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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.



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

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