Blackhawk Bancorp Announces 2019 Third Quarter Earnings

BELOIT, WI / ACCESSWIRE / October 17, 2019 / Blackhawk Bancorp, Inc. (OTCQX:BHWB) reported net income of $3.4 million for the third quarter of 2019, a 24% increase over the $2.75 million earned the previous quarter, and a 33% increase over the $2.58 million earned the third quarter of 2018. Fully diluted earnings per share (EPS) for the quarter ended September 30, 2019, was $1.03, an increase of $0.20 as compared to $0.83 for the quarter ended June 30, 2019 and an increase of $0.25 as compared to $0.78 for the same quarter a year ago. The third quarter 2019 results produced an annualized Return on Average Equity (ROAE) of 14.25% and Return on Average Assets (ROAA) of 1.40%. The third quarter results were boosted by a $624,000 (net of tax), gain on the sale of securities, which contributed $0.19 to fully diluted EPS, 2.62% to annualized ROAE and .26% to annualized ROAA.

For the nine months ended September 30, 2019, the company reported net income of $7.25 million, a 20% increase over the $6.05 million reported for the first nine months of 2018. Diluted earnings per share for the first nine months of 2019 increased by 20% to $2.20 compared to $1.83 for same period last year. The nine-month results produced a return on average assets of 1.04% and a return on average equity of 10.82%. The 2019 results include $1.45 million (net of tax) of non-recurring acquisition and integration related expenses, which negatively affected fully diluted EPS by $0.44, annualized ROAE by 2.16% and ROAA by .21%. The negative effect of the acquisition related expenses were partially offset by $843,000 (net of tax) of gains on the sale of securities, which contributed $0.25 to fully diluted EPS, 1.25% to annualized ROAE and .12% to annualized ROAA.

“We’re extremely pleased with our results for the quarter and the earnings momentum we have heading into the final quarter of the year,” said Todd James, the company’s Chief Executive Officer. “This momentum is being driven by loan growth supported by a strong core deposit base, which was bolstered by the First McHenry acquisition we made earlier in the year. The integration of the First McHenry locations is essentially complete with great retention of both customers and staff,” he added. “In the third quarter, we also took advantage of an opportunity the market gave us. We sold certain municipal and other non-government securities at historically low spreads to US Treasuries, harvesting the gains and redeploying the funds into our loan portfolio at higher yields. While the gains are non-recurring in nature, redeployment of liquidity acquired in the First McHenry acquisition was one of the strategic objectives of that transaction. The market conditions allowed us to generate gains in the process, accelerating the tangible book value earn-back.” Stated James.

Total assets increased by $159.0 million, or 19.5%, to $976.4 million at September 30, 2019, compared to $817.3 million as of December 31, 2018. Total gross loans increased by $94.6 million, or 17.1%, during the first nine months of 2019 to $648.9 million compared to $554.3 million at December 31, 2018. This includes $54.8 million in net organic growth as the acquisition of First McHenry included $39.8 million of total loans at closing. Total deposits increased by $158.1 million, or 23.1%, to $843.7 million as compared to $685.6 million at the end of 2018 and included $151.3 million from the First McHenry acquisition.

Net Interest Income

Net interest income for the third quarter of 2019 totaled $8.84 million, increasing $368,000, or 4.3%, compared to $8.48 million for the previous quarter and up $1.66 million, or 23.0%, from the third quarter of last year. The net interest margin was 3.93% for the third quarter of 2019 as compared to 3.88% for the quarter ended June 30, 2019, and 3.91% for the third quarter of last year.

The increasing trend in net interest income and stability in the net interest margin have been driven by the First McHenry acquisition and strong organic loan growth. Average total loans for the quarter ended September 30, 2019, equaled $633.2 million, a $32.0 million, or 5.3% increase over the previous quarter, and a $121.9 million, or 23.8% increase over the same quarter a year ago. Average total deposits for the quarter ended September 30, 2019, equaled $832.0 million, a $4.2 million, or 0.51% increase over the previous quarter, and a $132.0 million, or 18.9% increase over the same quarter a year ago.

Net interest income for the nine months ended September 30, 2019, increased by $4.9 million, or 24.0%, to $25.1 million as compared to $20.3 million for the first nine months of 2018. The net interest margin for the first nine months of 2019 increased by three basis points to 3.91% compared to 3.88% for the first nine months of 2018. Average total loans for the first nine months of 2019 were $599.7 million, an increase of $95.0 million, or 18.8%, as compared to $504.8 million for the first nine months of 2018, with the First McHenry acquisition contributing approximately $31 to the growth. Average total deposits for the first nine months of 2019 were $808.2 million, an increase of $139.5 million, or 20.9%, as compared to $668.7 for the first nine months of 2018, with the First McHenry acquisition contributing approximately $118 million to the growth.

Provision for Loan Losses and Credit Quality

The provision for loan losses for the quarter ended September 30, 2019, totaled $580,000, as compared to $180,000 for the quarter ended June 30, 2019, and $150,000 for the third quarter of 2018. The provision was increased in the third quarter to accommodate the establishment of a specific reserve for a loan impairment that was identified during the third quarter. The provision, which totaled $1,030,000 for the first nine months of 2019, was unchanged compared to the first nine months of 2018. Net charge-offs for the nine months ended September 30, 2019, equaled $45,000.

Total nonperforming assets, which include troubled debt restructures that are performing in accordance with their modified terms, equaled $9.11 million as of September 30, 2019, as compared to $7.80 million as of June 30, 2019, and $7.47 million at September 30, 2018. At September 30, 2019, the ratio of nonperforming assets to total assets equaled 0.93%, as compared to 0.80% at June 30, 2019, and 0.97% at September 30, 2018. The allowance for loan losses to total loans was 1.28% as of September 30, 2019, as compared to 1.24% at June 30, 2019, and 1.41% as of September 30, 2018. The ratio of the allowance for loan losses to nonperforming loans was 94.7% as of September 30, 2019, as compared to 106.1% at June 30, 2019, and 99.7% at September 30, 2018.

Non-Interest Income and Operating Expenses

Non-interest income for the quarter ended September 30, 2019, totaled $4.65 million, a $1,020,000 increase compared to $3.63 million the prior quarter, and a $1,506,000 increase over the $3.14 million recorded in the third quarter of 2018. The increase compared to the most recent quarter included a $720,000 increase in gain on sale of securities, in addition to growth in gain on sale of loans, deposit service fees and debit card revenue. These increases were offset by a $262,000 decrease in loan servicing income, which reflects the establishment of a valuation allowance of $218,000 against the company’s OMSR (Originated Mortgage Servicing Right) asset. The increase in non-interest income compared to the same quarter a year ago includes an $866,000 increase in gain on sale of securities and growth in essentially all other non-interest income sources, except for loan servicing. A $262,000 decrease in loan servicing revenue reflects the establishment of the aforementioned valuation allowance.

Non-interest income for the first nine months of 2019 increased $2.88 million to $11.6 million as compared to $8.7 million for the first nine months of 2018. The Company has realized growth in all non-interest income categories, except for loan servicing income due to the valuation allowance mentioned above.

Operating expenses for the quarter ended September 30, 2019, totaled $8.5 million, increasing by $121,000 compared to the quarter ended June 30, 2019, and increasing by $1.6 million, or 23.0%, compared to the third quarter of 2018. The Company incurred another $138,000 of non-recurring acquisition and integration expenses in the third quarter, including $119,000 of data processing and $19,000 in professional fees. The non-recurring acquisition expenses were more than offset by the recognition of an FDIC deposit insurance credit of $222,000, which is reflected in other expenses.

Operating expenses for the nine month period ended September 30, 2019, totaled $26.1 million, a $5.7 million, or 27.9% increase over the first nine months of 2018. That increase includes the $1.98 million in acquisition and integration expenses. Excluding those expenses, operating expenses increased $3.7 million, or 18.2%. The increase is partially driven by seven months of operations of the First McHenry locations in 2019.

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 Company’s strong credit quality, is expected to lead to continued earnings improvement. 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. 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. Non-GAAP measures are also used to assist investor comparison by identifying nonrecurring events such as the 2019 acquisition-related expenses 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 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.

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(UNAUDITED)
 
  September 30,     December 31,  
Assets
  2019     2018  
 
  (Dollars in thousands, except  
 
  share and per share data)  
Cash and due from banks
  $ 18,778     $ 16,677  
Interest-bearing deposits in banks and other
    22,478       2,760  
Total cash and cash equivalents
    41,256       19,437  
Equity securities at fair value
    2,359       2,250  
Securities available-for-sale
    229,806       198,670  
Loans held for sale
    7,571       5,164  
Federal Home Loan Bank stock, at cost
    653       1,643  
Loans, less allowance for loan losses of $8,324 and $7,339
               
at September 30, 2019 and December 31, 2018, respectively
    633,005       541,760  
Premises and equipment, net
    21,056       14,874  
Goodwill
    10,228       5,037  
Core Deposit Intangible
    2,347        
Mortgage servicing rights
    3,044       2,969  
Cash surrender value of bank-owned life insurance
    11,043       10,812  
Other assets
    13,990       14,671  
Total assets
  $ 976,358     $ 817,287  
 
               
Liabilities and Stockholders’ Equity
               
 
               
Liabilities
               
Deposits:
               
Noninterest-bearing
  $ 158,964     $ 121,024  
Interest-bearing
    684,739       564,615  
Total deposits
    843,703       685,639  
Subordinated debentures and notes (including $1,031 at fair value at
               
September 30, 2019 and December 31, 2018)
    5,155       5,155  
Senior secured term note
    14,000        
Other borrowings
    10,042       36,500  
Other liabilities
    7,516       5,701  
Total liabilities
    880,416       732,995  
 
               
Stockholders’ equity
               
Common stock, $0.01 par value, 10,000,000 shares authorized;
               
3,398,303 and 3,369,192 shares issued as of September 30, 2019 and
               
December 31, 2018, respectively
    34       34  
Additional paid-in capital
    33,908       33,478  
Retained earnings
    58,273       52,011  
Treasury stock, 104,743 and 97,570 shares at cost as of September 30, 2019
               
and December 31, 2018, respectively
    (1,396 )     (1,204 )
Accumulated other comprehensive income (loss)
    5,123       (27 )
Total stockholders’ equity
    95,942       84,292  
Total liabilities and stockholders’ equity
  $ 976,358     $ 817,287  

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES

                             
CONSOLIDATED STATEMENTS OF INCOME
                             
(UNAUDITED)
  For the Quarter Ended  
 
  September 30,     June 30,     March 31,     December 31,     September 30,  
 
  2019     2019     2019     2018     2018  
 
  (Dollars in thousands, except per share data)  
Interest Income:
                             
Interest and fees on loans
  $ 8,580     $ 8,043     $ 7,542     $ 7,174     $ 6,884  
Interest on available-for-sale securities:
                                       
Taxable
    1,591       1,659       1,345       1,062       980  
Tax-exempt
    356       451       448       431       389  
Interest on interest-bearing deposits and other
    133       130       158       41       208  
Total interest income
    10,660       10,283       9,493       8,708       8,461  
Interest Expense:
                                       
Interest on deposits
    1,485       1,458       1,463       1,336       1,213  
Interest on subordinated debentures and notes
    61       65       65       62       59  
Interest on senior secured term note
    173       186       67              
Interest on other borrowings
    97       98       105       89        
Total interest expense
    1,816       1,807       1,700       1,487       1,272  
Net interest income before provision for loan losses
    8,844       8,476       7,793       7,221       7,189  
Provision for loan losses
    580       180       270       150       150  
Net interest income after provision for loan losses
    8,264       8,296       7,523       7,071       7,039  
 
                                       
Noninterest Income:
                                       
Service charges on deposits accounts
    1,019       885       808       849       829  
Net gain on sale of loans
    1,333       1,040       581       886       1,070  
Net loan servicing income
    (91 )     171       172       170       171  
Debit card interchange fees
    910       827       789       683       663  
Net gains on sales of securities available-for-sale
    866       146       159       (19 )      
Net other gains (losses)
    81       94                    
Increase in cash surrender value of bank-owned life insurance
    74       74       83       73       72  
Other
    455       390       388       227       336  
Total noninterest income
    4,647       3,627       2,980       2,869       3,141  
 
                                       
Noninterest Expenses:
                                       
Salaries and employee benefits
    4,992       4,841       4,585       4,279       4,081  
Occupancy and equipment
    1,085       1,000       992       824       826  
Data processing
    657       571       1,827       425       428  
Debit card processing and issuance
    402       389       334       334       339  
Advertising and marketing
    100       142       108       176       126  
Amortization of intangibles
    119       119       40              
Professional fees
    387       393       579       443       350  
Office Supplies
    112       89       86       91       77  
Telephone
    137       130       116       129       125  
Other
    505       701       584       605       555  
Total noninterest expenses
    8,496       8,375       9,251       7,306       6,907  
Income before income taxes
    4,415       3,548       1,252       2,634       3,273  
Provision for income taxes
    996       794       173       538       695  
Net income
  $ 3,419     $ 2,754     $ 1,079     $ 2,096     $ 2,578  
 
                                       
Key Ratios
                             
 
                             
Basic Earnings Per Common Share
  $ 1.03     $ 0.83     $ 0.33     $ 0.64     $ 0.78  
Diluted Earnings Per Common Share
    1.03       0.83       0.33       0.64       0.78  
Dividends Per Common Share
    0.10       0.10       0.10       0.10       0.10  
 
                                       
Net Interest Margin (1)
    3.93 %     3.88 %     3.92 %     3.91 %     3.91 %
Efficiency Ratio (1)(2)
    67.19 %     69.77 %     86.07 %     71.37 %     66.11 %
Return on Assets
    1.40 %     1.15 %     0.50 %     1.05 %     1.29 %
Return on Common Equity
    14.25 %     12.54 %     5.12 %     10.13 %     12.67 %
 
                                       

(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  
 
  September 30,     June 30,     March 31,     December 31,     September 30,  
 
  2019     2019     2019     2018     2018  
 
  (Amounts in thousands, except per share data)  
Cash and due from banks
  $ 18,778     $ 17,364     $ 14,581     $ 16,677     $ 19,526  
Interest-bearing deposits in banks and other
    22,478       16,442       35,862       2,760       5,878  
Securities
    232,165       256,262       270,665       200,920       197,507  
Net loans/leases
    640,576       616,925       583,350       546,924       502,463  
Goodwill
    10,228       10,183       10,183       5,037       5,037  
Other assets
    52,133       52,295       51,795       44,969       41,943  
Total assets
  $ 976,358     $ 969,471     $ 966,436     $ 817,287     $ 772,354  
 
                                       
Deposits
  $ 843,703     $ 837,319     $ 854,505     $ 685,639     $ 680,136  
Subordinated debentures
    5,155       5,155       5,155       5,155       5,155  
Senior secured term note
    14,000       14,000       14,000              
Borrowings
    10,042       13,992             36,500        
Other liabilities
    7,516       6,614       5,360       5,701       6,241  
Stockholders’ equity
    95,942       92,391       87,416       84,292       80,822  
Total liabilities and stockholders’ equity
  $ 976,358     $ 969,471     $ 966,436     $ 817,287     $ 772,354  
 
                                       
 
                                       
ASSET QUALITY DATA
                             
(Amounts in thousands)
  September 30,     June 30,     March 31,     December 31,     September 30,  
 
  2019     2019     2019     2018     2018  
 
                             
Non-accrual loans
  $ 5,524     $ 3,712     $ 3,815     $ 2,312     $ 3,362  
Accruing loans past due 90 days or more
    104       272             17        
Troubled debt restructures – accruing
    3,163       3,321       3,546       3,797       3,873  
Total nonperforming loans
  $ 8,791     $ 7,305     $ 7,361     $ 6,126     $ 7,235  
Other real estate owned
    319       307       339       104       237  
Total nonperforming assets
  $ 9,110     $ 7,612     $ 7,700     $ 6,230     $ 7,472  
 
                                       
Total loans
  $ 648,900     $ 624,674     $ 590,895     $ 554,263     $ 509,674  
Allowance for loan losses
  $ 8,324     $ 7,749     $ 7,545     $ 7,339     $ 7,211  
 
  $ 640,576     $ 616,925     $ 583,350     $ 546,924     $ 502,463  
Nonperforming Assets to total Assets
    0.93 %     0.79 %     0.80 %     0.76 %     0.97 %
Nonperforming loans to total loans
    1.35 %     1.17 %     1.25 %     1.11 %     1.42 %
Allowance for loan losses to total loans
    1.28 %     1.24 %     1.28 %     1.32 %     1.41 %
Allowance for loan losses to nonperforming loans
    94.7 %     106.1 %     102.5 %     119.8 %     99.7 %
 
                                       
 
                                       
 
  For the Quarter Ended  
 
  September 30,     June 30,     March 31,     December 31,     September 30,  
ROLLFORWARD OF ALLOWANCE
    2019       2019       2019       2018       2018  
 
                                       
Beginning Balance
  $ 7,749     $ 7,545     $ 7,339     $ 7,211     $ 6,499  
Provision
    580       180       270       150       150  
Loans charged off
    52       11       102       76       105  
Loan recoveries
    47       35       38       54       667  
Net charge-offs
    5       (24 )     64       22       (562 )
Ending Balance
  $ 8,324     $ 7,749     $ 7,545     $ 7,339     $ 7,211  

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES

           
CONSOLIDATED STATEMENTS OF INCOME
           
(UNAUDITED)
  Nine months ended September 30,  
 
  2019     2018  
 
  (Amounts in thousands, except per share data)  
 
           
Interest Income:
           
Interest and fees on loans
  24,165     19,369  
Interest on available-for-sale securities:
               
Taxable
    4,594       2,591  
Tax-exempt
    1,256       1,123  
Interest on interest-bearing deposits and other
    421       340  
Total interest income
    30,436       23,423  
Interest Expense:
               
Interest on deposits
    4,406       2,956  
Interest on subordinated debentures and notes
    191       171  
Interest on senior secured term note
    426        
Interest on other borrowings
    300       46  
Total interest expense
    5,323       3,173  
Net interest income before provision for loan losses
    25,113       20,250  
Provision for loan losses
    1,030       1,030  
Net interest income after provision for loan losses
    24,083       19,220  
 
               
Noninterest Income:
               
Service charges on deposits accounts
    2,713       2,339  
Net gain on sale of loans
    2,954       2,500  
Net loan servicing income
    250       521  
Debit card interchange fees
    2,526       2,033  
Net gains on sales of securities available-for-sale
    1,171       65  
Net other gains (losses)
    176       46  
Increase in cash surrender value of bank-owned life insurance
    231       226  
Other
    1,233       943  
Total noninterest income
    11,254       8,673  
 
               
Noninterest Expenses:
               
Salaries and employee benefits
    14,418       11,998  
Occupancy and equipment
    3,077       2,549  
Data processing
    3,054       1,240  
Debit card processing and issuance
    1,125       968  
Advertising and marketing
    349       422  
Amortization of intangibles
    278        
Professional fees
    1,359       922  
Office Supplies
    288       266  
Telephone
    383       375  
Other
    1,790       1,685  
Total noninterest expenses
    26,121       20,425  
Income before income taxes
    9,216       7,468  
Provision for income taxes
    1,964       1,422  
Net income
  7,252     6,046  
 
               
Key Ratios
           
 
           
Basic Earnings Per Common Share
  2.20     1.83  
Diluted Earnings Per Common Share
    2.20       1.83  
Dividends Per Common Share
    0.30       0.28  
 
               
Net Interest Margin (1)
    3.91 %     3.88 %
Efficiency Ratio (1)(2)
    73.82 %     70.07 %
Return on Assets
    1.04 %     1.06 %
Return on Common Equity
    10.82 %     10.21 %
 
               

(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
ANALYSIS of AVERAGE BALANCES & TAX EQUIVALENT INTEREST RATES

Average Balance Sheet with Resultant Interest and Rates  
 
(Dollars in thousands – unaudited)
                                                     
(Yields on a tax-equivalent basis) (1)
  For the Quarter Ended  
 
  September 30, 2019     June 30, 2019     September 30, 2018  
 
  Average           Average     Average           Average     Average           Average  
 
  Balance     Interest     Rate     Balance     Interest     Rate     Balance     Interest     Rate  
Interest Earning Assets:
                                                     
Interest-bearing deposits and other
  $ 23,356     $ 133       2.26%     $ 21,250     $ 130       2.48%     $ 41,362     $ 208       1.99%  
Investment securities:
                                                                       
Taxable investment securities
    202,607       1,591       3.11%       212,708       1,659       3.13%       136,841       980       2.84%  
Tax-exempt investment securities
    43,558       356       4.10%       54,193       451       4.33%       51,527       389       3.90%  
Total Investment securities
    246,165       1,947       3.29%       266,901       2,110       3.37%       188,368       1,369       3.13%  
Loans
    633,215       8,580       5.38%       601,234       8,043       5.37%       511,279       6,884       5.34%  
 
                                                                       
Total Earning Assets
  $ 902,736     $ 10,660       4.73%     $ 889,385     $ 10,283       4.70%     $ 741,009     $ 8,461       4.59%  
Allowance for loan losses
    (7,860 )                     (7,645 )                     (7,092 )                
Cash and due from banks
    16,131                       15,165                       16,755                  
Other assets
    59,817                       59,805                       40,487                  
 
                                                                       
Total Assets
  $ 970,824                     $ 956,710                     $ 791,159                  
 
                                                                       
Interest Bearing Liabilities:
                                                                       
Interest bearing checking accounts
  $ 258,808     $ 399       0.61%     $ 258,866     $ 408       0.63%     $ 245,050     $ 338       0.55%  
Savings and money market deposits
    295,746       547       0.73%       289,097       535       0.74%       234,935       496       0.84%  
Time deposits
    118,910       539       1.80%       118,383       515       1.75%       94,937       379       1.58%  
Total interest bearing deposits
    673,464       1,485       0.88%       666,346       1,458       0.88%       574,922       1,213       0.84%  
Subordinated debentures and notes
    5,155       61       4.70%       5,155       65       5.03%       5,155       59       4.52%  
Borrowings
    32,870       270       3.25%       29,596       284       3.85%       160             2.32%  
 
                                                                       
Total Interest-Bearing Liabilities
  $ 711,489     $ 1,816       1.01%     $ 701,097     $ 1,807       1.03%     $ 580,237     $ 1,272       0.87%  
 
                                                                       
Interest Rate Spread
                    3.72%                       3.67%                       3.72%  
 
                                                                       
Noninterest checking accounts
    158,512                       161,461                       125,074                  
Other liabilities
    5,603                       6,055                       5,126                  
Total liabilities
    875,604                       868,613                       710,437                  
Total Stockholders’ equity
    95,220                       88,097                       80,722                  
Total Liabilities and
                                                                       
Stockholders’ Equity
  $ 970,824                     $ 956,710                     $ 791,159                  
 
                                                                       
Net Interest Income/Margin
          $ 8,844       3.93%             $ 8,476       3.88%             $ 7,189       3.91%  

(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 ratio 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.

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET WITH RESULTANT INTEREST AND RATES

Average Balance Sheet with Resultant Interest and Rates      
(Amounts in thousands)
                                   
(yields on a tax-equivalent basis)
  For the Nine Months Ended  
 
  September 30, 2019     September 30, 2018  
 
  Average           Average     Average           Average  
 
  Balance     Interest     Rate     Balance     Interest     Rate  
Interest Earning Assets:
                                   
Interest-bearing deposits and other
  $ 23,901     $ 421       2.37%     $ 25,308     $ 340       1.80%  
Investment securities:
                                               
Taxable investment securities
    194,127       4,594       3.16%       128,330       2,591       2.70%  
Tax-exempt investment securities
    53,331       1,256       4.04%       50,142       1,123       3.90%  
Total Investment securities
    247,458       5,850       3.35%       178,472       3,714       3.04%  
Loans
    599,712       24,165       5.39%       504,754       19,369       5.13%  
 
                                               
Total Earning Assets
  $ 871,071     $ 30,436       4.73%     $ 708,534     $ 23,423       4.48%  
Allowance for loan losses
    (7,652 )                     (6,436 )                
Cash and due from banks
    15,953                       17,350                  
Other assets
    57,443                       41,128                  
 
                                               
Total Assets
  $ 936,815                     $ 760,576                  
 
                                               
Interest Bearing Liabilities:
                                               
Interest bearing checking accounts
  $ 253,795     $ 1,122       0.59%     $ 231,636     $ 873       0.50%  
Savings and money market deposits
    284,070       1,725       0.81%       222,692       1,143       0.69%  
Time deposits
    116,247       1,559       1.79%       92,010       940       1.37%  
Total interest bearing deposits
    654,112       4,406       0.90%       546,338       2,956       0.72%  
Subordinated debentures
    5,155       191       4.94%       5,155       171       4.43%  
Borrowings
    28,123       726       3.45%       3,455       46       1.83%  
 
                                               
Total Interest-Bearing Liabilities
  $ 687,390     $ 5,323       1.04%     $ 554,948     $ 3,173       0.76%  
 
                                               
Interest Rate Spread
                    3.69%                       3.72%  
 
                                               
Noninterest checking accounts
    154,084                       122,404                  
Other liabilities
    5,723                       4,035                  
Total liabilities
    847,197                       681,387                  
Total Stockholders’ equity
    89,618                       79,189                  
Total Liabilities and
                                               
Stockholders’ Equity
  $ 936,815                     $ 760,576                  
 
                                               
Net Interest Income/Margin
          $ 25,113       3.91%             $ 20,250       3.88%  

 

CONTACT: 

Todd J. James, Chairman & CEO
tjames@blackhawkbank.com
(608) 364-8911

SOURCE: Blackhawk Bancorp, Inc.

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https://www.accesswire.com/563337/Blackhawk-Bancorp-Announces-2019-Third-Quarter-Earnings

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