CIB Marine Bancshares, Inc. Announces 2016 Second Quarter

WAUKESHA, WI --(Marketwired - July 14, 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 second quarter of 2016. Net income for the quarter was $1.2 million or $0.07 basic earnings per share, and for the six months ending June 30, 2016, $2.1 million or $0.12 per share. Earnings per share on a diluted basis for the same quarter and six month period were $0.03 and $0.06, respectively. This reflects a substantial increase over the prior year's results for the same periods.

Select highlights for the quarter include:

Return on average assets was 0.80% for the second quarter of 2016 and 0.73% for the six months ending June 30, 2016, compared to -0.11% and -0.05% for the same periods in 2015.
Net income for subsidiary CIBM Bank was $1.4 million for the second quarter and $2.1 million for the six months ending June 30, 2016; compared to $0.1 million and $0.3 million for the same periods of 2015, respectively.
Due primarily to an increase in average loan balances, net interest income increased $0.5 million for the second quarter and $1.1 million for the six months ending June 30, 2016, relative to the same periods of 2015.
Non-interest income increased $1.4 million for the second quarter and $2.0 million for the six months ending June 30, 2016, relative to the same periods of 2015. Year-to-date results compared to the same period of 2015 reflect a $1.1 million improvement in net mortgage banking revenues and $1.0 million in net gains/(losses) on sale of assets and write-downs, comprised primarily of gains on sale of other real estate owned.
Non-performing assets to total assets continued its decline to 1.59%, compared to 2.25% from year-end 2015 and 2.83% from the same quarter-end of 2015.
By the end of the second quarter of 2016, our actions for expense reductions announced in February 2016 were substantially complete. The second half of 2016 will more directly reflect the full amount of the $1.1 million per annum expense reductions.

"CIB Marine is reporting an even stronger second quarter than the first with substantial revenue improvements and relatively limited increases in expenses. Results reflect continued improvement in the critical areas we identified in our strategic goals," said Mr. J. Brian Chaffin, President and Chief Executive Officer of CIB Marine Bancshares, Inc. "Whereas the first quarter was dominated by stronger loan growth, the second quarter has started to reflect improved results from our mortgage banking division and our initiative to originate and sell the government guaranteed portion of SBA loans. In addition, CIB Marine began funding a SBA asset financing facility and increased its investment security holdings."

The Company also announced that it recently agreed to settle claims related to asset purchase transactions in 2006 and 2007. CIB Marine will receive approximately $1.3 million net of costs in a structured settlement, the majority of which is expected to be received in the second half of 2016. To date, none of the structured settlement has been received or recorded. As the payments are received, CIB Marine will record them as a loan loss recovery, which may result in a credit provision (i.e., a reversal of loan losses) in those future reporting periods thereby potentially increasing CIB Marine's net income by an amount up to the recovery.

Mr. Chaffin added, "As we look forward, we are focused on fulfilling our mission and growing our client relationship-based banking businesses along our corporate, mortgage and retail lines; at the same time further developing our SBA lending business and other related complementary banking and trust services as we leverage our geographic footprint and operations."

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.

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															Six Months Ended
			June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
			2016			2016			2015			2015			2015			2016			2015
			(Dollars in thousands, except share and per share data)
Selected Statement of Operations Data
Interest and dividend income			$	5,214		$	5,176		$	4,874		$	4,657		$	4,539		$	10,390		$	8,999
Interest expense				729			735			654			595			557			1,464			1,128
	Net interest income			4,485			4,441			4,220			4,062			3,982			8,926			7,871
Provision for (reversal of) loan losses				118			61			215			(337	)		97			179			183
	Net interest income after provision for (reversal of) loan losses			4,367			4,380			4,005			4,399			3,885			8,747			7,688
Noninterest income (1)				2,788			2,053			592			1,022			1,436			4,841			2,812
Noninterest expense				5,951			5,481			5,386			5,114			5,464			11,432			10,617
	Income (loss) before income taxes			1,204			952			(789	)		307			(143	)		2,156			(117	)
Income tax expense				15			0			6			0			0			15			0
	Net income (loss)		$	1,189		$	952		$	(795	)	$	307		$	(143	)	$	2,141		$	(117	)

Common Share Data
	Basic net income (loss) per share		$	0.07		$	0.05		$	(0.04	)	$	0.02		$	(0.01	)	$	0.12		$	(0.01	)
	Diluted net income (loss) per share			0.03			0.03			(0.04	)		0.01			(0.01	)		0.06			(0.01	)
	Dividend			0			0			0			0			0			0			0
	Tangible book value per share (2)			0.99			0.90			0.79			0.90			0.89			0.99			0.89
	Book value per share (2)			0.51			0.41			0.31			0.42			0.41			0.51			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			35,631,892			35,631,892			18,127,892			35,631,892			18,127,892			35,631,892			18,127,892
Financial Condition Data
	Total assets		$	615,708		$	597,089		$	571,233		$	531,744		$	525,513		$	615,708		$	525,513
	Loans			461,859			470,424			445,050			414,643			394,319			461,859			394,319
	Allowance for loan losses			(8,219	)		(8,235	)		(8,064	)		(7,883	)		(7,670	)		(8,219	)		(7,670	)
	Investment securities			103,542			97,474			94,702			92,674			90,912			103,542			90,912
	Deposits			468,377			467,334			443,571			415,185			402,858			468,377			402,858
	Borrowings			72,833			57,929			58,883			45,396			52,288			72,833			52,288
	Stockholders' equity			69,266			67,475			65,586			67,616			67,466			69,266			67,466
Financial Ratios and Other Data
	Performance Ratios:
		Net interest margin (3)		3.11	%		3.15	%		3.14	%		3.18	%		3.18	%		3.13	%		3.20	%
		Net interest spread (4)		2.96	%		3.00	%		2.98	%		3.03	%		3.03	%		2.98	%		3.05	%
		Noninterest income to average assets (5)		1.88	%		1.42	%		0.43	%		0.77	%		1.11	%		1.65	%		1.10	%
		Noninterest expense to average assets		4.02	%		3.78	%		3.89	%		3.87	%		4.22	%		3.90	%		4.17	%
		Efficiency ratio (6)		81.82	%		84.40	%		111.93	%		100.59	%		100.85	%		83.04	%		99.50	%
		Earnings (loss) on average assets (7)		0.80	%		0.66	%		-0.57	%		0.23	%		-0.11	%		0.73	%		-0.05	%
		Earnings (loss) on average equity (8)		6.98	%		5.75	%		-4.65	%		1.79	%		-0.84	%		6.37	%		-0.34	%
Asset Quality Ratios:
	Nonaccrual loans to loans (9)			0.81	%		0.81	%		0.70	%		0.75	%		1.39	%		0.81	%		1.39	%
	Nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing to total loans (9)			1.63	%		1.64	%		1.96	%		1.68	%		2.44	%		1.63	%		2.44	%
	Nonperforming assets, restructured loans and loans 90 days or more past due and still accruing to total assets (9)			1.59	%		1.94	%		2.25	%		2.20	%		2.83	%		1.59	%		2.83	%
	Allowance for loan losses to total loans			1.78	%		1.75	%		1.81	%		1.90	%		1.95	%		1.78	%		1.95	%
	Allowance for loan losses to nonaccrual loans, restructured loans and loans 90 days or more past due and still accruing (9)			109.14	%		106.74	%		92.25	%		113.03	%		79.70	%		109.14	%		79.70	%
	Net charge-offs (recoveries) annualized to average loans			0.12	%		-0.10	%		0.03	%		-0.54	%		0.01	%		0.01	%		0.04	%
Capital Ratios:
	Total equity to total assets			11.25	%		11.30	%		11.48	%		12.72	%		12.84	%		11.25	%		12.84	%
	Total risk-based capital ratio			15.59	%		15.19	%		15.45	%		16.57	%		16.86	%		15.59	%		16.86	%
	Tier 1 risk-based capital ratio			14.34	%		13.93	%		14.20	%		15.31	%		15.60	%		14.34	%		15.60	%
	Leverage capital ratio			11.69	%		11.72	%		12.27	%		13.01	%		13.09	%		11.69	%		13.09	%
Other Data:
	Number of employees (full-time equivalent)			167			180			173			159			158			167			158
	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)

			June 30,			March 31,			December 31,			September 30,			June 30,
			2016			2016			2015			2015			2015
			(Dollars in thousands, except share data)
Assets
Cash and due from banks			$	9,808		$	9,136		$	9,170		$	8,037		$	9,407
Reverse repurchase agreements			$	20,313		$	-		$	-		$	-		$	-
Securities available for sale				103,542			97,474			94,702			92,674			90,912
Loans held for sale				11,602			10,176			12,275			5,157			18,440

Loans				461,859			470,424			445,050			414,643			394,319
Allowance for loan losses				(8,219	)		(8,235	)		(8,064	)		(7,883	)		(7,670	)
	Net loans			453,640			462,189			436,986			406,760			386,649

Federal Home Loan Bank Stock				2,170			2,170			2,170			2,170			2,170
Premises and equipment, net				4,358			4,716			4,771			4,830			4,826
Accrued interest receivable				1,290			1,468			1,296			1,471			1,245
Other real estate owned, net				2,283			3,859			4,126			4,698			5,229
Bank owned life insurance				4,336			4,310			4,285			4,259			4,234
Goodwill and other intangible assets				232			237			243			248			254
Other assets				2,134			1,354			1,209			1,440			2,147
		Total Assets	$	615,708		$	597,089		$	571,233		$	531,744		$	525,513

Liabilities and Stockholders' Equity
Deposits:
	Noninterest-bearing demand		$	82,460		$	74,564		$	77,580		$	70,644		$	74,514
	Interest-bearing demand			31,508			32,096			33,192			30,320			29,909
	Savings			175,955			175,576			162,663			153,134			155,364
	Time			178,454			185,098			170,136			161,087			143,071
		Total deposits		468,377			467,334			443,571			415,185			402,858
Short-term borrowings				72,833			57,929			58,883			45,396			52,288
Accrued interest payable				335			339			321			305			272
Other liabilities				4,897			4,012			2,872			3,242			2,629
		Total liabilities		546,442			529,614			505,647			464,128			458,047

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				158,493			158,493			158,493			158,493			158,493
Accumulated deficit				(157,446	)		(158,636	)		(159,588	)		(158,793	)		(159,100	)
Accumulated other comprehensive loss, net				(598	)		(1,199	)		(2,136	)		(901	)		(744	)
Treasury stock 218,499 shares at cost				(529	)		(529	)		(529	)		(529	)		(529	)
		Total stockholders' equity		69,266			67,475			65,586			67,616			67,466
		Total liabilities and stockholders' equity	$	615,708		$	597,089		$	571,233		$	531,744		$	525,513

CIB MARINE BANCSHARES, INC.

Consolidated Statements of Operations (Unaudited)


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

Interest Income
Loans			$	4,635	$	4,572	$	4,248		$	4,044		$	3,850		$	9,207	$	7,680
Loans held for sale				95		83		77			58			134			178		206
Securities				478		517		546			553			552			995		1,107
Other investments				6		4		3			2			3			10		6
	Total interest income			5,214		5,176		4,874			4,657			4,539			10,390		8,999

Interest Expense
Deposits				692		705		640			583			542			1,397		1,104
Short-term borrowings				37		30		14			12			15			67		24
	Total interest expense			729		735		654			595			557			1,464		1,128
	Net interest income			4,485		4,441		4,220			4,062			3,982			8,926		7,871
Provision for (reversal of) loan losses				118		61		215			(337	)		97			179		183
	Net interest income after provision for (reversal of) loan losses for (reversal of) loan losses			4,367		4,380		4,005			4,399			3,885			8,747		7,688

Noninterest Income
Deposit service charges				121		103		113			119			110			224		218
Other service fees				52		67		60			73			54			119		103
Mortgage Banking revenue, net				2,102		1,336		545			805			1,253			3,438		2,374
Other income				96		117		104			102			50			213		238
Net gains on sale of securities				0		0		0			0			0			0		13
Net gains (losses) on sale of assets and (writedowns)				417		430		(230	)		(77	)		(31	)		847		(134	)
	Total noninterest income			2,788		2,053		592			1,022			1,436			4,841		2,812

Noninterest Expense
Compensation and employee benefits				4,143		3,624		3,419			3,195			3,443			7,767		6,901
Equipment				293		273		277			262			261			566		529
Occupancy and premises				389		435		396			404			376			824		776
Data Processing				151		154		158			173			144			305		290
Federal deposit insurance				106		106		104			110			106			212		211
Professional services				213		249		228			277			284			462		437
Telephone and data communication				99		109		113			86			103			208		212
Insurance				56		54		53			55			56			110		113
Other expense				501		477		638			552			691			978		1,148
	Total noninterest expense			5,951		5,481		5,386			5,114			5,464			11,432		10,617
Income (loss) from operations before income taxes				1,204		952		(789	)		307			(143	)		2,156		(117	)
Income tax expense				15		0		6			0			0			15		0
	Net income (loss)			1,189		952		(795	)		307			(143	)		2,141		(117	)
Preferred stock dividend				0		0		0			0			0			0		0
		Net income (loss) allocated to common stockholders	$	1,189	$	952	$	(795	)	$	307		$	(143	)	$	2,141	$	(117	)

Contact Information:

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

CIB Marine Bancshares, Inc. Announces 2016 Second Quarter Results