Blackhawk Bancorp Announces 2021 Second Quarter Earnings
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Blackhawk Bancorp Announces 2021 Second Quarter Earnings

Wednesday, July 21, 2021 2:00 PM
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BELOIT, WI / ACCESSWIRE / July 21, 2021 / Blackhawk Bancorp, Inc. (OTCQX:BHWB) reported net income of $4.06 million for the quarter ended June 30, 2021, an 18% increase over the $3.43 million earned the previous quarter, and a 58% increase compared to the $2.56 million earned the second quarter of 2020. Fully diluted earnings per share (EPS) for the quarter was $1.30, an increase of $0.28 as compared to $1.02 for the quarter ended March 31, 2021 and an increase of $0.53, or 69%, as compared to $0.77 reported for the quarter ended June 30, 2020. The second quarter 2021 results produced a Return on Average Equity (ROAE) of 15.74% and a Return on Average Assets (ROAA) of 1.26%.

The increase in earnings compared to the most recent quarter included a $0.50 million decrease in the provision for loan losses, a $0.45 million increase in net interest income, and a $0.25 million decrease in operating expenses. These earnings gains were offset by a $0.48 million decrease in revenue from the sale and servicing of mortgage loans.

The increase in net income for the second quarter of 2021 compared to the second quarter of the prior year reflects a $2.51 million decrease in provision for loan losses. This improvement was partially offset by a $0.55 million decrease in revenue from the sale and servicing of mortgage loans and a $0.51 million increase in operating expenses.

The increase in earnings per share for the quarter compared to the most recent quarter and the second quarter of 2020 was boosted by the recently completed tender offer and stock repurchase. On May 18, 2021 the Company repurchased 525,546 shares, or 15.6%, of its outstanding common stock, contributing $0.08 to earnings per share for the quarter.

For the six months ended June 30, 2021, the company reported net income of $7.49 million, a 61% increase over the $4.64 million reported for the first six months of 2020. Diluted earnings per share for the first half of 2021 increased by 65% to $2.31 compared to $1.40 for the first six months of 2020. The Company's results for the first six months of 2021 produced a return on average assets of 1.21% and a return on average equity of 13.93%.

"The strong second quarter results were driven primarily by the recognition of PPP (Paycheck Protection Program) loan fees, an abnormally low provision for loan losses and a continuing high level of mortgage banking activity," said Todd James, the Company's Chairman and CEO. "While we're pleased with the overall performance, we know these earnings tailwinds are unsustainable and future performance will be driven by loan growth and efficiency gains." he added.

Total assets of the company increased by $195.2 million, or 17%, to $1.33 billion as of June 30, 2021 compared to $1.14 billion as of December 31, 2020. Total gross loans decreased by $1.1 million, or less than 1%, and total investment securities increased $96.0 million, or 27%, during the first six months of 2021. Total Deposits increased by $201.7 million, or 20%, to $1.19 billion compared to $987.3 million at the end of 2020.

Net Interest Income

Net interest income for the second quarter of 2021 totaled $10.16 million, an increase of $0.45 million, or 5%, compared to the first quarter of 2021, and up $0.29 million, or 3%, compared to the second quarter of last year. The net interest margin was 3.37% for the second quarter of 2021 as compared to 3.52% for the quarter ended March 31, 2021, and 3.99% for the second quarter of the prior year.

The increase in net interest income compared to the second quarter of last year was due to a $216.6 million, or 22%, increase in average total earning assets to $1.22 billion compared to $1.01 billion the second quarter of 2020. The increase included a $129.3 million increase in average investment securities and a $88.3 increase in interest bearing deposits at other financial institutions. Total average loans decreased by $1.0 million. The decrease in average total loans included a decrease of $6.9 million in average Paycheck Protection Program (PPP) loans, which averaged $78.9 million for the quarter. During the second quarter of 2021 $1.10 million of PPP fees were recognized, resulting in a 6.60% annualized yield on average PPP loans for three months ended June, 30 2021. The PPP, pandemic-related stimulus payments and an overall influx of deposits drove a $228.9 million, or 25%, increase in total average deposits for the second quarter of 2021 compared to the second quarter of last year. With the majority of this liquidity being deployed in the investment securities portfolio or held in interest-bearing deposit accounts at other financial institutions, the net interest margin dropped 62 basis points to 3.37% compared to 3.99% for the second quarter of the prior year.

Net interest income for the six months ended June 30, 2021, increased by $1.39 million, or 8%, to $19.88 million as compared to $18.49 million for the first six months of 2020. The net interest margin for the first six months of 2021 decreased by 48 basis points to 3.44% compared to 3.92% for the first six months of 2020. Average total loans for the first six months of 2021 were $692.9 million, an increase of $28.0 million, or 4%, as compared to $664.9 million for the first six months of 2020. Average total deposits for the first six months of 2021 were $1.10 billion, an increase of $216.9 million, or 25%, as compared to $880.1 million for the first six months of 2020.

Provision for Loan Losses and Asset Quality

There was no provision for loan losses recorded for the quarter ended June 30, 2021, as compared to $0.50 million for the quarter ended March 31, 2021, and $2.51 million for the second quarter of 2020. The decreased provision reflects an improved credit outlook, especially as it relates to pandemic related losses. Net recoveries for the second quarter equaled $0.11 million.

Total nonperforming assets, which include troubled debt restructures performing in accordance with their modified terms, equaled $10.2 million as of June 30, 2021, as compared to $8.4 million as of March 31, 2021, and $11.6 million at June 30, 2020. At June 30, 2021, the ratio of nonperforming loans to total loans equaled 1.50%, as compared to 1.17% at March 31, 2021, and 1.52% at June 30, 2020. The allowance for loan losses to total loans was 1.66% as of June 30, 2021, as compared to 1.56% at March 31, 2021, and 1.43% as of June 30, 2020. The ratio of the allowance for loan losses to nonperforming loans decreased to 110.2% as of June 30, 2021, as compared to 133.0% at March 31, 2021, and 93.6% at June 30, 2020.

Management continues to work closely with borrowers to ensure credit issues are identified and addressed as early as possible, improving the overall probability of repayment. Blackhawk provided payment relief to borrowers negatively affected by the COVID-19 pandemic. Loans with an aggregate balance in excess of $70 million were modified, and as of June 30, 2021 all of the modified credits have either returned to normal payments or are reflected in the nonperforming loan numbers, except for a small number of credits totaling $2.4 million for which the modified terms have been extended and the borrowers are continuing to perform under the modified terms.

Non-Interest Income and Operating Expenses

Non-interest income for the quarter ended June 30, 2021 totaled $4.69 million, a $0.34 million decrease compared to $5.04 million the prior quarter, and a $0.16 million decrease from the $4.85 million recorded in the second quarter of 2020. The decrease compared to the first quarter of 2021 included a decrease of $0.48 million in net revenue from the sale and servicing of mortgage loans. This was partially offset by a $0.19 million increase in debit card interchange fees. The decrease in non-interest income compared to the second quarter of 2020 was primarily due to a $0.55 million decrease in revenue from the sale and servicing of mortgage loans that was partially offset by a $0.29 million increase in debit card interchange fees.

Non-interest income for the first six months of 2021 increased $1.38 million, or 17%, to $9.73 million as compared to $8.35 million for the first six months of 2020, including a $1.17 million increase in the sale and servicing of loans and a $0.49 million increase in debit card interchange fees.

Operating expenses for the quarter ended June 30, 2021 totaled $9.46 million, a decrease of $0.25 million, or 3%, compared to the quarter ended March 31, 2021, and increased by $0.51 million, or 6%, compared to the second quarter of 2020.

Operating expenses for the six-month period ended June 30, 2021, totaled $19.18 million, a $1.44 million, or 8%, increase over the first six month of 2020.

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 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 
[email protected]

Matthew McDonnell, SVP & CFO
[email protected]

Phone: (608) 364-8911

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2021 AND DECEMBER 31, 2020
(UNAUDITED)

       
       

 
 June 30,  December 31, 
Assets
 2021  2020 

 
 (Dollars in thousands, except 

 
 share and per share data) 
Cash and due from banks
 $16,418  $12,012 
Interest-bearing deposits in banks and other institutions
  136,657   42,119 
Total cash and cash equivalents
  153,075   54,131 

 
        
Certificates of deposit in banks and other institutions
  3,416   4,159 
Equity securities at fair value
  2,521   2,517 
Securities available-for-sale
  445,551   349,565 
Loans held for sale
  6,469   6,096 
Federal Home Loan Bank stock, at cost
  2,150   2,150 
Loans, less allowance for loan losses of $11,229 and $10,764
        
at June 30, 2021 and December 31, 2020, respectively
  660,269   662,225 
Premises and equipment, net
  20,915   20,254 
Goodwill and core deposit intangible
  11,819   12,018 
Mortgage servicing rights
  3,720   3,409 
Cash surrender value of bank-owned life insurance
  11,285   11,126 
Other assets
  15,559   13,949 
Total assets
 $1,336,749  $1,141,599 

 
        
Liabilities and Stockholders' Equity
        

 
        
Liabilities
        
Deposits:
        
Noninterest-bearing
 $389,940  $268,866 
Interest-bearing
  799,057   718,388 
Total deposits
  1,188,997   987,254 
Subordinated debentures and notes (including $1,031 at fair value at
        
June 30, 2021 and December 31, 2020)
  20,155   5,155 
Senior secured term note
  12,056   12,833 
Other borrowings
  5,000   14,000 
Other liabilities
  11,131   10,602 
Total liabilities
  1,237,339   1,029,844 

 
        
Stockholders' equity
        
Common stock, $0.01 par value, 10,000,000 shares authorized;
        
3,473,819 and 3,435,348 shares issued as of June 30, 2021 and
        
December 31, 2020, respectively
  35   35 
Additional paid-in capital
  35,455   35,062 
Retained earnings
  76,479   69,676 
Treasury stock, 630,991 and 62,999 shares at cost as of June 30, 2021
        
and December 31, 2020, respectively
  (18,952)  (941)
Accumulated other comprehensive income (loss)
  6,393   7,923 
Total stockholders' equity
  99,410   111,755 
Total liabilities and stockholders' equity
 $1,336,749  $1,141,599 
         
         

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

 
 Six months ended June 30, 

 
 2021  2020 

 
 (Amounts in thousands, except per share data) 

 
 
 
  
 
 
Interest Income:
 
 
  
 
 
Interest and fees on loans
 16,776  16,691 
Interest and dividends on available-for-sale securities:
        
Taxable
  3,479   3,123 
Tax-exempt
  762   695 
Interest on deposits in other financial institutions
  89   202 
Total interest income
  21,106   20,711 
Interest Expense:
        
Interest on deposits
  836   1,816 
Interest on subordinated debentures
  158   98 
Interest on senior secured term note
  210   267 
Interest on other borrowings
  20   41 
Total interest expense
  1,224   2,223 
Net interest income before provision for loan losses
  19,882   18,488 
Provision for loan losses
  500   3,270 
Net interest income after provision for loan losses
  19,382   15,218 

 
        
Noninterest Income:
        
Service charges on deposits accounts
  1,354   1,507 
Net gain on sale of loans
  4,579   4,097 
Net loan servicing income
  404   (280)
Debit card interchange fees
  2,245   1,757 
Net gains on sales of securities available-for-sale
  -   107 
Net other gains (losses)
  49   6 
Increase in cash surrender value of bank-owned life insurance
  159   159 
Change in value of equity securities
  (30)  60 
Other
  967   935 
Total noninterest income
  9,727   8,348 

 
        
Noninterest Expenses:
        
Salaries and employee benefits
  11,487   10,512 
Occupancy and equipment
  2,274   2,156 
Data processing
  1,232   1,071 
Debit card processing and issuance
  928   791 
Advertising and marketing
  169   135 
Amortization of core deposit intangible
  199   223 
Professional fees
  789   772 
Office Supplies
  170   178 
Telephone
  286   299 
Other
  1,641   1,601 
Total noninterest expenses
  19,175   17,738 
Income before income taxes
  9,934   5,828 
Provision for income taxes
  2,449   1,191 
Net income
 7,485  4,637 

 
        
Key Ratios
        

 
        
Basic Earnings Per Common Share
 2.31  1.40 
Diluted Earnings Per Common Share
  2.31   1.40 
Dividends Per Common Share
  0.22   0.22 

 
        
Net Interest Margin (1)
  3.44%  3.92%
Efficiency Ratio (1)(2)
  64.64%  65.89%
Return on Assets
  1.21%  0.90%
Return on Common Equity
  13.93%  9.19%
         

(1) Non-GAAP Presentations: Management discloses certain non-GAAP financial measures to evaluate and measure the Company's performance, including the presentation of the net interest margin and efficiency ratio calculations on a taxable equivalent basis ("TE"). The net interest margin ratio is calculated by dividing net interest income on a tax equivalent basis by average earning assets for the period. Management believes this measure provides investors with information regarding comparative balance sheet profitability.

(2) The efficiency ratio is calculated as noninterest expense divided by the sum of net interest income on a TE basis, noninterest income less any securities gains (losses) or other gains (losses), and also includes a TE adjustment on the increases in cash surrender value of bank-owned life insurance.

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

    
 
 For the Quarter Ended 

 
 June 30,  March 31,  December 31,  September 30,  June 30, 

 
 2021  2021  2020  2020  2020 

 
 (Dollars in thousands, except per share data) 
Interest Income:
 
 
  
 
  
 
  
 
  
 
 
Interest and fees on loans
 8,621  8,155  8,079  8,671  8,658 
Interest on available-for-sale securities:
                    
Taxable
  1,759   1,721   1,598   1,607   1,618 
Tax-exempt
  378   384   384   372   371 
Interest on deposits in other financial institutions
  48   41   33   41   40 
Total interest income
  10,806   10,301   10,094   10,691   10,687 
Interest Expense:
                    
Interest on deposits
  421   415   458   565   639 
Interest on subordinated debentures
  117   41   41   42   45 
Interest on senior secured term note
  104   107   113   119   111 
Interest on other borrowings
  -   20   40   47   19 
Total interest expense
  642   583   652   773   814 
Net interest income before provision for loan losses
  10,164   9,718   9,442   9,918   9,873 
Provision for loan losses
  -   500   1,715   2,615   2,505 
Net interest income after provision for loan losses
  10,164   9,218   7,727   7,303   7,368 

 
                    
Noninterest Income:
                    
Service charges on deposits accounts
  663   690   781   747   610 
Net gain on sale of loans
  2,217   2,362   3,572   3,412   3,192 
Net loan servicing income
  36   369   (177)  26   (389)
Debit card interchange fees
  1,218   1,027   979   1,002   924 
Net gains on sales of securities available-for-sale
  -   -   428   -   8 
Net other gains (losses)
  7   42   -   58   6 
Increase in cash surrender value of bank-owned life insurance
  72   87   75   76   74 
Other
  479   458   310   344   425 
Total noninterest income
  4,692   5,035   5,968   5,665   4,850 

 
                    
Noninterest Expenses:
                    
Salaries and employee benefits
  5,753   5,734   5,851   5,585   5,477 
Occupancy and equipment
  1,092   1,182   986   1,137   1,074 
Data processing
  641   591   683   629   561 
Debit card processing and issuance
  503   425   384   409   394 
Advertising and marketing
  70   99   75   87   38 
Amortization of intangibles
  96   104   107   107   107 
Professional fees
  399   390   373   386   405 
Office Supplies
  93   77   90   94   88 
Telephone
  144   141   140   138   149 
Other
  673   968   637   714   659 
Total noninterest expenses
  9,464   9,711   9,326   9,286   8,952 
Income before income taxes
  5,392   4,542   4,369   3,682   3,266 
Provision for income taxes
  1,337   1,112   1,021   819   704 
Net income
 4,055  3,430  3,348  2,863  2,562 

 
                    
Key Ratios
                    

 
                    
Basic Earnings Per Common Share
 1.30  1.02  1.00  0.86  0.77 
Diluted Earnings Per Common Share
  1.30   1.02   1.00   0.86   0.77 
Dividends Per Common Share
  0.11   0.11   0.11   0.11   0.11 

 
                    
Net Interest Margin (1)
  3.37%  3.52%  3.63%  3.83%  3.99%
Efficiency Ratio (1)(2)
  63.28%  65.53%  61.80%  59.39%  60.43%
Return on Assets
  1.26%  1.16%  1.20%  1.03%  0.96%
Return on Common Equity
  15.74%  12.44%  12.08%  10.64%  10.16%
                     

(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 

 
 June 30,  March 31,  December 31,  September 30,  June 30, 

 
 2021  2021  2020  2020  2020 

 
 (Amounts in thousands, except per share data) 
Cash and due from banks
 16,418  15,108  12,012  17,403  14,527 
Interest-bearing deposits in banks and other
  140,073   50,199   46,278   47,848   25,246 
Securities
  448,072   379,187   352,082   317,761   301,726 
Net loans/leases
  666,738   700,399   668,321   681,060   697,881 
Goodwill and core deposit intangible
  11,819   11,914   12,018   12,125   12,232 
Other assets
  53,629   50,826   50,888   50,105   49,485 
Total assets
 1,336,749  1,207,633  1,141,599  1,126,302  1,101,097 

 
                    
Deposits
 1,188,997  1,068,197  987,254  960,773  939,066 
Subordinated debentures
  20,155   5,155   5,155   5,155   5,155 
Senior secured term note
  12,056   12,445   12,833   13,222   13,611 
Borrowings
  5,000   4,000   14,000   29,000   29,000 
Other liabilities
  11,131   7,138   10,602   10,161   9,758 
Stockholders' equity
  99,410   110,698   111,755   107,991   104,507 
Total liabilities and stockholders' equity
 1,336,749  1,207,633  1,141,599  1,126,302  1,101,097 

ASSET QUALITY DATA

(Amounts in thousands)
 June 30,  March 31,  December 31,  September 30,  June 30, 

 
 2021  2021  2020  2020  2020 

 
 
 
  
 
  
 
  
 
  
 
 
Non-accrual loans
 8,228  6,361  7,013  8,584  8,427 
Accruing loans past due 90 days or more
  -   -   -   196   - 
Troubled debt restructures - accruing
  1,958   1,996   2,057   2,176   2,361 
Total nonperforming loans
 10,186  8,357  9,070  10,956  10,788 
Other real estate owned
  -   -   1   1   762 
Total nonperforming assets
 10,186  8,357  9,071  10,957  11,550 

 
                    
Total loans
 677,967  711,515  679,085  691,003  707,983 
Allowance for loan losses
 11,229  11,116  10,764  9,943  10,102 

 
 666,738  700,399  668,321  681,060  697,881 
Nonperforming Assets to total Assets
  0.76%  0.69%  0.79%  0.97%  1.05%
Nonperforming loans to total loans
  1.50%  1.17%  1.34%  1.59%  1.52%
Allowance for loan losses to total loans
  1.66%  1.56%  1.59%  1.44%  1.43%
Allowance for loan losses to nonperforming loans
  110.2%  133.0%  118.7%  90.8%  93.6%

 


 
 For the Quarter Ended 

 
 June 30,  March 31,  December 31,  September 30,  June 30, 
ROLLFORWARD OF ALLOWANCE
 2021  2021  2020  2020  2020 

 
 
 
  
 
  
 
  
 
  
 
 
Beginning Balance
 11,116  10,764  9,943  10,102  8,160 
Provision
  -   500   1,715   2,615   2,505 
Loans charged off
  61   582   1,334   2,892   639 
Loan recoveries
  174   434   440   118   76 
Net charge-offs
  (113)  148   894   2,774   563 
Ending Balance
 11,229  11,116  10,764  9,943  10,102 

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, 2021  March 31, 2021  June 30, 2020 

 
 Average  
 
  Average  Average  
 
  Average  Average  
 
  Average 

 
 Balance  Interest  Rate  Balance  Interest  Rate  Balance  Interest  Rate 
Interest Earning Assets:
 
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
 
Interest-bearing deposits and other
 105,385  48   0.18% 74,108  41   0.22% 17,056  40   0.95%
Investment securities:
                                    
Taxable investment securities
  365,329   1,759   1.93%  320,740   1,721   2.18%  241,831   1,618   2.69%
Tax-exempt investment securities
  52,197   378   3.73%  52,122   384   3.83%  46,443   371   4.13%
Total Investment securities
  417,526   2,137   2.16%  372,862   2,105   2.41%  288,274   1,989   2.92%
Loans
  700,109   8,621   4.94%  685,654   8,155   4.82%  701,080   8,658   4.97%

 
                                    
Total Earning Assets
 1,223,020  10,806   3.58% 1,132,624  10,301   3.73% 1,006,410  10,687   4.31%
Allowance for loan losses
  (11,221)          (11,075)          (8,769)        
Cash and due from banks
  17,124           16,052           15,232         
Other assets
  58,008           58,706           58,475         

 
                                    
Total Assets
 1,286,931          1,196,307          1,071,348         

 
                                    
Interest Bearing Liabilities:
                                    
Interest bearing checking accounts
 302,946  180   0.24% 284,527  161   0.23% 298,831  157   0.21%
Savings and money market deposits
  396,476   96   0.10%  356,615   84   0.10%  305,966   105   0.14%
Time deposits
  77,155   145   0.75%  81,807   170   0.84%  101,808   377   1.49%
Total interest bearing deposits
  776,577   421   0.22%  722,949   415   0.23%  706,605   639   0.36%
Subordinated debentures and notes
  13,067   117   3.59%  5,155   41   3.23%  5,155   45   3.53%
Borrowings
  16,501   104   2.51%  26,369   127   1.96%  39,436   130   1.32%

 
                                    
Total Interest-Bearing Liabilities
 806,145  642   0.32% 754,473  583   0.31% 751,196  814   0.44%

 
                                    
Interest Rate Spread
          3.26%          3.42%          3.87%

 
                                    
Noninterest checking accounts
  371,146           322,667           212,196         
Other liabilities
  6,283           7,373           6,570         
Total liabilities
  1,183,574           1,084,513           969,962         
Total Stockholders' equity
  103,357           111,794           101,386         
Total Liabilities and
                                    
Stockholders' Equity
 1,286,931          1,196,307          1,071,348         

 
                                    
Net Interest Income/Margin
     10,164   3.37%     9,718   3.52%     9,873   3.99%

 
                                    

(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)(1)
 For the Six Months Ended 

 
 June 30, 2021  June 30, 2020 

 
 Average  
 
  Average  Average  
 
  Average 

 
 Balance  Interest  Rate  Balance  Interest  Rate 
Interest Earning Assets:
 
 
  
 
  
 
  
 
  
 
  
 
 
Interest-bearing deposits and other
 89,833  89   0.20% 27,362  202   1.48%
Investment securities:
                        
Taxable investment securities
  343,158   3,479   2.04%  223,178   3,123   2.81%
Tax-exempt investment securities
  52,160   762   3.78%  43,659   695   4.11%
Total Investment securities
  395,318   4,241   2.27%  266,837   3,818   3.03%
Loans
  692,921   16,776   4.88%  664,941   16,691   5.05%

 
                        
Total Earning Assets
 1,178,072  21,106   3.65% 959,140  20,711   4.38%
Allowance for loan losses
  (11,148)          (8,392)        
Cash and due from banks
  16,591           15,427         
Other assets
  59,141           58,696         

 
                        
Total Assets
 1,242,656          1,024,871         

 
                        
Interest Bearing Liabilities:
                        
Interest bearing checking accounts
 293,787  341   0.23% 284,840  491   0.35%
Savings and money market deposits
  376,656   180   0.10%  294,040   467   0.32%
Time deposits
  79,468   315   0.80%  107,837   858   1.60%
Total interest bearing deposits
  749,911   836   0.22%  686,717   1,816   0.53%
Subordinated debentures
  9,133   158   3.49%  5,155   98   3.81%
Borrowings
  21,408   230   2.17%  32,018   308   1.93%

 
                        
Total Interest-Bearing Liabilities
 780,452  1,224   0.32% 723,890  2,222   0.62%

 
                        
Interest Rate Spread
          3.33%          3.76%

 
                        
Noninterest checking accounts
  347,041           193,372         
Other liabilities
  6,825           6,715         
Total liabilities
  1,134,318           923,977         
Total Stockholders' equity
  108,338           100,894         
Total Liabilities and
                        
Stockholders' Equity
 1,242,656          1,024,871         

 
                        
Net Interest Income/Margin
     19,882   3.44%     18,489   3.92%

 
                        

(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.

Blackhawk Bancorp, Inc.
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