CIB Marine Bancshares, Inc. Announces Second Quarter 2020 Results

BROOKFIELD, Wis., July 16, 2020 (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 second quarter of 2020.  Net income for the quarter was $1.7 million compared to $0.8 million for the same period in 2019 and, for the six months ending June 30, 2020, it was $2.5 million compared to $1.4 million for the same period in 2019.

A summary of financial results for the quarter and six months ended June 30, 2020, is attached.  Select highlights include:

• Net income and income before taxes for the quarter and six months ended June 30^th were the strongest in more than five years, excluding the deferred tax valuation adjustment made in the fourth quarter of 2017.
• CIBM Bank’s mortgage banking division was a significant contributor to improved earnings results.  For the six months ended June 30^th, net mortgage banking revenues were $6.2 million, nearly double the same period of the prior year.  Lower interest rates have fueled a surge in rate-refinance loan originations, as well as strong new home purchase activity, resulting in over $200 million in loan originations the first half of the year.   
• Net interest income was up $0.6 million for the first six months of 2020, compared to the same period in 2019.  The primary reasons for improvement were higher average balances in loans held for sale and Paycheck Protection Program (PPP) loans, and a 54 basis point reduction in the cost of interest bearing liabilities primarily due to repricing maturing time deposits and money market rate promotions and short-term borrowings in a lower rate environment. 
• COVID-19 has impacted the Company in many direct and indirect ways.  During the second quarter of 2020, CIBM Bank originated around 350 loans or $43 million in government guaranteed PPP loans.  In addition, COVID-19 loan payment deferrals reached 87 loans, or around $75 million in total outstanding balances.
• Provisions for loan losses were up $0.7 million during the six months ended June 30, 2020, versus the same period in 2019.  The primary reason for the increase is environmental and qualitative factors related to the impact COVID-19 has had on the current economic conditions, including the sharp decline in GDP and rapid rise in unemployed persons.  A significant number of government programs are acting to support businesses and household income so that the amount of problem loans has remained relatively low to date. 
• 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 1.02% and 0.92%, respectively, at March June 30, 2020, down from 1.35% and 1.09%, respectively, at December 31, 2019, and 1.40% and 1.12%, respectively, at June 30, 2020.  The improvements during the first six months of 2020 were related to certain loan level improvements, although credit quality is expected to deteriorate in the foreseeable future due to the economic impact of COVID-19.

Mr. J. Brian Chaffin, President and CEO of CIBM, commented, “The Company has spent a significant amount of time addressing COVID-19 related issues – from managing the branches for the safety of our staff and customers, to adjusting to having more than 70% of employees work from home, to working with our clients to meet their banking needs in these challenging times.  The situation has forced us to adapt and make or advance plans for improvements in both our products and delivery systems, and in our operations areas.  Investors can be proud of the dedication and commitment CIBM Bank employees have exhibited through this period.

“Although income for the first half of the year was much improved over the same period of 2019, we remain committed to improving our longer term operating results using the process we call ‘Project Falcon’, which includes plans to improve our deposit mix, enhance efficiencies, and excel at our core services.”  

Mr. Chaffin continued, “A Fifth Amendment to the Company’s Articles of Incorporation, which would make permanent the changes that permit the Company to engage in negotiated voluntary repurchases of its Preferred Stock, was approved by our Common Shareholders in April and has now been presented to the Preferred Shareholders for their approval at a Special Meeting of Preferred Shareholders to be held on August 5, 2020.  We will provide the results of that vote on our website following the meeting.”

He concluded, “As discussed in our June 17, 2020, press release, we have completed the third and final modified Dutch auction pursuant to the Second Amendment of our Articles of Incorporation that resulted in the repurchase of 214 shares of preferred stock for a total price of approximately $148,000 representing a $33,000 discount to the carry value of the preferred shares repurchased.  We will be providing a more detailed analysis in our upcoming quarterly shareholder letter.” 

CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates eleven 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.