Blackhawk Bancorp Achieves Record Earnings for 2020
*BELOIT, WI / ACCESSWIRE / January 27, 2021* */* Blackhawk Bancorp, Inc. *(OTCQX:BHWB)* reported net income of $3.3 million for the fourth quarter of 2020, a 17% increase over the $2.9 million earned the previous quarter, and a 42% increase compared to the $2.4 million earned the fourth quarter of 2019. Fully diluted earnings per share (EPS) for the quarter ended December 31, 2020, was $1.00, an increase of $0.14 as compared to $0.86 for the quarter ended September 30, 2020 and an increase of $0.29 as compared to $0.71 earned for the quarter ended December 31, 2019. The fourth quarter 2020 results produced an annualized Return on Average Equity (ROAE) of 12.08% and Return on Average Assets (ROAA) of 1.20%.
The earnings increase compared to the most recent quarter was driven by a $0.9 million decrease in provision for loan losses and a $0.4 million increase in securities gains. These were offset by a $0.5 million decrease in net interest income.
The increase in net income for the fourth quarter of 2020 compared to the fourth quarter of 2019 reflects increases of $0.9 million, $2.3 million and $0.4 million in net interest income, net revenue from the sale and servicing of mortgage loans, and securities gains, respectively. The growth in revenue was partially offset by increases in provision for loan losses of $0.7 million and operating expenses of $0.8 million.
For the year ended December 31, 2020, the Company reported record earnings with net income of $10.8 million, an increase of 13% over the previous record of $9.6 million reported for 2019. EPS for 2020 increased by 12% to $3.25 compared to $2.90 for 2019. The Company's results for the year ended December 31, 2020 produced a ROAE of 10.35% and a ROAA of 1.02%.
"I'm extremely proud of what our team accomplished this past year", said Todd James, the Company's Chief Executive Officer. "Blackhawk achieved record earnings, despite having to take a much different path to those results than originally planned", he added. "In response to the unprecedented events of 2020, our bankers focused their efforts on assisting our customers and prospects and helping them deal with the financial implications of the economic shutdown that was brought on by the pandemic. This included originating over $80 million in Paycheck Protection Program (PPP) loans, providing payment relief on another $72 million of loans, and helping over 1,900 homeowners lock in $295 million of mortgage loans at historical low rates", said James.
Total assets of the Company increased by $177.7 million, or 18%, to $1.1 billion at December 31, 2020, compared to $963.9 million as of December 31, 2019. Total gross loans increased by $44.4 million, or 7%, and total investment securities increased $114.6 million, or 48%, during the year of 2020. Total Deposits increased by $157.6 million, or 19%, to $987.3 million compared to $829.6 million at the end of 2019.
*Net Interest Income*
Net interest income for the fourth quarter of 2020 totaled $9.4 million, a decrease of $0.5 million, or 5%, compared to the third quarter of 2020, and up $0.9 million, or 10%, compared to the fourth quarter of 2019. The net interest margin was 3.63% for the fourth quarter of 2020 as compared to 3.83% for both the quarter ended September 30, 2020, and the fourth quarter of 2019.
The increase in net interest income compared to the fourth quarter of 2019 was the result of growth in average total earning assets, which increased by $148.6 million, or 17%. The increase was driven by the PPP, other pandemic stimulus and an overall influx of deposits as we saw a flight to safety. While the increase in average earning assets boosted net interest income, the net interest margin realized on many of the assets added was lean. Total average deposits increased by $126.1 million, or 15%, for the fourth quarter of 2020 compared to the fourth quarter of 2019. With average total loans increasing by $35.9 million, or 6%, for the same comparative quarters, much of the growth in deposits was deployed in the investment portfolio or held in interest-bearing bank accounts. The average balance of investment securities increased by $103.1 million, or 44%, for the fourth quarter of 2020 compared to the fourth quarter of 2019. With these securities being added during a time of historically low interest rates, the yield on investments dropped by 79 basis points to 2.47% for the fourth quarter of 2020 compared to 3.26% for the fourth quarter of 2019. The average balance of PPP loans for the fourth quarter of 2020 was $73.6 million. Including the $0.5 million in PPP origination fees recognized in the fourth quarter, the yield on PPP Loans was 3.82%.
Net interest income for the year ended December 31, 2020 increased by $4.2 million, or 12%, to $37.8 million as compared to $33.7 million for 2019. The net interest margin for 2020 decreased by six basis points to 3.82% compared to 3.88% for 2019.
The increase in net interest income for 2020, compared to the prior year, was the result of a $123.8 million, or 14%, increase in average total earning assets to $1.0 billion. Average total loans for the twelve months of 2020 were $675.5 million, an increase of $65.0 million, or 11%, as compared to $610.5 million for 2019. Average total loans for 2020 included $54.9 million of PPP loans. Average total deposits for 2020 were $915.2 million, an increase of $101.5 million, or 12%, as compared to $813.7 million for 2019. With deposit growth outpacing loan growth, average total investments for 2020 increased by $49.9 million, or 20%, to $294.0 million compared to $244 million for 2019. The Federal Reserve's aggressive rate cuts to address the economic fallout from the pandemic led to a 48 basis-point decrease in the yield on average earning assets as compared to 2019. Being funded primarily by a stable, core deposit base, the Company was able to act swiftly in adjusting deposit rates, achieving a 47 basis-point decrease in the cost of deposits and a 51 basis-point drop in cost of funds, limiting the decrease in the net interest margin to six basis points compared to the prior year.
*Provision for Loan Losses and Asset Quality*
The provision for loan losses for the quarter ended December 31, 2020, totaled $1.7 million, as compared to $2.6 million for the quarter ended September 30, 2020, and $1.0 million for the fourth quarter of 2019. The provision for loan losses for the year ended December 31, 2020 increased $5.6 million to $7.6 million compared to $2.0 million for 2019. The increased provision was made to replenish the allowance for loan losses for charge-offs taken in 2020, and to accommodate an increase in qualitative factors due to uncertainty and potential losses related COVID-19. Net charge-offs for the year equaled $4.8 million, with $3.8 million of that amount being related to one relationship.
Total nonperforming assets, which include troubled debt restructures that are performing in accordance with their modified terms, equaled $9.1 million as of December 31, 2020, as compared to $11.0 million as of September 30, 2020, and $13.6 million at December 31, 2019. At December 31, 2020, the ratio of nonperforming assets to total assets equaled 0.79%, as compared to 0.97% at September 30, 2020, and 1.41% at December 31, 2019. The allowance for loan losses to total loans was 1.59% as of December 31, 2020, as compared to 1.44% at September 30, 2020, and 1.25% as of December 31, 2019. The allowance for loan losses to total loans, excluding PPP loans, at December 31, 2020 is 1.74% compared to 1.64% at September 30, 2020. The ratio of the allowance for loan losses to nonperforming loans increased to 118.7% as of December 31, 2020, as compared to 90.8% at September 30, 2020, and 58.8% at December 31, 2019.
While overall delinquency rates and non-performing asset levels have improved, management believes that current economic conditions present a heightened level of uncertainty that could result in elevated losses in future quarters. Many borrowers have taken advantage of PPP, other stimulus programs, and payment deferral loan modifications provided by the Bank. Blackhawk will continue being proactive with borrowers to ensure credit issues are identified and addressed as early as possible, and will grant borrower concessions that improve the overall probability of repayment.
Blackhawk implemented a program to provide payment relief to borrowers negatively affected by the COVID-19 pandemic, including payment deferrals, interest only payments, and forbearance agreements offering other relief. Many of these customers have returned to normal payments, however some are still under the original or extended modification agreements. The table below summarizes the status of loans that have been modified under the program. The portfolio balances in the tables exclude loans originated under PPP, which are 100% guaranteed by the SBA:
Of the total $72.2 million of loans that were modified to grant payment relief, $45.2 million have returned to normal payments. Of the remaining $27 million, $5.1 million has been transferred to non-accrual status and $21.9 million are still categorized as performing loans. The decision to move a credit to non-accrual or non-performing status is based upon management's assessment of likelihood the borrower will ultimately be able to make all principal and interest payments post-COVID.
*Non-Interest Income and Operating Expenses*
Non-interest income for the quarter ended December 31, 2020, totaled $6.0 million, a $0.3 million increase compared to $5.7 million the prior quarter, and a $2.1 million increase over the $3.9 million recorded in the fourth quarter of 2019. The increase compared to the third quarter of 2020 was due to $0.4 million of securities gains recognized in the fourth quarter and none the previous quarter. This was partially offset by a $0.2 million decrease in net loan servicing income reflecting an increase in the valuation allowance on the originated mortgage servicing rights asset. The increase in non-interest income compared to the fourth quarter of 2019 includes a $2.3 million increase in net revenue from the sale and servicing of mortgage loans. The increase also includes $0.4 million of securities gains for the fourth quarter of 2020 with none realized in the fourth quarter of the prior year. These increases were offset by a $0.2 million decrease in service charges on deposits and a $0.3 million decrease in other non-interest income.
Non-interest income for the full year 2020 increased $4.7 million, or 31%, to $19.8 million as compared to $15.1 million for 2019, including a $6.1 million increase in revenue from the sale and servicing of mortgage loans. This increase was offset by $0.7 million decrease in deposit service charges and a $0.6 million decrease in gain on sale of securities.
Operating expenses for the quarter ended December 31, 2020, totaled $9.3 million, unchanged compared to the quarter ended September 30, 2020, and increasing by $0.8 million, or 10%, compared to the fourth quarter of 2019. The increase compared to the fourth quarter of 2019 was due to a $0.9 million increase in compensation, which includes elevated variable compensation related to increased mortgage loan originations.
Operating expenses for the full year 2020 increased $1.5 million, or 4%, to $36.2 million as compared to $34.6 million the year before. The 2019 results included $2 million of nonrecurring acquisition related expenses. Excluding the acquisition related expenses for 2019, operating expenses would have increased by $3.5 million, or 11%, over the previous year. This increase reflects operating the three acquired locations for the full year, versus only ten months in 2019, and the increased variable expenses related to mortgage banking activity.
*Share Repurchase Program*
At its meeting on October 21, 2020, the Company's Board of Directors authorized a share repurchase program, under which the Company may repurchase up to 200,000 shares of its outstanding common stock. As of December 31, 2020, the Company has repurchased 6,400 shares under the program. The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors including market conditions, capital requirements, and other corporate considerations as determined by the Company's management team. The repurchase program may be suspended or discontinued at any time. The Company expects to finance the purchases with existing cash balances.
*Outlook*
The outlook for Blackhawk as well as the entire banking industry is clouded by uncertainty related to the COVID-19 pandemic crisis. Blackhawk believes there is risk of elevated credit losses in future quarters as the economic impact of the crisis plays out. In addition, a prolonged low interest rate environment has the potential to negatively affect net interest income and the net interest margin. The Company will continue taking steps to increase revenue, implement government stimulus programs and work with credit customers to offset and mitigate losses to the extent possible. Management believes the Company's financial position is strong and it has ample resources to withstand a potentially severe and protracted recession. In addition to responding to this crisis, Blackhawk will continue to pursue 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 organic growth opportunities, Blackhawk may also pursue growth through selective acquisitions. Ability to grow or maintain profitability may be affected by 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
Matthew McDonnell, SVP & CFO
mmcdonnell@blackhawkbank.com
Phone: (608) 364-8911
*BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2020 AND DECEMBER 31, 2019
(UNAUDITED)*
*December 31,* *December 31,*
*Assets*
*2020* *2019*
(Dollars in thousands, except
share and per share data)
Cash and due from banks
$ 12,012 $ 12,320
Interest-bearing deposits in banks and other institutions
42,119 20,761
Total cash and cash equivalents
54,131 33,081
Certificates of deposit in banks and other institutions
4,159 6,325
Equity securities at fair value
2,517 2,365
Securities available-for-sale
349,565 235,083
Loans held for sale
6,096 6,540
Federal Home Loan Bank stock, at cost
2,150 742
Loans, less allowance for loan losses of $10,764 and $7,941
at December 31, 2020 and December 31, 2019, respectively
662,225 619,359
Premises and equipment, net
20,254 21,025
Goodwill and core deposit intangible
12,018 12,455
Mortgage servicing rights
3,409 3,106
Cash surrender value of bank-owned life insurance
11,126 11,118
Other assets
13,949 12,662
Total assets
$ 1,141,599 $ 963,861
*Liabilities and Stockholders' Equity*
Liabilities
Deposits:
Noninterest-bearing
$ 268,866 $ 155,978
Interest-bearing
718,388 673,631
Total deposits
987,254 829,609
Short-term borrowings
- -
Subordinated debentures and notes (including $1,031 at fair value at
December 31, 2020 and December 31, 2019)
5,155 5,155
Senior secured term note
12,833 14,000
Other borrowings
14,000 10,000
Other liabilities
10,602 7,773
*Total liabilities*
1,029,844 866,537
*Stockholders' equity*
Common stock, $0.01 par value, 10,000,000 shares authorized;
3,435,348 and 3,399,803 shares issued as of December 31, 2020 and
December 31, 2019, respectively
35 34
Additional paid-in capital
35,062 33,989
Retained earnings
69,676 60,295
Treasury stock, 62,999 and 105,185 shares at cost as of December 31, 2020
and December 31, 2019, respectively
(941 ) (1,408 )
Accumulated other comprehensive income (loss)
7,923 4,414
Total stockholders' equity
111,755 97,324
*Total liabilities and stockholders' equity*
$ 1,141,599 $ 963,861
*BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME*
*(UNAUDITED)*
*Twelve months ended December 31,*
*2020* *2019*
(Amounts in thousands, except per share data)
Interest Income:
Interest and fees on loans
$ 33,441 $ 32,449
Interest and dividends on available-for-sale securities:
Taxable
6,328 6,089
Tax-exempt
1,451 1,587
Interest on other financial institutions
276 528
*Total interest income*
41,496 40,653
Interest Expense:
Interest on deposits
2,840 5,806
Interest on short-term borrowings
44 313
Interest on subordinated debentures
182 248
Interest on senior secured term note
498 591
Interest on other
83 11
*Total interest expense*
3,647 6,969
*Net interest income before provision for loan losses*
37,849 33,684
Provision for loan losses
7,600 2,010
*Net interest income after provision for loan losses *
30,249 31,674
Noninterest Income:
Service charges on deposits accounts
3,035 3,715
Net gain on sale of loans
11,080 4,211
Net loan servicing income
(431 ) 369
Debit card interchange fees
3,738 3,402
Net gains on sales of securities available-for-sale
535 1,171
Net other gains (losses)
64 89
Increase in cash surrender value of bank-owned life insurance
310 306
Change in value of equity securities
70 33
Other
1,380 1,832
*Total noninterest income*
19,781 15,128
Noninterest Expenses:
Salaries and employee benefits
21,948 19,382
Occupancy and equipment
4,278 4,115
Data processing
2,383 3,574
Debit card processing and issuance
1,584 1,574
Advertising and marketing
297 450
Amortization of core deposit intangible
437 398
Professional fees
1,531 1,659
Office Supplies
363 405
Telephone
577 536
Other
2,752 2,520
*Total noninterest expenses*
36,150 34,613
*Income before income taxes*
13,880 12,189
Provision for income taxes
3,033 2,585
*Net income *
$ 10,847 $ 9,604
*Key Ratios*
Basic Earnings Per Common Share
$ 3.25 $ 2.90
Diluted Earnings Per Common Share
3.25 2.90
Dividends Per Common Share
0.44 0.40
Net Interest Margin (1)
3.82 % 3.88 %
Efficiency Ratio (1)(2)
63.14 % 72.10 %
Return on Assets
1.02 % 1.02 %
Return on Common Equity
10.35 % 10.49 %
(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,*
*2020* *2020* *2020* *2020* *2019*
Interest Income:
(Dollars in thousands, except per share data)
Interest and fees on loans
$ 8,079 $ 8,671 $ 8,658 $ 8,033 $ 8,284
Interest on available-for-sale securities:
Taxable
1,598 1,607 1,618 1,505 1,496
Tax-exempt
384 372 371 323 331
Interest on other financial institutions
33 41 40 162 107
*Total interest income*
10,094 10,691 10,687 10,023 10,218
Interest Expense:
Interest on deposits
458 565 639 1,177 1,400
Interest on subordinated debentures
41 42 45 53 58
Interest on senior secured term note
113 119 111 156 165
Interest on other borrowings
40 47 19 22 24
*Total interest expense*
652 773 814 1,408 1,647
*Net interest income before provision for loan losses*
9,442 9,918 9,873 8,615 8,571
Provision for loan losses
1,715 2,615 2,505 765 980
*Net interest income after provision for loan losses *
7,727 7,303 7,368 7,850 7,591
Noninterest Income:
Service charges on deposits accounts
781 747 610 897 1,002
Net gain on sale of loans
3,572 3,412 3,192 905 1,257
Net loan servicing income
(177 ) 26 (389 ) 110 119
Debit card interchange fees
979 1,002 924 832 876
Net gains on sales of securities available-for-sale
428 - 8 99 -
Net other gains (losses)
- 58 6 - (87 )
Increase in cash surrender value of bank-owned life insurance
75 76 74 85 75
Other
310 344 425 273 632
*Total noninterest income*
5,968 5,665 4,850 3,201 3,874
Noninterest Expenses:
Salaries and employee benefits
5,851 5,585 5,477 5,035 4,964
Occupancy and equipment
986 1,137 1,074 1,083 1,038
Data processing
683 629 561 510 520
Debit card processing and issuance
384 409 394 397 449
Advertising and marketing
75 87 38 97 101
Amortization of intangibles
107 107 107 115 119
Professional fees
373 386 405 367 300
Office Supplies
90 94 88 90 118
Telephone
140 138 149 150 153
Other
637 714 659 646 730
*Total noninterest expenses*
9,326 9,286 8,952 8,490 8,492
*Income before income taxes*
4,369 3,682 3,266 2,561 2,973
Provision for income taxes
1,022 819 704 487 621
*Net income *
$ 3,347 $ 2,863 $ 2,562 $ 2,074 $ 2,352
*Key Ratios*
Basic Earnings Per Common Share
$ 1.00 $ 0.86 $ 0.77 $ 0.63 $ 0.71
Diluted Earnings Per Common Share
1.00 0.86 0.77 0.63 0.71
Dividends Per Common Share
0.11 0.11 0.11 0.11 0.10
Net Interest Margin (1)
3.63 % 3.83 % 3.99 % 3.83 % 3.83 %
Efficiency Ratio (1)(2)
61.80 % 59.39 % 60.43 % 71.89 % 67.25 %
Return on Assets
1.20 % 1.03 % 0.96 % 0.85 % 0.97 %
Return on Common Equity
12.08 % 10.64 % 10.16 % 8.31 % 9.60 %
(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,*
*2020* *2020* *2020* *2020* *2019*
(Amounts in thousands, except per share data)
Cash and due from banks
$ 12,012 $ 17,403 $ 14,527 $ 15,240 $ 12,320
Interest-bearing deposits in banks and other
46,278 47,848 25,246 6,775 27,086
Securities
352,082 317,761 301,726 265,165 237,448
Net loans/leases
668,321 681,060 697,881 626,797 625,899
Goodwill and core deposit intangible
12,018 12,125 12,232 12,340 12,455
Other assets
50,888 50,105 49,485 50,688 48,653
*Total assets*
$ 1,141,599 $ 1,126,302 $ 1,101,097 $ 977,005 $ 963,861
Deposits
$ 987,254 $ 960,773 $ 939,066 $ 843,061 $ 829,609
Subordinated debentures
5,155 5,155 5,155 5,155 5,155
Senior secured term note
12,833 13,222 13,611 14,000 14,000
Borrowings
14,000 29,000 29,000 10,000 10,035
Other liabilities
10,602 10,161 9,758 6,083 7,738
Stockholders' equity
111,755 107,991 104,507 98,706 97,324
*Total liabilities and stockholders' equity*
$ 1,141,599 $ 1,126,302 $ 1,101,097 $ 977,005 $ 963,861
*ASSET QUALITY DATA *
(Amounts in thousands)
*December 31,* *September 30,* *June 30,* *March 31,* *December 31,*
*2020* *2020* *2020* *2020* *2019*
Non-accrual loans
$ 7,013 $ 8,584 $ 8,427 $ 9,680 $ 10,642
Accruing loans past due 90 days or more
- 196 - 845 -
Troubled debt restructures - accruing
2,057 2,176 2,361 2,770 2,866
Total nonperforming loans
$ 9,070 $ 10,956 $ 10,788 $ 13,295 $ 13,508
Other real estate owned
1 1 762 123 54
Total nonperforming assets
$ 9,071 $ 10,957 $ 11,550 $ 13,418 $ 13,562
Total loans
$ 679,085 $ 691,003 $ 707,983 $ 634,957 $ 633,840
Allowance for loan losses
$ 10,764 $ 9,943 $ 10,102 $ 8,160 $ 7,941
$ 668,321 $ 681,060 $ 697,881 $ 626,797 $ 625,899
Nonperforming Assets to total Assets
0.79 % 0.97 % 1.05 % 1.37 % 1.41 %
Nonperforming loans to total loans
1.34 % 1.59 % 1.52 % 2.09 % 2.13 %
Allowance for loan losses to total loans
1.59 % 1.44 % 1.43 % 1.29 % 1.25 %
Allowance for loan losses to nonperforming loans
118.7 % 90.8 % 93.6 % 61.4 % 58.8 %
*For the Quarter Ended*
*December 31,* *September 30,* *June 30,* *March 31,* *December 31,*
*ROLLFORWARD OF ALLOWANCE*
*2020* *2020* *2020* *2020* *2019*
Beginning Balance
$ 9,943 $ 10,102 $ 8,160 $ 7,941 $ 8,324
Provision
1,715 2,615 2,505 765 980
Loans charged off
1,334 2,892 639 633 1,463
Loan recoveries
440 118 76 87 100
Net charge-offs
894 2,774 563 546 1,363
Ending Balance
$ 10,764 $ 9,943 $ 10,102 $ 8,160 $ 7,941
*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)(1)
*For the Twelve Months Ended*
*December 31, 2020* *December 31, 2019*
*Average* *Average* *Average* *Average*
*Balance* *Interest* *Rate* *Balance* *Interest* *Rate*
*Interest Earning Assets:*
Interest-bearing deposits and other
$ 31,899 $ 276 0.86 % $ 23,058 $ 528 2.29 %
Investment securities:
Taxable investment securities
247,389 6,328 2.56 % 193,954 6,089 3.14 %
Tax-exempt investment securities
46,594 1,451 4.01 % 50,100 1,587 3.88 %
Total Investment securities
293,983 7,779 2.79 % 244,054 7,676 3.29 %
Loans
675,466 33,441 4.95 % 610,472 32,449 5.32 %
*Total Earning Assets*
*$* *1,001,348* *$* *41,496* *4.19* *%* *$* *877,584* *$* *40,653* *4.67* *%*
Allowance for loan losses
(9,535 ) (7,778 )
Cash and due from banks
16,453 15,765
Other assets
58,475 57,920
*Total Assets*
$ 1,066,741 $ 943,491
*Interest Bearing Liabilities:*
Interest bearing checking accounts
$ 281,053 $ 807 0.29 % $ 254,228 $ 1,483 0.58 %
Savings and money market deposits
318,169 676 0.21 % 286,719 2,237 0.78 %
Time deposits
97,747 1,357 1.39 % 116,814 2,086 1.79 %
Total interest bearing deposits
696,969 2,840 0.41 % 657,761 5,806 0.88 %
Subordinated debentures
5,155 182 3.53 % 5,155 248 4.81 %
Borrowings
34,227 625 1.83 % 27,145 915 3.37 %
*Total Interest-Bearing Liabilities*
*$* *736,351* *$* *3,647* *0.50* *%* *$* *690,061* *$* *6,969* *1.01* *%*
*Interest Rate Spread*
3.69 % 3.66 %
Noninterest checking accounts
218,254 155,936
Other liabilities
7,357 5,956
Total liabilities
961,962 851,953
*Total Stockholders' equity*
104,779 91,538
*Total Liabilities and*
*Stockholders' Equity*
$ 1,066,741 $ 943,491
*Net Interest Income/Margin*
*$* *37,849* *3.82* *%* *$* *33,684* *3.88* *%*
(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*
*Average Balance Sheet with Resultant Interest and Rates*
(Yields on a tax-equivalent basis) (1)
*For the Quarter Ended*
*December 31, 2020* * * * * *September 30, 2020*
*Average* * * * * * * * * *Average* * * * * *Average* * * * * * * * * *Average*
*Balance* * * * * *Interest* * * * * *Rate* * * * * *Balance* * * * * *Interest* * * * * *Rate*
*Interest Earning Assets:*
Interest-bearing deposits and other
$ 30,058 $ 32 0.43 % $ 42,716 $ 41 0.38 %
Investment securities:
Taxable investment securities
285,167 1,598 2.23 % 257,506 1,607 2.48 %
Tax-exempt investment securities
51,902 384 3.78 % 47,090 372 4.09 %
Total Investment securities
337,069 1,982 2.47 % 304,596 1,979 2.73 %
Loans
678,335 8,079 4.74 % 693,418 8,670 4.97 %
*Total Earning Assets*
* * *$ * *1,045,462* * * * * *$ * *10,093* * * * * * * *3.88* *%* * * *$ * *1,040,730* * * * * *$ * *10,690* * * * * * * *4.13* *%*
Allowance for loan losses
(10,313 ) (11,018 )
Cash and due from banks
16,032 18,901
Other assets
58,663 58,022
*Total Assets*
$ 1,109,844 $ 1,106,635
*Interest Bearing Liabilities:*
Interest bearing checking accounts
$ 261,739 $ 150 0.23 % $ 292,875 $ 166 0.23 %
Savings and money market deposits
349,028 98 0.11 % 335,043 111 0.13 %
Time deposits
84,166 210 0.99 % 91,366 288 1.25 %
Total interest bearing deposits
694,933 458 0.26 % 719,284 565 0.31 %
Subordinated debentures and notes
5,155 41 3.19 % 5,155 42 3.25 %
Borrowings
30,186 152 2.01 % 42,637 165 1.54 %
*Total Interest-Bearing Liabilities*
* * *$ * *730,274* * * * * *$ * *651* * * * * * * *0.36* *%* * * *$ * *767,076* * * * * *$ * *772* * * * * * * *0.40* *%*
*Interest Rate Spread*
* * *3.52* *%* 3.73 %
Noninterest checking accounts
261,182 224,552
Other liabilities
8,202 7,950
Total liabilities
999,658 999,578
*Total Stockholders' equity*
110,186 107,057
*Total Liabilities and*
*Stockholders' Equity*
$ 1,109,844 $ 1,106,635
*Net Interest Income/Margin*
* * * * * * * * * * *$ * *9,442* * * * * * * *3.63* *%* * * * * * * * * * * *$ * *9,918* * * * * * * *3.83* *%*
(1) Management discloses certain non-GAAP financial measures to evaluate and measure the Company's performance including a presentation of net interest income with a net interest margin 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.
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