BELOIT, WI / ACCESSWIRE / April 21, 2023 / Blackhawk Bancorp, Inc. (OTCQX:BHWB), (the "Company") parent company of Blackhawk Bank (the "Bank"), today reported net income of $2.89 million for the quarter ended March 31, 2023, a 29% decrease from the $4.05 million earned in the preceding quarter, and a 10% increase compared to the $2.62 million earned during the first quarter of 2022. Diluted Earnings per Share (EPS) for the current quarter was $1.00, a decrease of $0.41, or 29%, compared to the preceding quarter and a $0.08, or 9%, increase compared to the first quarter a year ago. The first quarter of 2023 results produced a Return on Average Equity (ROAE) of 15.09% and a Return on Average Assets (ROAA) of 0.87%.
Results for the first quarter of 2023 included $226,000 (after-tax) of expenses related to the pending merger with First Mid Bancshares, Inc. (NASDAQ: FMBH) ("First Mid"). Excluding these expenses, the 2023 first-quarter net income would have been $3.12 million, a $932,000, or 23%, decrease compared to the linked quarter ending December 31, 2022, and a $501,000, or 19%, increase over the first quarter of last year.
The increase in net income for the first quarter of 2023, compared to the first quarter of the prior year, includes a $2.01 million increase in net interest income, which was offset by a $415,000 increase in provision for loan losses, and a $906,000 decrease in income from the sale and servicing of mortgage loans.
"We finished the first quarter of 2023 strong, despite a volatile banking market and challenging interest rate environment," said Todd James, Chairman and CEO. "While quarterly loan growth has moderated from the robust levels we achieved during the last few quarters, we generated double digit loan growth year-over-year, while maintaining excellent asset quality. With a stable loan pipeline, strong capital position and ample available liquidity, we are well positioned for continued loan growth."
"Another highlight of the first quarter was our announced merger with First Mid. We look forward to our customers joining First Mid, which has a strong tradition of providing excellent banking resources and quality customer service s throughout the markets they serve," said James.
On March 21, 2023, the Company entered into an agreement to merge with First Mid Bancshares, Inc. in a 100% stock transaction. The transaction has been unanimously approved by each company's board of directors and is expected to close in the second half of 2023, subject to regulatory approvals, the approval of Blackhawk's stockholders and the satisfaction of customary closing conditions.
First Quarter 2023 Financial Highlights (at or for the three months ended March 31, 2023)
- Net income of $2.89 million, or $1.00 per diluted share, compared to $2.62 million, or $0.92 per diluted share, in the first quarter of 2022.
- Net interest margin of 3.77%, compared to 3.82% in the preceding quarter and 3.13% in the first quarter a year ago.
- Annualized return on average assets was 0.87%, compared to 0.80% in the first quarter of 2022.
- Annualized return on average equity was 15.09%, compared to 10.82% in the first quarter a year ago.
- Excluding Paycheck Protection Program (PPP) loans, average loans held for investment increased $87.7 million, or 12.6% to $785.5 million at March 31, 2023, compared to $697.8 million for the first quarter of last year.
- Total deposits contracted by $51.4 million to $1.15 billion at March 31, 2023 compared to $1.20 billion at the end of 2022.
- Allowance Credit Losses to total loans was 1.46% at quarter end, compared to 1.11% at the end of 2022. The increase includes a $2.64 million adjustment due to the adoption of CECL (Current Expected Credit Losses) accounting standard at the beginning of 2023. The initial adoption resulted in a $1.90 million reduction to retained earnings.
- Nonperforming assets to total assets of 0.34% at March 31, 2023 compared to 0.52% a year ago.
- On March 17, 2023, paid a quarterly cash dividend of $0.12 per share, marking the 35th consecutive quarterly cash dividend paid.
Net Interest Income
Net interest income totaled $11.67 million for the first quarter of 2023, which was a decrease of $404,000, or 3%, compared to the fourth quarter of 2022, and an increase of $2.01 million, or 21%, compared to the first quarter of the prior year. The increase over the first quarter of the prior year is net of a $539,000 reduction in PPP fees. No PPP fee income was recognized in the current or linked quarter and all PPP fee income has been recognized.
The Company's net interest margin was 3.77% for the first quarter of 2023, compared to 3.82% for the quarter ended December 31, 2022, and 3.13% for the first quarter of 2022. The tax-equivalent yield on earning assets increased to 4.70% for the first quarter of 2023, compared to 4.44% for the fourth quarter of 2022, and 3.32% for the first quarter of 2022. Total cost of deposits increased to 0.77% for the quarter ended March 31, 2023 compared to 0.50% and 0.11% for the quarters ended December 31, 2022 and March 31, 2022, respectively.
"Our business model is inherently hedged against some of the impacts from changing interest rates, with mortgage banking revenue and net interest margin growth moving in opposite directions as interest rates change," James said. "Our net interest margin improved year-over-year as deposit cost increases lagged asset repricing throughout 2022, and as expected, deposit costs have caught up somewhat in the first quarter."
Excluding PPP loans, average total loans increased by $5.9 million, or less than one percent, to $785.5 million for the first quarter of 2023, compared to $779.7 million for the fourth quarter of 2022 and increased $87.7 million, or 13%, compared to $697.8 million for the first quarter of 2022. Average total deposits for the first quarter of 2023 increased by $10.28 million to $1.20 billion compared to $1.19 billion in the first quarter of 2022.
Provision for Loan Losses and Asset Quality
The Company adopted CECL as of January 1, 2023, and recorded an increase of $2.64 million to the allowance for credit losses. The Company recorded a provision for loan losses of $415,000 for the quarter ended March 31, 2023 compared to $450,000 for the fourth quarter of 2022 and no provision in the first quarter of last year.
Total nonperforming assets, which include troubled debt restructures performing in accordance with their modified terms, equaled $4.4 million as of March 31, 2023, as compared to $4.7 million as of December 31, 2022, and $6.9 million at March 31, 2022. At March 31, 2023, the ratio of nonperforming loans to total loans equaled 0.56%, as compared to 0.60% at December 31, 2022, and 0.93% at March 31, 2022.
The allowance for credit losses to total loans was 1.46% as of March 31, 2023, compared to 1.11% at December 31, 2022, and 1.51% as of March 31, 2022. The allowance for credit losses to nonperforming loans increased to 262.9% as of March 31, 2023, compared to 185.1% at December 31, 2022, and 162.0% at March 31, 2022.
Noninterest Income and Operating Expenses
Noninterest income for the quarter ended March 31, 2023, totaled $3.19 million, a $229,000 decrease compared to $3.41 million the prior quarter and a $733,000 decrease from the $3.92 million recorded in the first quarter of 2022. The decline in noninterest income compared to the first quarter of 2022 includes a $906,000 decrease in revenue from the sale and servicing of mortgage loans.
Operating expenses for the quarter ended March 31, 2023, totaled $10.65 million, an increase of $442,000, or 4%, compared to the fourth quarter of2022, and an increase of $475,000, or 5%, compared to the first quarter of 2022. The increase compared to the linked quarter and first quarter of 2022 includes $314,000 of merger related costs.
Capital
Tangible book value per share was $24.02 at March 31, 2023, compared to $22.60 at December 31, 2022 and $26.58 at March 31, 2022. In addition to net income retained, the increase in tangible book value per share during the current quarter included a $3.84 million increase in accumulated other comprehensive income ("AOCI") due to a decrease in the unrealized loss on available for sale securities. The increase in AOCI was partially offset by the adoption of CECL, which resulted in a $1.9 million decrease in total shareholder equity. Excluding AOCI, tangible book value per share was $35.00 at March 31, 2023, a decrease of $0.03 compared to December 31, 2022 and an increase of $3.73 compared to March 31, 2022.
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 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.
Blackhawk Bancorp, Inc. | |
| Todd J. James, Chairman & CEO | Matthew McDonnell, SVP & CFO |
| [email protected] | [email protected] |
Phone: (608) 364-8911 |
| BLACKHAWK BANCORP, INC. AND SUBSIDIARIES | |||||
| CONSOLIDATED BALANCE SHEETS | |||||
| MARCH 31, 2023 AND DECEMBER 31, 2022 | |||||
(UNAUDITED) | |||||
| March 31, | December 31, | ||||
Assets | 2023 | 2022 | |||
| (Dollars in thousands, except | |||||
| share and per share data) | |||||
Cash and due from banks | $ | 14,383 | $ | 16,686 | |
Interest-bearing deposits in banks and other institutions | 5,054 | 6,071 | |||
Total cash and cash equivalents | 19,437 | 22,757 | |||
Certificates of deposit in banks and other institutions | 1,136 | 1,463 | |||
Equity securities at fair value | 3,535 | 3,455 | |||
Securities available-for-sale | 428,487 | 443,772 | |||
Loans held for sale | 2,353 | 2,190 | |||
Federal Home Loan Bank stock, at cost | 3,316 | 1,705 | |||
Loans, less allowance for loan losses of $11,469 and $8,714 | |||||
at March 31, 2023 and December 31, 2022, respectively | 770,064 | 771,468 | |||
Premises and equipment, net | 16,926 | 17,192 | |||
Goodwill and core deposit intangible | 11,206 | 11,286 | |||
Mortgage servicing rights | 3,847 | 3,985 | |||
Cash surrender value of bank-owned life insurance | 11,850 | 11,761 | |||
Other assets | 29,823 | 30,764 | |||
Total assets | $ | 1,301,980 | $ | 1,321,798 | |
Liabilities and Stockholders' Equity | |||||
Liabilities | |||||
Deposits: | |||||
Noninterest-bearing | $ | 272,389 | $ | 352,647 | |
Interest-bearing | 875,886 | 838,469 | |||
Total deposits | 1,148,275 | 1,191,116 | |||
Subordinated debentures and notes, net of issuance costs | 19,871 | 19,856 | |||
Senior secured term note | 9,333 | 9,722 | |||
Other borrowings | 34,500 | 18,000 | |||
Other liabilities | 9,239 | 7,043 | |||
Total liabilities | 1,221,218 | 1,245,737 | |||
Stockholders' equity | |||||
Common stock, $0.01 par value, 10,000,000 shares authorized; | |||||
3,536,837 and 3,507,220 shares issued as of March 31, 2023 and | |||||
December 31, 2022, respectively | 35 | 35 | |||
Additional paid-in capital | 36,926 | 36,694 | |||
Retained earnings | 94,886 | 94,243 | |||
Treasury stock, 641,032 and 640,594 shares at cost as of March 31, 2023 | |||||
and December 31, 2022, respectively | (19,289) | (19,276) | |||
Accumulated other comprehensive income (loss) | (31,796) | (35,635) | |||
Total stockholders' equity | 80,762 | 76,061 | |||
Total liabilities and stockholders' equity | $ | 1,301,980 | $ | 1,321,798 | |
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||
(UNAUDITED) | For the Quarter Ended | |||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||
Interest Income: | ||||||||||||||
Interest and fees on loans | $ | 10,237 | $ | 10,115 | $ | 9,306 | $ | 8,366 | $ | 7,808 | ||||
Interest on available-for-sale securities: | ||||||||||||||
Taxable | 3,619 | 3,284 | 2,913 | 2,364 | 2,068 | |||||||||
Tax-exempt | 299 | 379 | 372 | 369 | 365 | |||||||||
Interest on deposits in other financial institutions | 405 | 246 | 184 | 72 | 24 | |||||||||
Total interest income | 14,560 | 14,024 | 12,775 | 11,171 | 10,265 | |||||||||
Interest Expense: | ||||||||||||||
Interest on deposits | 2,323 | 1,555 | 815 | 375 | 322 | |||||||||
Interest on subordinated debentures | 231 | 219 | 196 | 186 | 195 | |||||||||
Interest on senior secured term note | 135 | 120 | 89 | 45 | 91 | |||||||||
Interest on other borrowings | 204 | 59 | 32 | 24 | - | |||||||||
Total interest expense | 2,893 | 1,953 | 1,132 | 630 | 608 | |||||||||
Net interest income before provision for loan losses | 11,667 | 12,071 | 11,643 | 10,541 | 9,657 | |||||||||
Provision for loan losses | 415 | 450 | 100 | (1,500 | - | |||||||||
Net interest income after provision for loan losses | 11,252 | 11,621 | 11,543 | 12,041 | 9,657 | |||||||||
Noninterest Income: | ||||||||||||||
Service charges on deposits accounts | 982 | 1,029 | 1,023 | 968 | 913 | |||||||||
Net gain on sale of loans | 465 | 551 | 868 | 1,063 | 1,146 | |||||||||
Net loan servicing income | 177 | 195 | 203 | 209 | 402 | |||||||||
Debit card interchange fees | 1,029 | 1,141 | 1,177 | 1,165 | 1,079 | |||||||||
Net gains (losses) on sales of securities available-for-sale | (50) | 20 | - | (20) | - | |||||||||
Net other gains (losses) | 3 | - | - | 11 | (4) | |||||||||
Increase in cash surrender value of bank-owned life insurance | 90 | 79 | 78 | 77 | 86 | |||||||||
Other | 489 | 399 | 392 | 347 | 296 | |||||||||
Total noninterest income | 3,185 | 3,414 | 3,741 | 3,820 | 3,918 | |||||||||
Noninterest Expenses: | ||||||||||||||
Salaries and employee benefits | 6,205 | 5,963 | 6,422 | 6,066 | 6,222 | |||||||||
Occupancy and equipment | 1,174 | 1,083 | 1,176 | 1,132 | 1,212 | |||||||||
Data processing | 785 | 724 | 705 | 681 | 708 | |||||||||
Debit card processing and issuance | 565 | 596 | 661 | 528 | 513 | |||||||||
Advertising and marketing | 107 | 81 | 138 | 140 | 108 | |||||||||
Amortization of intangibles | 80 | 84 | 88 | 88 | 96 | |||||||||
Professional fees | 587 | 439 | 417 | 392 | 389 | |||||||||
Office Supplies | 103 | 125 | 96 | 97 | 86 | |||||||||
Telephone | 129 | 133 | 136 | 146 | 140 | |||||||||
Other | 911 | 976 | 852 | 1,984 | 697 | |||||||||
Total noninterest expenses | 10,646 | 10,204 | 10,691 | 11,254 | 10,171 | |||||||||
Income before income taxes | 3,791 | 4,831 | 4,593 | 4,607 | 3,404 | |||||||||
Provision for income taxes | 898 | 779 | 1,107 | 1,129 | 785 | |||||||||
Net income | $ | 2,893 | $ | 4,052 | $ | 3,486 | $ | 3,478 | $ | 2,619 | ||||
Key Ratios | ||||||||||||||
Basic Earnings Per Common Share | $ | 1.00 | $ | 1.41 | $ | 1.21 | $ | 1.21 | $ | 0.92 | ||||
Diluted Earnings Per Common Share | 1.00 | 1.41 | 1.21 | 1.21 | 0.92 | |||||||||
Dividends Per Common Share | 0.12 | 0.12 | 0.12 | 0.12 | 0.12 | |||||||||
Book Value Per Common Share | 27.89 | 26.53 | 24.97 | 27.89 | 30.59 | |||||||||
Tangible Book Value Per Share | 24.02 | 22.60 | 21.01 | 23.91 | 26.58 | |||||||||
Tangible Book Value Excluding AOCI Per Share | 35.00 | 35.03 | 33.62 | 32.42 | 31.27 | |||||||||
Number of Shares Outstanding | 2,895,805 | 2,866,626 | 2,870,754 | 2,875,430 | 2,873,528 | |||||||||
Average Number of Shares Outstanding | 2,880,666 | 2,867,915 | 2,872,232 | 2,874,254 | 2,864,082 | |||||||||
Net Interest Margin (1) | 3.77% | 3.82% | 3.63% | 3.31% | 3.13% | |||||||||
Efficiency Ratio (1)(2)(3) | 71.09% | 65.54% | 69.04% | 68.96% | 74.35% | |||||||||
Return on Assets | 0.87% | 1.19% | 1.02% | 1.02% | 0.80% | |||||||||
Return on Common Equity | 15.09% | 22.31% | 16.73% | 16.75% | 10.82% | |||||||||
| (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 | |||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||
| (Amounts in thousands, except per share data) | ||||||||||||||
Cash and due from banks | $ | 14,383 | $ | 16,686 | $ | 18,618 | $ | 15,682 | $ | 13,413 | ||||
Interest-bearing deposits in banks and other | 6,190 | 7,534 | 60,116 | 12,990 | 42,103 | |||||||||
Securities | 432,022 | 447,227 | 452,198 | 472,977 | 484,420 | |||||||||
Net loans/leases | 772,417 | 773,658 | 770,279 | 765,979 | 716,456 | |||||||||
Goodwill and core deposit intangible | 11,206 | 11,286 | 11,369 | 11,453 | 11,536 | |||||||||
Other assets | 65,762 | 65,407 | 67,801 | 63,109 | 62,715 | |||||||||
Total assets | $ | 1,301,980 | $ | 1,321,798 | $ | 1,380,381 | $ | 1,342,190 | $ | 1,330,643 | ||||
Deposits | $ | 1,148,275 | $ | 1,191,116 | $ | 1,263,183 | $ | 1,220,667 | $ | 1,199,627 | ||||
Subordinated debentures | 19,871 | 19,856 | 19,841 | 19,827 | 19,812 | |||||||||
Senior secured term note | 9,333 | 9,722 | 10,111 | 10,500 | 10,889 | |||||||||
Borrowings | 34,500 | 18,000 | 5,000 | 5,000 | 5,000 | |||||||||
Other liabilities | 9,239 | 7,043 | 10,568 | 5,998 | 7,414 | |||||||||
Stockholders' equity | 80,762 | 76,061 | 71,678 | 80,198 | 87,901 | |||||||||
Total liabilities and stockholders' equity | $ | 1,301,980 | $ | 1,321,798 | $ | 1,380,381 | $ | 1,342,190 | $ | 1,330,643 | ||||
ASSET QUALITY DATA | ||||||||||||||
(Amounts in thousands) | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||
Non-accrual loans | $ | 2,721 | $ | 3,036 | $ | 3,254 | $ | 4,125 | $ | 4,983 | ||||
Accruing loans past due 90 days or more | 36 | - | - | - | - | |||||||||
Troubled debt restructures - accruing | 1,606 | 1,671 | 1,720 | 1,910 | 1,802 | |||||||||
Total nonperforming loans | $ | 4,363 | $ | 4,707 | $ | 4,974 | $ | 6,035 | $ | 6,785 | ||||
Other real estate owned | - | 17 | - | - | 75 | |||||||||
Total nonperforming assets | $ | 4,363 | $ | 4,724 | $ | 4,974 | $ | 6,035 | $ | 6,860 | ||||
Total loans | $ | 783,886 | $ | 782,372 | $ | 779,181 | $ | 775,474 | $ | 727,451 | ||||
Allowance for loan losses | 11,469 | 8,714 | 8,902 | 9,495 | 10,995 | |||||||||
Loans, less allowance for loan losses | $ | 772,417 | $ | 773,658 | $ | 770,279 | $ | 765,979 | $ | 716,456 | ||||
Nonperforming Assets to total Assets | 0.34% | 0.36% | 0.36% | 0.45% | 0.52% | |||||||||
Nonperforming loans to total loans | 0.56% | 0.60% | 0.64% | 0.78% | 0.93% | |||||||||
Allowance for loan losses to total loans | 1.46% | 1.11% | 1.14% | 1.22% | 1.51% | |||||||||
Allowance for loan losses to nonperforming loans | 262.9% | 185.1% | 179.0% | 157.3% | 162.0 | |||||||||
| For the Quarter Ended | ||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||
ROLLFORWARD OF ALLOWANCE | 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||
Beginning Balance | $ | 8,714 | $ | 8,902 | $ | 9,495 | $ | 10,995 | $ | 11,125 | ||||
CECL adoption | 2,408 | - | - | - | - | |||||||||
Provision | 415 | 450 | 100 | (1,500) | - | |||||||||
Loans charged off | 135 | 679 | 758 | 95 | 214 | |||||||||
Loan recoveries | 67 | 41 | 65 | 95 | 84 | |||||||||
Net charge-offs | 68 | 638 | 693 | - | 130 | |||||||||
Ending Balance | $ | 11,469 | $ | 8,714 | $ | 8,902 | $ | 9,495 | $ | 10,995 | ||||
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES | |||||
CONSOLIDATED STATEMENTS OF INCOME | |||||
(UNAUDITED) | Three months ended March 31, | ||||
| 2023 | 2022 | ||||
| (Amounts in thousands, except per share data) | |||||
Interest Income: | |||||
Interest and fees on loans | $ | 10,237 | $ | 7,808 | |
Interest and dividends on available-for-sale securities: | |||||
Taxable | 3,619 | 2,068 | |||
Tax-exempt | 299 | 365 | |||
Interest on deposits in other financial institutions | 405 | 24 | |||
Total interest income | 14,560 | 10,265 | |||
Interest Expense: | |||||
Interest on deposits | 2,323 | 322 | |||
Interest on subordinated debentures | 231 | 195 | |||
Interest on senior secured term note | 135 | 91 | |||
Interest on other borrowings | 204 | - | |||
Total interest expense | 2,893 | 608 | |||
Net interest income before provision for loan losses | 11,667 | 9,657 | |||
Provision for loan losses | 415 | - | |||
Net interest income after provision for loan losses | 11,252 | 9,657 | |||
Noninterest Income: | |||||
Service charges on deposits accounts | 982 | 913 | |||
Net gain on sale of loans | 465 | 1,146 | |||
Net loan servicing income | 177 | 402 | |||
Debit card interchange fees | 1,029 | 1,079 | |||
Net gains on sales of securities available-for-sale | (50) | - | |||
Net other gains (losses) | 3 | (4) | |||
Increase in cash surrender value of bank-owned life insurance | 90 | 86 | |||
Change in value of equity securities | 49 | (64) | |||
Other | 440 | 360 | |||
Total noninterest income | 3,185 | 3,918 | |||
Noninterest Expenses: | |||||
Salaries and employee benefits | 6,205 | 6,222 | |||
Occupancy and equipment | 1,174 | 1,212 | |||
Data processing | 785 | 708 | |||
Debit card processing and issuance | 565 | 513 | |||
Advertising and marketing | 107 | 108 | |||
Amortization of core deposit intangible | 80 | 96 | |||
Professional fees | 587 | 389 | |||
Office Supplies | 103 | 86 | |||
Telephone | 129 | 140 | |||
Other | 911 | 697 | |||
Total noninterest expenses | 10,646 | 10,171 | |||
Income before income taxes | 3,791 | 3,404 | |||
Provision for income taxes | 898 | 785 | |||
Net income | $ | 2,893 | $ | 2,619 | |
Key Ratios | |||||
Basic Earnings Per Common Share | $ | 1.00 | $ | 0.92 | |
Diluted Earnings Per Common Share | 1.00 | 0.92 | |||
Dividends Per Common Share | 0.12 | 0.12 | |||
Net Interest Margin (1) | 3.77% | 3.13% | |||
Efficiency Ratio (1)(2) | 71.09% | 74.35% | |||
Return on Assets | 0.87% | 0.80% | |||
Return on Common Equity | 15.09% | 10.82% | |||
| (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 | ||||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | March 31, 2022 | |||||||||||||||||||||
| Average | Average | Average | Average | Average | Average | ||||||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||
Interest Earning Assets: | |||||||||||||||||||||||
Interest-bearing deposits and other | $ | 37,127 | $ | 405 | 4.42% | $ | 29,253 | $ | 246 | 3.34% | $ | 48,261 | $ | 24 | 0.20% | ||||||||
Investment securities: | |||||||||||||||||||||||
Taxable investment securities | 394,967 | 3,619 | 3.72% | 393,291 | 3,284 | 3.31% | 448,643 | 2,068 | 1.87% | ||||||||||||||
Tax-exempt investment securities | 44,379 | 299 | 3.42% | 54,914 | 379 | 3.49% | 53,820 | 365 | 3.50% | ||||||||||||||
Total Investment securities | 439,346 | 3,918 | 3.69% | 448,205 | 3,663 | 3.33% | 502,463 | 2,433 | 2.04% | ||||||||||||||
Loans | 786,195 | 10,237 | 5.28% | 786,108 | 10,115 | 5.11% | 714,666 | 7,808 | 4.43% | ||||||||||||||
Total Earning Assets | $ | 1,262,668 | $ | 14,560 | 4.70% | $ | 1,263,566 | $ | 14,024 | 4.44% | $ | 1,265,390 | $ | 10,265 | 3.32% | ||||||||
Allowance for loan losses | (11,295) | (8,819) | (11,136) | ||||||||||||||||||||
Cash and due from banks | 15,389 | 15,834 | 14,956 | ||||||||||||||||||||
Other assets | 74,551 | 76,693 | 65,912 | ||||||||||||||||||||
Total Assets | $ | 1,341,313 | $ | 1,347,274 | $ | 1,335,122 | |||||||||||||||||
Interest Bearing Liabilities: | |||||||||||||||||||||||
Interest bearing checking accounts | $ | 451,741 | $ | 1,388 | 1.25% | $ | 367,443 | $ | 982 | 1.06% | $ | 313,986 | $ | 139 | 0.18% | ||||||||
Savings and money market deposits | 371,722 | 461 | 0.50% | 401,432 | 320 | 0.32% | 423,755 | 68 | 0.06% | ||||||||||||||
Time deposits | 96,298 | 474 | 2.00% | 84,817 | 253 | 1.18% | 77,755 | 115 | 0.60% | ||||||||||||||
Total interest bearing deposits | 919,761 | 2,323 | 1.02% | 853,692 | 1,555 | 0.72% | 815,496 | 322 | 0.16% | ||||||||||||||
Subordinated debentures and notes | 19,863 | 231 | 4.71% | 19,849 | 219 | 4.37% | 20,037 | 195 | 3.94% | ||||||||||||||
Borrowings | 31,465 | 339 | 4.37% | 17,962 | 179 | 3.95% | 16,071 | 91 | 2.29% | ||||||||||||||
Total Interest-Bearing Liabilities | $ | 971,089 | $ | 2,893 | 1.21% | $ | 891,503 | $ | 1,953 | 0.87% | $ | 851,604 | $ | 608 | 0.29% | ||||||||
Interest Rate Spread | 3.49% | 3.57% | 3.03% | ||||||||||||||||||||
Noninterest checking accounts | 284,430 | 375,569 | 378,414 | ||||||||||||||||||||
Other liabilities | 8,046 | 8,151 | 6,899 | ||||||||||||||||||||
Total liabilities | 1,263,565 | 1,275,223 | 1,236,917 | ||||||||||||||||||||
Total Stockholders' equity | 77,748 | 72,051 | 98,205 | ||||||||||||||||||||
Total Liabilities and | |||||||||||||||||||||||
Stockholders' Equity | $ | 1,341,313 | $ | 1,347,274 | $ | 1,335,122 | |||||||||||||||||
Net Interest Income/Margin | $ | 11,667 | 3.77% | $ | 12,071 | 3.82% | $ | 9,657 | 3.13% | ||||||||||||||
| (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.