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Blackhawk Bancorp Reports Second Quarter Results

BELOIT, WI / ACCESSWIRE / July 21, 2023 / Blackhawk Bancorp, Inc. (OTCQX:BHWB), (the "Company") the parent company of Blackhawk Bank (the "Bank"), today reported net income of $3.19 million for the quarter ended June 30, 2023, a 10% increase from the $2.89 million earned the in the preceding quarter, and an 8% decrease compared to the $3.48 million earned during the second quarter of 2022. Diluted Earnings per Share (EPS) for the current quarter was $1.10, an increase of $0.10, or 10%, compared to the preceding quarter, and a $0.11 decrease, or 9%, compared to the quarter ended June 30, 2022. The second quarter of 2023 results yielded a Return on Average Equity (ROAE) of 15.64% and a Return on Average Assets (ROAA) of 0.96%.

Results for the second quarter of 2023 included $202,000 (after-tax) of expenses related to the pending merger with First Mid Bancshares, Inc. (NASDAQ: FMBH) ("First Mid"). Excluding these expenses, the 2023 second-quarter net income would have been $3.40 million, a $503,000, or 17%, increase compared to the linked quarter ending March 31, 2023, and a $82,000, or 2%, decrease over the second quarter of last year.

The decrease in net income for the second quarter of 2023, compared to the second quarter of the prior year was driven by a $1.97 million increase in the provision for loan losses and a $476,000 decrease in revenue from the sale and servicing of mortgage loans. The increase in the provision for loan losses was due to a $1.50 million negative provision in the second quarter of last year. These variances were partially offset by an $812,000 increase in net interest income and a $1.42 million reduction in other operating expenses. The reduction in other operating expenses reflects the $1.27 million charge related to branch closures in the second quarter of 2022.

Second Quarter 2023 Financial Highlights (at or for the three months ended June 30, 2023) :

  • Net income was $3.19 million, or $1.10 per diluted share, compared to $3.48 million, or $1.21 per diluted share, in the second quarter of 2022.
  • Net interest margin was 3.63%, compared to 3.77% in the preceding quarter and 3.31% in the second quarter a year ago.
  • Annualized return on average assets was 0.96%, compared to 1.02% in the second quarter of 2022.
  • Annualized return on average equity was 15.64%, compared to 16.75% in the second quarter a year ago.
  • Total deposits decreased by $31.29 million to $1.19 billion at June 30, 2023 compared to $1.22 billion a year earlier.
  • Allowance for loan losses to total loans was 1.47% at quarter end.
  • Nonperforming assets to total assets was 0.32% at June 30, 2023 compared to 0.45% a year ago.
  • On June 16, 2023, the Company paid a quarterly cash dividend of $0.12 per share, marking the 36nd consecutive quarterly cash dividend paid.

For the six months ended June 30, 2023 the Company reported net income of $6.09 million slightly less than the $6.10 million reported in the first half of 2022. Diluted Earnings per Share (EPS) for the six months ended June 30, 2023 decreased $0.02 to $2.11 compared to $2.13 the first six months of the prior year. The Company's results for the six months ended June 30, 2023 produced a Return on Average Equity (ROAE) of 15.38% and a Return on Average Assets (ROAA) of 0.92%.

Net Interest Income

Net interest income totaled $11.35 million for the quarter ended June 30, 2023, a decrease of $314,000, or 3%, compared to the first quarter of 2023, and an increase of $812,000, or 8%, compared to the second quarter of the prior year.

The Company's net interest margin was 3.63% for the second quarter of 2023, compared to 3.77% for the quarter ended March 31, 2023, and 3.31% for the second quarter of 2022. The tax-equivalent yield on earning assets increased by 17 basis points to 4.87% for the second quarter of 2023, compared to the first quarter of 2023, and the cost of deposits increased by 45 basis point to 1.13% for the second quarter of 2023, compared to 0.77% for the linked quarter. Tax-equivalent yield on earning assets increased 136 basis points compared to 3.51% for the second quarter of 2022, and the cost of deposits increased by 101 basis points compared to 0.12% for the second quarter of 2022.

Average total deposits for the second quarter of 2023 decreased by $18.5 million to $1.21 billion compared to $1.23 billion in the second quarter of 2022. Average total loans for the second quarter of 2023 increased by $29.1 million, or 4%, compared to the prior year's second quarter.

Net interest income for the six months ended June 30, 2023 increased $2.82 million to $23.02 million compared to $20.20 million for the first half of 2022. For the first six months of 2023, the company's net interest margin was 3.70%, compared to 3.22% for the same period in the prior year. The tax-equivalent yield on earning assets increased by 137 basis points to 4.78% for the first six months of 2023, compared to 3.41% the first six months of 2022. The cost of deposits increased by 42 basis points to 0.06% compared to the first six months of 2022.

Provision for Loan Losses and Asset Quality

The provision for loan losses for the quarter ended June 30, 2023, totaled $466,000, as compared to $415,000 for the quarter ended March 31, 2023, and negative $1.5 million for the second quarter of 2022. The provision for loan losses for the first-half 2023 increased by $2.38 million to $881,000 compared to negative $1.50 million first-half of 2022. Net charge-offs for the six months ended June 30, 2023, equaled $392,000.

Total nonperforming assets, which include troubled debt restructures that are performing in accordance with their modified terms, equaled $4.19 million as of June 30, 2023, as compared to $4.36 million as of March 31, 2023, and $6.04 million at June 30, 2022. At June 30, 2023, the ratio of nonperforming assets to total assets equaled 0.32%, as compared to 0.34% at March 31, 2023, and 0.45% at June 30, 2022.

The allowance for loan losses to total loans was 1.47% as of June 30, 2023, as compared to 1.46% at March 31, 2023, and 1.22% as of June 30, 2022. The ratio of the allowance for loan losses to nonperforming loans increased to 276.9% as of June 30, 2023, as compared to 262.9% at March 31, 2023, and 157.3% at June 30, 2022.

Noninterest Income and Operating Expenses

Noninterest income for the quarter ended June 30, 2023, totaled $3.54 million, a $353,000 increase compared to $3.19 million the prior quarter and a $282,000 decrease from the $3.82 million recorded in the second quarter of 2022. The decline in noninterest income compared to the second quarter of 2022 includes a $476,000 decrease in revenue from the sale and servicing of mortgage loans.

Noninterest income for the six months ended June 30, 2023 totaled $6.72 million, a $1.02 million decrease compared to the $7.74 million for the same period in the prior year. The decrease was mainly driven by a $1.38 million decrease in revenue the sale and servicing of mortgage loans.

Operating expenses for the quarter ended June 30, 2023, totaled $10.14 million, a decrease of $509,000, or 5%, compared to the first quarter of 2023, and decrease of $1.12 million, or 10%, compared to the second quarter of 2022. The first and second quarters of 2023 include $314,000 and $279,000 of merger related expenses. The decrease compared to the second quarter of 2022 includes a $1.27 million charge related to branch closures.

Operating expenses for the six months ended June 30, 2023 totaled $20.78 million, a $642,000, or 3%, decrease compared to the same period in 2022. Excluding the merger related one-time charges of $593,000, operating expenses for the six months ended June 30, 2023 would have been $20.19 million, a $1.24 million decrease over the same period in 2022.

Capital

Tangible book value per share was $23.99 at June 30, 2023, compared to $24.02 at March 31, 2023 and $23.91 at June 30, 2022. The decrease in tangible book value per share during the current quarter was primarily due to a $3.26 million decrease in accumulated other comprehensive income ("AOCI") related primarily to an increase in the unrealized loss on available for sale securities. Excluding AOCI, tangible book value per share was $36.11 at June 30, 2023, an increase of $1.11 and $3.70 compared to March 31, 2023 and June 30, 2022, respectively.

About Blackhawk Bancorp

Blackhawk Bancorp, Inc. is headquartered in Beloit, Wisconsin, and is the parent company of Blackhawk Bank. The combined entity operates ten full-service banking centers located in Rock County, Wisconsin, and the Illinois counties of Winnebago, Boone, McHenry, 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, securities gains and losses and other non-recurring gains or losses 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 & CFO
mmcdonnell@blackhawkbank.com

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2023 AND DECEMBER 31, 2022
(UNAUDITED)


June 30, December 31,
Assets
2023 2022

(Dollars in thousands, except

share and per share data)
Cash and due from banks
$ 16,967 $ 16,686
Interest-bearing deposits in banks and other institutions
22,931 6,071
Total cash and cash equivalents
39,898 22,757

Certificates of deposit in banks and other institutions
935 1,463
Equity securities at fair value
3,501 3,455
Securities available-for-sale
409,020 443,772
Loans held for sale
4,144 2,190
Federal Home Loan Bank stock, at cost
1,737 1,705
Loans, less allowance for loan losses of $11,611 and $8,714
at June 30, 2023 and December 31, 2022, respectively
773,021 771,468
Premises and equipment, net
16,547 17,192
Goodwill and core deposit intangible
11,135 11,286
Mortgage servicing rights
3,756 3,985
Cash surrender value of bank-owned life insurance
11,931 11,761
Other assets
29,922 30,764
Total assets
$ 1,305,547 $ 1,321,798

Liabilities and Stockholders' Equity

Liabilities
Deposits:
Noninterest-bearing
$ 285,736 $ 352,647
Interest-bearing
903,644 838,469
Total deposits
1,189,380 1,191,116
Subordinated debentures and notes, net of issuance costs
19,885 19,856
Senior secured term note
8,945 9,722
Other borrowings
- 18,000
Other liabilities
6,817 7,043
Total liabilities
1,225,027 1,245,737

Stockholders' equity
Common stock, $0.01 par value, 10,000,000 shares authorized;
3,535,287 and 3,507,220 shares issued as of June 30, 2023 and
December 31, 2022, respectively
35 35
Additional paid-in capital
37,158 36,694
Retained earnings
97,733 94,243
Treasury stock, 643,303 and 640,594 shares at cost as of June 30, 2023
and December 31, 2022, respectively
(19,355 ) (19,276 )
Accumulated other comprehensive income (loss)
(35,051 ) (35,635 )
Total stockholders' equity
80,520 76,061
Total liabilities and stockholders' equity
$ 1,305,547 $ 1,321,798

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)
For the Quarter Ended

June 30, March 31, December 31, September 30, June 30,
2023 2023 2022 2022 2022
(Dollars in thousands, except per share data)
Interest Income:
Interest and fees on loans
$ 10,682 $ 10,237 $ 10,115 $ 9,306 $ 8,366
Interest on available-for-sale securities:
Taxable
3,631 3,619 3,284 2,913 2,364
Tax-exempt
265 299 379 372 369
Interest on deposits in other financial institutions
690 405 246 184 72
Total interest income
15,268 14,560 14,024 12,775 11,171
Interest Expense:
Interest on deposits
3,458 2,323 1,555 815 375
Interest on subordinated debentures
236 231 219 196 186
Interest on senior secured term note
141 135 120 89 45
Interest on other borrowings
80 204 59 32 24
Total interest expense
3,915 2,893 1,953 1,132 630
Net interest income before provision for loan losses
11,353 11,667 12,071 11,643 10,541
Provision for loan losses
466 415 450 100 (1,500
Net interest income after provision for loan losses
10,887 11,252 11,621 11,543 12,041
Noninterest Income:
Service charges on deposits accounts
1,002 982 1,029 1,023 968
Net gain on sale of loans
565 465 551 868 1,063
Net loan servicing income
231 177 195 203 209
Debit card interchange fees
1,150 1,029 1,141 1,177 1,165
Net gains on sales of securities available-for-sale
1 (50 ) 20 - (20
Net other gains (losses)
60 3 - - 11
Increase in cash surrender value of bank-owned life insurance
80 90 79 78 77
Other
449 489 399 392 347
Total noninterest income
3,538 3,185 3,414 3,741 3,820
Noninterest Expenses:
Salaries and employee benefits
6,142 6,205 5,963 6,422 6,066
Occupancy and equipment
1,154 1,174 1,083 1,176 1,132
Data processing
726 785 724 705 681
Debit card processing and issuance
569 565 596 661 528
Advertising and marketing
123 107 81 138 140
Amortization of intangibles
72 80 84 88 88
Professional fees
567 587 439 417 392
Office Supplies
100 103 125 96 97
Telephone
116 129 133 136 146
Other
568 911 976 852 1,984
Total noninterest expenses
10,137 10,646 10,204 10,691 11,254
Income before income taxes
4,288 3,791 4,831 4,593 4,607
Provision for income taxes
1,094 898 779 1,107 1,129
Net income
$ 3,194 $ 2,893 $ 4,052 $ 3,486 $ 3,478

Key Ratios
Basic Earnings Per Common Share
$ 1.10 $ 1.00 $ 1.41 $ 1.21 $ 1.21
Diluted Earnings Per Common Share
1.10 1.00 1.41 1.21 1.21
Dividends Per Common Share
0.12 0.12 0.12 0.12 0.12
Book Value Per Common Share
27.84 27.89 26.53 24.97 27.89
Tangible Book Value Per Share
23.99 24.02 22.60 21.01 23.91
Tangible Book Value Excluding AOCI Per Share
36.11 35.00 35.03 33.62 32.42
Number of Shares Outstanding
2,891,984 2,895,805 2,866,626 2,870,754 2,875,430
Average Number of Shares Outstanding
2,893,790 2,880,666 2,867,915 2,872,232 2,874,254
Net Interest Margin (1)
3.63 % 3.77 % 3.82 % 3.63 % 3.31
Efficiency Ratio (1)(2)(3)
67.69 % 71.09 % 65.54 % 69.04 % 68.96
Return on Assets
0.96 % 0.87 % 1.19 % 1.02 % 1.02
Return on Common Equity
15.64 % 15.09 % 22.31 % 16.73 % 16.75

(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.

(3) The efficiency ratio excludes one time charges related to branch closures in 2022.

(UNAUDITED)
As of
June 30, March 31, December 31, September 30, June 30,
2023 2023 2022 2022 2022
(Amounts in thousands, except per share data)
Cash and due from banks
$ 16,967 $ 14,383 $ 16,686 $ 18,618 $ 15,682
Interest-bearing deposits in banks and other
23,866 6,190 7,534 60,116 12,990
Securities
412,521 432,022 447,227 452,198 472,977
Net loans/leases
777,165 772,417 773,658 770,279 765,979
Goodwill and core deposit intangible
11,135 11,206 11,286 11,369 11,453
Other assets
63,893 65,762 65,407 67,801 63,109
Total assets
$ 1,305,547 $ 1,301,980 $ 1,321,798 $ 1,380,381 $ 1,342,190
Deposits
$ 1,189,380 $ 1,148,275 $ 1,191,116 $ 1,263,183 $ 1,220,667
Subordinated debentures
19,885 19,871 19,856 19,841 19,827
Senior secured term note
8,945 9,333 9,722 10,111 10,500
Borrowings
- 34,500 18,000 5,000 5,000
Other liabilities
6,817 9,239 7,043 10,568 5,998
Stockholders' equity
80,520 80,762 76,061 71,678 80,198
Total liabilities and stockholders' equity
$ 1,305,547 $ 1,301,980 $ 1,321,798 $ 1,380,381 $ 1,342,190

ASSET QUALITY DATA
(Amounts in thousands)
June 30, March 31, December 31, September 30, June 30,
2023 2023 2022 2022 2022
Non-accrual loans
$ 2,674 $ 2,721 $ 3,036 $ 3,254 $ 4,125
Accruing loans past due 90 days or more
- 36 - - -
Troubled debt restructures - accruing
1,519 1,606 1,671 1,720 1,910
Total nonperforming loans
$ 4,193 $ 4,363 $ 4,707 $ 4,974 $ 6,035
Other real estate owned
- - 17 - -
Total nonperforming assets
$ 4,193 $ 4,363 $ 4,724 $ 4,974 $ 6,035
Total loans
$ 788,776 $ 783,886 $ 782,372 $ 779,181 $ 775,474
Allowance for loan losses
11,611 11,469 8,714 8,902 9,495
Loans, less allowance for loan losses
$ 777,165 $ 772,417 $ 773,658 $ 770,279 $ 765,979
Nonperforming Assets to total Assets
0.32 % 0.34 % 0.36 % 0.36 % 0.45
Nonperforming loans to total loans
0.53 % 0.56 % 0.60 % 0.64 % 0.78
Allowance for loan losses to total loans
1.47 % 1.46 % 1.11 % 1.14 % 1.22
Allowance for loan losses to nonperforming loans
276.9 % 262.9 % 185.1 % 179.0 % 157.3

For the Quarter Ended
June 30, March 31, December 31, September 30, June 30,
ROLLFORWARD OF ALLOWANCE
2023 2023 2022 2022 2022
Beginning Balance
$ 11,469 $ 8,714 $ 8,902 $ 9,495 $ 10,995
CECL adoption
- 2,408 - - -
Provision
466 415 450 100 (1,500
Loans charged off
384 135 679 758 95
Loan recoveries
60 67 41 65 95
Net charge-offs
324 68 638 693 -
Ending Balance
$ 11,611 $ 11,469 $ 8,714 $ 8,902 $ 9,495

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)
Six months ended June 30,

2023 2022

(Amounts in thousands, except per share data)



Interest Income:


Interest and fees on loans
$ 20,919 $ 16,174
Interest and dividends on available-for-sale securities:
Taxable
7,250 4,433
Tax-exempt
564 733
Interest on deposits in other financial institutions
1,095 96
Total interest income
29,828 21,436
Interest Expense:
Interest on deposits
5,781 698
Interest on subordinated debentures
284 381
Interest on senior secured term note
276 136
Interest on other borrowings
467 24
Total interest expense
6,808 1,239
Net interest income before provision for loan losses
23,020 20,197
Provision for loan losses
881 (1,500 )
Net interest income after provision for loan losses
22,139 21,697

Noninterest Income:
Service charges on deposits accounts
1,985 1,882
Net gain on sale of loans
1,030 2,209
Net loan servicing income
407 612
Debit card interchange fees
2,179 2,244
Net gains on sales of securities available-for-sale
(50 ) (20 )
Net other gains (losses)
64 7
Increase in cash surrender value of bank-owned life insurance
170 163
Change in value of equity securities
(15 ) (109 )
Other
953 751
Total noninterest income
6,723 7,739

Noninterest Expenses:
Salaries and employee benefits
12,347 12,288
Occupancy and equipment
2,328 2,344
Data processing
1,512 1,389
Debit card processing and issuance
1,133 1,041
Advertising and marketing
230 248
Amortization of core deposit intangible
151 185
Professional fees
1,154 781
Office Supplies
203 183
Telephone
245 285
Other
1,480 2,681
Total noninterest expenses
20,783 21,425
Income before income taxes
8,079 8,011
Provision for income taxes
1,992 1,914
Net income
$ 6,087 $ 6,097

Key Ratios

Basic Earnings Per Common Share
$ 2.11 $ 2.13
Diluted Earnings Per Common Share
2.11 2.13
Dividends Per Common Share
0.24 0.24

Net Interest Margin (1)
3.70 % 3.22 %
Efficiency Ratio (1)(2)
69.57 % 76.11 %
Return on Assets
0.92 % 0.91 %
Return on Common Equity
15.38 % 13.54 %

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

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

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
ANALYSIS of AVERAGE BALANCES & TAX EQUIVALENT INTEREST RATES

Average Balance Sheet with Resultant Interest and Rates
(Dollars in thousands - unaudited)
(Yields on a tax-equivalent basis) (1)

For the Quarter Ended
June 30, 2023 March 31, 2023 June 30, 2022
Average Average Average Average Average Average
Balance Interest Rate Balance Interest Rate Balance Interest Rate
Interest Earning Assets:









Interest-bearing deposits and other
$ 54,875 $ 690 5.04 % $ 37,127 $ 405 4.42 % $ 50,333 $ 72 0.58 %
Investment securities:
Taxable investment securities
387,211 3,631 3.76 % 394,967 3,619 3.72 % 432,659 2,364 2.19 %
Tax-exempt investment securities
39,786 265 3.38 % 44,379 299 3.42 % 54,184 369 3.48 %
Total Investment securities
426,997 3,896 3.73 % 439,346 3,918 3.69 % 486,843 2,733 2.33 %
Loans
781,947 10,682 5.48 % 786,195 10,237 5.28 % 752,785 8,366 4.46 %
Total Earning Assets
$ 1,263,819 $ 15,268 4.87 % $ 1,262,668 $ 14,560 4.70 % $ 1,289,961 $ 11,171 3.51 %
Allowance for loan losses
(11,579 ) (11,295 ) (10,618 )
Cash and due from banks
15,265 15,389 14,900
Other assets
71,816 74,551 70,202
Total Assets
$ 1,339,321 $ 1,341,313 $ 1,364,445
Interest Bearing Liabilities:
Interest bearing checking accounts
$ 459,788 $ 2,084 1.82 % $ 451,741 $ 1,388 1.25 % $ 316,829 $ 175 0.22 %
Savings and money market deposits
341,744 623 0.73 % 371,722 461 0.50 % 426,585 75 0.07 %
Time deposits
111,691 751 2.70 % 96,298 474 2.00 % 77,287 125 0.65 %
Total interest bearing deposits
913,223 3,458 1.52 % 919,761 2,323 1.02 % 820,701 375 0.18 %
Subordinated debentures and notes
19,879 236 4.77 % 19,863 231 4.71 % 19,820 186 3.77 %
Borrowings
15,196 221 5.82 % 31,465 339 4.37 % 22,143 69 1.25 %
Total Interest-Bearing Liabilities
$ 948,298 $ 3,915 1.66 % $ 971,089 $ 2,893 1.21 % $ 862,664 $ 630 0.29 %
Interest Rate Spread
3.21 % 3.49 % 3.22 %
Noninterest checking accounts
301,442 284,430 412,508
Other liabilities
7,684 8,046 5,965
Total liabilities
1,257,424 1,263,565 1,281,137
Total Stockholders' equity
81,897 77,748 83,308
Total Liabilities and
Stockholders' Equity
$ 1,339,321 $ 1,341,313 $ 1,364,445

Net Interest Income/Margin
$ 11,353 3.63 % $ 11,667 3.77 % $ 10,541 3.31 %

(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, 2023 June 30, 2022
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Interest Earning Assets:
Interest-bearing deposits and other
$ 46,051 $ 1,095 4.80 % $ 49,303 $ 96 0.39 %
Investment securities:
Taxable investment securities
391,067 7,250 3.74 % 440,607 4,433 2.03 %
Tax-exempt investment securities
42,070 564 3.40 % 54,003 733 3.49 %
Total Investment securities
433,137 7,814 3.71 % 494,610 5,166 2.19 %
Loans
784,059 20,919 5.38 % 733,830 16,174 4.44 %
Total Earning Assets
$ 1,263,247 $ 29,828 4.78 % $ 1,277,743 $ 21,436 3.41 %
Allowance for loan losses
(11,438 ) (10,875 )
Cash and due from banks
15,326 14,928
Other assets
73,311 68,128
Total Assets
$ 1,340,446 $ 1,349,924
Interest Bearing Liabilities:
Interest bearing checking accounts
$ 455,787 $ 3,472 1.54 % $ 315,415 $ 315 0.20 %
Savings and money market deposits
356,650 1,084 0.61 % 425,178 143 0.07 %
Time deposits
104,037 1,225 2.38 % 77,520 240 0.62 %
Total interest bearing deposits
916,474 5,781 1.27 % 818,113 698 0.17 %
Subordinated debentures
19,871 467 4.74 % 19,928 381 3.86 %
Borrowings
23,286 560 4.85 % 19,124 160 1.68 %
Total Interest-Bearing Liabilities
$ 959,631 $ 6,808 1.43 % $ 857,165 $ 1,239 0.29 %
Interest Rate Spread
3.35 % 3.12 %
Noninterest checking accounts
292,983 395,555
Other liabilities
7,998 6,430
Total liabilities
1,260,612 1,259,150
Total Stockholders' equity
79,834 90,774
Total Liabilities and
Stockholders' Equity
$ 1,340,446 $ 1,349,924
Net Interest Income/Margin
$ 23,020 3.70 % $ 20,197 3.22 %

(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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https://www.accesswire.com/769469/Blackhawk-Bancorp-Reports-Second-Quarter-Results

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