BELOIT, WI / ACCESSWIRE / January 30, 2020 / Blackhawk Bancorp, Inc. (OTCQX:BHWB) reported net income of $2.35 million for the fourth quarter of 2019, a 31% decrease as compared to the $3.42 million earned in the most recent quarter ended September 30, 2019, but a 12% increase over the $2.10 million earned the fourth quarter of 2018. Diluted earnings per share (EPS) for the quarter ended December 31, 2019 was $0.71, a decrease of $0.32 as compared to $1.03 for the quarter ended September 30, 2019 but an increase of $0.07 as compared to $0.64 for the same quarter a year ago. The fourth quarter 2019 results produced an annualized Return on Average Equity (ROAE) of 9.60% and Return on Average Assets (ROAA) of 0.97%.
The decrease in earnings as compared to the most recent quarter was driven by a $273,000 decrease in net interest income, a $400,000 increase in the provision for loan losses and a $1.03 million decrease in net gain on sale of securities and other assets.
The increase in earnings as compared to the fourth quarter of 2018 was attributable to increases of $1.51 and $1.0 million in net interest income and non-interest income, respectively. These revenue increases were partially offset by an $830,000 increase in the provision for loan losses and a $1.19 million increase in operating expenses.
For the year ended December 31, 2019, the company reported record net income of $9.60 million, an 18% increase over the $8.14 million reported for 2018. Diluted earnings per share for 2019 increased by $0.43, or 17%, to a record $2.91 compared to $2.47 in 2018. The annual results produced an ROAE of 10.49% and an ROAA of 1.02%. The 2019 results include non-recurring acquisition related expenses totaling $1.45 million (net of tax), which negatively affected EPS by $0.44, and ROAE and ROAA by 1.58 and .15 percentage points, respectively. The negative effect of the acquisition related expenses was partially offset by gains on the sale of securities of $843,000 (net of tax), which contributed $0.25 to EPS, and .92 and .09 percentage points to ROAE and ROAA, respectively.
Excluding the non-recurring acquisition related expenses and securities gains, 2019 core earnings increased 25% compared to 2018. The growth in core earnings was driven by increases of $6.21 and $2.46 million in net interest income and non-interest income, respectively. These improvements were offset by an $830,000 increase in the provision for loan losses and $4.9 million increase in operating expenses, excluding the acquisition related expenses.
"The past year has been an exciting and productive one for Blackhawk," said Todd James, the Company's Chief Executive Officer. "In addition to achieving record earnings, we successfully integrated the First McHenry acquisition and continued to make investments in the talent and technology required to drive future growth," he added. "However, we are a little disappointed in how we finished the year. Our fourth quarter was negatively affected by an increase in the provision for loan losses, and about a $15 million decrease in total loans outstanding. Excluding intentional reductions in exposure to certain credit relationships, gross loans outstanding were essentially unchanged from the previous quarter end," stated James.
Total assets increased by $146.6 million, or 18%, to $963.9 million at December 31, 2019, compared to $817.3 million as of December 31, 2018. Total gross loans increased by $79.6 million, or 14%, during 2019 to $633.8 million compared to $554.3 million at December 31, 2018. This includes $37 million in net organic growth as the acquisition of First McHenry included $42.5 million of total loans at closing. Total deposits increased by $144.0 million, or 21%, to $829.6 million as compared to $685.6 million at the end of 2018, and included $150.5 million of total deposits at closing from the First McHenry acquisition. With the acquisition of First McHenry and the core deposit base that came with it, the company was able to reduce institutional deposits by $29.8 million and Federal Home Loan Bank advances by $26.5 million during 2019. The reduction in Federal Home Loan Bank borrowings was partially offset by a $14 million increase in senior debt added at the Holding Company level used to partially fund the First McHenry acquisition.
Net Interest Income
Net interest income for the fourth quarter of 2019 totaled $8.57 million, decreasing $273,000, or 3%, compared to $8.84 million for the previous quarter and up $1.35 million, or 19%, from the fourth quarter of last year. The net interest margin was 3.83% for the fourth quarter of 2019 as compared to 3.93% for the quarter ended September 30, 2019, and 3.91% for the fourth quarter of last year.
The decrease in net interest income compared to the most recent quarter ended September 30, 2019 included a $73,000 decrease in net accretion of loan and deposit fair value marks, which was $56,000 in the fourth quarter compared to $129,000 in the third quarter. The third quarter amount was elevated due to pre-payments. In addition, the three rate cuts by the Federal Reserve Bank in the second half of 2019 increased pressure on the company's net interest margin, as much of the C&I portfolio is indexed to prime. The increase in net interest income for the fourth quarter compared to the same quarter a year ago was due to growth in earning assets and core deposits, including organic growth and the effect of the First McHenry acquisition. Average total loans for the quarter ended December 31, 2019 equaled $642.4 million, a $9.2 million, or 2% increase over the previous quarter and a $106.7 million, or 20% increase, over the same quarter a year ago. Average total deposits for the quarter ended December 31, 2019 equaled $830 million a $2 million, or 0.23% decrease, from the previous quarter and a $142.4 million, or 21% increase, over the same quarter a year ago.
Net interest income for 2019, increased by $6.21 million, or 23%, to $33.68 million as compared to $27.47 million in 2018.The net interest margin for 2019 decreased by three basis points to 3.88% compared to 3.91% in 2018. Average total loans for 2019 were $610.5 million, an increase of $97.9 million, or 19%, as compared to $512.5 million for 2018, with the First McHenry acquisition contributing approximately $35.0 million to the 2019 year to date average balance. Average total deposits for 2019 were $813.7 million, an increase of $140.2 million, or 21%, as compared to $673.5 for 2018 with the First McHenry acquisition contributing approximately $125.0 million to total average deposits for the year.
Provision for Loan Losses and Credit Quality
The provision for loan losses for the quarter ended December 31, 2019 totaled $980,000, as compared to $580,000 for the quarter ended September 30, 2019, and $150,000 for the fourth quarter of 2018. The provision for loan losses was $2.01 million for the full year 2019, increasing by $830,000 compared to 2018. The increase in the fourth quarter and full year provision was related to a credit tied to the Northern White frac sand industry. The provision taken reflects what management believes to be a worst case scenario for that credit, which is the company's only exposure to the industry. Net charge-offs for 2019, equaled $1.41 million, with $1.22 million related to the frac sand industry credit mentioned above.
Total nonperforming assets, which include troubled debt restructures, that are performing in accordance with their modified terms equaled $13.6 million as of December 31, 2019 compared to $9.10 million as of September 30, 2019 and $6.2 million at December 31, 2018. The increase in the fourth quarter of 2019 was attributable to one commercial relationship that is experiencing financial difficulty and was moved to nonaccrual status, although no principal loss is expected. At December 31, 2019, the ratio of nonperforming assets to total assets equaled 1.41%, as compared to 0.93% at September 30, 2019, and 0.76% at December 31, 2018. The allowance for loan losses to total loans was 1.25% as of December 31, 2019, as compared to 1.28% at September 30, 2019, and 1.32% as of December 31, 2018. The ratio of the allowance for loan losses to nonperforming loans was 59% as of December 31, 2019, compared to 95% at September 30, 2019, and 120% at December 31, 2018.
Non-Interest Income and Operating Expenses
Non-interest income for the quarter ended December 31, 2019 totaled $3.87 million, a $773,000 decrease compared to $4.65 million the prior quarter, and a $1.01 million increase over the $2.87 million recorded in the fourth quarter of 2018. The decrease compared to the most recent quarter included an $866,000 decrease in gain on sale of securities. The increase in non-interest income compared to the same quarter a year ago includes an increase of $320,000 from the sale and servicing of mortgage loans, and increases of $153,000 and $193,000 in deposit service charges and debit card interchange, respectively.
Non-interest income for the year 2019 increased $3.59 million to $15.13 million as compared to $11.54 million for 2018. Excluding the $1.13 million increase in the gain on sale of securities, non-interest income increased by $2.46 million, including increases of $527,000, $503,000 and $686,000 in deposit service fees, revenue from sale and servicing of mortgage loans, and debit card interchange, respectively.
Operating expenses for the quarter ended December 31, 2019, totaled $8.49 million, essentially unchanged compared to the quarter ended September 30, 2019, and increasing by $1.2 million, or 16%, compared to the fourth quarter of 2018. The increase over the fourth quarter of 2018 included the increased staffing and occupancy and equipment expenses related to the acquired locations.
Operating expenses for the year 2019, totaled $34.6 million, a $6.9 million, or 25% increase over 2018. That increase includes the $1.98 million in non-recurring acquisition related expenses. Excluding the acquisition related expenses, operating expenses increased $4.9 million, or 18%. The increase is partially driven by ten months of operations of the First McHenry locations in 2019, and includes $398,000 of amortization of the deposit intangible related to the acquisition.
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 the 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 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, nonrecurring securities gains and the impact such items 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.
Todd J. James, Chairman & CEO
tjames@blackhawkbank.com
Phone: (608) 364-8911
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2019 AND DECEMBER 31, 2018
(UNAUDITED)
December 31,
December 31,
Assets
2019
2018
(Dollars in thousands, except
share and per share data)
Cash and due from banks
$
12,320
$
16,677
Interest-bearing deposits in banks and other
27,086
2,760
Total cash and cash equivalents
39,406
19,437
Equity securities at fair value
2,365
2,250
Securities available-for-sale
235,083
198,670
Loans held for sale
6,540
5,164
Federal Home Loan Bank stock, at cost
742
1,643
Loans, less allowance for loan losses of $7,941 and $7,339
at December 31, 2019 and December 31, 2018, respectively
619,359
541,760
Premises and equipment, net
21,025
14,874
Goodwill
10,228
5,037
Core deposit intangible
2,227
–
Mortgage servicing rights
3,106
2,969
Cash surrender value of bank-owned life insurance
11,118
10,812
Other assets
12,662
14,671
Total assets
$
963,861
$
817,287
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Noninterest-bearing
$
155,978
$
121,024
Interest-bearing
673,631
564,615
Total deposits
829,609
685,639
Subordinated debentures and notes (including $1,031 at fair value at
December 31, 2019 and December 31, 2018)
5,155
5,155
Senior secured term note
14,000
–
Other borrowings
10,035
36,500
Other liabilities
7,738
5,701
Total liabilities
866,537
732,995
Stockholders' equity
Common stock, $0.01 par value, 10,000,000 shares authorized;
3,399,803 and 3,369,192 shares issued as of December 31, 2019 and
December 31, 2018, respectively
34
34
Additional paid-in capital
33,989
33,478
Retained earnings
60,295
52,011
Treasury stock, 105,185 and 97,570 shares at cost as of December 31, 2019
and December 31, 2018, respectively
(1,408
)
(1,204
)
Accumulated other comprehensive income (loss)
4,414
(27
)
Total stockholders' equity
97,324
84,292
Total liabilities and stockholders' equity
$
963,861
$
817,287
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Twelve months ended December 31,
2019
2018
(Amounts in thousands, except per share data)
Interest Income:
Interest and fees on loans
$
32,449
$
26,543
Interest on available-for-sale securities:
Taxable
6,089
3,653
Tax-exempt
1,587
1,554
Interest on interest-bearing deposits and other
528
381
Total interest income
40,653
32,131
Interest Expense:
Interest on deposits
5,806
4,292
Interest on subordinated debentures and notes
248
233
Interest on senior secured term note
591
–
Interest on other borrowings
324
135
Total interest expense
6,969
4,660
Net interest income before provision for loan losses
33,684
27,471
Provision for loan losses
2,010
1,180
Net interest income after provision for loan losses
31,674
26,291
Noninterest Income:
Service charges on deposits accounts
3,715
3,188
Net gain on sale of loans
4,211
3,386
Net loan servicing income
369
691
Debit card interchange fees
3,402
2,716
Net gains on sales of securities available-for-sale
1,171
46
Net other gains (losses)
89
(63
)
Increase in cash surrender value of bank-owned life insurance
306
299
Other
1,864
1,278
Total noninterest income
15,127
11,541
Noninterest Expenses:
Salaries and employee benefits
19,382
16,277
Occupancy and equipment
4,115
3,373
Data processing
3,574
1,665
Debit card processing and issuance
1,574
1,302
Advertising and marketing
450
598
Amortization of intangibles
398
–
Professional fees
1,659
1,365
Office Supplies
405
357
Telephone
536
504
Other
2,520
2,290
Total noninterest expenses
34,613
27,731
Income before income taxes
12,188
10,101
Provision for income taxes
2,585
1,960
Net income
$
9,603
$
8,141
Key Ratios
Basic Earnings Per Common Share
$
2.91
$
2.47
Diluted Earnings Per Common Share
2.91
2.47
Dividends Per Common Share
0.40
0.38
Net Interest Margin (1)
3.88
%
3.91
%
Efficiency Ratio (1)(2)
72.10
%
70.32
%
Return on Assets
1.02
%
1.06
%
Return on Common Equity
10.49
%
10.19
%
(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
December 31,
September 30,
June 30,
March 31,
December 31,
2019
2019
2019
2019
2018
(Dollars in thousands, except per share data)
Interest Income:
Interest and fees on loans
$
8,284
$
8,580
$
8,043
$
7,542
$
7,174
Interest on available-for-sale securities:
Taxable
1,496
1,591
1,659
1,345
1,062
Tax-exempt
331
356
451
448
431
Interest on interest-bearing deposits and other
107
133
130
158
41
Total interest income
10,218
10,660
10,283
9,493
8,708
Interest Expense:
Interest on deposits
1,400
1,485
1,458
1,463
1,336
Interest on subordinated debentures and notes
58
61
65
65
62
Interest on senior secured term note
165
173
186
67
–
Interest on other borrowings
24
97
98
105
89
Total interest expense
1,647
1,816
1,807
1,700
1,487
Net interest income before provision for loan losses
8,571
8,844
8,476
7,793
7,221
Provision for loan losses
980
580
180
270
150
Net interest income after provision for loan losses
7,591
8,264
8,296
7,523
7,071
Noninterest Income:
Service charges on deposits accounts
1,002
1,019
885
808
849
Net gain on sale of loans
1,257
1,333
1,040
581
886
Net loan servicing income
119
(91
)
171
172
170
Debit card interchange fees
876
910
827
789
683
Net gains on sales of securities available-for-sale
–
866
146
159
(19
)
Net other gains (losses)
(87
)
81
94
–
–
Increase in cash surrender value of bank-owned life insurance
75
74
74
83
73
Other
632
455
390
388
227
Total noninterest income
3,874
4,647
3,627
2,980
2,869
Noninterest Expenses:
Salaries and employee benefits
4,964
4,992
4,841
4,585
4,279
Occupancy and equipment
1,038
1,085
1,000
992
824
Data processing
520
657
571
1,827
425
Debit card processing and issuance
449
402
389
334
334
Advertising and marketing
101
100
142
108
176
Amortization of intangibles
119
119
119
40
–
Professional fees
300
387
393
579
443
Office Supplies
118
112
89
86
91
Telephone
153
137
130
116
129
Other
730
505
701
584
605
Total noninterest expenses
8,492
8,496
8,375
9,251
7,306
Income before income taxes
2,973
4,415
3,548
1,252
2,634
Provision for income taxes
621
996
794
173
538
Net income
$
2,352
$
3,419
$
2,754
$
1,079
$
2,096
Key Ratios
Basic Earnings Per Common Share
$
0.71
$
1.03
$
0.83
$
0.33
$
0.64
Diluted Earnings Per Common Share
0.71
1.03
0.83
0.33
0.64
Dividends Per Common Share
0.10
0.10
0.10
0.10
0.10
Net Interest Margin (1)
3.83
%
3.93
%
3.88
%
3.92
%
3.91
%
Efficiency Ratio (1)(2)
67.25
%
67.19
%
69.77
%
86.07
%
71.37
%
Return on Assets
0.97
%
1.40
%
1.15
%
0.50
%
1.05
%
Return on Common Equity
9.60
%
14.25
%
12.54
%
5.12
%
10.13
%
(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
December 31,
September 30,
June 30,
March 31,
December 31,
2019
2019
2019
2019
2018
(Amounts in thousands, except per share data)
Cash and due from banks
$
12,320
$
18,778
$
17,364
$
14,581
$
16,677
Interest-bearing deposits in banks and other
27,086
22,478
16,442
35,862
2,760
Securities
237,448
232,165
256,262
270,665
200,920
Net loans/leases
625,899
640,576
616,925
583,350
546,924
Goodwill
10,228
10,228
10,183
10,183
5,037
Other assets
50,880
52,133
52,295
51,795
44,969
Total assets
$
963,861
$
976,358
$
969,471
$
966,436
$
817,287
Deposits
$
829,609
$
843,703
$
837,319
$
854,505
$
685,639
Subordinated debentures
5,155
5,155
5,155
5,155
5,155
Senior secured term note
14,000
14,000
14,000
14,000
–
Borrowings
10,035
10,042
13,992
–
36,500
Other liabilities
7,738
7,516
6,614
5,360
5,701
Stockholders' equity
97,324
95,942
92,391
87,416
84,292
Total liabilities and stockholders' equity
$
963,861
$
976,358
$
969,471
$
966,436
$
817,287
ASSET QUALITY DATA
(Amounts in thousands)
December 31,
September 30,
June 30,
March 31,
December 31,
2019
2019
2019
2018
2018
Non-accrual loans
$
10,642
$
5,524
$
3,712
$
3,815
$
2,312
Accruing loans past due 90 days or more
–
104
272
–
17
Troubled debt restructures – accruing
2,866
3,163
3,321
3,546
3,797
Total nonperforming loans
$
13,508
$
8,791
$
7,305
$
7,361
$
6,126
Other real estate owned
54
319
307
339
104
Total nonperforming assets
$
13,562
$
9,110
$
7,612
$
7,700
$
6,230
Total loans
$
633,840
$
648,900
$
624,674
$
590,895
$
554,263
Allowance for loan losses
$
7,941
$
8,324
$
7,749
$
7,545
$
7,339
$
625,899
$
640,576
$
616,925
$
583,350
$
546,924
Nonperforming Assets to total Assets
1.41
%
0.93
%
0.79
%
0.80
%
0.76
%
Nonperforming loans to total loans
2.13
%
1.35
%
1.17
%
1.25
%
1.11
%
Allowance for loan losses to total loans
1.25
%
1.28
%
1.24
%
1.28
%
1.32
%
Allowance for loan losses to nonperforming loans
58.8
%
94.7
%
106.1
%
102.5
%
119.8
%
For the Quarter Ended
December 31,
September 30,
June 30,
March 31,
December 31,
ROLLFORWARD OF ALLOWANCE
2019
2019
2019
2019
2018
Beginning Balance
$
8,324
$
7,749
$
7,545
$
7,339
$
7,211
Provision
980
580
180
270
150
Loans charged off
1,463
52
11
102
76
Loan recoveries
100
47
35
38
54
Net charge-offs
1,363
5
(24
)
64
22
Ending Balance
$
7,941
$
8,324
$
7,749
$
7,545
$
7,339
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET WITH RESULTANT INTEREST AND RATES
(Amounts in thousands)
(yields on a tax-equivalent basis) (1)
For the Twelve Months Ended
December 31, 2019
December 31, 2018
Average
Average
Average
Average
Balance
Interest
Rate
Balance
Interest
Rate
Interest Earning Assets:
Interest-bearing deposits and other
$
23,058
$
528
2.29
%
$
20,832
$
381
1.83
%
Investment securities:
Taxable investment securities
193,954
6,089
3.14
%
132,422
3,653
2.76
%
Tax-exempt investment securities
50,100
1,587
3.88
%
51,783
1,554
4.10
%
Total Investment securities
244,054
7,676
3.29
%
184,205
5,207
3.13
%
Loans
610,472
32,449
5.32
%
512,544
26,543
5.18
%
Total Earning Assets
$
877,584
$
40,653
4.67
%
$
717,581
$
32,131
4.56
%
Allowance for loan losses
(7,778
)
(6,648
)
Cash and due from banks
15,765
17,373
Other assets
57,920
40,623
Total Assets
$
943,491
$
768,929
Interest Bearing Liabilities:
Interest bearing checking accounts
$
254,228
$
1,483
0.58
%
$
228,838
$
1,141
0.50
%
Savings and money market deposits
286,719
2,237
0.78
%
225,207
1,702
0.76
%
Time deposits
116,814
2,086
1.79
%
95,939
1,449
1.51
%
Total interest bearing deposits
657,761
5,806
0.88
%
549,984
4,292
0.78
%
Subordinated debentures
5,155
248
4.81
%
5,155
233
4.51
%
Borrowings
27,145
915
3.37
%
6,178
135
2.18
%
Total Interest-Bearing Liabilities
$
690,061
$
6,969
1.01
%
$
561,317
$
4,660
0.83
%
Interest Rate Spread
3.66
%
3.73
%
Noninterest checking accounts
155,936
123,516
Other liabilities
5,956
4,172
Total liabilities
851,953
689,005
Total Stockholders' equity
91,538
79,924
Total Liabilities and
Stockholders' Equity
$
943,491
$
768,929
Net Interest Income/Margin
$
33,684
3.88
%
$
27,471
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
ANALYSIS of AVERAGE BALANCES & TAX EQUIVALENT INTEREST RATES
(Dollars in thousands – unaudited)
(Yields on a tax-equivalent basis) (1)
For the Quarter Ended
December 31, 2019
September 30, 2019
December 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
$
20,557
$
107
2.09
%
$
23,356
$
133
2.26
%
$
7,554
$
41
2.18
%
Investment securities:
Taxable investment securities
193,439
1,496
3.07
%
202,607
1,591
3.11
%
144,565
1,062
2.91
%
Tax-exempt investment securities
40,513
331
4.16
%
43,558
356
4.10
%
56,653
431
3.86
%
Total Investment securities
233,952
1,827
3.26
%
246,165
1,947
3.29
%
201,218
1,493
3.18
%
Loans
642,399
8,284
5.12
%
633,215
8,580
5.38
%
535,659
7,174
5.31
%
Total Earning Assets
$
896,908
$
10,218
4.56
%
$
902,736
$
10,660
4.73
%
$
744,431
$
8,708
4.71
%
Allowance for loan losses
(8,154
)
(7,860
)
(7,277
)
Cash and due from banks
15,207
16,131
17,442
Other assets
59,337
59,817
39,495
Total Assets
$
963,298
$
970,824
$
794,091
Interest Bearing Liabilities:
Interest bearing checking accounts
$
255,516
$
361
0.56
%
$
258,808
$
399
0.61
%
$
220,536
$
267
0.48
%
Savings and money market deposits
294,580
513
0.69
%
295,746
547
0.73
%
232,669
559
0.95
%
Time deposits
118,497
526
1.76
%
118,910
539
1.80
%
107,599
510
1.88
%
Total interest bearing deposits
668,593
1,400
0.83
%
673,464
1,485
0.88
%
560,804
1,336
0.95
%
Subordinated debentures and notes
5,155
58
4.45
%
5,155
61
4.70
%
5,155
62
4.76
%
Borrowings
24,243
189
3.09
%
32,870
270
3.25
%
14,257
89
2.43
%
Total Interest-Bearing Liabilities
$
697,991
$
1,647
0.94
%
$
711,489
$
1,816
1.01
%
$
580,216
$
1,487
1.02
%
Interest Rate Spread
3.62
%
3.72
%
3.69
%
Noninterest checking accounts
161,432
158,512
126,816
Other liabilities
6,641
5,603
4,956
Total liabilities
866,064
875,604
711,988
Total Stockholders' equity
97,234
95,220
82,103
Total Liabilities and
Stockholders' Equity
$
963,298
$
970,824
$
794,091
Net Interest Income/Margin
$
8,571
3.83
%
$
8,844
3.93
%
$
7,221
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.
SOURCE: Blackhawk Bancorp, Inc.
ReleaseID: 574764
