CIB Marine Bancshares, Inc. Announces 2016 Results

WAUKESHA, WI--(Marketwired - January 13, 2017) - 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 fourth quarter and year of 2016. Net income for the fourth quarter of 2016 was $1.4 million or $0.08 basic and $0.04 diluted earnings per share compared to a loss of $0.8 million or $0.04 basic and diluted earnings per share for the same period in 2015, and for the year ended December 31, 2016, net income was $4.4 million or $0.24 basic and $0.12 diluted earnings per share compared to a loss of $0.6 million or $0.03 basic and diluted earnings per share for the same period of 2015.

Select highlights for the quarter and year include:

Return on average assets was 0.71% for the year 2016, a substantial improvement over the (0.12%) reported for the year 2015.
Net income for subsidiary CIBM Bank was $4.6 million for the year 2016, an increase of $4.3 million from the year 2015.
Net interest income increased $1.8 million for the year 2016 compared 2015. The increase was primarily due to a $64 million dollar increase in average loans outstanding.
Non-interest income increased $5.0 million for the year 2016 compared to the same period of 2015, due primarily to mortgage activity and, to a lesser extent, gains related to assets previously charged or written down. For the quarter, net mortgage banking revenues were down $0.9 million due to seasonal factors and the increase in interest rates.
Reversal of loan losses was $0.9 million for the year ending December 31, 2016, compared to a provision for loan losses of $0.1 million for the same period in 2015. The reversal of loan losses was related to a $1.5 million structured settlement payment announced earlier in 2016 which has been received and recorded in the allowance for loan losses as a recovery of loans previously charged off.
Noninterest expenses rose for the year 2016 by $2.7 million versus the prior year, primarily due to a $2.9 million increase in compensation caused by commissions for higher loan originations offset by reductions in other areas.
Non-performing assets to total assets were 1.83% at the year-end 2016, down from 2.25% the prior year end and up from 1.32% at September 30, 2016. The increase from the prior quarter-end was due primarily to one relationship.
Net recoveries for loans previously charged off to average loans was (0.24%) for the year ending December 31, 2016, compared to (0.11%) for the same period in the prior year.

"CIB Marine completed a successful year in 2016 and is pleased to be reporting for the year an increase of 74% in the book value per share of common stock and progress in a number of strategic areas of the company," said Mr. J. Brian Chaffin, President and Chief Executive Officer of CIB Marine Bancshares, Inc. "For the year 2016 our loan portfolio grew on net 8.8% reflecting more than $100 million in new portfolio loan originations, deposits grew 8.9% and mortgage revenues grew 92%. In addition, we started our SBA lending and facility financing activities; executed a significant expense management program; and made a number of investments in information technology to enhance our services and improve product delivery, as well as fund a number of security and infrastructure measures."

Mr. Chaffin added, "Our eyes and energy are focused on 2017 and the future now. Interest rates are higher across the yield curve over the past year and Fed policy rates are forecast to increase further in 2017. During 2017 we expect a softer residential lending market due to the increase in mortgage rates, but we continue to work on expanding our mortgage lending activities more deeply through our banking markets and we are optimistic our SBA lending activities will increase over the prior year. Our traditional retail and commercial community banking activities contributed significantly to the results in 2016 and we are working towards continued development and growth of our customer relationships within the communities where we live and work."

CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates 11 banking offices and 3 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.

Notice that Preferred Dividend has not been declared: Pursuant to Sections 5.4(e)(v) and 5.5(e)(v) of the Company's Articles of Incorporation, notice is hereby given that the Board of Directors of the Company has not declared a dividend on its Series A Preferred Stock or its Series B Convertible Preferred Stock for the period ended December 31, 2016 and, accordingly, no dividend will be paid to preferred shareholders for such Dividend Period.

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, 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										Years Ended
			December 31,		September 30,		June 30,		March 31,		December 31,		December 31,		December 31,
			2016		2016		2016		2016		2015		2016		2015
			(Dollars in thousands, except share and per share data)
Selected Statement of Operations Data
Interest and dividend income			$	5,273	$	5,286	$	5,214	$	5,176	$	4,874	$	20,949	$	18,530
Interest expense				793		740		729		735		654		2,997		2,377
	Net interest income			4,480		4,546		4,485		4,441		4,220		17,952		16,153
Provision for (reversal of) loan losses				(1,101)		69		118		61		215		(853)		61
	Net interest income after provision for (reversal of) loan losses			5,581		4,477		4,367		4,380		4,005		18,805		16,092
Noninterest income (1)				1,908		2,651		2,788		2,053		592		9,400		4,426
Noninterest expense				6,127		6,220		5,951		5,481		5,386		23,779		21,117
	Income (loss) before income taxes			1,362		908		1,204		952		(789)		4,426		(599)
Income tax expense				(5)		40		15		0		6		50		6
	Net income (loss)		$	1,367	$	868	$	1,189	$	952	$	(795)	$	4,376	$	(605)

Common Share Data
	Basic net income (loss) per share		$	0.08	$	0.05	$	0.07	$	0.05	$	(0.04)	$	0.24	$	(0.03)
	Diluted net income (loss) per share			0.04		0.02		0.03		0.03		(0.04)		0.12		(0.03)
	Dividend			0		0		0		0		0		0		0
	Tangible book value per share (2)			1.03		1.04		0.99		0.90		0.79		1.03		0.79
	Book value per share (2)			0.54		0.56		0.51		0.41		0.31		0.54		0.31
	Weighted average shares outstanding - basic			18,127,892		18,127,892		18,127,892		18,127,892		18,127,892		18,127,892		18,127,892
	Weighted average shares outstanding - diluted			36,082,522		35,818,022		35,631,892		35,631,892		18,127,892		35,791,952		18,127,892
Financial Condition Data
	Total assets		$	653,864	$	632,628	$	615,708	$	597,089	$	571,233	$	653,864	$	571,233
	Loans			484,255		466,057		461,859		470,424		445,050		484,255		445,050
	Allowance for loan losses			(8,329)		(8,549)		(8,219)		(8,235)		(8,064)		(8,329)		(8,064)
	Investment securities			112,072		103,853		103,542		97,474		94,702		112,072		94,702
	Deposits			483,097		476,428		468,377		467,334		443,571		483,097		443,571
	Borrowings			96,944		81,636		72,833		57,929		58,883		96,944		58,883
	Stockholders' equity			69,828		70,094		69,266		67,475		65,586		69,828		65,586
Financial Ratios and Other Data
	Performance Ratios:
		Net interest margin (3)		2.84%		2.95%		3.11%		3.15%		3.14%		3.01%		3.18%
		Net interest spread (4)		2.70%		2.80%		2.96%		3.00%		2.98%		2.86%		3.03%
		Noninterest income to average assets (5)		1.18%		1.68%		1.88%		1.42%		0.43%		1.53%		0.84%
		Noninterest expense to average assets		3.79%		3.93%		4.02%		3.78%		3.89%		3.88%		4.02%
		Efficiency ratio (6)		95.91%		86.42%		81.82%		84.40%		111.93%		86.94%		102.68%
		Earnings (loss) on average assets (7)		0.85%		0.55%		0.80%		0.66%		-0.57%		0.71%		-0.12%
		Earnings (loss) on average equity (8)		7.63%		4.89%		6.98%		5.75%		-4.65%		6.32%		-0.89%
Asset Quality Ratios:
	Nonaccrual loans to loans (9)			1.41%		1.16%		0.81%		0.81%		0.70%		1.41%		0.70%
	Nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing to total loans (9)			1.75%		1.58%		1.63%		1.64%		1.96%		1.75%		1.96%
	Nonperforming assets, restructured loans and loans 90 days or more past due and still accruing to total assets (9)			1.83%		1.32%		1.59%		1.94%		2.25%		1.83%		2.25%
	Allowance for loan losses to total loans			1.72%		1.83%		1.78%		1.75%		1.81%		1.72%		1.81%
	Allowance for loan losses to nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing (9)			98.16%		116.08%		109.14%		106.74%		92.25%		98.16%		92.25%
	Net charge-offs (recoveries) annualized to average loans			-0.74%		-0.22%		0.12%		-0.10%		0.03%		-0.24%		-0.11%
Capital Ratios:
	Total equity to total assets			10.68%		11.08%		11.25%		11.30%		11.48%		10.68%		11.48%
	Total risk-based capital ratio			15.55%		15.66%		15.60%		15.19%		15.45%		15.55%		15.45%
	Tier 1 risk-based capital ratio			14.29%		14.41%		14.34%		13.93%		14.20%		14.29%		14.20%
	Leverage capital ratio			11.18%		11.20%		11.69%		11.72%		12.27%		11.18%		12.27%
Other Data:
	Number of employees (full-time equivalent)			171		169		167		180		173		171		173
	Number of banking facilities			11		11		11		11		11		11		11

(1)	Noninterest income includes gains and losses on securities.
(2)	Tangible book value per share is the shareholder 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 shareholder equity less the liquidation preference of the preferred stock, divided by the total shares of common outstanding.
(3)	Net interest margin is the ratio of net interest income to average interest-earning assets.
(4)	Net interest spread is the yield on average interest-earning assets less the rate on average interest-bearing liabilities.
(5)	Noninterest income to average assets excludes gains and losses on securities.
(6)	The efficiency ratio is noninterest expense divided by the sum of net interest income plus noninterest income, excluding gains and losses on securities.
(7)	Earnings on average assets are net income divided by average total assets.
(8)	Earnings on average equity are net income divided by average common equity.
(9)	Excludes loans held for sale.

CIB MARINE BANCSHARES, INC.
Consolidated Balance Sheets (unaudited)

			December 31,			September 30,			June 30,			March 31,			December 31,
			2016			2016			2016			2016			2015
			(Dollars in thousands, except share data)
Assets
Cash and due from banks			$	10,291		$	11,427		$	9,808		$	9,136		$	9,170
Reverse repurchase agreements				24,275			27,560			20,313			-			-
Securities available for sale				112,072			103,853			103,542			97,474			94,702
Loans held for sale				11,469			15,875			11,602			10,176			12,275

Loans				484,255			466,057			461,859			470,424			445,050
Allowance for loan losses				(8,329	)		(8,549	)		(8,219	)		(8,235	)		(8,064	)
	Net loans			475,926			457,508			453,640			462,189			436,986

Federal Home Loan Bank Stock				3,803			3,803			2,170			2,170			2,170
Premises and equipment, net				4,427			4,256			4,358			4,716			4,771
Accrued interest receivable				1,382			1,289			1,290			1,468			1,296
Other real estate owned, net				3,464			982			2,283			3,859			4,126
Bank owned life insurance				4,389			4,363			4,336			4,310			4,285
Goodwill and other intangible assets				221			226			232			237			243
Other assets				2,145			1,486			2,134			1,354			1,209
	Total Assets		$	653,864		$	632,628		$	615,708		$	597,089		$	571,233

Liabilities and Stockholders' Equity
Deposits:
	Noninterest-bearing demand		$	77,154		$	87,216		$	82,460		$	74,564		$	77,580
	Interest-bearing demand			33,832			29,821			31,508			32,096			33,192
	Savings			176,435			169,390			175,955			175,576			162,663
	Time			195,676			190,001			178,454			185,098			170,136
		Total deposits		483,097			476,428			468,377			467,334			443,571
Short-term borrowings				96,944			81,636			72,833			57,929			58,883
Accrued interest payable				349			319			335			339			321
Other liabilities				3,646			4,151			4,897			4,012			2,872
		Total liabilities		584,036			562,534			546,442			529,614			505,647

Stockholders' Equity
Preferred stock, $1 par value; 5,000,000 authorized shares; 7% fixed rate noncumulative perpetual issued-55,624 shares of series A and 4,376 shares of series B; convertible; aggregate liquidation preference- $60,000				51,000			51,000			51,000			51,000			51,000
Common stock, $1 par value; 50,000,000 authorized shares; 18,346,391 issued shares; 18,135,344 outstanding shares				18,346			18,346			18,346			18,346			18,346
Capital surplus				158,552			158,510			158,493			158,493			158,493
Accumulated deficit				(155,212	)		(156,579	)		(157,446	)		(158,636	)		(159,588	)
Accumulated other comprehensive loss, net				(2,329	)		(654	)		(598	)		(1,199	)		(2,136	)
Treasury stock 218,499 shares at cost				(529	)		(529	)		(529	)		(529	)		(529	)
		Total stockholders' equity		69,828			70,094			69,266			67,475			65,586
		Total liabilities and stockholders' equity	$	653,864		$	632,628		$	615,708		$	597,089		$	571,233

CIB MARINE BANCSHARES, INC.

Consolidated Statements of Operations (Unaudited)

			At or for the
			Quarters Ended													Years Ended
			December 31,			September 30,			June 30,		March 31,		December 31,			December 31,			December 31,
			2016			2016			2016		2016		2015			2016			2015
			(Dollars in thousands)

Interest Income
Loans			$	4,493		$	4,540		$	4,635	$	4,572	$	4,248		$	18,240		$	15,972
Loans held for sale				141			153			95		83		77			472			341
Securities				563			513			478		517		546			2,071			2,206
Other investments				76			80			6		4		3			166			11
	Total interest income			5,273			5,286			5,214		5,176		4,874			20,949			18,530

Interest Expense
Deposits				697			659			692		705		640			2,753			2,327
Short-term borrowings				96			81			37		30		14			244			50
	Total interest expense			793			740			729		735		654			2,997			2,377
	Net interest income			4,480			4,546			4,485		4,441		4,220			17,952			16,153
Provision for (reversal of) loan losses				(1,101	)		69			118		61		215			(853	)		61
	Net interest income after provision for (reversal of) loan losses			5,581			4,477			4,367		4,380		4,005			18,805			16,092

Noninterest Income
Deposit service charges				121			125			121		103		113			470			450
Other service fees				45			47			52		67		60			211			236
Mortgage Banking revenue, net				1,414			2,285			2,102		1,336		545			7,137			3,724
Other income				136			206			96		117		104			555			444
Net gains on sale of securities				0			0			0		0		0			0			13
Net gains (losses) on sale of assets and (writedowns)				192			(12	)		417		430		(230	)		1,027			(441	)
	Total noninterest income			1,908			2,651			2,788		2,053		592			9,400			4,426

Noninterest Expense
Compensation and employee benefits				4,228			4,426			4,143		3,624		3,419			16,421			13,515
Equipment				305			277			293		273		277			1,148			1,068
Occupancy and premises				390			377			389		435		396			1,591			1,576
Data Processing				123			185			151		154		158			613			621
Federal deposit insurance				92			105			106		106		104			409			425
Professional services				156			157			213		249		228			775			942
Telephone and data communication				90			92			99		109		113			390			411
Insurance				60			60			56		54		53			230			221
Other expense				683			541			501		477		638			2,202			2,338
	Total noninterest expense			6,127			6,220			5,951		5,481		5,386			23,779			21,117
Income (loss) from operations before income taxes				1,362			908			1,204		952		(789	)		4,426			(599	)
Income tax expense				(5	)		40			15		0		6			50			6
	Net income (loss)			1,367			868			1,189		952		(795	)		4,376			(605	)
Preferred stock dividend				0			0			0		0		0			0			0
		Net income (loss) allocated to common stockholders	$	1,367		$	868		$	1,189	$	952	$	(795	)	$	4,376		$	(605	)

Contact Information:

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