are higher and the market is experiencing refinance burnout. -- 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 0.25% and 0.18%, respectively, at September 30, 2021, down from 0.54% and 0.23%, respectively, at December 31, 2020, and 0.60% and 0.22%, respectively, at September 30, 2020. The results continue to be near this credit cycles best, partially due to collection related activity and federal monetary policy and fiscal support measures for businesses and households. -- During 2020 and 2021, CIBM Bank originated $63 million in Paycheck Protection Program (PPP) loans. As of September 30, 2021, PPP loan balances paid down to approximately $17 million, with substantially all paid off PPP loans to date receiving 100% forgiveness funding from the SBA. -- Balance sheet liquidity is currently supported by robust deposit levels, with checking account deposits up $32.6 million and savings and money market account deposits up $43.7 million, since year-end. The increases reflect ongoing marketing activity and the general market liquidity conditions bolstered by federal fiscal and monetary policies (e.g., low interest rates and liquidity support programs).

Mr. J. Brian Chaffin, CIB Marines President and CEO, commented, Continued strong results in commercial and residential mortgage lending were complimented by a sizeable increase in activity by our Government Guaranteed Lending Division, which has generated $7.8 million in SBA 7(a) and 504 loan originations year to date. In addition, after a significant build up by CIB Marine and peers in the allowance for loan losses last year, we have been cautiously unwinding that in 2021 due to improved asset quality in the portfolio and economic conditions supported by prior monetary and fiscal support measures for businesses and households.

Noting the improved deposit mix and net interest margin, Mr. Chaffin commented, Our Project Falcon initiatives, combined with market liquidity conditions, have supported improvement in our deposit mix and lower cost of funds, which extended our net interest margins positive trend into the third quarter. Since year-end 2020, our checking and savings deposit product balances have increased $76 million, with time deposits down $38 million. Both CIB Marine and the market have perceptively high levels of cash and cash equivalents in the balance sheet, primarily due to the uncertain nature of the stability of checking and money market product balances.

He concluded, Finally, thanks to the approval granted by our common and preferred shareholders at their meetings held on September 24, 2021, we have moved forward with our Preferred Stock Redemption Plan and expect to execute the $18 million Initial Redemption in October. Nearly 50% of all outstanding preferred shares will be redeemed on a pro-rata basis at $825 per share. With a current carrying value and liquidation preference of $850 and $1,000 per preferred share, respectively, the transaction represents a discount to the carrying value of the redeemed shares of approximately $545,000, or $0.42 per outstanding share of common stock. Further, following the Initial Redemption, the dilution that would occur with the conversion of the Series B Shares to common shares (which may occur only in certain, limited circumstances) will be reduced from 40% to 24% of the total issued and outstanding common shares on a pro-forma, fully-diluted basis.

CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates ten 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, 2021 2021 2021 2020 2020 2021 2020 (Dollars in thousands, except share and per share data)SelectedStatement of OperationsData:Interest anddividend $ 6,311 $ 6,239 $ 6,265 $ 6,489 $ 7,202 $ 18,815 $ 20,507 incomeInterest 417 456 536 765 1,017 1,409 4,049 expenseNet interest 5,894 5,783 5,729 5,724 6,185 17,406 16,458 incomeProvision for(reversal of) (413 ) (300 ) 20 101 501 (693 ) 952 loan lossesNet interestincome after provision for(reversal of) 6,307 6,083 5,709 5,623 5,684 18,099 15,506 loan lossesNoninterest 4,072 3,135 5,146 6,566 8,104 12,353 15,235 income (1)Noninterest 7,517 7,279 7,940 9,317 9,056 22,736 22,686 expenseIncome before 2,862 1,939 2,915 2,872 4,732 7,716 8,055 income taxesIncome tax 788 558 798 565 1,322 2,144 2,178 expenseNet income $ 2,074 $ 1,381 $ 2,117 $ 2,307 $ 3,410 $ 5,572 $ 5,877 Common Share Data:Basic netincome per $ 1.63 $ 1.08 $ 1.67 $ 1.82 $ 2.69 $ 4.36 $ 4.69 share (2)Diluted netincome per 0.94 0.63 0.97 1.06 1.56 2.55 2.73 share (2)Dividend 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Tangible bookvalue per 56.14 54.19 53.25 52.28 50.35 56.14 50.35 share (3)Book value 51.07 49.16 48.21 47.19 45.27 51.07 45.27 per share (3)Weightedaverageshares 1,274,216 1,282,917 1,268,947 1,267,584 1,267,582 1,277,464 1,260,499 outstanding -basicWeightedaverageshares 2,196,173 2,208,600 2,185,433 2,181,142 2,181,868 2,188,547 2,163,850 outstanding -dilutedFinancialCondition Data:Total assets $ 775,912 $ 753,660 $ 752,715 $ 750,982 $ 793,604 $ 775,912 $ 793,604 Loans 559,079 553,642 540,206 539,227 546,351 559,079 546,351 Allowance for (8,699 ) (9,165 ) (9,253 ) (9,122 ) (9,037 ) (8,699 ) (9,037 )loan lossesInvestment 102,243 108,825 112,400 108,492 107,351 102,243 107,351 securitiesDeposits 624,579 609,964 608,433 586,373 593,370 624,579 593,370 Borrowings 34,577 29,592 30,736 51,310 87,994 34,577 87,994 Stockholders' 108,984 107,051 105,593 103,704 101,271 108,984 101,271 equityFinancialRatios and Other Data:Performance Ratios:Net interest 3.21 % 3.26 % 3.23 % 3.14 % 3.30 % 3.23 % 3.10 %margin (4)Net interest 3.12 % 3.16 % 3.13 % 3.01 % 3.16 % 3.14 % 2.90 %spread (5)Noninterestincome to 2.13 % 1.68 % 2.79 % 3.43 % 4.12 % 2.20 % 2.72 %averageassets (6)Noninterestexpense to 3.92 % 3.91 % 4.27 % 4.86 % 4.60 % 4.03 % 4.06 %averageassetsEfficiency 75.34 % 81.69 % 72.72 % 75.77 % 63.38 % 76.28 % 71.71 %ratio (7)Earnings onaverage 1.08 % 0.74 % 1.14 % 1.20 % 1.73 % 0.99 % 1.05 %assets (8)Earnings onaverage 7.59 % 5.18 % 8.10 % 8.83 % 13.51 % 6.95 % 8.05 %equity (9)Asset Quality Ratios:Nonaccrualloans to 0.18 % 0.19 % 0.23 % 0.23 % 0.32 % 0.18 % 0.32 %loans (10)Nonaccrualloans, restructuredloans andloans 90 daysor more past due and stillaccruing tototal loans 0.27 % 0.32 % 0.37 % 0.40 % 0.49 % 0.27 % 0.49 %(10)Nonperformingassets, restructuredloansand loans 90days or more past due andstillaccruing tototal assets 0.25 % 0.29 % 0.52 % 0.54 % 0.60 % 0.25 % 0.60 %(10)Allowance forloan losses 1.56 % 1.66 % 1.71 % 1.69 % 1.65 % 1.56 % 1.65 %to totalloans (10)Allowance forloan losses to nonaccrualloans,restructuredloans and loans 90 daysormore past dueand still 575.33 % 519.26 % 459.21 % 421.14 % 338.59 % 575.33 % 338.59 %accruing (10)Netcharge-offs (recoveries)annualizedto average 0.04 % -0.16 % -0.08 % 0.01 % -0.04 % -0.07 % -0.02 %loans (10)Capital Ratios:Total equityto total 14.05 % 14.20 % 14.03 % 13.81 % 12.76 % 14.05 % 12.76 %assetsTotalrisk-based 18.14 % 18.02 % 18.15 % 17.44 % 16.13 % 18.14 % 16.13 %capital ratioTier 1risk-based 16.88 % 16.76 % 16.89 % 16.19 % 14.87 % 16.88 % 14.87 %capital ratioLeverage 12.44 % 12.32 % 11.88 % 11.46 % 11.20 % 12.44 % 11.20 %capital ratioOther Data: Number ofemployees 179 176 179 176 176 179 176 (full-timeequivalent)Number ofbanking 10 10 10 11 11 10 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 $0.03 million for the 9months ended September 30, 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 averageinterest-earning assets.(5) Net interest spread is the yield on average interest-earning assets lessthe rate on average interest-bearing liabilities.(6) Noninterest income to average assets excludes gains and losses onsecurities.(7) The efficiency ratio is noninterest expense divided by the sum of netinterest income plus noninterest income, excluding gains and losses onsecurities.(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) September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 (Dollars in Thousands, Except Shares)Assets Cash and due from $ 69,217 $ 52,467 $ 51,691 $ 29,927 $ 30,544 banksReverse repurchase - - - - 8,208 agreementsSecurities 99,813 106,383 109,965 106,014 104,866 available for saleEquity securities 2,430 2,442 2,435 2,478 2,485 at fair valueLoans held for sale 18,258 13,168 18,136 42,977 67,496 Loans 559,079 553,642 540,206 539,227 546,351 Allowance for loan (8,699 ) (9,165 ) (9,253 ) (9,122 ) (9,037 )lossesNet loans 550,380 544,477 530,953 530,105 537,314 Federal Home Loan 3,140 3,140 3,140 3,140 3,140 Bank StockPremises and 3,979 3,873 4,476 4,682 4,667 equipment, netAccrued interest 1,813 1,916 1,983 2,050 2,075 receivableDeferred tax 15,193 15,632 16,417 16,292 18,547 assets, netOther real estate 403 403 1,875 1,875 2,103 owned, netBank owned life 5,894 4,861 4,831 4,802 4,774 insuranceGoodwill and other 115 120 126 131 137 intangible assetsOther assets 5,277 4,778 6,687 6,509 7,248 Total Assets $ 775,912 $ 753,660 $ 752,715 $ 750,982 $ 793,604 Liabilities andStockholders' EquityDeposits: Noninterest-bearing $ 122,441 $ 121,862 $ 109,466 $ 92,544 $ 91,134 demandInterest-bearing 62,414 61,439 63,033 59,679 61,262 demandSavings 287,609 266,085 268,026 243,888 225,724 Time 152,115 160,578 167,908 190,262 215,250 Total deposits 624,579 609,964 608,433 586,373 593,370 Short-term 34,577 29,592 30,736 51,310 54,052 borrowingsLong-term - - - - 33,942 borrowingsAccrued interest 111 127 140 246 398 payableOther liabilities 7,661 6,926 7,813 9,349 10,571 Total liabilities 666,928 646,609 647,122 647,278 692,333 Stockholders' EquityPreferred stock, $1par value;5,000,000authorized sharesat both September30, 2021 andDecember 31, 2020;7% fixed ratenoncumulative 37,308 37,308 37,308 37,308 37,308 perpetual issued;40,690 shares ofseries A and 3,201shares of series B;convertible; $43.9million aggregateliquidationpreferenceCommon stock, $1par value;75,000,000authorized shares;1,289,494 and1,285,385 issuedshares; 1,275,425 1,302 1,301 1,295 1,282 1,282 and 1,268,316outstanding sharesat September 30,2021 and December31, 2020,respectively. (1)Capital surplus 179,557 179,421 179,291 179,188 179,090 Accumulated deficit (109,997 ) (112,071 ) (113,452 ) (115,569 ) (117,875 )Accumulated othercomprehensive 1,348 1,626 1,685 2,029 2,000 income, netTreasury stock,14,791 shares onSeptember 30, 2021 (534 ) (534 ) (534 ) (534 ) (534 )and December 31,2020Total stockholders' 108,984 107,051 105,593 103,704 101,271 equityTotal liabilitiesand stockholders' $ 775,912 $ 753,660 $ 752,715 $ 750,982 $ 793,604 equity (1) Both issued and outstanding shares as stated here exclude 67,837 shares ofunvested restricted stock awards at September 30, 2021 and 59,842 shares atDecember 31, 2020.

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 30, September September 30, 31, 30, 30, 2021 2021 2021 2020 2020 2021 2020 (Dollars in thousands) Interest IncomeLoans $ 5,646 $ 5,583 $ 5,524 $ 5,577 $ 6,054 $ 16,753 $ 17,297 Loans held 135 95 175 331 537 405 1,107 for saleSecurities 509 551 555 564 573 1,615 1,997 Other 21 10 11 17 38 42 106 investmentsTotalinterest 6,311 6,239 6,265 6,489 7,202 18,815 20,507 income Interest ExpenseDeposits 409 447 512 735 942 1,368 3,717 Short-term 8 9 24 30 38 41 269 borrowingsLong-term 0 0 0 0 37 0 63 borrowingsTotalinterest 417 456 536 765 1,017 1,409 4,049 expenseNet interest 5,894 5,783 5,729 5,724 6,185 17,406 16,458 incomeProvision for(reversal of) (413 ) (300 ) 20 101 501 (693 ) 952 loan lossesNet interestincome after provision for(reversal of) 6,307 6,083 5,709 5,623 5,684 18,099 15,506 loan losses Noninterest IncomeDepositservice 97 90 84 91 89 271 273 chargesOther service 35 43 40 37 36 118 92 feesMortgagebanking 3,626 2,763 4,983 6,387 7,741 11,372 13,908 revenue, netOther income 186 280 192 165 226 658 757 Net gains onsale ofsecurities 0 0 0 0 0 0 0 available forsaleUnrealizedgains(losses) (12 ) 7 (43 ) (6 ) 0 (48 ) 59 recognized onequitysecuritiesNet gains(loss) on 151 0 0 55 (55 ) 151 469 sale of SBAloansNet gains(losses) onsale of (11 ) (48 ) (110 ) (163 ) 67 (169 ) (323 )assets and(writedowns)Totalnoninterest 4,072 3,135 5,146 6,566 8,104 12,353 15,235 income Noninterest ExpenseCompensationand employee 5,436 5,099 5,956 7,015 7,329 16,491 17,201 benefitsEquipment 390 384 379 402 352 1,153 1,094 Occupancy and 395 443 434 452 390 1,272 1,257 premisesData 105 181 185 178 177 471 496 ProcessingFederaldeposit 46 47 48 49 48 141 95 insuranceProfessional 227 328 253 322 162 808 702 servicesTelephone anddata 70 56 60 82 71 186 206 communicationInsurance 66 64 68 62 58 198 167 Other expense 782 677 557 755 469 2,016 1,468 Totalnoninterest 7,517 7,279 7,940 9,317 9,056 22,736 22,686 expenseIncome from operationsbefore income 2,862 1,939 2,915 2,872 4,732 7,716 8,055 taxesIncome tax 788 558 798 565 1,322 2,144 2,178 expenseNet income 2,074 1,381 2,117 2,307 3,410 5,572 5,877 Preferredstock 0 0 0 0 0 0 0 dividendDiscount fromrepurchase of 0 0 0 0 0 0 33 preferredstockNet income allocated tocommon $ 2,074 $ 1,381 $ 2,117 $ 2,307 $ 3,410 $ 5,572 $ 5,910 stockholders