Blackhawk Bancorp Announces Record Earnings for 2021
01/24/2022 - 11:40 AM
BELOIT, WI / ACCESSWIRE / January 24, 2022 / Blackhawk Bancorp, Inc. (OTCQX:BHWB) reported record earnings for the year ended December 31, 2021 with net income of $13.62 million exceeding the previous year's net income of $10.85 million by 26% . Diluted Earnings per Share (EPS) for 2021 increased 38% to $4.47 compared to the previous record of $3.25 reported for 2020. The Company's results for the year ended 2021 produced a Return on Average Equity (ROAE) of 12.99% and a Return on Average Assets of 1.06% .
The increase in earnings for 2021 as compared to 2020 includes an increase in net interest income of $1.43 million and a decrease in the provision for loan losses of $7.10 million . These earnings improvements were partially offset by a $0.68 million decrease in noninterest income and a $3.94 million increase in operating expenses.
The Company reported net income of $2.91 million for the quarter ended December 31, 2021, a $0.31 million , or 10% , decrease compared to the $3.22 million earned the previous quarter, and a $0.44 million , or 13% , decrease compared to the $3.35 million earned the fourth quarter of 2020. EPS for the fourth quarter was $1.02 , a decrease of $0.11 as compared to $1.13 for the quarter ended September 30, 2021, and an increase of $0.02 as compared to $1.00 reported for the quarter ended December 31, 2020. The 2021 fourth quarter results produced a ROAE of 11.41% and a ROAA of 0.89% .
The $0.44 million decrease in net income for the fourth quarter of 2021 compared to the fourth quarter of the prior year reflects a $1.34 million decrease in revenue from the sale and servicing of mortgage loans, a $0.43 million decrease in net gain on sale of securities, and a $1.18 million increase in operating expenses. These earnings declines were partially offset by a $1.72 million decrease in the provision for loan losses. Despite the 13% decrease in net income compared to the fourth quarter of 2020, EPS increased by 2% , reflecting the repurchase of 525,546 shares, or 15.6% , of the Company's outstanding common stock in the second quarter of 2021.
"We're extremely pleased to be reporting another year of record earnings," said Todd James, the Company's Chairman and CEO. "While the 2021 performance was boosted by several factors that aren't expected to be as strong going forward such as Paycheck Protection Program (PPP) fees, low provision costs and strong mortgage activity, the Company is well positioned going into 2022. In 2021 we transitioned our Kane County, IL loan production office to a full service branch in downtown St. Charles, IL, added several experienced business bankers to our team, and gained momentum in our campground and RV park lending initiative, all of which contributed to the 6% loan growth we realized in the fourth quarter," added James.
Total assets of the Company increased by $23.5 million , or 2% , to $1.34 billion as of December 31, 2021 compared to $1.32 billion at September 30, 2021. Total gross loans increased by $40.5 million , or 6% , to $710.0 million compared to $669.5 million as of September 30, 2021. Total deposits grew by $28.0 million during the quarter to $1.20 billion compared to $1.17 billion at September 30, 2021.
Total assets of the Company increased by $199.9 million , or 18% , to $1.34 billion as of December 31, 2021, compared to $1.14 billion as of December 31, 2020. Total gross loans increased by $30.9 million , or 5% , and total investment securities increased $154.8 million , or 44% , during the year ended 2021. Total deposits increased by $209.8 million , or 21% , to $1.20 billion compared to $987.3 million at the end of 2020.
Net Interest Income
Net interest income for the year ended December 31, 2021 increased by $1.43 million , or 4% , to $39.28 million compared to $37.85 million for 2020. The increase in net interest income includes a $1.50 million increase in PPP loan fees recognized. As of December 31, 2021, the balance of PPP loans was $22.6 with $0.90 million of deferred fees remaining, which will be recognized in future periods. While net interest income increased, the net interest margin for 2021 decreased by 55 basis points to 3.27% compared to 3.82% for 2020. The decrease in the net interest margin compared to the prior year reflects a $219.1 million , or 24% , increase in average deposits that were deployed in cash equivalent investments and the investment securities portfolio. The deposit growth was driven by the tremendous amount of economic stimulus that was distributed through the various COVID relief programs, which when combined with the labor and supply chain issues being experienced by our commercial customers, dampened loan demand. Average total loans for the year increased by $8.4 million , or 1% to $683.9 million compared to $675.5 million in 2020. Net of PPP loans, average total loans for the full year 2021 decreased by $3.5 million compared to the prior year. The Company achieved a 17 basis point decrease in the cost of deposits to 0.14% compared to 0.31% for the twelve months ended December 31, 2020; however, the decrease was more than offset by a 71 basis point decrease in the tax-equivalent yield on average total earning assets to 3.48% as compared to 4.19% for 2020.
For the fourth quarter of 2021 net interest income totaled $9.63 million , a decrease of $0.15 million , or 1% , compared to the third quarter of 2021, and an increase of $0.18 million , or 2% , compared to the fourth quarter of the prior year. The net interest margin was 3.12% for the fourth quarter of 2021 compared to 3.11% for the quarter ended September 30, 2021, and 3.63% for the fourth quarter of 2020. The tax-equivalent yield on earning assets for the fourth quarter of 2021 dropped 56 basis points to 3.32% , compared to 3.88% for the fourth quarter of 2020, while at the same time, the cost of deposits decreased only eight basis points to 0.11% compared to 0.19% the same quarter the year before. In addition, interest expense on subordinated debentures increased by $0.16 million reflecting the issuance of $15 million of subordinated debt, which was used to fund the share repurchase in the second quarter of 2021. Average total deposits for the fourth quarter of 2021 increased by $203.5 million to $1.16 billion compared to $956.1 million in the fourth quarter of 2020. Average total loans for the fourth quarter of 2021 decreased by $3.5 million , or 1% , compared to the fourth quarter of the prior year. Excluding PPP loans, average total loans increased by $38.4 million to $645.9 million compared to $607.5 million for the fourth quarter of 2020.
Provision for Loan Losses and Asset Quality
The provision for loan losses for 2021 decreased by $7.10 million , or 93% , to $.50 million compared to $7.60 million for 2020. The decrease in provision reflects the improved credit outlook, especially as it related to potential losses related to the pandemic. There was no provision for loan losses recorded for the quarter ended December 31, 2021, or September 30, 2021, compared to $1.72 million for the quarter ended December 31, 2020.
Total nonperforming assets, which include troubled debt restructures performing in accordance with their modified terms, equaled $7.3 million as of December 31, 2021, as compared to $9.8 million as of September 30, 2021, and $9.1 million at December 31, 2020. At December 31, 2021, the ratio of nonperforming loans to total loans equaled 1.02% , as compared to 1.46% at September 30, 2021, and 1.34% at December 31, 2020. The allowance for loan losses to total loans was 1.57% as of December 31, 2021, as compared to 1.68% at September 30, 2021, and 1.59% as of December 31, 2020. The allowance for loan losses to nonperforming loans increased to 153.0% as of December 31, 2021, compared to 114.5% at September 30, 2021, and 118.7% at December 31, 2020. As of December 31, 2021, all but $2.4 million of credits that were granted modifications for COVID relief have been returned to normal payments, or are included in the nonperforming asset numbers above. The majority of this amount relates to one commercial credit that is returning to normal payments in January of 2022.
NonInterest Income and Operating Expenses
Noninterest income for 2021 decreased $0.68 million , or 3% , to $19.0 million as compared to $19.68 million for the prior year, including a $1.38 million decrease in revenue from the sale and servicing of mortgage loans and a $0.54 million decrease in net gains on sale of securities. These declines were partially offset by a $0.82 million increase in debit card revenue.
Noninterest income for the quarter ended December 31, 2021, totaled $4.52 million , a $0.24 million decrease compared to $4.76 million the prior quarter and a $1.45 million decrease from the $5.97 million recorded in the fourth quarter of 2020. The decrease in noninterest income compared to the fourth quarter of 2020 was due to a $1.34 million decrease in revenue from the sale and servicing of mortgage loans and a $0.43 million decrease in the net gain on sale of securities. These declines were partially offset by a $0.19 million increase in debit card revenue and a $0.12 million increase in deposit service fees.
Operating expenses for 2021, totaled $40.0 million , a $3.94 million , or 11% , increase over the twelve months of 2020. The increase compared to the twelve months of 2020 included an increase of $2.1 million in salary and employee benefits.
Operating expenses for the quarter ended December 31, 2021, totaled $10.51 million , an increase of $0.19 million , or 2% , compared to the quarter ended September 30, 2021, and an increase of $1.18 million , or 13% , compared to the fourth quarter of 2020. The increase compared to the fourth quarter of 2020 included a $0.55 million increase in salary and employee benefits.
About Blackhawk Bancorp
Blackhawk Bancorp, Inc. is headquartered in Beloit, Wisconsin and is the parent company of Blackhawk Bank. The combined entity operates twelve full-service banking centers which are located in Rock County, Wisconsin and the Illinois counties of Winnebago, Boone, McHenry, Lake, and Kane. 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 tjames@blackhawkbank.com Phone: (608) 364-8911
Matthew McDonnell, SVP & CFOmmcdonnell@blackhawkbank.com
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND DECEMBER 31, 2020 (UNAUDITED)
December 31, December 31, Assets
2021 2020 (Dollars in thousands, except share and per share data) Cash and due from banks
$ 10,846 $ 12,012 Interest-bearing deposits in banks and other institutions
55,721 42,119 Total cash and cash equivalents
66,567 54,131 Certificates of deposit in banks and other institutions
2,161 4,159 Equity securities at fair value
2,553 2,517 Securities available-for-sale
504,341 349,565 Loans held for sale
2,585 6,096 Federal Home Loan Bank stock, at cost
2,150 2,150 Loans, less allowance for loan losses of $11,125 and $10,764
at December 31, 2021 and December 31, 2020, respectively
696,292 662,225 Premises and equipment, net
20,778 20,254 Goodwill and core deposit intangible
11,628 12,018 Mortgage servicing rights
3,833 3,409 Cash surrender value of bank-owned life insurance
11,440 11,126 Other assets
17,227 13,949 Total assets
$ 1,341,555 $ 1,141,599 Liabilities and Stockholders' Equity
Liabilities
Deposits:
Noninterest-bearing
$ 380,601 $ 268,866 Interest-bearing
816,440 718,388 Total deposits
1,197,041 987,254 Subordinated debentures and notes (including $1,031 at fair value at
December 31, 2021 and December 31, 2020)
20,155 5,155 Senior secured term note
11,278 12,833 Other borrowings
5,000 14,000 Other liabilities
6,985 10,602 Total liabilities
1,240,459 1,029,844 Stockholders' equity
Common stock, $0.01 par value, 10,000,000 shares authorized;
3,479,069 and 3,435,348 shares issued as of December 31, 2021 and
December 31, 2020, respectively
35 35 Additional paid-in capital
35,890 35,062 Retained earnings
81,987 69,676 Treasury stock, 630,991 and 62,999 shares at cost as of December 31, 2021
and December 31, 2020, respectively
(18,952 ) (941 ) Accumulated other comprehensive income (loss)
2,136 7,923 Total stockholders' equity
101,096 111,755 Total liabilities and stockholders' equity
$ 1,341,555 $ 1,141,599
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Twelve months ended December 31, 2021 2020 (Amounts in thousands, except per share data) Interest Income: Interest and fees on loans
$ 32,832 $ 33,441 Interest and dividends on available-for-sale securities:
Taxable
7,269 6,328 Tax-exempt
1,550 1,451 Interest on deposits in other financial institutions
183 276 Total interest income
41,834 41,496 Interest Expense:
Interest on deposits
1,576 2,840 Interest on subordinated debentures
548 182 Interest on senior secured term note
412 498 Interest on other borrowings
21 127 Total interest expense
2,557 3,647 Net interest income before provision for loan losses
39,277 37,849 Provision for loan losses
500 7,600 Net interest income after provision for loan losses
38,777 30,249 Noninterest Income:
Service charges on deposits accounts
3,041 3,035 Net gain on sale of loans
8,592 11,080 Net loan servicing income
681 (431 ) Debit card interchange fees
4,559 3,738 Net gains on sales of securities available-for-sale
- 535 Net other gains (losses)
106 - Increase in cash surrender value of bank-owned life insurance
314 310 Change in value of equity securities
(28 ) 70 Other
1,739 1,347 Total noninterest income
19,004 19,684 Noninterest Expenses:
Salaries and employee benefits
24,008 21,948 Occupancy and equipment
4,656 4,278 Data processing
2,614 2,383 Debit card processing and issuance
1,950 1,584 Advertising and marketing
425 297 Amortization of core deposit intangible
390 437 Professional fees
1,660 1,531 Office Supplies
371 363 Telephone
568 577 Other
3,355 2,655 Total noninterest expenses
39,997 36,053 Income before income taxes
17,784 13,880 Provision for income taxes
4,165 3,033 Net income
$ 13,619 $ 10,847 Key Ratios
Basic Earnings Per Common Share
$ 4.47 $ 3.25 Diluted Earnings Per Common Share
4.47 3.25 Dividends Per Common Share
0.44 0.44 Net Interest Margin (1)
3.27 % 3.82 % Efficiency Ratio (1)(2)
68.63 % 63.14 % Return on Assets
1.06 % 1.02 % Return on Common Equity
12.99 % 10.35 %
(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,
2021 2021 2021 2021 2020
(Dollars in thousands, except per share data) Interest Income:
Interest and fees on loans
$ 7,876 $ 8,180 $ 8,621 $ 8,155 $ 8,079 Interest on available-for-sale securities:
Taxable
1,960 1,830 1,759 1,721 1,598 Tax-exempt
369 419 378 384 384 Interest on deposits in other financial institutions
33 61 48 41 33 Total interest income
10,238 10,490 10,806 10,301 10,094 Interest Expense:
Interest on deposits
319 421 421 415 458 Interest on subordinated debentures
196 195 117 41 41 Interest on senior secured term note
98 103 104 107 113 Interest on other borrowings
- - - 20 40 Total interest expense
613 719 642 583 652 Net interest income before provision for loan losses
9,625 9,771 10,164 9,718 9,442 Provision for loan losses
- - - 500 1,715 Net interest income after provision for loan losses
9,625 9,771 10,164 9,218 7,727 Noninterest Income:
Service charges on deposits accounts
901 787 663 690 781 Net gain on sale of loans
1,865 2,147 2,217 2,362 3,572 Net loan servicing income
186 90 36 369 (177 ) Debit card interchange fees
1,168 1,146 1,218 1,027 979 Net gains on sales of securities available-for-sale
- - - - 428 Net other gains (losses)
5 52 7 42 - Increase in cash surrender value of bank-owned life insurance
77 78 72 87 75 Other
317 457 479 458 310 Total noninterest income
4,519 4,757 4,692 5,035 5,968 Noninterest Expenses:
Salaries and employee benefits
6,403 6,118 5,753 5,734 5,851 Occupancy and equipment
1,109 1,273 1,092 1,182 986 Data processing
694 689 641 591 683 Debit card processing and issuance
533 489 503 425 384 Advertising and marketing
115 141 70 99 75 Amortization of intangibles
95 96 96 104 107 Professional fees
436 434 399 390 373 Office Supplies
127 74 93 77 90 Telephone
143 139 144 141 140 Other
850 865 673 968 637 Total noninterest expenses
10,505 10,318 9,464 9,711 9,326 Income before income taxes
3,639 4,210 5,392 4,542 4,369 Provision for income taxes
728 988 1,337 1,112 1,021 Net income
$ 2,911 $ 3,222 $ 4,055 $ 3,430 $ 3,348 Key Ratios
Basic Earnings Per Common Share
$ 1.02 $ 1.13 $ 1.30 $ 1.02 $ 1.00 Diluted Earnings Per Common Share
1.02 1.13 1.30 1.02 1.00 Dividends Per Common Share
0.11 0.11 0.11 0.11 0.11 Book Value Per Common Share
35.50 35.29 34.97 32.95 33.14 Tangible Book Value Per Share
31.41 31.17 30.81 29.40 29.57 Number of Shares Outstanding
2,848,078 2,848,078 2,842,828 3,359,613 3,372,349 Average Number of Shares Outstanding
2,848,109 2,848,109 3,118,265 3,372,684 3,360,579 Net Interest Margin (1)
3.12 % 3.11 % 3.37 % 3.52 % 3.63 % Efficiency Ratio (1)(2)
73.75 % 70.70 % 63.28 % 65.53 % 61.80 % Return on Assets
0.89 % 0.96 % 1.26 % 1.16 % 1.20 % Return on Common Equity
11.41 % 12.57 % 15.74 % 12.44 % 12.08 %
(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,
2021 2021 2021 2021 2020
(Amounts in thousands, except per share data) Cash and due from banks
$ 10,846 $ 16,536 $ 16,418 $ 15,108 $ 12,012 Interest-bearing deposits in banks and other
57,882 104,722 140,073 50,199 46,278 Securities
506,894 472,472 448,072 379,187 352,082 Net loans/leases
698,877 658,323 666,738 700,399 668,321 Goodwill and core deposit intangible
11,628 11,723 11,819 11,914 12,018 Other assets
55,428 54,218 53,629 50,826 50,888 Total assets
$ 1,341,555 $ 1,317,994 $ 1,336,749 $ 1,207,633 $ 1,141,599 Deposits
$ 1,197,041 $ 1,169,085 $ 1,188,997 $ 1,068,197 $ 987,254 Subordinated debentures
20,155 20,155 20,155 5,155 5,155 Senior secured term note
11,278 11,667 12,056 12,445 12,833 Borrowings
5,000 5,000 5,000 4,000 14,000 Other liabilities
6,985 11,585 11,131 7,138 10,602 Stockholders' equity
101,096 100,502 99,410 110,698 111,755 Total liabilities and stockholders' equity
$ 1,341,555 $ 1,317,994 $ 1,336,749 $ 1,207,633 $ 1,141,599
ASSET QUALITY DATA
(Amounts in thousands)
December 31, September 30, June 30, March 31, December 31,
2021 2021 2021 2021 2020
Non-accrual loans
$ 5,430 $ 7,827 $ 8,228 $ 6,361 $ 7,013 Accruing loans past due 90 days or more
- - - - - Troubled debt restructures - accruing
1,843 1,975 1,958 1,996 2,057 Total nonperforming loans
$ 7,273 $ 9,802 $ 10,186 $ 8,357 $ 9,070 Other real estate owned
24 - - - 1 Total nonperforming assets
$ 7,297 $ 9,802 $ 10,186 $ 8,357 $ 9,071
Total loans
$ 710,002 $ 669,547 $ 677,967 $ 711,515 $ 679,085 Allowance for loan losses
11,125 11,224 11,229 11,116 10,764 Loans, less allowance for loan losses
$ 698,877 $ 658,323 $ 666,738 $ 700,399 $ 668,321 Nonperforming Assets to total Assets
0.54 % 0.74 % 0.76 % 0.69 % 0.79 % Nonperforming loans to total loans
1.02 % 1.46 % 1.50 % 1.17 % 1.34 % Allowance for loan losses to total loans
1.57 % 1.68 % 1.66 % 1.56 % 1.59 % Allowance for loan losses to nonperforming loans
153.0 % 114.5 % 110.2 % 133.0 % 118.7 %
For the Quarter Ended
December 31, September 30, June 30, March 31, December 31, ROLLFORWARD OF ALLOWANCE
2021 2021 2021 2021 2020 Beginning Balance
$ 11,224 $ 11,229 $ 11,116 $ 10,764 $ 9,943 Provision
- - - 500 1,715 Loans charged off
181 103 61 582 1,334 Loan recoveries
82 98 174 434 440 Net charge-offs
99 5 (113 ) 148 894 Ending Balance
$ 11,125 $ 11,224 $ 11,229 $ 11,116 $ 10,764
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, 2021 December 31, 2020 Average Average Average Average
Balance Interest Rate Balance Interest Rate Interest Earning Assets:
Interest-bearing deposits and other
$ 90,300 $ 183 0.20 % $ 31,899 $ 276 0.86 % Investment securities:
Taxable investment securities
387,361 7,269 1.88 % 247,389 6,328 2.56 % Tax-exempt investment securities
52,435 1,550 3.76 % 46,594 1,451 4.01 % Total Investment securities
439,796 8,819 2.10 % 293,983 7,779 2.79 % Loans
683,859 32,832 4.80 % 675,466 33,441 4.95 % Total Earning Assets
$ 1,213,955 $ 41,834 3.48 % $ 1,001,348 $ 41,496 4.19 % Allowance for loan losses
(11,180 ) (9,535 ) Cash and due from banks
16,640 16,453 Other assets
60,379 58,475 Total Assets
$ 1,279,794 $ 1,066,741 Interest Bearing Liabilities:
Interest bearing checking accounts
$ 299,213 $ 636 0.21 % $ 281,053 $ 807 0.29 % Savings and money market deposits
400,323 366 0.09 % 318,169 676 0.21 % Time deposits
78,553 574 0.73 % 97,747 1,357 1.39 % Total interest bearing deposits
778,089 1,576 0.20 % 696,969 2,840 0.41 % Subordinated debentures
14,689 548 3.73 % 5,155 182 3.53 % Borrowings
18,928 433 2.29 % 34,227 625 1.83 % Total Interest-Bearing Liabilities
$ 811,706 $ 2,557 0.32 % $ 736,351 $ 3,647 0.50 % Interest Rate Spread
3.16 % 3.69 % Noninterest checking accounts
356,227 218,254 Other liabilities
6,995 7,357 Total liabilities
1,174,928 961,962 Total Stockholders' equity
104,866 104,779 Total Liabilities and
Stockholders' Equity
$ 1,279,794 $ 1,066,741 Net Interest Income/Margin
$ 39,277 3.27 % $ 37,849 3.82 %
(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 (Dollars in thousands - unaudited) (Yields on a tax-equivalent basis) (1)
For the Quarter Ended
December 31, 2021 September 30, 2021 December 31, 2020
Average Average Average Average Average Average
Balance Interest Rate Balance Interest Rate Balance Interest Rate Interest Earning Assets:
Interest-bearing deposits and other
$ 61,530 $ 33 0.21 % $ 119,991 $ 61 0.20 % $ 30,058 $ 32 0.43 % Investment securities:
Taxable investment securities
447,836 1,960 1.74 % 413,853 1,830 1.75 % 285,167 1,598 2.23 % Tax-exempt investment securities
52,749 369 3.57 % 52,663 420 4.05 % 51,902 384 3.78 % Total Investment securities
500,585 2,329 1.93 % 466,516 2,250 2.01 % 337,069 1,982 2.47 % Loans
674,818 7,876 4.63 % 675,070 8,180 4.81 % 678,335 8,079 4.74 % Total Earning Assets
$ 1,236,933 $ 10,238 3.32 % $ 1,261,577 $ 10,491 3.34 % $ 1,045,462 $ 10,093 3.88 % Allowance for loan losses
(11,192 ) (11,229 ) (10,313 ) Cash and due from banks
16,557 16,821 16,032 Other assets
62,310 61,274 58,663 Total Assets
$ 1,304,608 $ 1,328,443 $ 1,109,844 Interest Bearing Liabilities:
Interest bearing checking accounts
$ 308,166 $ 116 0.15 % $ 300,935 $ 180 0.24 % $ 261,739 $ 150 0.23 % Savings and money market deposits
423,311 77 0.07 % 423,894 109 0.10 % 349,028 98 0.11 % Time deposits
78,625 126 0.64 % 76,682 133 0.69 % 84,166 210 0.99 % Total interest bearing deposits
810,102 319 0.16 % 801,511 422 0.21 % 694,933 458 0.26 % Subordinated debentures and notes
20,155 196 3.85 % 20,155 195 3.83 % 5,155 41 3.19 % Borrowings
16,306 98 2.40 % 16,670 103 2.45 % 30,186 152 2.01 % Total Interest-Bearing Liabilities
$ 846,563 $ 613 0.29 % $ 838,336 $ 720 0.34 % $ 730,274 $ 651 0.36 % Interest Rate Spread
3.03 % 3.00 % 3.52 % Noninterest checking accounts
349,482 381,046 261,182 Other liabilities
7,342 7,381 8,202 Total liabilities
1,203,387 1,226,763 999,658 Total Stockholders' equity
101,221 101,680 110,186 Total Liabilities and
Stockholders' Equity
$ 1,304,608 $ 1,328,443 $ 1,109,844 Net Interest Income/Margin
$ 9,625 3.12 % $ 9,771 3.11 % $ 9,442 3.63 %
(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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