CIB Marine Bancshares, Inc. Announces 2017 First Quarter

WAUKESHA, WI--(Marketwired - April 13, 2017) - CIB Marine Bancshares, Inc. (the "Company" or "CIBM") (OTCQB: CIBH), the holding company of CIBM Bank (the "Bank"), today announces its results of operations and financial condition for the first quarter of 2017. Net income for the first quarter was $0.9 million or $0.05 per share basic. This compares to net income of $1.1 million or $0.06 per share basic for the fourth quarter of 2016 and net income of $1.0 million or $0.05 per share basic for the first quarter of 2016.

Select highlights for the quarter include:

Return on average assets for the first quarter of 2017 is 0.56%, compared to 0.66% for the fourth quarter of 2016 and 0.66% for the first quarter of 2016. Both of the prior periods reported significant recovery of prior loan related losses whereas there was none in the current quarter.
Our book and tangible book value per share of common stock are reported at $0.60 and $1.08, respectively, compared to $0.41 and $0.90 from one year prior.
Net income for subsidiary CIBM Bank was $1.1 million, compared to net income of $1.2 million for the fourth quarter of 2016 boosted by a large loan loss recovery and $0.7 million for the first quarter of 2016. Improvements are due to higher net interest income and gains on sale of SBA loans, as well as lower noninterest expense.
Net interest income of $4.7 million for the quarter is an increase of $0.2 million from the fourth quarter of 2016 and $0.3 million from the first quarter of 2016.
Non-interest income of $1.9 million for the quarter was on par with $1.9 million from the fourth quarter of 2016. Non-interest income for the first quarter of 2016 was $2.1 million and included $0.4 million in net gains from sale of OREO assets net of other write-downs.

"CIB Marine's performance reflected continued gains consistent with our business plan. Our net interest income grew due to higher earning asset volumes and the new Fed rate hikes. Gains on sale of SBA loans of $0.4 million reported in net gains on sale of assets is an early sign of the kind of performance our new SBA Lending division is capable of providing. Retail banking generated more than $20 million gross in new deposits to assist funding prior asset growth and a reduction in our FHLB borrowings. At Avenue Mortgage, although off to a seasonally slower start, the month of March showed signs of strength as the home purchase markets started to heat up and our new and growing lending team in central Illinois is just getting started," said Mr. J. Brian Chaffin, President and CEO of CIB Marine Bancshares, Inc.

Mr. Chaffin added, "We are excited to introduce our Affordable Loan Program to assist low and moderate income households in our communities and the creation of a new Community Development Officer position. Early indicators are very positive and show what a positive force the company and its employees can have within the communities we live and work."

Mr. Chaffin then noted, "As referenced in our shareholder letter dated April 3, 2017, we have included with this release a summary analysis of the potential impact preferred stock repurchases under various discount scenarios would have on book value. More information and a proposal for common shareholders to vote on will be included in the Proxy Statement for the 2017 Annual Shareholder Meeting."

CIB Marine Bancshares, Inc. is the holding company for CIBM Bank, which operates 11 banking offices in Illinois, Wisconsin and Indiana and 4 separate 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 March 31, 2017 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															Three Months Ended
			March 31,			December 31,			September 30,			June 30,			March 31,			March 31,			March 31,
			2017			2016			2016			2016			2016			2017			2016
			(Dollars in thousands, except share and per share data)
Selected Statement of Operations Data
Interest and dividend income			$	5,562		$	5,273		$	5,286		$	5,214		$	5,176		$	5,562		$	5,176
Interest expense				892			793			740			729			735			892			735
	Net interest income			4,670			4,480			4,546			4,485			4,441			4,670			4,441
Provision for (reversal of) loan losses				228			(796	)		69			118			61			228			61
	Net interest income after provision for (reversal of) loan losses			4,442			5,276			4,477			4,367			4,380			4,442			4,380
Noninterest income (1)				1,847			1,908			2,651			2,788			2,053			1,847			2,053
Noninterest expense				5,401			6,127			6,220			5,951			5,481			5,401			5,481
	Income (loss) before income taxes			888			1,057			908			1,204			952			888			952
Income tax expense				0			(5	)		40			15			0			0			0
	Net income (loss)		$	888		$	1,062		$	868		$	1,189		$	952		$	888		$	952

Common Share Data
	Basic net income (loss) per share		$	0.05		$	0.06		$	0.05		$	0.07		$	0.05		$	0.05		$	0.05
	Diluted net income (loss) per share			0.02			0.03			0.02			0.03			0.03			0.02			0.03
	Dividend			0			0			0			0			0			0			0
	Tangible book value per share (2)			1.08			1.01			1.04			0.99			0.90			1.08			0.90
	Book value per share (2)			0.60			0.53			0.56			0.51			0.41			0.60			0.41
	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			36,193,353			36,082,522			35,818,022			35,631,892			35,631,892			36,193,353			35,631,892
Financial Condition Data
	Total assets		$	631,160		$	653,559		$	632,628		$	615,708		$	597,089		$	631,160		$	597,089
	Loans			483,501			483,518			466,057			461,859			470,424			483,501			470,424
	Allowance for loan losses			(7,567	)		(7,592	)		(8,549	)		(8,219	)		(8,235	)		(7,567	)		(8,235	)
	Investment securities			111,745			112,072			103,853			103,542			97,474			111,745			97,474
	Deposits			497,144			483,097			476,428			468,377			467,334			497,144			467,334
	Borrowings			60,837			96,944			81,636			72,833			57,929			60,837			57,929
	Stockholders' equity			70,819			69,523			70,094			69,266			67,475			70,819			67,475
Financial Ratios and Other Data
	Performance Ratios:
		Net interest margin (3)		3.02	%		2.84	%		2.95	%		3.11	%		3.15	%		3.02	%		3.15	%
		Net interest spread (4)		2.87	%		2.70	%		2.80	%		2.96	%		3.00	%		2.87	%		3.00	%
		Noninterest income to average assets (5)		1.16	%		1.18	%		1.68	%		1.88	%		1.42	%		1.16	%		1.42	%
		Noninterest expense to average assets		3.40	%		3.79	%		3.93	%		4.02	%		3.78	%		3.40	%		3.78	%
		Efficiency ratio (6)		82.88	%		95.91	%		86.42	%		81.82	%		84.40	%		82.88	%		84.40	%
		Earnings (loss) on average assets (7)		0.56	%		0.66	%		0.55	%		0.80	%		0.66	%		0.56	%		0.66	%
		Earnings (loss) on average equity (8)		5.10	%		5.93	%		4.89	%		6.98	%		5.75	%		5.10	%		5.75	%
Asset Quality Ratios:
	Nonaccrual loans to loans (9)			1.32	%		1.26	%		1.16	%		0.81	%		0.81	%		1.32	%		0.81	%
	Nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing to total loans (9)			1.65	%		1.60	%		1.58	%		1.63	%		1.64	%		1.65	%		1.64	%
	Nonperforming assets, restructured loans and loans 90 days or more past due and still accruing to total assets (9)			1.77	%		1.67	%		1.32	%		1.59	%		1.94	%		1.77	%		1.94	%
	Allowance for loan losses to total loans			1.57	%		1.57	%		1.83	%		1.78	%		1.75	%		1.57	%		1.75	%
	Allowance for loan losses to nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing (9)			94.67	%		97.99	%		116.08	%		109.14	%		106.74	%		94.67	%		106.74	%
	Net charge-offs (recoveries) annualized to average loans			0.21	%		0.14	%		-0.22	%		0.12	%		-0.10	%		0.21	%		-0.10	%
Capital Ratios:
	Total equity to total assets			11.02	%		10.64	%		11.08	%		11.25	%		11.30	%		11.02	%		11.30	%
	Total risk-based capital ratio			15.90	%		15.40	%		15.66	%		15.60	%		15.19	%		15.90	%		15.19	%
	Tier 1 risk-based capital ratio			14.65	%		14.15	%		14.41	%		14.34	%		13.93	%		14.65	%		13.93	%
	Leverage capital ratio			11.21	%		11.14	%		11.20	%		11.69	%		11.72	%		11.21	%		11.72	%
Other Data:
	Number of employees (full-time equivalent)			181			171			169			167			180			181			180
	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)

			March 31,			December 31,			September 30,			June 30,			March 31,
			2017			2016			2016			2016			2016
			(Dollars in thousands, except share data)
Assets
Cash and due from banks			$	12,773		$	10,291		$	11,427		$	9,808		$	9,136
Reverse repurchase agreements				11,019			24,275			27,560			20,313			-
Securities available for sale				111,745			112,072			103,853			103,542			97,474
Loans held for sale				2,448			11,469			15,875			11,602			10,176

Loans				483,501			483,518			466,057			461,859			470,424
Allowance for loan losses				(7,567	)		(7,592	)		(8,549	)		(8,219	)		(8,235	)
	Net loans			475,934			475,926			457,508			453,640			462,189

Federal Home Loan Bank Stock				2,070			3,803			3,803			2,170			2,170
Premises and equipment, net				4,369			4,427			4,256			4,358			4,716
Accrued interest receivable				1,377			1,382			1,289			1,290			1,468
Other real estate owned, net				3,153			3,159			982			2,283			3,859
Bank owned life insurance				4,414			4,389			4,363			4,336			4,310
Goodwill and other intangible assets				215			221			226			232			237
Other assets				1,643			2,145			1,486			2,134			1,354
		Total Assets	$	631,160		$	653,559		$	632,628		$	615,708		$	597,089

Liabilities and Stockholders' Equity
Deposits:
	Noninterest-bearing demand		$	76,088		$	77,154		$	87,216		$	82,460		$	74,564
	Interest-bearing demand			33,027			33,832			29,821			31,508			32,096
	Savings			192,175			176,435			169,390			175,955			175,576
	Time			195,854			195,676			190,001			178,454			185,098
		Total deposits		497,144			483,097			476,428			468,377			467,334
Short-term borrowings				60,837			96,944			81,636			72,833			57,929
Accrued interest payable				327			349			319			335			339
Other liabilities				2,033			3,646			4,151			4,897			4,012
		Total liabilities		560,341			584,036			562,534			546,442			529,614

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				158,602			158,552			158,510			158,493			158,493
Accumulated deficit				(154,629	)		(155,517	)		(156,579	)		(157,446	)		(158,636	)
Accumulated other comprehensive loss, net				(1,971	)		(2,329	)		(654	)		(598	)		(1,199	)
Treasury stock 218,499 shares at cost				(529	)		(529	)		(529	)		(529	)		(529	)
		Total stockholders' equity		70,819			69,523			70,094			69,266			67,475
		Total liabilities and stockholders' equity	$	631,160		$	653,559		$	632,628		$	615,708		$	597,089

CIB MARINE BANCSHARES, INC.

Consolidated Statements of Operations (Unaudited)


		At or for the
		Quarters Ended												Three Months Ended
		March 31,		December 31,			September 30,			June 30,		March 31,		March 31,		March 31,
		2017		2016			2016			2016		2016		2017		2016
		(Dollars in thousands)

Interest Income
Loans		$	4,826	$	4,493		$	4,540		$	4,635	$	4,572	$	4,826	$	4,572
Loans held for sale			46		141			153			95		83		46		83
Securities			611		563			513			478		517		611		517
Other investments			79		76			80			6		4		79		4
	Total interest income		5,562		5,273			5,286			5,214		5,176		5,562		5,176

Interest Expense
Deposits			749		697			659			692		705		749		705
Short-term borrowings			143		96			81			37		30		143		30
	Total interest expense		892		793			740			729		735		892		735
	Net interest income		4,670		4,480			4,546			4,485		4,441		4,670		4,441
Provision for (reversal of) loan losses			228		(796	)		69			118		61		228		61
	Net interest income after provision for (reversal of) loan losses		4,442		5,276			4,477			4,367		4,380		4,442		4,380

Noninterest Income
Deposit service charges			113		121			125			121		103		113		103
Other service fees			46		45			47			52		67		46		67
Mortgage Banking revenue, net			1,142		1,414			2,285			2,102		1,336		1,142		1,336
Other income			97		136			206			96		117		97		117
Net gains on sale of securities			0		0			0			0		0		0		0
Net gains (losses) on sale of assets and (writedowns)			449		192			(12	)		417		430		449		430
	Total noninterest income		1,847		1,908			2,651			2,788		2,053		1,847		2,053

Noninterest Expense
Compensation and employee benefits			3,705		4,228			4,426			4,143		3,624		3,705		3,624
Equipment			290		305			277			293		273		290		273
Occupancy and premises			390		390			377			389		435		390		435
Data Processing			140		123			185			151		154		140		154
Federal deposit insurance			87		92			105			106		106		87		106
Professional services			200		156			157			213		249		200		249
Telephone and data communication			81		90			92			99		109		81		109
Insurance			59		60			60			56		54		59		54
Other expense			449		683			541			501		477		449		477
	Total noninterest expense		5,401		6,127			6,220			5,951		5,481		5,401		5,481
Income (loss) from operations before income taxes			888		1,057			908			1,204		952		888		952
Income tax expense			0		(5	)		40			15		0		0		0
	Net income (loss)		888		1,062			868			1,189		952		888		952
Preferred stock dividend			0		0			0			0		0		0		0
	Net income (loss) allocated to common stockholders	$	888	$	1,062		$	868		$	1,189	$	952	$	888	$	952

CIB Marine Bancshares, Inc.

Summary of Preferred Stock Repurchase Program Scenario Analysis

In a letter to shareholders dated April 3, 2017, we discussed a plan to be presented to shareholders at the 2017 Annual Shareholder Meeting on May 25, 2017, in Champaign, Illinois. The Company intends to create a non-mandatory preferred stock repurchase program if the common and preferred shareholders vote in favor of an amendment to the Company's Articles of Incorporation permitting individually negotiated repurchases of the preferred stock. The repurchase of preferred stock at a discount to par is accretive for the Company and its shareholders, and creates the opportunity for liquidity for preferred shareholders who choose for themselves to sell their stock at a mutually agreeable price. The analysis below demonstrates the accretion to book value of preferred stock repurchases under various discount scenarios.


REPURCHASE SCENARIO AT 30% of Liquidation Preference
End of Year		2016	2017	2018	2019	2020	2021	2022	2023
Repurchase Price of Series A as % of Liquidation Preference			30%	30%	30%	30%
Preferred Series A Outstanding, end of period		55,624	35,624	25,624	15,624	0
Cash Used for Repurchase			$6,000,000	$3,000,000	$3,000,000	$4,687,200	no remaining Preferred Series A
	Total Shares of Series A Repurchased		20,000.00	10,000.00	10,000.00	15,624.00
	Tangible Book Value per Common Share, basic	$1.03	$1.83	$2.40	$2.97	$3.71
	Book Value per Common Share, basic	$0.53	$1.49	$2.15	$2.79	$3.67
REPURCHASE SCENARIO AT 70% of Liquidation Preference
End of Year		2016	2017	2018	2019	2020	2021	2022	2023
Repurchase Price of Series A as % of Liquidation Preference			70%	70%	70%	70%	70%	70%	70%
Preferred Series A Outstanding, end of period		55,624	47,053	42,767	38,481	34,195	29,910	25,624	21,338
Cash Used for Repurchase			$6,000,000	$3,000,000	$3,000,000	$3,000,000	$3,000,000	$3,000,000	$3,000,000
	Total Shares of Series A Repurchased		8,571.43	4,285.71	4,285.71	4,285.71	4,285.71	4,285.71	4,285.71
	Tangible Book Value per Common Share, basic	$1.03	$1.30	$1.60	$1.90	$2.20	$2.53	$2.86	$3.18
	Book Value per Common Share, basic	$0.53	$0.86	$1.21	$1.53	$1.87	$2.23	$2.60	$2.96
REPURCHASE SCENARIO AT 30%, 50% then 70% of Liquidation Preference
End of Year		2016	2017	2018	2019	2020	2021	2022	2023
Repurchase Price of Series A as % of Liquidation Preference			30%	50%	70%	70%	70%	70%	70%
Preferred Series A Outstanding, end of period		55,624	35,624	29,624	25,338	21,053	16,767	12,481	8,195
Cash Used for Repurchase			$6,000,000	$3,000,000	$3,000,000	$3,000,000	$3,000,000	$3,000,000	$3,000,000
	Total Shares of Series A Repurchased		20,000.00	6,000.00	4,285.71	4,285.71	4,285.71	4,285.71	4,285.71
	Tangible Book Value per Common Share, basic	$1.03	$1.83	$2.21	$2.51	$2.82	$3.15	$3.47	$3.80
	Book Value per Common Share, basic	$0.53	$1.49	$1.93	$2.25	$2.60	$2.96	$3.32	$3.68

Assumptions

1) Sufficient cash is available from earnings and liquidity to support the repurchase plan, and at the same time support a strong capital position at the subsidiary bank and the company on a consolidated basis.

2) The amendments proposed in the 2017 Proxy Statement are approved by all necessary parties and any and all regulatory approvals are obtained to engage in the repurchase activity.

3) Repurchased shares are cancelled and not retained as treasury stock.

4) Common Stock Issued and Outstanding as reflected in the basic shares used to determine the book values per share reflect 0% forfeiture of Restricted Stock Awards.

5) The Tangible Book Values and Book Values per share reflect both the accretive affects of the repurchase program and a baseline earnings forecast for purposes of demonstrating the potential outcomes.

The scenarios are an expression of possible outcomes with willing parties, free to chose for themselves when and at what prices they are willing to sell their shares of preferred stock for cash. The scenarios do not fully reflect all possible outcomes or the potential upside to the Preferred Shareholders should they retain their holdings.

Contact Information:

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

CIB Marine Bancshares, Inc. Announces 2017 First Quarter Results