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CIB Marine Bancshares, Inc. Announces Second Quarter 2021 Results

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BROOKFIELD, Wis., July 13, 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 six months and quarter ended June 30, 2021. Net income for the six months was $3.5 million compared to $2.5 million for the same period in 2020, and $1.4 million for the quarter compared to $1.7 million for the same quarter in 2020.

Financial highlights include:

  • Return on average assets improved to 0.94% for the six months, compared to 0.68% for the same period in 2020; and 0.74% for the quarter compared to 0.89% for the same period of 2020.

  • Tangible book value attributable to the common stock increased to $54.19 per share outstanding at June 30, 2021, compared to $52.28 at December 31, 2020, and $47.25 at June 30, 2020, reflecting a 12-month increase of 14.7%.

  • Net interest income was up for the six months and the quarter by $1.2 million and $0.5 million, respectively, compared to the same periods in 2020. The primary reason for the change is a 74 basis point and 60 basis point decline in the cost of interest bearing liabilities over the respective time periods, compared to a 36 and 19 basis point change in yields on interest earning assets, respectively. The change in the cost of interest bearing liabilities is due to repricing 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. In addition, yields on loans have declined slowly due to the predominantly fixed rate nature of the portfolio and a change in portfolio mix away from lower earning residential loans in favor of higher earning commercial real estate loans. As a result, the net interest margin as of June 30, 2021, is 3.24%, which is 24 basis points higher than at June 30, 2020.

  • Net mortgage banking revenues were up $1.6 million for the six months and down $1.2 million for the quarter, compared to the same periods of 2020. The decline in the quarter-end results was primarily due to the exceptional levels of mortgage refinance activity and pricing margins in 2020, and the increase in the six-month results is due to the relative strength of first quarter production in 2021 compared to the same period in 2020. Although mortgage rates are up 25 to 50 basis points from last year, the total origination of mortgage loans for the six months ended June 30, 2021, was $239 million compared to $218 million in the same period of 2020, with the current year production comprised of more purchase money and cash out refinance mortgage loans.

  • Compensation expenses increased $1.2 million for the six-month period compared to the same period last year, primarily due to increased performance-related compensation in the mortgage division.

  • 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 0.29% and 0.19%, respectively, at June 30, 2021, down from 0.54% and 0.23%, respectively, at December 31, 2020, and 1.02% and 0.92%, respectively, at June 30, 2020. The results continue to be near this credit cycle’s best, due in part to fiscal support measures for businesses in certain sectors, the credit resolution of a few large loans, and the sale of OREO property.

  • During the six months ended June 30, 2021, CIBM Bank originated $19 million in round two Paycheck Protection Program (PPP) loans. As of June 30, 2021, CIBM Bank had received $37 million in SBA forgiveness funding for the approximately $43 million in PPP loans originated in 2020; and $1 million of forgiveness for PPP loans originated in 2021. The forgiveness funding rate per loan as a percent of the original loan balance has been 100% to date.

  • Checking account deposits grew by $31.1 million, and savings and money market account deposits grew by $22.2 million, from December 31, 2020 to June 30, 2021, reflecting federal fiscal and monetary policies (e.g., low interest rates and liquidity support programs) as well as ongoing marketing activity results.

Mr. J. Brian Chaffin, CIB Marine’s President and CEO, commented, “Improvements to our cost of funds and higher commercial loan balances have supported strong growth of $1.2 million in our net interest income year-to-date. Solid mortgage origination production is above where it was last year at this time, but the pipeline of loans not yet closed is lower compared to this time in 2020 due in part to the higher interest rates and lower levels of rate refinance activity. SBA lending activity in the first six months of 2021 has again been dominated by PPP loan activity, including originations and forgiveness funding. We have begun to originate SBA 7(a) loans again; up to $3 million may be ready for sale in the second half of 2021 and more production is expected in the future.”

Noting an increase in deposit balances across the financial industry as a whole, Mr. Chaffin commented, “Total balances in combined checking, savings, and money market products at CIBM Bank increased $99 million over the last 12 months and $53 million the last six months due, in part, to federal economic stimulus policies and programs. We expect these balances to recede in the future as stimulus monies are spent and further when short-term interest rates begin to rise.”

He also remarked on non-performing loan credit metrics at or near cyclical bests, noting, “We are very pleased with the results, due in part to the diversification of the portfolio by segment and commercial real estate property type. However, we remain cautious about future credit quality in higher risk segments of the portfolio due to the lingering impact of the pandemic. As a result, although down from the prior quarter- and year-end, we continue to have a higher than normal loan loss reserve reflecting, in part, higher environmental factor adjustments.

“Finally, we know our shareholders are anxiously awaiting news on the status of negotiations regarding our plan to repurchase preferred stock. Progress has been slower than expected, but continues. We ask for your patience as we work through the process. If we are able to reach an agreement on a proposal that will benefit all shareholders, we will present it for approval in a new proxy statement. If such an agreement is not possible, we will notify shareholders and the Annual Meeting will proceed as currently scheduled on July 29th,” he concluded.

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 STATEMENTS
CIB 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 Marine’s current views with respect to future events and financial performance that are subject to many uncertainties and factors relating to CIB Marine’s 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 Marine’s 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 Marine’s 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 Marine’s 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 Marine’s 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

6 Months Ended

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

2021

2021

2020

2020

2020

2021

2020

(Dollars in thousands, except share and per share data)

Selected Statement of Operations Data:

Interest and dividend income

$

6,239

$

6,265

$

6,489

$

7,202

$

6,669

$

12,504

$

13,305

Interest expense

456

536

765

1,017

1,343

992

3,032

Net interest income

5,783

5,729

5,724

6,185

5,326

11,512

10,273

Provision for (reversal of) loan losses

(300

)

20

101

501

249

(280

)

451

Net interest income after provision for

(reversal of) loan losses

6,083

5,709

5,623

5,684

5,077

11,792

9,822

Noninterest income (1)

3,135

5,146

6,566

8,104

4,489

8,281

7,131

Noninterest expense

7,279

7,940

9,317

9,056

7,308

15,219

13,630

Income before income taxes

1,939

2,915

2,872

4,732

2,258

4,854

3,323

Income tax expense

558

798

565

1,322

575

1,356

856

Net income

$

1,381

$

2,117

$

2,307

$

3,410

$

1,683

$

3,498

$

2,467

Common Share Data (2):

Basic net income per share (3)

$

1.08

$

1.67

$

1.82

$

2.69

$

1.36

$

2.74

$

1.99

Diluted net income per share (3)

0.63

0.97

1.06

1.56

0.79

1.59

1.16

Dividend

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Tangible book value per share (4)

54.19

53.25

52.28

50.35

47.25

54.19

47.25

Book value per share (4)

49.16

48.21

47.19

45.27

42.00

49.16

42.00

Weighted average shares outstanding - basic

1,282,917

1,268,947

1,267,584

1,267,582

1,266,174

1,275,971

1,257,224

Weighted average shares outstanding - diluted

2,208,600

2,185,433

2,181,142

2,181,868

2,160,201

2,197,071

2,155,394

Financial Condition Data:

Total assets

$

753,660

$

752,715

$

750,982

$

793,604

$

793,151

$

753,660

$

793,151

Loans

553,642

540,206

539,227

546,351

535,692

553,642

535,692

Allowance for loan losses

(9,165

)

(9,253

)

(9,122

)

(9,037

)

(8,483

)

(9,165

)

(8,483

)

Investment securities

108,825

112,400

108,492

107,351

113,303

108,825

113,303

Deposits

609,964

608,433

586,373

593,370

566,811

609,964

566,811

Borrowings

29,592

30,736

51,310

87,994

120,233

29,592

120,233

Stockholders' equity

107,051

105,593

103,704

101,271

97,347

107,051

97,347

Financial Ratios and Other Data:

Performance Ratios:

Net interest margin (5)

3.26

%

3.23

%

3.14

%

3.30

%

2.96

%

3.24

%

3.00

%

Net interest spread (6)

3.16

%

3.13

%

3.01

%

3.16

%

2.76

%

3.15

%

2.77

%

Noninterest income to average assets (7)

1.68

%

2.79

%

3.43

%

4.12

%

2.36

%

2.24

%

1.95

%

Noninterest expense to average assets

3.91

%

4.27

%

4.86

%

4.60

%

3.86

%

4.09

%

3.77

%

Efficiency ratio (8)

81.69

%

72.72

%

75.77

%

63.38

%

74.61

%

76.75

%

78.58

%

Earnings on average assets (9)

0.74

%

1.14

%

1.20

%

1.73

%

0.89

%

0.94

%

0.68

%

Earnings on average equity (10)

5.18

%

8.10

%

8.83

%

13.51

%

6.97

%

6.62

%

5.17

%

Asset Quality Ratios:

Nonaccrual loans to loans (11)

0.19

%

0.23

%

0.23

%

0.32

%

0.92

%

0.19

%

0.92

%

Nonaccrual loans, restructured loans and

loans 90 days or more past due and still

accruing to total loans (11)

0.32

%

0.37

%

0.40

%

0.49

%

1.07

%

0.32

%

1.07

%

Nonperforming assets, restructured loans

and loans 90 days or more past due and still

accruing to total assets (11)

0.29

%

0.52

%

0.54

%

0.60

%

1.02

%

0.29

%

1.02

%

Allowance for loan losses to total loans (11)

1.66

%

1.71

%

1.69

%

1.65

%

1.58

%

1.66

%

1.58

%

Allowance for loan losses to nonaccrual loans,

restructured loans and loans 90 days or

more past due and still accruing (11)

519.26

%

459.21

%

421.14

%

338.59

%

147.79

%

519.26

%

147.79

%

Net charge-offs (recoveries) annualized

to average loans (11)

-0.16

%

-0.08

%

0.01

%

-0.04

%

-0.09

%

-0.12

%

-0.01

%

Capital Ratios:

Total equity to total assets

14.20

%

14.03

%

13.81

%

12.76

%

12.27

%

14.20

%

12.27

%

Total risk-based capital ratio

18.02

%

18.15

%

17.44

%

16.13

%

15.49

%

18.02

%

15.49

%

Tier 1 risk-based capital ratio

16.76

%

16.89

%

16.19

%

14.87

%

14.23

%

16.76

%

14.23

%

Leverage capital ratio

12.19

%

11.88

%

11.46

%

11.20

%

10.82

%

12.19

%

10.82

%

Other Data:

Number of employees (full-time equivalent)

176

179

176

176

177

176

177

Number of banking facilities

10

10

11

11

11

10

11

(1) Noninterest income includes gains and losses on securities.

(2) Common share data prior to September 14, 2020, is adjusted to reflect the 1:15 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 earnings per share includes the difference between the carrying amount less the consideration paid for redeemed preferred stock of $0.03 million for the 2nd quarter and 12 months ended 2020.

(4) Tangible book value per share is the stockholder equity less the carry value of the preferred stock and less the goodwill and intangible assets, divided by the total shares of common outstanding. Book value per share is the stockholder equity less the liquidation preference of the preferred stock, divided by the total shares of common outstanding. Book value measures are reported inclusive of the net deferred tax assets. As presented here, shares of common outstanding excludes unvested restricted stock awards.

(5) Net interest margin is the ratio of net interest income to average interest-earning assets.

(6) Net interest spread is the yield on average interest-earning assets less the rate on average interest-bearing liabilities.

(7) Noninterest income to average assets excludes gains and losses on securities.

(8) The efficiency ratio is noninterest expense divided by the sum of net interest income plus noninterest income, excluding gains and losses on securities.

(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)

June 30,

March 31,

December 31,

September 30,

June 30,

2021

2021

2020

2020

2020

(Dollars in Thousands, Except Shares)

Assets

Cash and due from banks

$

52,467

$

51,691

$

29,927

$

30,544

$

9,120

Reverse repurchase agreements

-

-

-

8,208

18,117

Securities available for sale

106,383

109,965

106,014

104,866

110,818

Equity securities at fair value

2,442

2,435

2,478

2,485

2,485

Loans held for sale

13,168

18,136

42,977

67,496

83,997

Loans

553,642

540,206

539,227

546,351

535,692

Allowance for loan losses

(9,165

)

(9,253

)

(9,122

)

(9,037

)

(8,483

)

Net loans

544,477

530,953

530,105

537,314

527,209

Federal Home Loan Bank Stock

3,140

3,140

3,140

3,140

2,948

Premises and equipment, net

3,873

4,476

4,682

4,667

4,679

Accrued interest receivable

1,916

1,983

2,050

2,075

1,973

Deferred tax assets, net

15,632

16,417

16,292

18,547

19,325

Other real estate owned, net

403

1,875

1,875

2,103

2,334

Bank owned life insurance

4,861

4,831

4,802

4,774

4,745

Goodwill and other intangible assets

120

126

131

137

142

Other assets

4,778

6,687

6,509

7,248

5,259

Total Assets

$

753,660

$

752,715

$

750,982

$

793,604

$

793,151

Liabilities and Stockholders' Equity

Deposits:

Noninterest-bearing demand

$

121,862

$

109,466

$

92,544

$

91,134

$

90,450

Interest-bearing demand

61,439

63,033

59,679

61,262

54,288

Savings

266,085

268,026

243,888

225,724

205,470

Time

160,578

167,908

190,262

215,250

216,603

Total deposits

609,964

608,433

586,373

593,370

566,811

Short-term borrowings

29,592

30,736

51,310

54,052

77,273

Long-term borrowings

-

-

-

33,942

42,960

Accrued interest payable

127

140

246

398

447

Other liabilities

6,926

7,813

9,349

10,571

8,313

Total liabilities

646,609

647,122

647,278

692,333

695,804

Stockholders' Equity

Preferred stock, $1 par value; 5,000,000 authorized shares at both June 30, 2021 and December 31, 2020;
7% fixed rate noncumulative perpetual issued; 40,690 shares of series A and 3,201 shares of series B;
convertible; $43.9 million aggregate liquidation preference

37,308

37,308

37,308

37,308

37,308

Common stock, $1 par value; 75,000,000 authorized shares; 1,299,553 and 1,285,385 issued shares;
1,285,484 and 1,268,316 outstanding shares at June 30, 2021 and December 31, 2020, respectively. (1)(2)

1,301

1,295

1,282

1,282

19,240

Capital surplus (2)

179,421

179,291

179,188

179,090

161,032

Accumulated deficit

(112,071

)

(113,452

)

(115,569

)

(117,875

)

(121,285

)

Accumulated other comprehensive income, net

1,626

1,685

2,029

2,000

1,586

Treasury stock, 14,791 shares on June 30, 2021 and December 31, 2020 and 221,902 shares prior at cost (2)

(534

)

(534

)

(534

)

(534

)

(534

)

Total stockholders' equity

107,051

105,593

103,704

101,271

97,347

Total liabilities and stockholders' equity

$

753,660

$

752,715

$

750,982

$

793,604

$

793,151

(1) Both issued and outstanding shares as stated here exclude 70,206 shares of unvested restricted stock awards at June 30, 2021 and 59,842 at December 31, 2020.

(2) Effective September 14, 2020, the Company executed a reverse stock split of 1 share for every 15 shares outstanding. Fractional shares were remitted cash at 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

6 Months Ended

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

2021

2021

2020

2020

2020

2021

2020

(Dollars in thousands)

Interest Income

Loans

$

5,583

$

5,524

$

5,577

$

6,054

$

5,540

$

11,107

$

11,243

Loans held for sale

95

175

331

537

451

270

570

Securities

551

555

564

573

661

1,106

1,424

Other investments

10

11

17

38

17

21

68

Total interest income

6,239

6,265

6,489

7,202

6,669

12,504

13,305

Interest Expense

Deposits

447

512

735

942

1,263

959

2,775

Short-term borrowings

9

24

30

38

54

33

231

Long-term borrowings

0

0

0

37

26

0

26

Total interest expense

456

536

765

1,017

1,343

992

3,032

Net interest income

5,783

5,729

5,724

6,185

5,326

11,512

10,273

Provision for (reversal of) loan losses

(300

)

20

101

501

249

(280

)

451

Net interest income after provision for

(reversal of) loan losses

6,083

5,709

5,623

5,684

5,077

11,792

9,822

Noninterest Income

Deposit service charges

90

84

91

89

88

174

184

Other service fees

43

40

37

36

36

83

56

Mortgage banking revenue, net

2,763

4,983

6,387

7,741

3,990

7,746

6,167

Other income

280

192

165

226

266

472

531

Net gains on sale of securities available for sale

0

0

0

0

0

0

0

Unrealized gains (losses) recognized on equity securities

7

(43

)

(6

)

0

20

(36

)

59

Net gains (loss) on sale of SBA loans

0

0

55

(55

)

87

0

524

Net gains (losses) on sale of assets and (writedowns)

(48

)

(110

)

(163

)

67

2

(158

)

(390

)

Total noninterest income

3,135

5,146

6,566

8,104

4,489

8,281

7,131

Noninterest Expense

Compensation and employee benefits

5,099

5,956

7,015

7,329

5,451

11,055

9,872

Equipment

384

379

402

352

379

763

742

Occupancy and premises

443

434

452

390

407

877

867

Data Processing

181

185

178

177

155

366

319

Federal deposit insurance

47

48

49

48

47

95

47

Professional services

328

253

322

162

242

581

540

Telephone and data communication

56

60

82

71

67

116

135

Insurance

64

68

62

58

55

132

109

Other expense

677

557

755

469

505

1,234

999

Total noninterest expense

7,279

7,940

9,317

9,056

7,308

15,219

13,630

Income from operations

before income taxes

1,939

2,915

2,872

4,732

2,258

4,854

3,323

Income tax expense

558

798

565

1,322

575

1,356

856

Net income

1,381

2,117

2,307

3,410

1,683

3,498

2,467

Preferred stock dividend

0

0

0

0

0

0

0

Discount from repurchase of preferred stock

0

0

0

33

0

0

0

Net income allocated to

common stockholders

$

1,381

$

2,117

$

2,307

$

3,443

$

1,683

$

3,498

$

2,467

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


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