BELOIT, WI / ACCESSWIRE / July 26, 2019 / Blackhawk Bancorp, Inc. (OTCQX: BHWB) reported net income of $2.75 million for the second quarter of 2019, a 155% increase over the $1.08 million earned for the previous quarter, and a 37% increase over the $2.02 million earned the second quarter of 2018. The increase compared to the most recent quarter is largely due to $1.34 million (after-tax) of acquisition, transition, and integration expenses related to the First National Bank of McHenry (FNB) acquisition being recorded in the first quarter. Excluding these expenses, net income for the second quarter of 2019 increased by $334,000, or 14%, as compared to the linked quarter ending March 31, 2019.
Fully diluted earnings per share (EPS) for the quarter ended June 30, 2019, was $0.83, an increase of $0.50 as compared to $0.33 for the quarter ended March 31, 2019 and an increase of $0.22 as compared to $0.61 for the quarter ended June 30, 2018. The increase compared to the most recent quarter is largely due to the above-mentioned acquisition, transition, and integration expenses. Excluding the acquisition related expenses, the 2019 second-quarter EPS increased by $0.10, or 14%, over the quarter ended March 31, 2019. The second quarter 2019 results produced a Return on Average Equity (ROAE) of 12.54% and a Return on Average Assets (ROAA) of 1.15%.
For the six months ended June 30, 2019, the company reported net income of $3.83 million, a 10% increase over the $3.47 million reported for the first half of 2018. Diluted earnings per share for the first six months of 2019 increased by 10% to $1.16 compared to $1.05 for the first half of 2018. The six-month results produced a return on average assets of 0.84% and a return on average equity of 8.91%. Excluding the acquisition-related expenses mentioned above, earnings for the first half of 2019 would have been $5.17 million, a $1.71 million, or 49.2% increase over the first half of 2018 and would have equated to $1.57 EPS, a $0.52 per share, or 49.5% increase over the first half of the prior year.
"We are very pleased with the earnings momentum reflected in our first-half results and our prospects for continued growth," said Todd James, Chairman and Chief Executive Officer. "During the second quarter, we generated over $30 million of loan growth, converted the FNB accounts to our operating systems and merged FNB with and into the Company's wholly-owned subsidiary Blackhawk Bank. These accomplishments combined with our passion and ability to provide personalized and responsive services to our customers should keep the momentum going," he added.
Total assets increased by $152.2 million, or 18.6%, to $969.5 million at June 30, 2019, compared to $817.3 million as of December 31, 2018. Total gross loans increased by $70.4 million, or 12.7%, during the first six months of 2019 to $624.7 million compared to $554.3 million at December 31, 2018. This included $30.0 million in net organic growth as First National Bank of McHenry provided $39.8 million of the first half increase in loans. Total deposits increased by $151.7 million, or 22.1%, to $837.3 million as compared to $685.6 million at the end of 2018 and included $151.3 million in McHenry deposits.
Net Interest Income
Net interest income for the second quarter of 2019 totaled $8.48 million, increasing $683,000, or 8.8%,
compared to $7.79 million for the previous quarter and up $1.69 million, or 25.0%, from the second quarter of last year. The net interest margin was 3.88% for the second quarter of 2019 as compared to 3.92% for the quarter ended March 31, 2019, and 3.91% for the second quarter of last year.
The increases in net interest income for each comparative period was driven by strong organic and acquisitive growth in average earning assets and deposits. Average total loans for the quarter ended June 30, 2019, equaled $601.2 million, a $37.3 million, or 6.6% increase over the previous quarter, and an $83.8 million, or 16.2% increase over the same quarter a year ago. The $83.8 million increase in second-quarter 2019 average loans over the second quarter of 2018 includes the effect of acquiring $41.5 million in net loans from FNB. Average total deposits for the quarter ended June 30, 2019, equaled $862.6 million, a $63.7 million, or 8.3% increase over the previous quarter, and a $162.8 million, or 24.5% increase over the same quarter a year ago. The growth in average total deposits reflects the impact of the $150.1 million in total deposits added with the FNB acquisition.
Net interest income for the six months ended June 30, 2019, increased by $3.2 million, or 24.6%, to $16.3 million as compared to $13.1 million for the first half of 2018. The net interest margin for the first half of 2019 increased by three basis points to 3.90% compared to 3.87% for the first half of 2018. Average total loans for the first half of 2019 were $582.7 million, an increase of $81.2 million, or 16.2%, as compared to $501.4 million for the first half of 2018 with the FNB acquisition contributing $27.5 million of the 2019 increase. Average total deposits for the first-half of 2019 were $796.1 million, an increase of $143.2 million, or 21.9%, as compared to $652.9 for the first half of 2018 with FNB contributing $101.4 million in average deposits.
Provision for Loan Losses and Credit Quality
The provision for loan losses for the quarter ended June 30, 2019, totaled $180,000, as compared to $270,000 for the quarter ended March 31, 2019, and $370,000 for the second quarter of 2018. The provision for the first-half 2019 decreased to $450,000 compared to $880,000 for the first-half of 2018. Net charge-offs for the six months ended June 30, 2019, equaled $40,000.
Total nonperforming assets, which include troubled debt restructures that are performing in accordance with their modified terms, equaled $7.80 million as of June 30, 2019, as compared to $7.70 million as of March 31, 2019, and $8.56 million at June 30, 2018. The FNB acquisition added $597,000 to nonperforming loans. At June 30, 2019, the ratio of nonperforming assets to total assets equaled 0.79%, as compared to 0.80% at March 31, 2019, and 1.10% at June 30, 2018. The allowance for loan losses to total loans was 1.24% as of June 30, 2019, as compared to 1.28% at March 31, 2019, and 1.30% as of June 30, 2018. The ratio of the allowance for loan losses to nonperforming loans increased to 106.1% as of June 30, 2019, as compared to 102.5% at March 31, 2019, and 79.2% at June 30, 2018. In addition to the balance of the allowance for loan losses, the balance sheet includes an additional $595,000 credit-related valuation discount attributable to the non-credit impaired loans acquired in the FNB transaction.
Non-Interest Income and Operating Expenses
Non-interest income for the quarter ended June 30, 2019, totaled $3.63 million, a $647,000 increase compared to $2.98 million the prior quarter, and a $589,000 increase over the $3.04 million recorded in the second quarter of 2018. The increase compared to the most recent quarter was primarily due to a $458,000 increase in revenue from the sale and servicing of mortgage loans, and also included increases in deposit service charges, debit interchange and net gains on the sale of other real estate. The increase compared to the second quarter of 2018 reflects growth in substantially all recurring fee income categories, but also includes a $181,000 increase in combined net gains from the sale of securities and other real estate.
Non-interest income for the first half of 2019 increased $1.07 million to $6.6 million as compared to $5.5 million for the first half of 2018 reflecting increases across all categories, including $183,000 in deposit service fees, $183,000 in net revenue from the sale and servicing of mortgage loans, $246,000 in interchange income, and a combined $240,000 in net gains on sale of securities.
Operating expenses for the quarter ended June 30, 2019, totaled $8.38 million, decreasing by $876,000 compared to the quarter ended March 31, 2019, and increasing by $1.4 million, or 20.3%, compared to the second quarter of 2018. The decrease compared to the most recent quarter was the result of $1.83 million of merger-related expenses being recorded in the first quarter of 2019. Excluding those acquisition-related expenses, total operating expenses for the second quarter increased by $951,000 compared to the first quarter of 2019, reflecting the first full quarter of operations of the FNB locations.
Operating expenses for the six-month period ended June 30, 2019, totaled $17.6 million, a $4.1 million, or 30.4% increase over the first half of 2018. That increase includes the $1.83 million in acquisition-related expenses mentioned above. Excluding those expenses, operating expenses increased $2.3 million, or 16.8%. The increase is partially driven by four months of operations of the First McHenry locations being included in the first half of 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.
CONTACT:
Todd J. James, Chairman & CEO
tjames@blackhawkbank.com
Phone: (608) 364-8911
Mary King McGovern, SVP & CFO
mmcgovern@blackhawkbank.com
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2019 AND DECEMBER 31, 2018
(UNAUDITED)
| June 30, | December 31, | |||||||
Assets | 2019 | 2018 | ||||||
| (Dollars in thousands, except | ||||||||
| share and per share data) | ||||||||
Cash and due from banks | $ | 17,364 | $ | 16,677 | ||||
Interest-bearing deposits in banks and other | 16,442 | 2,760 | ||||||
Total cash and cash equivalents | 33,806 | 19,437 | ||||||
Equity securities at fair value | 2,332 | 2,250 | ||||||
Securities available-for-sale | 253,930 | 198,670 | ||||||
Loans held for sale | 5,383 | 5,164 | ||||||
Federal Home Loan Bank stock, at cost | 700 | 1,643 | ||||||
Loans, less allowance for loan losses of $7,749 and $7,339 | ||||||||
at June 30, 2019 and December 31, 2018, respectively | 611,542 | 541,760 | ||||||
Premises and equipment, net | 21,066 | 14,874 | ||||||
Goodwill | 10,183 | 5,037 | ||||||
Core Deposit Intangible | 2,466 | - | ||||||
Mortgage servicing rights | 3,153 | 2,969 | ||||||
Cash surrender value of bank-owned life insurance | 10,969 | 10,812 | ||||||
Other assets | 13,941 | 14,671 | ||||||
Total assets | $ | 969,471 | $ | 817,287 | ||||
Liabilities and Stockholders' Equity | ||||||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 154,813 | $ | 121,024 | ||||
Interest-bearing | 682,506 | 564,615 | ||||||
Total deposits | 837,319 | 685,639 | ||||||
Subordinated debentures and notes (including $1,031 at fair value at | ||||||||
June 30, 2019 and December 31, 2018) | 5,155 | 5,155 | ||||||
Senior secured term note | 14,000 | - | ||||||
Other borrowings | 13,992 | 36,500 | ||||||
Other liabilities | 6,614 | 5,701 | ||||||
Total liabilities | 877,080 | 732,995 | ||||||
Stockholders' equity | ||||||||
Common stock, $0.01 par value, 10,000,000 shares authorized; | ||||||||
3,396,366 and 3,369,192 shares issued as of June 30, 2019 and | ||||||||
December 31, 2018, respectively | 34 | 34 | ||||||
Additional paid-in capital | 33,785 | 33,478 | ||||||
Retained earnings | 55,183 | 52,011 | ||||||
Treasury stock, 104,570 and 97,570 shares at cost as of June 30, 2019 | ||||||||
and December 31, 2018, respectively | (1,391 | ) | (1,204 | ) | ||||
Accumulated other comprehensive income (loss) | 4,780 | (27 | ) | |||||
Total stockholders' equity | 92,391 | 84,292 | ||||||
Total liabilities and stockholders' equity | $ | 969,471 | $ | 817,287 | ||||
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
| Six months ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| (Amounts in thousands, except per share data) | ||||||||
Interest Income: | ||||||||
Interest and fees on loans | $ | 15,585 | $ | 12,485 | ||||
Interest on available-for-sale securities: | ||||||||
Taxable | 3,003 | 1,611 | ||||||
Tax-exempt | 900 | 734 | ||||||
Interest on interest-bearing deposits and other | 288 | 132 | ||||||
Total interest income | 19,776 | 14,962 | ||||||
Interest Expense: | ||||||||
Interest on deposits | 2,920 | 1,743 | ||||||
Interest on subordinated debentures and notes | 130 | 112 | ||||||
Interest on senior secured term note | 253 | - | ||||||
Interest on other borrowings | 203 | 46 | ||||||
Total interest expense | 3,506 | 1,901 | ||||||
Net interest income before provision for loan losses | 16,270 | 13,061 | ||||||
Provision for loan losses | 450 | 880 | ||||||
Net interest income after provision for loan losses | 15,820 | 12,181 | ||||||
Noninterest Income: | ||||||||
Service charges on deposits accounts | 1,693 | 1,510 | ||||||
Net gain on sale of loans | 1,621 | 1,430 | ||||||
Net loan servicing income | 342 | 350 | ||||||
Debit card interchange fees | 1,616 | 1,370 | ||||||
Net gains on sales of securities available-for-sale | 305 | 65 | ||||||
Net other gains (losses) | 94 | (23 | ) | |||||
Increase in cash surrender value of bank-owned life insurance | 157 | 154 | ||||||
Other | 777 | 676 | ||||||
Total noninterest income | 6,605 | 5,532 | ||||||
Noninterest Expenses: | ||||||||
Salaries and employee benefits | 9,426 | 7,917 | ||||||
Occupancy and equipment | 1,992 | 1,723 | ||||||
Data processing | 2,398 | 812 | ||||||
Debit card processing and issuance | 723 | 629 | ||||||
Advertising and marketing | 249 | 296 | ||||||
Amortization of intangibles | 159 | - | ||||||
Professional fees | 972 | 572 | ||||||
Office Supplies | 175 | 189 | ||||||
Telephone | 246 | 250 | ||||||
Other | 1,285 | 1,130 | ||||||
Total noninterest expenses | 17,625 | 13,518 | ||||||
Income before income taxes | 4,800 | 4,195 | ||||||
Provision for income taxes | 967 | 727 | ||||||
Net income | $ | 3,833 | $ | 3,468 | ||||
Key Ratios | ||||||||
Basic Earnings Per Common Share | $ | 1.16 | $ | 1.05 | ||||
Diluted Earnings Per Common Share | 1.16 | 1.05 | ||||||
Dividends Per Common Share | 0.20 | 0.18 | ||||||
Net Interest Margin (1) | 3.90 | % | 3.87 | % | ||||
Efficiency Ratio (1)(2) | 77.47 | % | 72.01 | % | ||||
Return on Assets | 0.84 | % | 0.94 | % | ||||
Return on Common Equity | 8.91 | % | 8.92 | % | ||||
(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 | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2019 | 2019 | 2018 | 2018 | 2018 | ||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
Interest Income: | ||||||||||||||||||||
Interest and fees on loans | $ | 8,043 | $ | 7,542 | $ | 7,174 | $ | 6,884 | $ | 6,610 | ||||||||||
Interest on available-for-sale securities: | ||||||||||||||||||||
Taxable | 1,659 | 1,345 | 1,062 | 980 | 839 | |||||||||||||||
Tax-exempt | 451 | 448 | 431 | 389 | 359 | |||||||||||||||
Interest on interest-bearing deposits and other | 130 | 158 | 41 | 208 | 59 | |||||||||||||||
Total interest income | 10,283 | 9,493 | 8,708 | 8,461 | 7,867 | |||||||||||||||
Interest Expense: | ||||||||||||||||||||
Interest on deposits | 1,458 | 1,463 | 1,336 | 1,213 | 991 | |||||||||||||||
Interest on subordinated debentures and notes | 65 | 65 | 62 | 59 | 59 | |||||||||||||||
Interest on senior secured term note | 186 | 67 | - | - | - | |||||||||||||||
Interest on other borrowings | 98 | 105 | 89 | - | 34 | |||||||||||||||
Total interest expense | 1,807 | 1,700 | 1,487 | 1,272 | 1,084 | |||||||||||||||
Net interest income before provision for loan losses | 8,476 | 7,793 | 7,221 | 7,189 | 6,783 | |||||||||||||||
Provision for loan losses | 180 | 270 | 150 | 150 | 370 | |||||||||||||||
Net interest income after provision for loan losses | 8,296 | 7,523 | 7,071 | 7,039 | 6,413 | |||||||||||||||
Noninterest Income: | ||||||||||||||||||||
Service charges on deposits accounts | 885 | 808 | 849 | 829 | 769 | |||||||||||||||
Net gain on sale of loans | 1,040 | 581 | 886 | 1,070 | 960 | |||||||||||||||
Net loan servicing income | 171 | 172 | 170 | 171 | 173 | |||||||||||||||
Debit card interchange fees | 827 | 789 | 683 | 663 | 675 | |||||||||||||||
Net gains on sales of securities available-for-sale | 146 | 159 | (19 | ) | - | 59 | ||||||||||||||
Net other gains (losses) | 94 | - | - | - | - | |||||||||||||||
Increase in cash surrender value of bank-owned life insurance | 74 | 83 | 73 | 72 | 73 | |||||||||||||||
Other | 390 | 388 | 227 | 336 | 329 | |||||||||||||||
Total noninterest income | 3,627 | 2,980 | 2,869 | 3,141 | 3,038 | |||||||||||||||
Noninterest Expenses: | ||||||||||||||||||||
Salaries and employee benefits | 4,841 | 4,585 | 4,279 | 4,081 | 4,050 | |||||||||||||||
Occupancy and equipment | 1,000 | 992 | 824 | 826 | 891 | |||||||||||||||
Data processing | 571 | 1,827 | 425 | 428 | 417 | |||||||||||||||
Debit card processing and issuance | 389 | 334 | 334 | 339 | 336 | |||||||||||||||
Advertising and marketing | 142 | 108 | 176 | 126 | 143 | |||||||||||||||
Amortization of intangibles | 119 | 40 | - | - | - | |||||||||||||||
Professional fees | 393 | 579 | 443 | 350 | 316 | |||||||||||||||
Office Supplies | 89 | 86 | 91 | 77 | 79 | |||||||||||||||
Telephone | 130 | 116 | 129 | 125 | 126 | |||||||||||||||
Other | 701 | 584 | 605 | 555 | 604 | |||||||||||||||
Total noninterest expenses | 8,375 | 9,251 | 7,306 | 6,907 | 6,962 | |||||||||||||||
Income before income taxes | 3,548 | 1,252 | 2,634 | 3,273 | 2,489 | |||||||||||||||
Provision for income taxes | 794 | 173 | 538 | 695 | 473 | |||||||||||||||
Net income | $ | 2,754 | $ | 1,079 | $ | 2,096 | $ | 2,578 | $ | 2,016 | ||||||||||
Key Ratios | ||||||||||||||||||||
Basic Earnings Per Common Share | $ | 0.83 | $ | 0.33 | $ | 0.64 | $ | 0.78 | $ | 0.61 | ||||||||||
Diluted Earnings Per Common Share | 0.83 | 0.33 | 0.64 | 0.78 | 0.61 | |||||||||||||||
Dividends Per Common Share | 0.10 | 0.10 | 0.10 | 0.10 | 0.10 | |||||||||||||||
Net Interest Margin (1) | 3.88 | % | 3.92 | % | 3.91 | % | 3.91 | % | 3.91 | % | ||||||||||
Efficiency Ratio (1)(2) | 69.77 | % | 86.07 | % | 71.37 | % | 66.11 | % | 70.53 | % | ||||||||||
Return on Assets | 1.15 | % | 0.50 | % | 1.05 | % | 1.29 | % | 1.06 | % | ||||||||||
Return on Common Equity | 12.54 | % | 5.12 | % | 10.13 | % | 12.67 | % | 10.25 | % | ||||||||||
(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 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.
(UNAUDITED) | As of | |||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2019 | 2019 | 2018 | 2018 | 2018 | ||||||||||||||||
| (Amounts in thousands, except per share data) | ||||||||||||||||||||
Cash and due from banks | $ | 17,364 | $ | 14,581 | $ | 16,677 | $ | 19,526 | $ | 16,942 | ||||||||||
Interest-bearing deposits in banks and other | 16,442 | 35,862 | 2,760 | 5,878 | 43,001 | |||||||||||||||
Securities | 256,262 | 270,665 | 200,920 | 197,507 | 181,466 | |||||||||||||||
Net loans/leases | 616,925 | 583,350 | 546,924 | 502,463 | 495,005 | |||||||||||||||
Goodwill | 10,183 | 10,183 | 5,037 | 5,037 | 5,037 | |||||||||||||||
Other assets | 52,295 | 51,795 | 44,969 | 41,943 | 39,978 | |||||||||||||||
Total assets | $ | 969,471 | $ | 966,436 | $ | 817,287 | $ | 772,354 | $ | 781,429 | ||||||||||
Deposits | $ | 837,319 | $ | 854,505 | $ | 685,639 | $ | 680,136 | $ | 692,968 | ||||||||||
Subordinated debentures | 5,155 | 5,155 | 5,155 | 5,155 | 5,155 | |||||||||||||||
Senior secured note | 14,000 | - | - | - | - | |||||||||||||||
Other borrowings | 13,992 | 14,000 | 36,500 | - | - | |||||||||||||||
Other liabilities | 6,614 | 5,360 | 5,701 | 6,241 | 3,856 | |||||||||||||||
Stockholders' equity | 92,391 | 87,416 | 84,292 | 80,822 | 79,450 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 969,471 | $ | 966,436 | $ | 817,287 | $ | 772,354 | $ | 781,429 | ||||||||||
ASSET QUALITY DATA
(Amounts in thousands)
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2019 | 2019 | 2018 | 2018 | 2018 | ||||||||||||||||
Non-accrual loans | $ | 3,712 | $ | 3,815 | $ | 2,312 | $ | 3,362 | $ | 3,539 | ||||||||||
Accruing loans past due 90 days or more | 272 | - | 17 | - | 388 | |||||||||||||||
Troubled debt restructures - accruing | 3,321 | 3,546 | 3,797 | 3,873 | 4,283 | |||||||||||||||
Total nonperforming loans | $ | 7,305 | $ | 7,361 | $ | 6,126 | $ | 7,235 | $ | 8,210 | ||||||||||
Other real estate owned | 307 | 339 | 104 | 237 | 350 | |||||||||||||||
Total nonperforming assets | $ | 7,802 | $ | 7,700 | $ | 6,230 | $ | 7,472 | $ | 8,560 | ||||||||||
Total loans | $ | 624,674 | $ | 590,895 | $ | 554,263 | $ | 509,674 | $ | 501,504 | ||||||||||
Allowance for loan losses | 7,749 | $ | 7,545 | $ | 7,339 | $ | 7,211 | $ | 6,499 | |||||||||||
Loans, net of allowance for loan losses | $ | 616,925 | $ | 583,350 | $ | 546,924 | $ | 502,463 | $ | 495,005 | ||||||||||
Nonperforming Assets to total Assets | 0.79 | % | 0.80 | % | 0.76 | % | 0.97 | % | 1.10 | % | ||||||||||
Nonperforming loans to total loans | 1.17 | % | 1.25 | % | 1.11 | % | 1.42 | % | 1.64 | % | ||||||||||
Allowance for loan losses to total loans | 1.24 | % | 1.28 | % | 1.32 | % | 1.41 | % | 1.30 | % | ||||||||||
Allowance for loan losses to nonperforming loans | 106.1 | % | 102.5 | % | 119.8 | % | 99.7 | % | 79.2 | % | ||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
ROLLFORWARD OF ALLOWANCE | 2019 | 2019 | 2018 | 2018 | 2018 | |||||||||||||||
Beginning Balance | $ | 7,545 | $ | 7,339 | $ | 7,211 | $ | 6,499 | $ | 6,149 | ||||||||||
Provision | 180 | 270 | 150 | 150 | 370 | |||||||||||||||
Loans charged off | 11 | 102 | 76 | 105 | 178 | |||||||||||||||
Loan recoveries | 35 | 38 | 54 | 667 | 158 | |||||||||||||||
Net (recoveries) charge-offs | (24 | ) | 64 | 22 | (562 | ) | 20 | |||||||||||||
Ending Balance | $ | 7,749 | $ | 7,545 | $ | 7,339 | $ | 7,211 | $ | 6,499 | ||||||||||
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 | ||||||||||||||||||||||||||||||||||||
| June 30, 2019 | March 31, 2019 | June 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 | $ | 21,250 | $ | 130 | 2.48 | % | $ | 27,139 | $ | 158 | 2.37 | % | $ | 14,326 | $ | 59 | 1.64 | % | ||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||||||||||||
Taxable investment securities | 212,708 | 1,659 | 3.13 | % | 170,477 | 1,345 | 3.20 | % | 127,448 | 839 | 2.64 | % | ||||||||||||||||||||||||
Tax-exempt investment securities | 54,193 | 451 | 4.33 | % | 58,645 | 448 | 4.03 | % | 47,889 | 359 | 3.92 | % | ||||||||||||||||||||||||
Total Investment securities | 266,901 | 2,110 | 3.37 | % | 229,122 | 1,793 | 3.41 | % | 175,337 | 1,198 | 2.99 | % | ||||||||||||||||||||||||
Loans | 601,234 | 8,043 | 5.37 | % | 563,927 | 7,542 | 5.42 | % | 517,412 | 6,610 | 5.12 | % | ||||||||||||||||||||||||
Total Earning Assets | $ | 889,385 | $ | 10,283 | 4.70 | % | $ | 820,188 | $ | 9,493 | 4.76 | % | $ | 707,075 | $ | 7,867 | 4.52 | % | ||||||||||||||||||
Allowance for loan losses | (7,645 | ) | (7,446 | ) | (6,403 | ) | ||||||||||||||||||||||||||||||
Cash and due from banks | 15,165 | 16,567 | 17,228 | |||||||||||||||||||||||||||||||||
Other assets | 59,805 | 52,023 | 41,613 | |||||||||||||||||||||||||||||||||
Total Assets | $ | 956,710 | $ | 881,332 | $ | 759,513 | ||||||||||||||||||||||||||||||
Interest Bearing Liabilities: | ||||||||||||||||||||||||||||||||||||
Interest bearing checking accounts | $ | 258,866 | $ | 408 | 0.63 | % | $ | 243,543 | $ | 315 | 0.52 | % | $ | 225,104 | $ | 294 | 0.52 | % | ||||||||||||||||||
Savings and money market deposits | 289,097 | 535 | 0.74 | % | 267,052 | 642 | 0.97 | % | 225,411 | 397 | 0.71 | % | ||||||||||||||||||||||||
Time deposits | 118,383 | 515 | 1.75 | % | 111,365 | 506 | 1.84 | % | 90,779 | 300 | 1.33 | % | ||||||||||||||||||||||||
Total interest bearing deposits | 666,346 | 1,458 | 0.88 | % | 621,960 | 1,463 | 0.95 | % | 541,294 | 991 | 0.73 | % | ||||||||||||||||||||||||
Subordinated debentures and notes | 5,155 | 65 | 5.03 | % | 5,155 | 65 | 5.11 | % | 5,155 | 59 | 4.59 | % | ||||||||||||||||||||||||
Borrowings | 29,596 | 284 | 3.85 | % | 21,616 | 172 | 3.23 | % | 6,999 | 34 | 1.95 | % | ||||||||||||||||||||||||
Total Interest-Bearing Liabilities | $ | 701,097 | $ | 1,807 | 1.03 | % | $ | 648,731 | $ | 1,700 | 1.06 | % | $ | 553,448 | $ | 1,084 | 0.79 | % | ||||||||||||||||||
Interest Rate Spread | 3.67 | % | 3.70 | % | 3.73 | % | ||||||||||||||||||||||||||||||
Noninterest checking accounts | 161,461 | 142,178 | 123,689 | |||||||||||||||||||||||||||||||||
Other liabilities | 6,055 | 4,993 | 3,472 | |||||||||||||||||||||||||||||||||
Total liabilities | 868,613 | 795,902 | 680,609 | |||||||||||||||||||||||||||||||||
Total Stockholders' equity | 88,097 | 85,430 | 78,904 | |||||||||||||||||||||||||||||||||
Total Liabilities and | ||||||||||||||||||||||||||||||||||||
Stockholders' Equity | $ | 956,710 | $ | 881,332 | $ | 759,513 | ||||||||||||||||||||||||||||||
Net Interest Income/Margin | $ | 8,476 | 3.88 | % | $ | 7,793 | 3.92 | % | $ | 6,783 | 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 averages.
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 Six Months Ended | ||||||||||||||||||||||||
| June 30, 2019 | June 30, 2018 | |||||||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||
Interest Earning Assets: | ||||||||||||||||||||||||
Interest-bearing deposits and other | $ | 24,178 | $ | 288 | 2.42 | % | $ | 17,148 | $ | 132 | 1.55 | % | ||||||||||||
Investment securities: | % | |||||||||||||||||||||||
Taxable investment securities | 190,021 | 3,003 | 3.19 | % | 124,005 | 1,611 | 2.62 | % | ||||||||||||||||
Tax-exempt investment securities | 58,095 | 900 | 4.03 | % | 49,438 | 734 | 3.90 | % | ||||||||||||||||
Total Investment securities | 248,116 | 3,903 | 3.38 | % | 173,443 | 2,345 | 2.99 | % | ||||||||||||||||
Loans | 582,684 | 15,585 | 5.39 | % | 501,437 | 12,485 | 5.02 | % | ||||||||||||||||
Total Earning Assets | $ | 854,978 | $ | 19,776 | 4.73 | % | $ | 692,028 | $ | 14,962 | 4.42 | % | ||||||||||||
Allowance for loan losses | (7,546 | ) | (6,103 | ) | ||||||||||||||||||||
Cash and due from banks | 15,862 | 17,652 | ||||||||||||||||||||||
Other assets | 55,917 | 41,676 | ||||||||||||||||||||||
Total Assets | $ | 919,211 | $ | 745,253 | ||||||||||||||||||||
Interest Bearing Liabilities: | ||||||||||||||||||||||||
Interest bearing checking accounts | $ | 251,246 | $ | 723 | 0.58 | % | $ | 224,818 | $ | 535 | 0.48 | % | ||||||||||||
Savings and money market deposits | 278,135 | 1,177 | 0.85 | % | 216,469 | 647 | 0.60 | % | ||||||||||||||||
Time deposits | 114,893 | 1,021 | 1.79 | % | 90,521 | 561 | 1.25 | % | ||||||||||||||||
Total interest bearing deposits | 644,274 | 2,921 | 0.91 | % | 531,808 | 1,743 | 0.66 | % | ||||||||||||||||
Subordinated debentures | 5,155 | 130 | 5.07 | % | 5,155 | 112 | 4.38 | % | ||||||||||||||||
Borrowings | 25,644 | 456 | 3.59 | % | 5,131 | 46 | 1.82 | % | ||||||||||||||||
Total Interest-Bearing Liabilities | $ | 675,073 | $ | 3,507 | 1.05 | % | $ | 542,094 | $ | 1,901 | 0.71 | % | ||||||||||||
| | ||||||||||||||||||||||||
Interest Rate Spread | 3.68 | % | 3.71 | % | ||||||||||||||||||||
Noninterest checking accounts | 151,833 | 121,047 | ||||||||||||||||||||||
Other liabilities | 5,534 | 3,702 | ||||||||||||||||||||||
Total liabilities | 832,440 | 666,843 | ||||||||||||||||||||||
Total Stockholders' equity | 86,771 | 78,410 | ||||||||||||||||||||||
Total Liabilities and | ||||||||||||||||||||||||
Stockholders' Equity | $ | 919,211 | $ | 745,253 | ||||||||||||||||||||
Net Interest Income/Margin | $ | 16,269 | 3.90 | % | $ | 13,061 | 3.87 | % | ||||||||||||||||
(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 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 average balances.
SOURCE: Blackhawk Bancorp, Inc.
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https://www.accesswire.com/553631/Blackhawk-Bancorp-Announces-2019-Second-Quarter-Earnings
