CIB Marine Bancshares, Inc. Announces 2016 Third Quarter

WAUKESHA, WI--(Marketwired - October 13, 2016) - CIB Marine Bancshares, Inc. (the "Company" or "CIBM") (OTCQB: CIBH), the holding company of CIBM Bank, announced its results of operations and financial condition for the third quarter of 2016. Net income for the quarter was $0.9 million or $0.05 basic earnings per share, and for the nine months ending September 30, 2016, $3.0 million or $0.17 per share. Earnings per share on a diluted basis for the same quarter and nine month period were $0.02 and $0.08, respectively. This reflects a substantial increase over the prior year's results for the same periods as shown in the included financial information.

Select highlights for the quarter include:

Return on average assets was 0.55% for the third quarter of 2016 and 0.67% for the nine months ending September 30, 2016, showing a substantial improvement over the 0.23% and 0.05% reported for the same periods in 2015.
Net income for subsidiary CIBM Bank was $1.0 million for the third quarter and $3.1 million for the nine months ending September 30, 2016; compared to $0.6 million and $0.9 million for the same periods of 2015.
The growing and diversified loan portfolio has been the main driver of CIBM's net interest income growth as it has increased $0.5 million for the third quarter and $1.5 million for the nine months ending September 30, 2016, relative to the same periods of 2015.
Non-interest income increased $1.6 million for the third quarter and $3.7 million for the nine months ending September 30, 2016, relative to the same periods of 2015, due primarily to mortgage activity.
In addition to the growing revenues, our expense management activities discussed in prior earnings releases and shareholder letters have played a role in this outcome as well. The primary source of noninterest expense growth has been from higher commissions related to mortgage production.
Although net recoveries from prior charge-offs annualized to average loans has been fairly strong this past quarter and year to date, the approximately $1.3 million (net of costs) structured settlement payment announced earlier this year has not yet been received or recorded.
Non-performing assets to total assets continued its decline to 1.32% from 1.59% the prior quarter, 2.25% at the year-end 2015, and 2.20% at the same quarter-end of 2015.

"CIB Marine is pleased to be reporting year-on-year earnings improvements, continued growth in revenues and key accomplishments in executing some expense reductions," said Mr. J. Brian Chaffin, President and Chief Executive Officer of CIB Marine Bancshares, Inc. "Our third quarter saw growth in all of our key production units with especially strong results coming out of our mortgage banking division. In addition, we have received our first full quarter's results from the SBA financing facility discussed in the prior quarter, this facility is reported under reverse repurchase agreements in the balance sheet and other investments in the income statement."

Mr. Chaffin added, "We continue to focus on fulfilling our mission and growing our client relationship-based banking businesses along our corporate, mortgage and retail lines. We have made several new hires in our retail banking division recently, and Joe Arie joined our management team in the third quarter to develop our SBA lending business. Joe has a long history in SBA lending management and participation in various roles with key SBA trade organizations. In addition, CIBM successfully implemented a new customer relationship management system this past quarter -- this will assist in better meeting our customers' financial service needs and coordinate those efforts internally across our divisions and geographies."

CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates 11 banking 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 quarter ended September 30, 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															Nine Months Ended
			September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
			2016			2016			2016			2015			2015			2016			2015
			(Dollars in thousands, except share and per share data)
Selected Statement of Operations Data
Interest and dividend income			$	5,286		$	5,214		$	5,176		$	4,874		$	4,657		$	15,676		$	13,656
Interest expense				740			729			735			654			595			2,204			1,723
	Net interest income			4,546			4,485			4,441			4,220			4,062			13,472			11,933
Provision for (reversal of) loan losses				69			118			61			215			(337	)		248			(154	)
	Net interest income after provision for (reversal of) loan losses			4,477			4,367			4,380			4,005			4,399			13,224			12,087
Noninterest income (1)				2,651			2,788			2,053			592			1,022			7,492			3,834
Noninterest expense				6,220			5,951			5,481			5,386			5,114			17,652			15,731
	Income (loss) before income taxes			908			1,204			952			(789	)		307			3,064			190
Income tax expense				40			15			0			6			0			55			0
	Net income (loss)		$	868		$	1,189		$	952		$	(795	)	$	307		$	3,009		$	190

Common Share Data
	Basic net income (loss) per share		$	0.05		$	0.07		$	0.05		$	(0.04	)	$	0.02		$	0.17		$	0.01
	Diluted net income (loss) per share			0.02			0.03			0.03			(0.04	)		0.01			0.08			0.01
	Dividend			0			0			0			0			0			0			0
	Tangible book value per share (2)			1.04			0.99			0.90			0.79			0.90			1.04			0.90
	Book value per share (2)			0.56			0.51			0.41			0.31			0.42			0.56			0.42
	Weighted average shares outstanding - basic			18,127,892			18,127,892			18,17,892			18,127,892			18,127,92			18,127,892			18,127,892
	Weighted average shares outstanding - diluted			35,818,022			35,631,892			35,631,892			18,127,892			35,631,892			35,694,388			35,631,892
Financial Condition Data
	Total assets		$	632,628		$	615,708		$	597,089		$	571,233		$	531,744		$	632,628		$	531,744
	Loans			466,057			461,859			470,424			445,050			414,643			466,057			414,643
	Allowance for loan losses			(8,549	)		(8,219	)		(8,235	)		(8,064	)		(7,883	)		(8,549	)		(7,883	)
	Investment securities			103,853			103,542			97,474			94,702			92,674			103,853			92,674
	Deposits			476,428			468,377			467,334			443,571			415,185			476,428			415,185
	Borrowings			81,636			72,833			57,929			58,883			45,396			81,636			45,396
	Stockholders' equity			70,094			69,266			67,475			65,586			67,616			70,094			67,616
Financial Ratios and Other Data
	Performance Ratios:
		Net interest margin (3)		2.95	%		3.11	%		3.15	%		3.14	%		3.18	%		3.07	%		3.19	%
		Net interest spread (4)		2.80	%		2.96	%		3.00	%		2.98	%		3.03	%		2.92	%		3.04	%
		Noninterest income to average assets (5)		1.68	%		1.88	%		1.42	%		0.43	%		0.77	%		1.66	%		0.99	%
		Noninterest expense to average assets		3.93	%		4.02	%		3.78	%		3.89	%		3.87	%		3.91	%		4.07	%
		Efficiency ratio (6)		86.42	%		81.82	%		84.40	%		111.93	%		100.59	%		84.20	%		99.85	%
		Earnings (loss) on average assets (7)		0.55	%		0.80	%		0.66	%		-0.57	%		0.23	%		0.67	%		0.05	%
		Earnings (loss) on average equity (8)		4.89	%		6.98	%		5.75	%		-4.65	%		1.79	%		5.86	%		0.37	%
Asset Quality Ratios:
	Nonaccrual loans to loans (9)			1.16	%		0.81	%		0.81	%		0.70	%		0.75	%		1.16	%		0.75	%
	Nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing to total loans (9)			1.58	%		1.63	%		1.64	%		1.96	%		1.68	%		1.58	%		1.68	%
	Nonperforming assets, restructured loans and loans 90 days or more past due and still accruing to total assets (9)			1.32	%		1.59	%		1.94	%		2.25	%		2.20	%		1.32	%		2.20	%
	Allowance for loan losses to total loans			1.83	%		1.78	%		1.75	%		1.81	%		1.90	%		1.83	%		1.90	%
	Allowance for loan losses to nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing (9)			116.08	%		109.14	%		106.74	%		92.25	%		113.03	%		116.08	%		113.03	%
	Net charge-offs (recoveries) annualized to average loans			-0.22	%		0.12	%		-0.10	%		0.03	%		-0.54	%		-0.07	%		-0.16	%
Capital Ratios:
	Total equity to total assets			11.08	%		11.25	%		11.30	%		11.48	%		12.72	%		11.08	%		12.72	%
	Total risk-based capital ratio			15.66	%		15.60	%		15.19	%		15.45	%		16.57	%		15.66	%		16.57	%
	Tier 1 risk-based capital ratio			14.41	%		14.34	%		13.93	%		14.20	%		15.31	%		14.41	%		15.31	%
	Leverage capital ratio			11.20	%		11.69	%		11.72	%		12.27	%		13.01	%		11.20	%		13.01	%
Other Data:
	Number of employees (full-time equivalent)			169			167			180			173			159			169			159
	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)

			September 30,			June 30,			March 31,			December 31,			September 30,
			2016			2016			2016			2015			2015
			(Dollars in thousands, except share data)
Assets
Cash and due from banks			$	11,427		$	9,808		$	9,136		$	9,170		$	8,037
Reverse repurchase agreements				27,560			20,313			-			-			-
Securities available for sale				103,853			103,542			97,474			94,702			92,674
Loans held for sale				15,875			11,602			10,176			12,275			5,157

Loans				466,057			461,859			470,424			445,050			414,643
Allowance for loan losses				(8,549	)		(8,219	)		(8,235	)		(8,064	)		(7,883	)
		Net loans		457,508			453,640			462,189			436,986			406,760

Federal Home Loan Bank Stock				3,803			2,170			2,170			2,170			2,170
Premises and equipment, net				4,256			4,358			4,716			4,771			4,830
Accrued interest receivable				1,289			1,290			1,468			1,296			1,471
Other real estate owned, net				982			2,283			3,859			4,126			4,698
Bank owned life insurance				4,363			4,336			4,310			4,285			4,259
Goodwill and other intangible assets				226			232			237			243			248
Other assets				1,486			2,134			1,354			1,209			1,440
		Total Assets	$	632,628		$	615,708		$	597,089		$	571,233		$	531,744

Liabilities and Stockholders' Equity
Deposits:
	Noninterest-bearing demand		$	87,216		$	82,460		$	74,564		$	77,580		$	70,644
	Interest-bearing demand			29,821			31,508			32,096			33,192			30,320
	Savings			169,390			175,955			175,576			162,663			153,134
	Time			190,001			178,454			185,098			170,136			161,087
		Total deposits		476,428			468,377			467,334			443,571			415,185
Short-term borrowings				81,636			72,833			57,929			58,883			45,396
Accrued interest payable				319			335			339			321			305
Other liabilities				4,151			4,897			4,012			2,872			3,242
		Total liabilities		562,534			546,442			529,614			505,647			464,128

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				158,510			158,493			158,493			158,493			158,493
Accumulated deficit				(156,579	)		(157,446	)		(158,636	)		(159,588	)		(158,793	)
Accumulated other comprehensive loss, net				(654	)		(598	)		(1,199	)		(2,136	)		(901	)
Treasury stock 218,499 shares at cost				(529	)		(529	)		(529	)		(529	)		(529	)
		Total stockholders' equity		70,094			69,266			67,475			65,586			67,616
		Total liabilities and stockholders' equity	$	632,628		$	615,708		$	597,089		$	571,233		$	531,744

CIB MARINE BANCSHARES, INC.

Consolidated Statements of Operations (Unaudited)


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

Interest Income
Loans		$	4,540		$	4,635	$	4,572	$	4,248		$	4,044		$	13,747	$	11,724
Loans held for sale			153			95		83		77			58			331		264
Securities			513			478		517		546			553			1,508		1,660
Other investments			80			6		4		3			2			90		8
	Total interest income		5,286			5,214		5,176		4,874			4,657			15,676		13,656

Interest Expense
Deposits			659			692		705		640			583			2,056		1,687
Short-term borrowings			81			37		30		14			12			148		36
	Total interest expense		740			729		735		654			595			2,204		1,723
	Net interest income		4,546			4,485		4,441		4,220			4,062			13,472		11,933
Provision for (reversal of) loan losses			69			118		61		215			(337	)		248		(154	)
	Net interest income after provision for (reversal of) loan losses		4,477			4,367		4,380		4,005			4,399			13,224		12,087

Noninterest Income
Deposit service charges			125			121		103		113			119			349		337
Other service fees			47			52		67		60			73			166		176
Mortgage Banking revenue, net			2,285			2,102		1,336		545			805			5,723		3,179
Other income			206			96		117		104			102			419		340
Net gains on sale of securities			0			0		0		0			0			0		13
Net gains (losses) on sale of assets and (writedowns)			(12	)		417		430		(230	)		(77	)		835		(211	)
	Total noninterest income		2,651			2,788		2,053		592			1,022			7,492		3,834

Noninterest Expense
Compensation and employee benefits			4,426			4,143		3,624		3,419			3,195			12,193		10,096
Equipment			277			293		273		277			262			843		791
Occupancy and premises			377			389		435		396			404			1,201		1,180
Data Processing			185			151		154		158			173			490		463
Federal deposit insurance			105			106		106		104			110			317		321
Professional services			157			213		249		228			277			619		714
Telephone and data communication			92			99		109		113			86			300		298
Insurance			60			56		54		53			55			170		168
Other expense			541			501		477		638			552			1,519		1,700
	Total noninterest expense		6,220			5,951		5,481		5,386			5,114			17,652		15,731
Income (loss) from operations before income taxes			908			1,204		952		(789	)		307			3,064		190
Income tax expense			40			15		0		6			0			55		0
	Net income (loss)		868			1,189		952		(795	)		307			3,009		190
Preferred stock dividend			0			0		0		0			0			0		0
	Net income (loss) allocated to common stockholders	$	868		$	1,189	$	952	$	(795	)	$	307		$	3,009	$	190

Contact Information:

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

CIB Marine Bancshares, Inc. Announces 2016 Third Quarter Results