GlobeNewswire Inc | Jan 19, 2022 01:32PM EST

January 19, 2022

BROOKFIELD, Wis., Jan. 19, 2022 (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 fourth quarter and full year ended December 31, 2021. Improvements in net interest income, strong commercial loan originations, and net recoveries of prior loan losses partially offset lower overall refinance mortgage lending from the prior year, and resulted in net income of $6.7 million for the twelve months ended December 31, 2021, compared to $8.2 million for the same period in 2020. Net income allocated to common shareholders was $7.2 million for the year compared to $8.2 million for the year 2020, with the $0.5 million improvement attributable to the discount to the carrying value for preferred shares repurchased during 2021.

Financial highlights include:

-- Common stock tangible book value increased to $57.06 per share outstanding at December 31, 2021, compared to $52.28 at December 31, 2020, reflecting a 9.1% increase due primarily to earnings and the discount to the carrying value of repurchased preferred stock, off-set in part by a decline in accumulated other comprehensive income due to an increase in interest rates. -- Return on average assets (ROAA) was 0.88% for the year compared to 1.09% for the same period 2020. For the Companys subsidiary, CIBM Bank, ROAA was 1.01% for the year compared to 1.21% for the same period in 2020. The primary difference between the consolidated company and the bank in 2021 was due to ongoing holding company expenses, including additional expenses related to the activities that culminated in the shareholder approved plan to repurchase all outstanding preferred stock over a period of approximately four years and the repurchase of nearly 50% of outstanding preferred stock during the fourth quarter of 2021. -- Net interest income for the year ended December 31, 2021, totaled $23.3 million, up $1.1 million from the same period in 2020. The increase was due to a $0.4 million increase in accreted deferred Paycheck Protection Program (PPP) fees net of costs, a $10 million increase in average earning assets, and a 52 basis point decline in interest bearing liabilities compared to a 32 basis point decline in the yield on interest earning assets. As a result, the net interest margin in 2021 improved 11 basis points to 3.22. -- Net recoveries of loans previously charged off totaling $0.4 million, combined with improved loan portfolio asset quality and environmental factors, contributed to a $1.2 million reversal of provision for loan losses for the year 2021 compared to provisions of $1.1 million in 2020. -- 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 0.21% and 0.14%, respectively, at December 31, 2021, down from 0.54% and 0.23%, respectively, at December 31, 2020. Improvements are related, in part, to collection related activity and federal monetary policy and fiscal support measures for businesses and households. -- CIBM Banks Mortgage Division had another solid year with loan closings of approximately $440 million the divisions second highest level of closings following 2020s record year of approximately $600 million and net mortgage banking revenues of $13.7 million compared to $20.3 million in 2020. Stronger purchase money originations partially offset lower refinance lending due to higher mortgage rates and refinance burnout. -- During 2020 and 2021, CIBM Bank originated $63 million in PPP loans. As of December 31, 2021, PPP loan balances were paid down to approximately $8 million with substantially all pay downs resulting from 100% loan forgiveness funding from the SBA. Accreted PPP fees net of costs was $1.0 million in 2021, up $0.4 million from 2020, with remaining deferred fees of $0.3 million at December 31, 2021. -- High levels of balance sheet liquidity, in part reflected by cash and due from bank balances of $59 million, were supported by robust deposit level growth, with checking account deposits up $32 million and savings and money market account deposits up $46 million, since year-end 2020. The increases reflect ongoing marketing activity and 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, 2021 saw strong results in commercial and residential mortgage lending activity, continued growth in checking and money market balances, and improvement in our SBA 7(a) and 504 origination activity. In addition, improvements to the asset quality of the portfolio and continued economic growth has allowed the Bank to begin to cautiously unwind the significant build up in the allowance for loan losses experienced by CIB Marine and its peers in 2020. We continue to closely monitor the impact of the latest surge in COVID infections.

Mr. Chaffin added, We have witnessed the yield curve move up significantly, reflecting the fixed income markets pricing for three to four Fed funds rate increases in 2022 and beyond. We are aware that the high levels of checking and money market balances seen across the industry over the last two years are vulnerable to rising rates. Despite the potential for a reversal of this deposit balance trend, CIBM Bank continues to emphasize developing new checking and money market account relationships, which is a focus of our strategic plan.

He concluded, Once again, we want to thank our shareholders for their support during 2021, particularly as it relates to their approval of our Amended and Restated Articles of Incorporation, which paved the way for the implementation of our preferred stock redemption plan. Through this plan, we repurchased nearly 50%, or $18 million, of all outstanding preferred stock during the fourth quarter. The purchase was at a discount of $0.5 million to the carrying value, or $0.42 per outstanding share of common stock at the time, and further reduced the dilution that would occur upon the conversion of the Series B preferred shares to common shares (which may occur only in certain, limited circumstances) 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.

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, 2021 2021 2021 2021 2020 2021 2020 (Dollars in thousands, except share and per share data)SelectedStatement of OperationsData:Interest anddividend $ 6,244 $ 6,311 $ 6,239 $ 6,265 $ 6,489 $ 25,059 $ 26,996 incomeInterest 387 417 456 536 765 1,796 4,814 expenseNet interest 5,857 5,894 5,783 5,729 5,724 23,263 22,182 incomeProvision for(reversal of) (502 ) (413 ) (300 ) 20 101 (1,195 ) 1,053 loan lossesNet interestincome after provision for(reversal of) 6,359 6,307 6,083 5,709 5,623 24,458 21,129 loan lossesNoninterest 2,718 4,072 3,135 5,146 6,566 15,071 21,801 income (1)Noninterest 7,641 7,517 7,279 7,940 9,317 30,377 32,003 expenseIncome before 1,436 2,862 1,939 2,915 2,872 9,152 10,927 income taxesIncome tax 336 788 558 798 565 2,480 2,743 expenseNet income $ 1,100 $ 2,074 $ 1,381 $ 2,117 $ 2,307 $ 6,672 $ 8,184 Common Share Data: (2)Basic netincome per $ 1.28 $ 1.61 $ 1.08 $ 1.67 $ 1.82 $ 5.64 $ 6.51 share (3)Diluted netincome per 0.92 0.94 0.63 0.97 1.06 4.06 3.79 share (3)Dividend 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Tangible bookvalue per 57.06 55.60 54.19 53.25 52.28 57.06 52.28 share (4)Book value 54.55 50.58 49.16 48.21 47.19 54.55 47.19 per share (4)Weightedaverageshares 1,287,438 1,286,536 1,282,917 1,268,947 1,267,584 1,280,259 1,262,279 outstanding -basicWeightedaverageshares 1,784,005 2,208,493 2,208,600 2,185,433 2,181,142 1,778,294 2,167,731 outstanding -dilutedFinancialCondition Data:Total assets $ 745,393 $ 775,912 $ 753,660 $ 752,715 $ 750,982 $ 745,393 $ 750,982 Loans 543,819 559,079 553,642 540,206 539,227 543,819 539,227 Allowance for (8,352 ) (8,699 ) (9,165 ) (9,253 ) (9,122 ) (8,352 ) (9,122 )loan lossesInvestment 106,647 102,243 108,825 112,400 108,492 106,647 108,492 securitiesDeposits 618,991 624,579 609,964 608,433 586,373 618,991 586,373 Borrowings 27,049 34,577 29,592 30,736 51,310 27,049 51,310 Stockholders' 91,780 108,984 107,051 105,593 103,704 91,780 103,704 equityFinancialRatios and Other Data:Performance Ratios:Net interest 3.18 % 3.21 % 3.26 % 3.23 % 3.14 % 3.22 % 3.11 %margin (5)Net interest 3.10 % 3.12 % 3.16 % 3.13 % 3.01 % 3.13 % 2.93 %spread (6)Noninterestincome to 1.43 % 2.13 % 1.68 % 2.79 % 3.43 % 2.00 % 2.90 %averageassets (7)Noninterestexpense to 3.98 % 3.92 % 3.91 % 4.27 % 4.86 % 4.02 % 4.26 %averageassetsEfficiency 88.87 % 75.34 % 81.69 % 72.72 % 75.77 % 79.10 % 72.85 %ratio (8)Earnings onaverage 0.57 % 1.08 % 0.74 % 1.14 % 1.20 % 0.88 % 1.09 %assets (9)Earnings onaverage 4.47 % 7.59 % 5.18 % 8.10 % 8.83 % 6.37 % 8.26 %equity (10)Asset Quality Ratios:Nonaccrualloans to 0.14 % 0.18 % 0.19 % 0.23 % 0.23 % 0.14 % 0.23 %loans (11)Nonaccrualloans, restructuredloans andloans 90 daysor more past due and stillaccruing tototal loans 0.21 % 0.27 % 0.32 % 0.37 % 0.40 % 0.21 % 0.40 %(11)Nonperformingassets, restructuredloansand loans 90days or more past due andstillaccruing tototal assets 0.21 % 0.25 % 0.29 % 0.52 % 0.54 % 0.21 % 0.54 %(11)Allowance forloan losses 1.54 % 1.56 % 1.66 % 1.71 % 1.69 % 1.54 % 1.69 %to totalloans (11)Allowance forloan losses to nonaccrualloans,restructuredloans and loans 90 daysormore past dueand still 726.26 % 575.33 % 519.26 % 459.21 % 421.14 % 726.26 % 421.14 %accruing (11)Netcharge-offs (recoveries)annualizedto average -0.11 % 0.04 % -0.16 % -0.08 % 0.01 % -0.08 % 0.15 %loans (11)Capital Ratios:Total equityto total 12.31 % 14.05 % 14.20 % 14.03 % 13.81 % 12.31 % 13.81 %assetsTotalrisk-based 15.53 % 18.14 % 18.02 % 18.15 % 17.44 % 15.53 % 17.44 %capital ratioTier 1risk-based 14.28 % 16.89 % 16.76 % 16.89 % 16.19 % 14.28 % 16.19 %capital ratioLeverage 10.22 % 12.44 % 12.32 % 11.88 % 11.46 % 10.22 % 11.46 %capital ratioOther Data: Number ofemployees 177 179 176 179 176 177 176 (full-timeequivalent)Number ofbanking 10 10 10 10 11 10 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-for-15 reverse split to allow for comparability between the pre- and post-reverse splite 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 $0.5 million and $0.03million for the 12 months ended December 31, 2021 and 2020, respectively.(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, 2021 2021 2021 2021 2020 (Dollars in Thousands, Except Shares)Assets Cash and due from $ 59,184 $ 69,217 $ 52,467 $ 51,691 $ 29,927 banksReverse repurchase - - - - - agreementsSecurities 104,240 99,813 106,383 109,965 106,014 available for saleEquity securities 2,407 2,430 2,442 2,435 2,478 at fair valueLoans held for sale 9,859 18,258 13,168 18,136 42,977 Loans 543,819 559,079 553,642 540,206 539,227 Allowance for loan (8,352 ) (8,699 ) (9,165 ) (9,253 ) (9,122 )lossesNet loans 535,467 550,380 544,477 530,953 530,105 Federal Home Loan 3,140 3,140 3,140 3,140 3,140 Bank StockPremises and 4,200 3,979 3,873 4,476 4,682 equipment, netAccrued interest 1,605 1,813 1,916 1,983 2,050 receivableDeferred tax 14,731 15,193 15,632 16,417 16,292 assets, netOther real estate 403 403 403 1,875 1,875 owned, netBank owned life 5,930 5,894 4,861 4,831 4,802 insuranceGoodwill and other 109 115 120 126 131 intangible assetsOther assets 4,118 5,277 4,778 6,687 6,509 Total Assets $ 745,393 $ 775,912 $ 753,660 $ 752,715 $ 750,982 Liabilities andStockholders' EquityDeposits: Noninterest-bearing $ 120,479 $ 122,441 $ 121,862 $ 109,466 $ 92,544 demandInterest-bearing 63,693 62,414 61,439 63,033 59,679 demandSavings 289,943 287,609 266,085 268,026 243,888 Time 144,876 152,115 160,578 167,908 190,262 Total deposits 618,991 624,579 609,964 608,433 586,373 Short-term 27,049 34,577 29,592 30,736 51,310 borrowingsLong-term - - - - - borrowingsAccrued interest 100 111 127 140 246 payableOther liabilities 7,473 7,661 6,926 7,813 9,349 Total liabilities 653,613 666,928 646,609 647,122 647,278 Stockholders' EquityPreferred stock, $1par value;5,000,000authorized sharesat December 31,2021 and December31, 2020; 7% fixedrate noncumulativeperpetual issued;20,463 shares and 18,762 37,308 37,308 37,308 37,308 40,690 shares ofseries A and 1,610shares and 3,201shares of series B;convertible; $22.1million and $43.9million aggregateliquidationpreference,respectivelyCommon stock, $1par value;75,000,000authorized shares;1,306,660 and1,282,385 issuedshares; 1,292,591 1,307 1,302 1,301 1,295 1,282 and 1,268,316outstanding sharesat December 31,2021 and December31, 2020,respectively. (1)Capital surplus 180,360 179,557 179,421 179,291 179,188 Accumulated deficit (108,897 ) (109,997 ) (112,071 ) (113,452 ) (115,569 )Accumulated othercomprehensive 782 1,348 1,626 1,685 2,029 income, netTreasury stock,14,791 shares onDecember 31, 2021 (534 ) (534 ) (534 ) (534 ) (534 )and December 31,2020Total stockholders' 91,780 108,984 107,051 105,593 103,704 equityTotal liabilitiesand stockholders' $ 745,393 $ 775,912 $ 753,660 $ 752,715 $ 750,982 equity (1) Both issued and outstanding shares as stated here exclude 66,299 shares ofunvested restricted stock awards at December 31, 2021 and 59,842 shares atDecember 31, 2020. Treasury shares include 722 shares held by subsidiary bankCIBM Bank.

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, 2021 2021 2021 2021 2020 2021 2020 (Dollars in thousands) Interest IncomeLoans $ 5,572 $ 5,646 $ 5,583 $ 5,524 $ 5,577 $ 22,325 $ 22,874 Loans held 131 135 95 175 331 536 1,438 for saleSecurities 516 509 551 555 564 2,131 2,561 Other 25 21 10 11 17 67 123 investmentsTotalinterest 6,244 6,311 6,239 6,265 6,489 25,059 26,996 income Interest ExpenseDeposits 379 409 447 512 735 1,747 4,452 Short-term 8 8 9 24 30 49 299 borrowingsLong-term 0 0 0 0 0 0 63 borrowingsTotalinterest 387 417 456 536 765 1,796 4,814 expenseNet interest 5,857 5,894 5,783 5,729 5,724 23,263 22,182 incomeProvision for(reversal of) (502 ) (413 ) (300 ) 20 101 (1,195 ) 1,053 loan lossesNet interestincome after provision for(reversal of) 6,359 6,307 6,083 5,709 5,623 24,458 21,129 loan losses Noninterest IncomeDepositservice 95 97 90 84 91 366 364 chargesOther service 23 35 43 40 37 141 129 feesMortgagebanking 2,300 3,626 2,763 4,983 6,387 13,672 20,295 revenue, netOther income 185 186 280 192 165 843 922 Net gains onsale ofsecurities 0 0 0 0 0 0 0 available forsaleUnrealizedgains(losses) (23 ) (12 ) 7 (43 ) (6 ) (71 ) 53 recognized onequitysecuritiesNet gains(loss) on 120 151 0 0 55 271 524 sale of SBAloansNet gains(losses) onsale of 18 (11 ) (48 ) (110 ) (163 ) (151 ) (486 )assets and(writedowns)Totalnoninterest 2,718 4,072 3,135 5,146 6,566 15,071 21,801 income Noninterest ExpenseCompensationand employee 5,334 5,436 5,099 5,956 7,015 21,825 24,216 benefitsEquipment 446 390 384 379 402 1,599 1,496 Occupancy and 400 395 443 434 452 1,672 1,709 premisesData 167 105 181 185 178 638 674 ProcessingFederaldeposit 51 46 47 48 49 192 144 insuranceProfessional 353 227 328 253 322 1,161 1,024 servicesTelephone anddata 67 70 56 60 82 253 288 communicationInsurance 72 66 64 68 62 270 229 Other expense 751 782 677 557 755 2,767 2,223 Totalnoninterest 7,641 7,517 7,279 7,940 9,317 30,377 32,003 expenseIncome from operationsbefore income 1,436 2,862 1,939 2,915 2,872 9,152 10,927 taxesIncome tax 336 788 558 798 565 2,480 2,743 expenseNet income 1,100 2,074 1,381 2,117 2,307 6,672 8,184 Preferredstock 0 0 0 0 0 0 0 dividendDiscount fromrepurchase of 546 0 0 0 0 546 33 preferredstockNet income allocated tocommon $ 1,646 $ 2,074 $ 1,381 $ 2,117 $ 2,307 $ 7,218 $ 8,217 stockholders



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