Blackhawk Bancorp Announces 2019 First Quarter Earnings

BELOIT, WI / ACCESSWIRE / April 29, 2019 / Blackhawk Bancorp, Inc. (OTCQX: BHWB) reported that for the three months ended March 31, 2019, the Company’s net income totaled $1.08 million, as compared to $2.10 million for the previous quarter, and $1.45 million for the quarter ended March 31, 2018. The 2019 first quarter results included $1.34 million (after-tax) of acquisition, transition, and integration expenses. Excluding these expenses, the 2019 first-quarter net income would have been $2.42 million, a $324,000, or 15%, increase compared to the linked quarter ending December 31, 2018, and a $968,000, or 67%, increase over the first quarter of last year.

Fully diluted earnings per share for the three months ended March 31, 2019, was $0.33, a decrease of $0.31, as compared to $0.64 for the quarter ended December 31, 2018, and a decrease of $0.11 as compared to $0.44 for the quarter ended March 31, 2018. Excluding the acquisition, transition and integration expenses mentioned above, fully diluted earnings per share for the first quarter of 2019 would have been $0.73, increasing by 14% and 66% compared to the quarters ended December 31, 2018, and March 31, 2018, respectively.

The first quarter results produced a Return on Average Equity (ROAE) of 5.12% and a Return on Average Assets (ROAA) of .50%. Excluding the acquisition, transition, and integration expenses the first quarter ROAE and ROAA would have been 11.49% and 1.11%, respectively. “What a great start to the new year,” said Todd James, Chairman and Chief Executive Officer. “Our strategy of expansion and investment in talent and infrastructure continues to drive core earnings growth, producing meaningful value for our customers and shareholders”, he added.

On March 1, 2019, the Company completed its previously announced acquisition of First McHenry Corporation (First McHenry). The transaction was a $23.0 million all-cash purchase that was funded with cash on hand and a $14.0 million senior note. “The integration process is progressing as planned and we couldn’t be more pleased with how the employees have come together to ensure a smooth transition for our new customers,” said James. “The actual acquisition costs incurred are in line with our initial projections and the Company is on track to merge First McHenry’s subsidiary, First National Bank of McHenry, into Blackhawk Bank in the third quarter of this year,” James concluded.

Total assets increased by $149.1 million, or 18.2%, to $966.4 million at March 31, 2019, as compared to $817.3 million as of December 31, 2018. The asset growth in the first quarter was essentially all attributable to the closing of the First McHenry transaction. At closing, $174.3 million of assets were added to the Company’s balance sheet, including a core deposit intangible of $2.6 million and goodwill of $5.1 million. After the closing, approximately $40 million of the acquired securities were sold, with the proceeds being used primarily to reduce borrowings. Net loans grew by $38.2 million, or 7.1%, during the first quarter to $580.0 million, as compared to $541.8 million, at the end of the prior year. However, excluding $41.5 million of net loans from the acquisition, net loans decreased by $3.3 million during the first quarter. Total deposits increased by $168.9 million, or 24.6%, to $854.5 million as compared to $685.6 million at the end of 2018, including $150.1 million of deposits from the First McHenry acquisition.

Net Interest Income

Net interest income totaled $7.79 million for the quarter ending March 31, 2019, an increase of $572,000, or 7.9%, as compared to $7.22 million for the fourth quarter of 2018, and an increase of $1.51 million, or 24.1%, as compared $6.28 million for the quarter ended March 31, 2018. The increase in net interest income compared to the most recent quarter was driven by growth in earnings assets, while the net interest margin increased by just one basis point to 3.92%. This growth included a $28.3 million, or 5.3% increase in average total loans, a $27.9 million, or 13.9% increase in average investment securities and a $19.6 million increase in average interest-bearing deposits at other banks. The First McHenry acquisition contributed $14.3 million and $23.7 million to the increases in total average loans and total average investment securities, respectively. Average total deposits increased by $76.5 million, or 11.1%, including a $52.1 million contribution from the First McHenry acquisition. The increase in net interest income compared to the first quarter of 2018 was driven by both growth and an improvement in the net interest margin, with average total earning assets increasing by $143.4 million, or 21.2%, and the net interest margin improving by nine basis points to 3.91%. The earning asset growth included a $78.6 million, or 16.2% increase in average total loans and a $57.6 million, or 33.6%, increase average investment securities. Average total deposits increased by $123.5 million, or 19.3%.

Provision for Loan Losses and Credit Quality

The provision for loan losses for the quarter ended March 31, 2019, totaled $270,000, as compared to $150,000 for the quarter ended December 31, 2018, and $510,000 for the first quarter of 2018.

Total nonperforming assets, which include troubled debt restructures that are performing in accordance with their modified terms, equaled $7.70 million as of March 31, 2019, as compared to $6.23 million as of December 31, 2018, and $8.62 million at March 31, 2018. The First McHenry acquisition contributed $801,000 to the increase of nonperforming assets as of March 31, 2019. At March 31, 2019, the ratio of nonperforming assets to total assets equaled 0.80%, as compared to 0.76% at December 31, 2018, and 1.16% at March 31, 2018. The allowance for loan losses to total loans was 1.28% as of March 31, 2019, as compared to 1.32% at December 31, 2018, and 1.22% as of March 31, 2018. The ratio of the allowance for loan losses to nonperforming loans decreased to 102.5% as of March 31, 2019, as compared to 119.8% at December 31, 2018, and 75.9% at March 31, 2018. In addition to the balance of the allowance for loan losses, the balance sheet includes a $621,000 credit-related valuation discount attributable to the non-credit impaired loans acquired in the First McHenry transaction.

Non-Interest Income and Operating Expenses

Non-interest income for the quarter ended March 31, 2019, totaled $2.98 million, which was a $111,000 increase as compared to $2.87 million for the quarter ended December 31, 2018, and a $486,000 increase over the $2.49 million total for the first quarter of 2018. The 2019 first quarter results included a total of $47,000 of deposit service fees, debit interchange and other fee income from the First McHenry acquisition. Excluding the First McHenry contribution, the non-interest income increase compared to the most recent quarter was driven by a $178,000 increase in net securities gains, an $83,000 increase in interchange fees, and a $155,000 increase in other income. The increases were offset by decreases in revenue from the sale and servicing of mortgage loans and deposit service fees. When compared to the first quarter of 2018 non-interest income excluding the First McHenry Contribution, increased $439,000. The increase included a $153,000 increase in net securities gains, a $106,000 increase revenue from the sale and servicing of mortgage loans and a $178,000 increase in deposit service fees, interchange fees, and other income.

Operating expenses for the first quarter ending March 31, 2019, totaled $9.25 million, increasing $1.95 million, or 26.6%, as compared to the quarter ended December 31, 2018, and $2.70 million, or 41.1%, as compared to the first quarter of 2018. The 2019 first quarter expenses include $1.83 million in nonrecurring expenses related to the First McHenry acquisition and integration, including integrative salaries and benefits expense of $225,000, $1.35 million in data-processing contract termination and negotiated conversion fees and $257,000 in professional fees. In addition, the First McHenry acquisition contributed an additional $287,000 to operating expenses related to on-going operations.

Income Taxes

The provision for income taxes was $173,000 in the first quarter of 2019 as compared to $538,000 for the quarter ended December 31, 2018, and $254,000 for the first quarter of 2018. Note that the Company’s effective tax rate differs from statutory tax rates primarily due to tax-exempt income from municipal securities and loans, increases in cash surrender value of life insurance, tax benefits of a captive insurance company, and tax credits related to a Low-Income Housing Tax Credit investment.

Capital

Shareholders’ equity increased $3.1 million to $87.4 million as of March 31, 2019, as compared to $84.3 million at December 31, 2018, and $78.0 million at March 31, 2018. With the completion of the First McHenry transaction, $174.3 million of assets were added to the Company’s balance sheet, which included a core deposit intangible asset of $2.6 million and goodwill of $5.1 million. With those additions, tangible capital to tangible assets decreased to 7.83% as of March 31, 2019, as compared to 9.76% at December 31, 2018, and 9.89% as of March 31, 2018. The Company is considered well capitalized under all regulatory requirements.

Outlook

Blackhawk expects to grow by pursuing creditworthy and profitable business and consumer relationships in its Wisconsin and Illinois markets, emphasizing the value of its personal attention and service that remains unmatched by larger competitors. In addition to such organic growth opportunities, Blackhawk may also pursue growth through selective acquisition opportunities. Growth, combined with the ongoing strengthening of the company’s credit quality, is expected to lead to continued earnings growth. Growth and earnings could, however, be tempered by such occurrences as uncertain economic conditions, competitive pressures, changes in regulatory burden and the interest rate environment.

About Blackhawk Bancorp

Blackhawk Bancorp, Inc. is headquartered in Beloit, Wisconsin and is the parent company of Blackhawk Bank and First National Bank of McHenry. The combined entity operates eleven full-service banking centers and a dedicated commercial office, which are located in Rock County, Wisconsin and the Illinois counties of Winnebago, Boone, McHenry, Lake, and Kane. The Company’s footprint stretches along the I-90 corridor from Janesville, Wisconsin to Elgin, Illinois and into the Northwest collar counties of the Chicagoland area. The company offers a variety of value-added consultative services to its business customers and their employees related to the financial products it provides.

Disclosures Regarding non-GAAP Measures

This report refers to financial measures that are identified as non-GAAP that the Company believes help to evaluate and measure the Company’s performance, including the presentation of net interest income to interest-earning assets, the net interest margin ratio, and efficiency ratio calculations on a taxable-equivalent basis. The Company believes that these non-GAAP measures are helpful because they provide investors additional information to compare operating performance in a manner similar to management, the industry, bank stock analysts, and bank regulators. Non-GAAP measures are also used to assist investor comparison by identifying nonrecurring events such as the 2019 acquisition-related expenses (estimated after-tax) and the impact such net expenses have on the performance measures of return on average assets, return on average equity, diluted earnings per share, and the efficiency ratio. This supplemental information should not be considered in isolation or as a substitute for the related GAAP measures.

Forward-Looking Statements

When used in this communication, the words “believes,” “expects,” “likely”, “would”, and similar expressions are intended to identify forward-looking statements. The company’s actual results may differ materially from those described in the forward-looking statements. Factors which could cause such a variance to occur include, but are not limited to: heightened competition; adverse state and federal regulation; failure to obtain new or retain existing customers; ability to attract and retain key executives and personnel; changes in interest rates; unanticipated changes in industry trends; unanticipated changes in credit quality and risk factors, including general economic conditions particularly in the Company’s markets; potential deterioration in real estate values, success in gaining regulatory approvals when required; changes in the Federal Reserve Board monetary policies; unexpected outcomes of new and existing litigation in which Blackhawk or its subsidiaries, officers, directors or employees is named defendants; technological changes; changes in accounting principles generally accepted in the United States; changes in assumptions or conditions affecting the application of “critical accounting policies”; inability to recover previously recorded losses as anticipated, and the inability of third party vendors to perform critical services for the company or its customers. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that future events or plans contemplated by the Company will be achieved. The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information or otherwise.

Further information is available on the company’s website at www.blackhawkbank.com.

CONTACT:

Blackhawk Bancorp, Inc.
Todd J. James, Chairman & CEO
tjames@blackhawkbank.com

Mary King McGovern, SVP & CFO
mmcgovern@blackhawkbank.com
Phone: (608) 364-8911

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2019 AND DECEMBER 31, 2018
(UNAUDITED)
March 31,
December 31,
Assets
2019
2018
(Dollars in thousands, except
share and per share data)
Cash and due from banks
$ 14,581 $ 16,677
Interest-bearing deposits in banks and other
35,862 2,760
Total cash and cash equivalents
50,443 19,437
Equity securities at fair value
2,295 2,250
Securities available-for-sale
268,370 198,670
Loans held for sale
3,347 5,164
Federal Home Loan Bank stock, at cost
708 1,643
Loans, less allowance for loan losses of $7,545 and $7,339
at March 31, 2019 and December 31, 2018, respectively
580,003 541,760
Premises and equipment, net
21,004 14,874
Goodwill
10,183 5,037
Core Deposit Intangible
2,585
Mortgage servicing rights
3,005 2,969
Cash surrender value of bank-owned life insurance
10,895 10,812
Other assets
13,598 14,671
Total assets
$ 966,436 $ 817,287
Liabilities and Stockholders’ Equity
Liabilities
Deposits:
Noninterest-bearing
$ 158,086 $ 121,024
Interest-bearing
696,419 564,615
Total deposits
854,505 685,639
Subordinated debentures and notes (including $1,031 at fair value at
March 31, 2019 and December 31, 2018)
5,155 5,155
Senior secured term note
14,000
Other borrowings
36,500
Other liabilities
5,360 5,701
Total liabilities
879,020 732,995
Stockholders’ equity
Common stock, $0.01 par value, 10,000,000 shares authorized;
3,391,166 and 3,369,192 shares issued as of March 31, 2019 and
December 31, 2018, respectively
34 34
Additional paid-in capital
33,632 33,478
Retained earnings
52,759 52,011
Treasury stock, 104,570 and 97,570 shares at cost as of March 31, 2019
and December 31, 2018, respectively
(1,391 ) (1,204 )
Accumulated other comprehensive income (loss)
2,382 (27 )
Total stockholders’ equity
87,416 84,292
Total liabilities and stockholders’ equity
$ 966,436 $ 817,287
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended March 31,
2019
2018
(Amounts in thousands, except per share data)
Interest Income:
Interest and fees on loans
$ 7,542 $ 5,875
Interest on available-for-sale securities:
Taxable
1,345 772
Tax-exempt
448 375
Interest on interest-bearing deposits and other
158 73
Total interest income
9,493 7,095
Interest Expense:
Interest on deposits
1,463 752
Interest on subordinated debentures and notes
65 53
Interest on senior secured term note
67
Interest on other borrowings
105 12
Total interest expense
1,700 817
Net interest income before provision for loan losses
7,793 6,278
Provision for loan losses
270 510
Net interest income after provision for loan losses
7,523 5,768
Noninterest Income:
Service charges on deposits accounts
808 741
Net gain on sale of loans
581 470
Net loan servicing income
172 177
Debit card interchange fees
789 695
Net gains on sales of securities available-for-sale
159 6
Increase in cash surrender value of bank-owned life insurance
83 81
Other
388 324
Total noninterest income
2,980 2,494
Noninterest Expenses:
Salaries and employee benefits
4,585 3,867
Occupancy and equipment
992 832
Data processing
1,827 395
Debit card processing and issuance
334 293
Advertising and marketing
108 153
Amortization of intangibles
40
Professional fees
579 256
Office Supplies
86 110
Telephone
116 124
Other
584 526
Total noninterest expenses
9,251 6,556
Income before income taxes
1,252 1,706
Provision for income taxes
173 254
Net income
$ 1,079 $ 1,452
Key Ratios
Basic Earnings Per Common Share
$ 0.33 $ 0.44
Diluted Earnings Per Common Share
0.33 0.44
Dividends Per Common Share
0.10 0.08
Net Interest Margin (1)
3.92 % 3.83 %
Efficiency Ratio (1)(2)
86.07 % 73.79 %
Return on Assets
0.50 % 0.81 %
Return on Common Equity
5.12 % 7.56 %

(1) Non-GAAP Presentations: Management discloses certain non-GAAP financial measures to evaluate and measure the Company’s performance, including the presentation of the net interest margin and efficiency ratio calculations on a taxable equivalent basis (“TE”). The net interest margin ratio is calculated by dividing net interest income on a tax equivalent basis by average earning assets for the period. Management believes this measure provides investors with information regarding comparative balance sheet profitability.

(2) The efficiency ratio is calculated as noninterest expense divided by the sum of net interest income on a TE basis, noninterest income less any securities gains (losses) or other gains (losses), and also includes a TE adjustment on the increases in cash surrender value of bank-owned life insurance.
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
For the Quarter Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2019
2018
2018
2018
2018
(Dollars in thousands, except per share data)
Interest Income:
Interest and fees on loans
$ 7,542 $ 7,174 $ 6,884 $ 6,610 $ 5,875
Interest on available-for-sale securities:
Taxable
1,345 1,062 980 839 772
Tax-exempt
448 431 389 359 375
Interest on interest-bearing deposits and other
158 41 208 59 73
Total interest income
9,493 8,708 8,461 7,867 7,095
Interest Expense:
Interest on deposits
1,463 1,336 1,213 991 752
Interest on subordinated debentures and notes
65 62 59 59 53
Interest on senior secured term note
67
Interest on other borrowings
105 89 34 12
Total interest expense
1,700 1,487 1,272 1,084 817
Net interest income before provision for loan losses
7,793 7,221 7,189 6,783 6,278
Provision for loan losses
270 150 150 370 510
Net interest income after provision for loan losses
7,523 7,071 7,039 6,413 5,768
Noninterest Income:
Service charges on deposits accounts
808 849 829 769 741
Net gain on sale of loans
581 886 1,070 960 470
Net loan servicing income
172 170 171 173 177
Debit card interchange fees
789 683 663 675 695
Net gains on sales of securities available-for-sale
159 (19 ) 59 6
Increase in cash surrender value of bank-owned life insurance
83 73 72 73 81
Other
388 227 336 329 324
Total noninterest income
2,980 2,869 3,141 3,038 2,494
Noninterest Expenses:
Salaries and employee benefits
4,585 4,279 4,081 4,050 3,867
Occupancy and equipment
992 824 826 891 832
Data processing
1,827 425 428 417 395
Debit card processing and issuance
334 334 339 336 293
Advertising and marketing
108 176 126 143 153
Amortization of intangibles
40
Professional fees
579 443 350 316 256
Office Supplies
86 91 77 79 110
Telephone
116 129 125 126 124
Other
584 605 555 604 526
Total noninterest expenses
9,251 7,306 6,907 6,962 6,556
Income before income taxes
1,252 2,634 3,273 2,489 1,706
Provision for income taxes
173 538 695 473 254
Net income
$ 1,079 $ 2,096 $ 2,578 $ 2,016 $ 1,452
Key Ratios
Basic Earnings Per Common Share
$ 0.33 $ 0.64 $ 0.78 $ 0.61 $ 0.44
Diluted Earnings Per Common Share
0.33 0.64 0.78 0.61 0.44
Dividends Per Common Share
0.10 0.10 0.10 0.10 0.08
Net Interest Margin (1)
3.92 % 3.91 % 3.91 % 3.91 % 3.83 %
Efficiency Ratio (1)(2)
86.07 % 71.37 % 66.55 % 70.41 % 73.79 %
Return on Assets
0.50 % 1.05 % 1.29 % 1.06 % 0.81 %
Return on Common Equity
5.12 % 10.13 % 12.67 % 10.25 % 7.56 %

(1) Non-GAAP Presentations: Management discloses certain non-GAAP financial measures to evaluate and measure the Company’s performance, including the presentation of net interest income, net interest margin and efficiency ratio calculations on a taxable equivalent basis (“TE”). The net interest margin is calculated by dividing net interest income on a TE basis by average earning assets for the period. Management believes this measure provides investors with information regarding comparative balance sheet profitability.

(2) The efficiency ratio is calculated as noninterest expense divided by the sum of net interest income on an TE basis, noninterest income less any securities gains (losses) or other gains (losses), and also includes a TE adjustment on interest on tax-exempt securities, loans, and the increases in cash surrender value of bank-owned life insurance.
(UNAUDITED)
As of
March 31,
December 31,
September 30,
June 30,
March 31,
2019
2018
2018
2018
2018
(Amounts in thousands, except per share data)
Cash and due from banks
$ 14,581 $ 16,677 $ 19,526 $ 16,942 $ 16,727
Interest-bearing deposits in banks and other
35,862 2,760 5,878 43,001 13,503
Securities
270,665 200,920 197,507 181,466 171,814
Net loans/leases
583,350 546,924 502,463 495,005 497,630
Goodwill
10,183 5,037 5,037 5,037 5,037
Other assets
51,795 44,969 41,943 39,978 37,743
Total assets
$ 966,436 $ 817,287 $ 772,354 $ 781,429 $ 742,454
Deposits
$ 854,505 $ 685,639 $ 680,136 $ 692,968 $ 656,114
Subordinated debentures
5,155 5,155 5,155 5,155 5,155
Borrowings
14,000 36,500
Other liabilities
5,360 5,701 6,241 3,856 3,185
Stockholders’ equity
87,416 84,292 80,822 79,450 78,000
Total liabilities and stockholders’ equity
$ 966,436 $ 817,287 $ 772,354 $ 781,429 $ 742,454
ASSET QUALITY DATA
(Amounts in thousands)
March 31,
December 31,
September 30,
June 30,
March 31,
2019
2018
2018
2018
2018
Non-accrual loans
$ 3,815 $ 2,312 $ 3,362 $ 3,539 $ 3,511
Accruing loans past due 90 days or more
17 388 139
Troubled debt restructures – accruing
3,546 3,797 3,873 4,283 4,456
Total nonperforming loans
$ 7,361 $ 6,126 $ 7,235 $ 8,210 $ 8,106
Other real estate owned
339 104 237 350 511
Total nonperforming assets
$ 7,700 $ 6,230 $ 7,472 $ 8,560 $ 8,617
Total loans
$ 590,895 $ 554,263 $ 509,674 $ 501,504 $ 503,779
Allowance for loan losses
$ 7,545 $ 7,339 $ 7,211 $ 6,499 $ 6,149
$ 583,350 $ 546,924 $ 502,463 $ 495,005 $ 497,630
Nonperforming Assets to total Assets
0.80 % 0.76 % 0.97 % 1.10 % 1.16 %
Nonperforming loans to total loans
1.25 % 1.11 % 1.42 % 1.64 % 1.61 %
Allowance for loan losses to total loans
1.28 % 1.32 % 1.41 % 1.30 % 1.22 %
Allowance for loan losses to nonperforming loans
102.5 % 119.8 % 99.7 % 79.2 % 75.9 %
For the Quarter Ended
March 31,
December 31,
September 30,
June 30,
March 31,
ROLLFORWARD OF ALLOWANCE
2019
2018
2018
2018
2018
Beginning Balance
$ 7,339 $ 7,211 $ 6,499 $ 6,149 $ 5,503
Provision
270 150 150 370 510
Loans charged off
102 76 105 178 52
Loan recoveries
38 54 667 158 188
Net charge-offs
64 22 (562 ) 20 (136 )
Ending Balance
$ 7,545 $ 7,339 $ 7,211 $ 6,499 $ 6,149
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
ANALYSIS of AVERAGE BALANCES WITH RESULTANT INTEREST and TAX-EQUIVALENT RATES

Average Balance Sheet with Resultant Interest and Rates
(Dollars in thousands – unaudited)
(Yields on a tax-equivalent basis) (1)

For the Quarter Ended
March 31, 2019
December 31, 2018
March 31, 2018
Average
Average
Average
Average
Average
Average
Balance
Interest
Rate
Balance
Interest
Rate
Balance
Interest
Rate
Interest Earning Assets:
Interest-bearing deposits and other
$ 27,139 $ 158 2.37 % $ 7,554 $ 41 2.18 % $ 20,001 $ 73 1.48 %
Investment securities:
Taxable investment securities
170,477 1,345 3.20 % 144,565 1,062 2.91 % 120,523 772 2.60 %
Tax-exempt investment securities
58,645 448 4.03 % 56,653 431 3.86 % 51,004 375 3.83 %
Total Investment securities
229,122 1,793 3.41 % 201,218 1,493 3.18 % 171,527 1,147 2.96 %
Loans
563,927 7,542 5.42 % 535,659 7,174 5.31 % 485,284 5,875 4.91 %
Total Earning Assets
$ 820,188 $ 9,493 4.76 % $ 744,431 $ 8,708 4.71 % $ 676,812 $ 7,095 4.32 %
Allowance for loan losses
(7,446 ) (7,277 ) (5,800 )
Cash and due from banks
16,567 17,442 18,080
Other assets
52,023 39,495 41,744
Total Assets
$ 881,332 $ 794,091 $ 730,836
Interest Bearing Liabilities:
Interest bearing checking accounts
$ 243,543 $ 315 0.52 % $ 220,536 $ 267 0.48 % $ 224,529 $ 241 0.43 %
Savings and money market deposits
267,052 642 0.97 % 232,669 559 0.95 % 207,427 250 0.49 %
Time deposits
111,365 506 1.84 % 107,599 510 1.88 % 90,261 261 1.17 %
Total interest bearing deposits
621,960 1,463 0.95 % 560,804 1,336 0.95 % 522,217 752 0.58 %
Subordinated debentures and notes
5,155 65 5.11 % 5,155 62 4.76 % 5,155 53 4.16 %
Borrowings
21,616 172 3.23 % 14,257 89 2.43 % 3,242 12 1.55 %
Total Interest-Bearing Liabilities
$ 648,731 $ 1,700 1.06 % $ 580,216 $ 1,487 1.02 % $ 530,614 $ 817 0.62 %
Interest Rate Spread
3.70 % 3.69 % 3.70 %
Noninterest checking accounts
142,178 126,816 118,376
Other liabilities
4,993 4,956 3,935
Total liabilities
795,902 711,988 652,925
Total Stockholders’ equity
85,430 82,103 77,911
Total Liabilities and
Stockholders’ Equity
$ 881,332 $ 794,091 $ 730,836
Net Interest Income/Margin (1)
$ 7,793 3.92 % $ 7,221 3.91 % $ 6,278 3.83 %

(1) Management discloses certain non-GAAP financial measures to evaluate and measure the Company’s performance including a presentation of net interest income with a net interest margin on a tax-equivalent (TE) basis. The net interest margin is calculated by dividing net interest income on a TE basis by average earning assets for the period. Management believes this measure provides investors with information regarding comparative balance sheet profitability. Nonaccrual loans are included in the above-stated average balances.

SOURCE: Blackhawk Bancorp, Inc.

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