Blackhawk Bancorp Announces 2020 Third Quarter Earnings and Share Repurchase Program
Blackhawk Bancorp reported a net income of $2.9 million for Q3 2020, marking a 12% increase from Q2 but a 16% decrease year-over-year. Fully diluted EPS rose to $0.86, up $0.09 from Q2, down $0.17 from Q3 2019. Despite a slight increase in net interest income to $9.9 million, a higher provision for loan losses of $2.6 million and rising operating costs impacted overall performance. Total assets grew by 17% to $1.1 billion, with total deposits increasing 16% to $960.8 million.
- Net income rose 12% from the previous quarter to $2.9 million.
- Total assets increased 17% year-to-date to $1.1 billion.
- Total deposits grew by 16% to $960.8 million, reflecting strong customer engagement.
- Net income decreased 16% year-over-year, from $3.4 million in Q3 2019.
- Provision for loan losses increased to $2.6 million, highlighting credit risk concerns.
- Operating expenses grew by 9% compared to Q3 2019, affecting profitability.
BELOIT, WI / ACCESSWIRE / October 26, 2020 / Blackhawk Bancorp, Inc. (OTCQX:BHWB) reported net income of
The earnings increase compared to the most recent quarter was primarily driven by an increase in net revenue from the sale and servicing of residential mortgage loans, which was partially offset by an increase in operating expenses. Net interest income for the quarter increased only slightly compared to the most recent quarter.
The decrease in net income for the third quarter of 2020 compared to the third quarter of last year reflects an increase in the provision for loan losses, a decrease in net gain on sale of securities and an increase in operating expenses, which were partially offset by growth in net interest income and net revenue from the sale and servicing of residential mortgage loans.
For the nine months ended September 30, 2020, the company reported net income of
Total assets of the company increased by
Net Interest Income
Net interest income for the third quarter of 2020 totaled
The increase in net interest income compared to the third quarter of last year was driven by the overall increase in earning assets and recognition
Average total loans for the quarter ended September 30, 2020, equaled
Average total deposits for the quarter ended September 30, 2020, equaled
Net interest income for the nine months ended September 30, 2020, increased by
Provision for Loan Losses and Asset Quality
The provision for loan losses for the quarter ended September 30, 2020, totaled
Total nonperforming assets, which include troubled debt restructures that were performing in accordance with their modified terms, equaled
While overall delinquency rates and non-performing asset levels have not increased, management believes that current economic conditions could result in elevated losses in future quarters. Many borrowers have taken advantage of PPP, other stimulus programs, and the loan modifications provided by Blackhawk. Management expects to continue recording elevated provision for loan losses for the rest of the year, and will continue being proactive with borrowers to ensure credit issues are identified and addressed as early as possible, improving the overall probability of repayment.
Blackhawk has provided payment relief to borrowers negatively affected by the COVID-19 pandemic, including payment deferrals, interest only payments and forbearance agreements offering other relief. During the third quarter many of these customers had returned to normal payments, however, some were still under the original or extended modification agreements. The total balance of loans under COVID-related modifications decreased by
As of 9/30/20 (balance in thousands) | ||||||||||||||||||||||||
Balance of Loans by Modification Type | ||||||||||||||||||||||||
Industry | Portfolio Balance* | Payment Deferrals | Interest Only | Other | Total Modified | Percent of Portfolio Modified | ||||||||||||||||||
High Risk Industries | ||||||||||||||||||||||||
Arts, Entertainment and Recreation | 4,208 | - | - | - | - | 0 | % | |||||||||||||||||
Health Care and Social Assistance | 49,250 | 2,441 | 2,720 | - | 5,161 | 10 | % | |||||||||||||||||
Hospitality and Food Services | 29,505 | 4,149 | 7 | - | 4,156 | 14 | % | |||||||||||||||||
Other Services (except Public Admin) | 14,401 | 1,098 | - | - | 1,098 | 8 | % | |||||||||||||||||
Real Estate Rental and Leasing | 108,882 | - | 814 | - | 814 | 1 | % | |||||||||||||||||
Retail Trade | 40,798 | 1,078 | - | - | 1,078 | 3 | % | |||||||||||||||||
High Risk Industries Total | 247,044 | 8,766 | 3,541 | - | 12,307 | 5 | % | |||||||||||||||||
Other Industries and Consumer Total | ||||||||||||||||||||||||
Construction | 32,247 | - | 387 | - | 387 | 1 | % | |||||||||||||||||
Manufacturing | 102,404 | 309 | - | - | 309 | 0 | % | |||||||||||||||||
Other Industries | 100,440 | 2,587 | 3,519 | - | 6,106 | 6 | % | |||||||||||||||||
Consumer, Mortgage and Other | 113,071 | 467 | - | 3,600 | 4,067 | 4 | % | |||||||||||||||||
Other Industries and Consumer Total | 348,162 | 3,363 | 3,906 | 3,600 | 10,869 | 3 | % | |||||||||||||||||
Grand Total | 595,206 | 12,129 | 7,447 | 3,600 | 23,176 | 4 | % | |||||||||||||||||
*Excluding loans held for sale and PPP loans | ||||||||||||||||||||||||
Non-Interest Income and Operating Expenses
Non-interest income for the quarter ended September 30, 2020, totaled
Non-interest income for the first nine months of 2020 increased
Operating expenses for the quarter ended September 30, 2020, totaled
Operating expenses for the nine-month period ended September 30, 2020, totaled
Share Repurchase Program
At its meeting on October 21, 2020, the Company's Board of Directors authorized a share repurchase program, under which the Company may repurchase up to 200,000 shares of its outstanding common stock.
According to Todd James, Blackhawk Bancorp, Inc.'s President and CEO, "the stock repurchase program announced today is part of an overall plan to balance the use of Company resources to support all of its stakeholders. As we manage through these unprecedented times, Blackhawk has been and will continue supporting its customers, communities and employees that are negatively affected by COVID-19. This repurchase plan was adopted to extend similar support to our shareholders. While the number of shares authorized to be repurchased is relatively low, it demonstrates our confidence in the strength of our Company and will provide some level of liquidity for shareholders at a time when other alternatives may not be readily available," added James.
Under the share repurchase program, the Company may purchase, from time to time, on the open market or otherwise, shares of common stock of the Company in such quantities, at such prices, in such manner and on such terms and conditions as the Company's management team may deem appropriate, so long as the aggregate number of shares of common stock repurchased shall not exceed 200,000. Unless extended by the Board, the repurchase program will terminate on the twelve-month anniversary of its adoption.
The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, capital requirements and other corporate considerations, as determined by the Company's management team. The repurchase program may be suspended or discontinued at any time. The Company expects to finance the purchases with existing cash balances.
Outlook
The outlook for Blackhawk as well as the entire banking industry is clouded by uncertainty related to the COVID-19 pandemic crisis. Blackhawk believes there is risk of elevated credit losses in future quarters as the economic impact of the crisis plays out, and will continue taking steps to increase revenue, implement government stimulus programs and work with credit customers to offset and mitigate losses to the extent possible. Management believes the Company's financial position is strong and it has ample resources to withstand a potentially severe and protracted recession. In addition to responding to this crisis, Blackhawk will continue to pursue creditworthy and profitable business and consumer relationships in its Wisconsin and Illinois markets, emphasizing the value of its personal attention and service that remains unmatched by larger competitors. In addition to organic growth opportunities, Blackhawk may also pursue growth through selective acquisitions. Ability to grow or maintain profitability may be affected by uncertain economic conditions, competitive pressures, changes in regulatory burden and the interest rate environment.
About Blackhawk Bancorp
Blackhawk Bancorp, Inc. is headquartered in Beloit, Wisconsin and is the parent company of Blackhawk Bank. The combined entity operates eleven full-service banking centers and a dedicated commercial office, which are located in Rock County, Wisconsin and the Illinois counties of Winnebago, Boone, McHenry, Lake, and Kane. The Company's footprint stretches along the I-90 corridor from Janesville, Wisconsin to Elgin, Illinois and into the Northwest collar counties of the Chicagoland area. The company offers a variety of value-added consultative services to its business customers and their employees related to the financial products it provides.
Disclosures Regarding non-GAAP Measures
This report refers to financial measures that are identified as non-GAAP that the Company believes help to evaluate and measure the Company's performance, including the presentation of the net interest margin ratio and efficiency ratio calculations on a taxable-equivalent basis. Non-GAAP measures are also used to assist investor comparison by identifying nonrecurring events such as the 2019 acquisition-related expenses, 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 & CFO
mmcdonnell@blackhawkbank.com
Phone: (608) 364-8911
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
SEPTEMBER 30, 2020 AND DECEMBER 31, 2019 | ||||||||
(UNAUDITED) | ||||||||
September 30, | December 31, | |||||||
Assets | 2020 | 2019 | ||||||
(Dollars in thousands, except | ||||||||
share and per share data) | ||||||||
Cash and due from banks | $ | 17,403 | $ | 12,320 | ||||
Interest-bearing deposits in banks and other institutions | 43,441 | 20,761 | ||||||
Total cash and cash equivalents | 60,844 | 33,081 | ||||||
Certificates of deposit in banks and other institutions | 4,407 | 6,325 | ||||||
Equity securities at fair value | 2,529 | 2,365 | ||||||
Securities available-for-sale | 315,232 | 235,083 | ||||||
Loans held for sale | 11,826 | 6,540 | ||||||
Federal Home Loan Bank stock, at cost | 2,150 | 742 | ||||||
Loans, less allowance for loan losses of | ||||||||
at September 30, 2020 and December 31, 2019, respectively | 669,234 | 619,359 | ||||||
Premises and equipment, net | 20,095 | 21,025 | ||||||
Goodwill and core deposit intangible | 12,125 | 12,455 | ||||||
Mortgage servicing rights | 3,416 | 3,106 | ||||||
Cash surrender value of bank-owned life insurance | 11,051 | 11,118 | ||||||
Other assets | 13,393 | 12,662 | ||||||
Total assets | $ | 1,126,302 | $ | 963,861 | ||||
Liabilities and Stockholders' Equity | ||||||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 257,123 | $ | 155,978 | ||||
Interest-bearing | 703,650 | 673,631 | ||||||
Total deposits | 960,773 | 829,609 | ||||||
Short-term borrowings | - | - | ||||||
Subordinated debentures and notes (including | ||||||||
September 30, 2020 and December 31, 2019) | 5,155 | 5,155 | ||||||
Senior secured term note | 13,222 | 14,000 | ||||||
Other borrowings | 29,000 | 10,000 | ||||||
Other liabilities | 10,161 | 7,773 | ||||||
Total liabilities | 1,018,311 | 866,537 | ||||||
Stockholders' equity | ||||||||
Common stock, | ||||||||
3,435,348 and 3,399,803 shares issued as of September 30, 2020 and | ||||||||
December 31, 2019, respectively | 34 | 34 | ||||||
Additional paid-in capital | 34,487 | 33,989 | ||||||
Retained earnings | 66,700 | 60,295 | ||||||
Treasury stock, 106,364 and 105,185 shares at cost as of September 30, 2020 | ||||||||
and December 31, 2019, respectively | (1,440 | ) | (1,408 | ) | ||||
Accumulated other comprehensive income (loss) | 8,210 | 4,414 | ||||||
Total stockholders' equity | 107,991 | 97,324 | ||||||
Total liabilities and stockholders' equity | $ | 1,126,302 | $ | 963,861 | ||||
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Nine months ended September 30, | ||||||||
2020 | 2019 | |||||||
(Amounts in thousands, except per share data) | ||||||||
Interest Income: | ||||||||
Interest and fees on loans | $ | 25,362 | $ | 24,165 | ||||
Interest and dividends on available-for-sale securities: | ||||||||
Taxable | 4,729 | 4,594 | ||||||
Tax-exempt | 1,067 | 1,256 | ||||||
Interest on other financial institutions | 244 | 421 | ||||||
Total interest income | 31,402 | 30,436 | ||||||
Interest Expense: | ||||||||
Interest on deposits | 2,381 | 4,406 | ||||||
Interest on short-term borrowings | 27 | 130 | ||||||
Interest on subordinated debentures | 141 | 61 | ||||||
Interest on senior secured term note | 385 | 426 | ||||||
Interest on other | 61 | 300 | ||||||
Total interest expense | 2,995 | 5,323 | ||||||
Net interest income before provision for loan losses | 28,407 | 25,113 | ||||||
Provision for loan losses | 5,885 | 1,030 | ||||||
Net interest income after provision for loan losses | 22,522 | 24,083 | ||||||
Noninterest Income: | ||||||||
Service charges on deposits accounts | 2,254 | 2,713 | ||||||
Net gain on sale of loans | 7,509 | 2,954 | ||||||
Net loan servicing income | (254 | ) | 250 | |||||
Debit card interchange fees | 2,759 | 2,526 | ||||||
Net gains on sales of securities available-for-sale | 107 | 1,171 | ||||||
Net other gains (losses) | 64 | 176 | ||||||
Increase in cash surrender value of bank-owned life insurance | 235 | 231 | ||||||
Change in value of equity securities | 77 | 109 | ||||||
Other | 1,030 | 1,124 | ||||||
Total noninterest income | 13,781 | 11,254 | ||||||
Noninterest Expenses: | ||||||||
Salaries and employee benefits | 16,097 | 14,418 | ||||||
Occupancy and equipment | 3,293 | 3,077 | ||||||
Data processing | 1,700 | 3,054 | ||||||
Debit card processing and issuance | 1,200 | 1,125 | ||||||
Advertising and marketing | 222 | 349 | ||||||
Amortization of core deposit intangible | 330 | 278 | ||||||
Professional fees | 1,157 | 1,359 | ||||||
Office Supplies | 273 | 288 | ||||||
Telephone | 437 | 383 | ||||||
Other | 2,083 | 1,790 | ||||||
Total noninterest expenses | 26,792 | 26,121 | ||||||
Income before income taxes | 9,511 | 9,216 | ||||||
Provision for income taxes | 2,011 | 1,964 | ||||||
Net income | $ | 7,500 | $ | 7,252 | ||||
Key Ratios | ||||||||
Basic Earnings Per Common Share | $ | 2.26 | $ | 2.20 | ||||
Diluted Earnings Per Common Share | 2.26 | 2.20 | ||||||
Dividends Per Common Share | 0.33 | 0.30 | ||||||
Net Interest Margin (1) | 3.89 | % | 3.91 | % | ||||
Efficiency Ratio (1)(2) | 63.44 | % | 73.82 | % | ||||
Return on Assets | 0.95 | % | 1.04 | % | ||||
Return on Common Equity | 9.69 | % | 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
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
For the Quarter Ended | ||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
2020 | 2020 | 2020 | 2019 | 2019 | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||
Interest Income: | ||||||||||||||||||||
Interest and fees on loans | $ | 8,671 | $ | 8,658 | $ | 8,033 | $ | 8,284 | $ | 8,580 | ||||||||||
Interest on available-for-sale securities: | ||||||||||||||||||||
Taxable | 1,607 | 1,618 | 1,505 | 1,496 | 1,591 | |||||||||||||||
Tax-exempt | 372 | 371 | 323 | 331 | 356 | |||||||||||||||
Interest on other financial institutions | 41 | 40 | 162 | 107 | 133 | |||||||||||||||
Total interest income | 10,691 | 10,687 | 10,023 | 10,218 | 10,660 | |||||||||||||||
Interest Expense: | ||||||||||||||||||||
Interest on deposits | 565 | 639 | 1,177 | 1,400 | 1,485 | |||||||||||||||
Interest on subordinated debentures | 42 | 45 | 53 | 58 | 61 | |||||||||||||||
Interest on senior secured term note | 119 | 111 | 156 | 165 | 173 | |||||||||||||||
Interest on other borrowings | 47 | 19 | 22 | 24 | 97 | |||||||||||||||
Total interest expense | 773 | 814 | 1,408 | 1,647 | 1,816 | |||||||||||||||
Net interest income before provision for loan losses | 9,918 | 9,873 | 8,615 | 8,571 | 8,844 | |||||||||||||||
Provision for loan losses | 2,615 | 2,505 | 765 | 980 | 580 | |||||||||||||||
Net interest income after provision for loan losses | 7,303 | 7,368 | 7,850 | 7,591 | 8,264 | |||||||||||||||
Noninterest Income: | ||||||||||||||||||||
Service charges on deposits accounts | 747 | 610 | 897 | 1,002 | 1,019 | |||||||||||||||
Net gain on sale of loans | 3,412 | 3,192 | 905 | 1,257 | 1,333 | |||||||||||||||
Net loan servicing income | 26 | (389 | ) | 110 | 119 | (91 | ) | |||||||||||||
Debit card interchange fees | 1,002 | 924 | 832 | 876 | 910 | |||||||||||||||
Net gains on sales of securities available-for-sale | - | 8 | 99 | - | 866 | |||||||||||||||
Net other gains (losses) | 58 | 6 | - | (87 | ) | 81 | ||||||||||||||
Increase in cash surrender value of bank-owned life insurance | 76 | 74 | 85 | 75 | 74 | |||||||||||||||
Other | 344 | 425 | 273 | 632 | 455 | |||||||||||||||
Total noninterest income | 5,665 | 4,850 | 3,201 | 3,874 | 4,647 | |||||||||||||||
Noninterest Expenses: | ||||||||||||||||||||
Salaries and employee benefits | 5,585 | 5,477 | 5,035 | 4,964 | 4,992 | |||||||||||||||
Occupancy and equipment | 1,137 | 1,074 | 1,083 | 1,038 | 1,085 | |||||||||||||||
Data processing | 629 | 561 | 510 | 520 | 657 | |||||||||||||||
Debit card processing and issuance | 409 | 394 | 397 | 449 | 402 | |||||||||||||||
Advertising and marketing | 87 | 38 | 97 | 101 | 100 | |||||||||||||||
Amortization of intangibles | 107 | 107 | 115 | 119 | 119 | |||||||||||||||
Professional fees | 386 | 405 | 367 | 300 | 387 | |||||||||||||||
Office Supplies | 94 | 88 | 90 | 118 | 112 | |||||||||||||||
Telephone | 138 | 149 | 150 | 153 | 137 | |||||||||||||||
Other | 714 | 659 | 646 | 730 | 505 | |||||||||||||||
Total noninterest expenses | 9,286 | 8,952 | 8,490 | 8,492 | 8,496 | |||||||||||||||
Income before income taxes | 3,682 | 3,266 | 2,561 | 2,973 | 4,415 | |||||||||||||||
Provision for income taxes | 819 | 704 | 487 | 621 | 996 | |||||||||||||||
Net income | $ | 2,863 | $ | 2,562 | $ | 2,074 | $ | 2,352 | $ | 3,419 | ||||||||||
Key Ratios | ||||||||||||||||||||
Basic Earnings Per Common Share | $ | 0.86 | $ | 0.77 | $ | 0.63 | $ | 0.71 | $ | 1.03 | ||||||||||
Diluted Earnings Per Common Share | 0.86 | 0.77 | 0.63 | 0.71 | 1.03 | |||||||||||||||
Dividends Per Common Share | 0.11 | 0.11 | 0.11 | 0.10 | 0.10 | |||||||||||||||
Net Interest Margin (1) | 3.83 | % | 3.99 | % | 3.83 | % | 3.83 | % | 3.93 | % | ||||||||||
Efficiency Ratio (1)(2) | 59.39 | % | 60.43 | % | 71.89 | % | 67.25 | % | 67.19 | % | ||||||||||
Return on Assets | 1.03 | % | 0.96 | % | 0.85 | % | 0.97 | % | 1.40 | % | ||||||||||
Return on Common Equity | 10.64 | % | 10.16 | % | 8.31 | % | 9.60 | % | 14.25 | % | ||||||||||
(1) Non-GAAP Presentations: Management discloses certain non-GAAP financial measures to evaluate and measure the Company's performance, including the presentation of net interest income, net interest margin and efficiency ratio calculations on a taxable equivalent basis ("TE"). The net interest margin is calculated by dividing net interest income on a TE basis by average earning assets for the period. Management believes this measure provides investors with information regarding comparative balance sheet profitability.
(2) The efficiency ratio is calculated as noninterest expense divided by the sum of net interest income on 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 | |||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
2020 | 2020 | 2020 | 2019 | 2019 | ||||||||||||||||
(Amounts in thousands, except per share data) | ||||||||||||||||||||
Cash and due from banks | $ | 17,403 | $ | 14,527 | $ | 15,240 | $ | 12,320 | $ | 18,778 | ||||||||||
Interest-bearing deposits in banks and other | 47,848 | 25,246 | 6,775 | 27,086 | 22,478 | |||||||||||||||
Securities | 317,761 | 301,726 | 265,165 | 237,448 | 232,165 | |||||||||||||||
Net loans/leases | 681,060 | 697,881 | 626,797 | 625,899 | 640,576 | |||||||||||||||
Goodwill and core deposit intangible | 12,125 | 12,232 | 12,340 | 12,455 | 12,575 | |||||||||||||||
Other assets | 50,105 | 49,485 | 50,688 | 48,653 | 49,786 | |||||||||||||||
Total assets | $ | 1,126,302 | $ | 1,101,097 | $ | 977,005 | $ | 963,861 | $ | 976,358 | ||||||||||
Deposits | $ | 960,773 | $ | 939,066 | $ | 843,061 | $ | 829,609 | $ | 843,703 | ||||||||||
Subordinated debentures | 5,155 | 5,155 | 5,155 | 5,155 | 5,155 | |||||||||||||||
Senior secured term note | 13,222 | 13,611 | 14,000 | 14,000 | 14,000 | |||||||||||||||
Borrowings | 29,000 | 29,000 | 10,000 | 10,035 | 10,042 | |||||||||||||||
Other liabilities | 10,161 | 9,758 | 6,083 | 7,738 | 7,516 | |||||||||||||||
Stockholders' equity | 107,991 | 104,507 | 98,706 | 97,324 | 95,942 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 1,126,302 | $ | 1,101,097 | $ | 977,005 | $ | 963,861 | $ | 976,358 | ||||||||||
ASSET QUALITY DATA | ||||||||||||||||||||
(Amounts in thousands) | September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | |||||||||||||||
Non-accrual loans | $ | 8,584 | $ | 8,427 | $ | 9,680 | $ | 10,642 | $ | 5,524 | ||||||||||
Accruing loans past due 90 days or more | 196 | - | 845 | - | 104 | |||||||||||||||
Troubled debt restructures - accruing | 2,176 | 2,361 | 2,770 | 2,866 | 3,163 | |||||||||||||||
Total nonperforming loans | $ | 10,956 | $ | 10,788 | $ | 13,295 | $ | 13,508 | $ | 8,791 | ||||||||||
Other real estate owned | 1 | 762 | 123 | 54 | 319 | |||||||||||||||
Total nonperforming assets | $ | 10,957 | $ | 11,550 | $ | 13,418 | $ | 13,562 | $ | 9,110 | ||||||||||
Total loans | $ | 691,003 | $ | 707,983 | $ | 634,957 | $ | 633,840 | $ | 648,900 | ||||||||||
Allowance for loan losses | $ | 9,943 | $ | 10,102 | $ | 8,160 | $ | 7,941 | $ | 8,324 | ||||||||||
$ | 681,060 | $ | 697,881 | $ | 626,797 | $ | 625,899 | $ | 640,576 | |||||||||||
Nonperforming Assets to total Assets | 0.97 | % | 1.05 | % | 1.37 | % | 1.41 | % | 0.93 | % | ||||||||||
Nonperforming loans to total loans | 1.59 | % | 1.52 | % | 2.09 | % | 2.13 | % | 1.35 | % | ||||||||||
Allowance for loan losses to total loans | 1.44 | % | 1.43 | % | 1.29 | % | 1.25 | % | 1.28 | % | ||||||||||
Allowance for loan losses to nonperforming loans | 90.8 | % | 93.6 | % | 61.4 | % | 58.8 | % | 94.7 | % | ||||||||||
For the Quarter Ended | ||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
ROLLFORWARD OF ALLOWANCE | 2020 | 2020 | 2020 | 2019 | 2019 | |||||||||||||||
Beginning Balance | $ | 10,102 | $ | 8,160 | $ | 7,941 | $ | 8,324 | $ | 7,749 | ||||||||||
Provision | 2,615 | 2,505 | 765 | 980 | 580 | |||||||||||||||
Loans charged off | 2,892 | 639 | 633 | 1,463 | 52 | |||||||||||||||
Loan recoveries | 118 | 76 | 87 | 100 | 47 | |||||||||||||||
Net charge-offs | 2,774 | 563 | 546 | 1,363 | 5 | |||||||||||||||
Ending Balance | $ | 9,943 | $ | 10,102 | $ | 8,160 | $ | 7,941 | $ | 8,324 | ||||||||||
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 | ||||||||||||||||||||||||||||||||||||
September 30, 2020 | June 30, 2020 | September 30, 2019 | ||||||||||||||||||||||||||||||||||
Average | Average | Average | Average | Average | Average | |||||||||||||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||||||||||||
Interest Earning Assets: | ||||||||||||||||||||||||||||||||||||
Interest-bearing deposits and other | $ | 42,716 | $ | 41 | 0.38 | % | $ | 17,056 | $ | 40 | 0.95 | % | $ | 23,356 | $ | 133 | 2.26 | % | ||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||||||||||||
Taxable investment securities | 257,506 | 1,607 | 2.48 | % | 241,831 | 1,618 | 2.69 | % | 202,607 | 1,591 | 3.11 | % | ||||||||||||||||||||||||
Tax-exempt investment securities | 47,090 | 372 | 4.09 | % | 46,443 | 371 | 4.13 | % | 43,558 | 356 | 4.10 | % | ||||||||||||||||||||||||
Total Investment securities | 304,596 | 1,979 | 2.73 | % | 288,274 | 1,989 | 2.92 | % | 246,165 | 1,947 | 3.29 | % | ||||||||||||||||||||||||
Loans | 693,418 | 8,670 | 4.97 | % | 701,080 | 8,658 | 4.97 | % | 633,215 | 8,580 | 5.38 | % | ||||||||||||||||||||||||
Total Earning Assets | $ | 1,040,730 | $ | 10,690 | 4.13 | % | $ | 1,006,410 | $ | 10,687 | 4.31 | % | $ | 902,736 | $ | 10,660 | 4.73 | % | ||||||||||||||||||
Allowance for loan losses | (11,018 | ) | (8,769 | ) | (7,860 | ) | ||||||||||||||||||||||||||||||
Cash and due from banks | 18,901 | 15,232 | 16,131 | |||||||||||||||||||||||||||||||||
Other assets | 58,022 | 58,475 | 59,817 | |||||||||||||||||||||||||||||||||
Total Assets | $ | 1,106,635 | $ | 1,071,348 | $ | 970,824 | ||||||||||||||||||||||||||||||
Interest Bearing Liabilities: | ||||||||||||||||||||||||||||||||||||
Interest bearing checking accounts | $ | 292,875 | $ | 166 | 0.23 | % | $ | 298,831 | $ | 157 | 0.21 | % | $ | 258,808 | $ | 399 | 0.61 | % | ||||||||||||||||||
Savings and money market deposits | 335,043 | 111 | 0.13 | % | 305,966 | 105 | 0.14 | % | 295,746 | 547 | 0.73 | % | ||||||||||||||||||||||||
Time deposits | 91,366 | 288 | 1.25 | % | 101,808 | 377 | 1.49 | % | 118,910 | 539 | 1.80 | % | ||||||||||||||||||||||||
Total interest bearing deposits | 719,284 | 565 | 0.31 | % | 706,605 | 639 | 0.36 | % | 673,464 | 1,485 | 0.88 | % | ||||||||||||||||||||||||
Subordinated debentures and notes | 5,155 | 42 | 3.25 | % | 5,155 | 45 | 3.53 | % | 5,155 | 61 | 4.70 | % | ||||||||||||||||||||||||
Borrowings | 42,637 | 165 | 1.54 | % | 39,436 | 130 | 1.32 | % | 32,870 | 270 | 3.25 | % | ||||||||||||||||||||||||
Total Interest-Bearing Liabilities | $ | 767,076 | $ | 772 | 0.40 | % | $ | 751,196 | $ | 814 | 0.44 | % | $ | 711,489 | $ | 1,816 | 1.01 | % | ||||||||||||||||||
Interest Rate Spread | 3.73 | % | 3.87 | % | 3.72 | % | ||||||||||||||||||||||||||||||
Noninterest checking accounts | 224,552 | 212,196 | 158,512 | |||||||||||||||||||||||||||||||||
Other liabilities | 7,950 | 6,570 | 5,603 | |||||||||||||||||||||||||||||||||
Total liabilities | 999,578 | 969,962 | 875,604 | |||||||||||||||||||||||||||||||||
Total Stockholders' equity | 107,057 | 101,386 | 95,220 | |||||||||||||||||||||||||||||||||
Total Liabilities and | ||||||||||||||||||||||||||||||||||||
Stockholders' Equity | $ | 1,106,635 | $ | 1,071,348 | $ | 970,824 | ||||||||||||||||||||||||||||||
Net Interest Income/Margin | $ | 9,918 | 3.83 | % | $ | 9,873 | 3.99 | % | $ | 8,844 | 3.93 | % | ||||||||||||||||||||||||
(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 Nine Months Ended | ||||||||||||||||||||||||
September 30, 2020 | September 30, 2019 | |||||||||||||||||||||||
Average | Average | Average | Average | |||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||
Interest Earning Assets: | ||||||||||||||||||||||||
Interest-bearing deposits and other | $ | 32,518 | $ | 244 | 1.00 | % | $ | 23,901 | $ | 421 | 2.37 | % | ||||||||||||
Investment securities: | ||||||||||||||||||||||||
Taxable investment securities | 234,704 | 4,729 | 2.69 | % | 194,127 | 4,594 | 3.16 | % | ||||||||||||||||
Tax-exempt investment securities | 44,811 | 1,067 | 4.10 | % | 53,331 | 1,256 | 4.04 | % | ||||||||||||||||
Total Investment securities | 279,515 | 5,796 | 2.92 | % | 247,458 | 5,850 | 3.35 | % | ||||||||||||||||
Loans | 674,503 | 25,362 | 5.02 | % | 599,712 | 24,165 | 5.39 | % | ||||||||||||||||
Total Earning Assets | $ | 986,536 | $ | 31,402 | 4.29 | % | $ | 871,071 | $ | 30,436 | 4.73 | % | ||||||||||||
Allowance for loan losses | (9,274 | ) | (7,652 | ) | ||||||||||||||||||||
Cash and due from banks | 16,594 | 15,953 | ||||||||||||||||||||||
Other assets | 58,483 | 57,443 | ||||||||||||||||||||||
Total Assets | $ | 1,052,339 | $ | 936,815 | ||||||||||||||||||||
Interest Bearing Liabilities: | ||||||||||||||||||||||||
Interest bearing checking accounts | $ | 287,538 | $ | 657 | 0.31 | % | $ | 253,795 | $ | 1,122 | 0.59 | % | ||||||||||||
Savings and money market deposits | 307,807 | 578 | 0.25 | % | 284,070 | 1,725 | 0.81 | % | ||||||||||||||||
Time deposits | 102,306 | 1,146 | 1.50 | % | 116,247 | 1,559 | 1.79 | % | ||||||||||||||||
Total interest bearing deposits | 697,651 | 2,381 | 0.46 | % | 654,112 | 4,406 | 0.90 | % | ||||||||||||||||
Subordinated debentures | 5,155 | 141 | 3.64 | % | 5,155 | 191 | 4.94 | % | ||||||||||||||||
Borrowings | 35,584 | 473 | 1.78 | % | 28,123 | 726 | 3.45 | % | ||||||||||||||||
Total Interest-Bearing Liabilities | $ | 738,390 | $ | 2,995 | 0.54 | % | $ | 687,390 | $ | 5,323 | 1.04 | % | ||||||||||||
Interest Rate Spread | 3.75 | % | 3.69 | % | ||||||||||||||||||||
Noninterest checking accounts | 203,854 | 154,084 | ||||||||||||||||||||||
Other liabilities | 7,131 | 5,723 | ||||||||||||||||||||||
Total liabilities | 949,375 | 847,197 | ||||||||||||||||||||||
Total Stockholders' equity | 102,964 | 89,618 | ||||||||||||||||||||||
Total Liabilities and | ||||||||||||||||||||||||
Stockholders' Equity | $ | 1,052,339 | $ | 936,815 | ||||||||||||||||||||
Net Interest Income/Margin | $ | 28,407 | 3.89 | % | $ | 25,113 | 3.91 | % | ||||||||||||||||
(1) Management discloses certain non-GAAP financial measures to evaluate and measure the Company's performance including a presentation of net interest income with a net interest margin ratio on a tax-equivalent (TE) basis. The net interest margin is calculated by dividing net interest income on a TE basis by average earning assets for the period. Management believes this measure provides investors with information regarding comparative balance sheet profitability. Nonaccrual loans are included in the above-stated average balances.
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
MODIFIED LOAN BALANCES BY INDUSTRY CODE (UNAUDITED)
As of 9/30/20 (balance in thousands) | ||||||||||||||||||||||||
Balance of Loans by Modification Type | ||||||||||||||||||||||||
Industry | Portfolio Balance* | Payment Deferrals | Interest Only | Other | Total Modified | Percent of Portfolio Modified | ||||||||||||||||||
High Risk Industries | ||||||||||||||||||||||||
Arts, Entertainment and Recreation | 4,208 | - | - | - | - | 0 | % | |||||||||||||||||
Health Care and Social Assistance | 49,250 | 2,441 | 2,720 | - | 5,161 | 10 | % | |||||||||||||||||
Hospitality and Food Services | 29,505 | 4,149 | 7 | - | 4,156 | 14 | % | |||||||||||||||||
Other Services (except Public Admin) | 14,401 | 1,098 | - | - | 1,098 | 8 | % | |||||||||||||||||
Real Estate Rental and Leasing | 108,882 | - | 814 | - | 814 | 1 | % | |||||||||||||||||
Retail Trade | 40,798 | 1,078 | - | - | 1,078 | 3 | % | |||||||||||||||||
High Risk Industries Total | 247,044 | 8,766 | 3,541 | - | 12,307 | 5 | % | |||||||||||||||||
Other Industries and Consumer Total | ||||||||||||||||||||||||
Construction | 32,247 | - | 387 | - | 387 | 1 | % | |||||||||||||||||
Manufacturing | 102,404 | 309 | - | - | 309 | 0 | % | |||||||||||||||||
Other Industries | 100,440 | 2,587 | 3,519 | - | 6,106 | 6 | % | |||||||||||||||||
Consumer, Mortgage and Other | 113,071 | 467 | - | 3,600 | 4,067 | 4 | % | |||||||||||||||||
Other Industries and Consumer Total | 348,162 | 3,363 | 3,906 | 3,600 | 10,869 | 3 | % | |||||||||||||||||
Grand Total | 595,206 | 12,129 | 7,447 | 3,600 | 23,176 | 4 | % | |||||||||||||||||
*Excluding loans held for sale and PPP loans | ||||||||||||||||||||||||
As of 6/30/20 (balance in thousands) | ||||||||||||||||||||||||
Balance of Loans by Modification Type | ||||||||||||||||||||||||
Industry | Portfolio Balance* | Payment Deferrals | Interest Only | Other | Total Modified | Percent of Portfolio Modified | ||||||||||||||||||
High Risk Industries | ||||||||||||||||||||||||
Arts, Entertainment and Recreation | 4,363 | 219 | 1,101 | - | 1,320 | 30 | % | |||||||||||||||||
Health Care and Social Assistance | 50,855 | 3,176 | 6,342 | - | 9,518 | 19 | % | |||||||||||||||||
Hospitality and Food Services | 27,540 | 8,766 | 9,578 | - | 18,344 | 67 | % | |||||||||||||||||
Other Services (except Public Admin) | 16,164 | 7,809 | 1,702 | - | 9,511 | 59 | % | |||||||||||||||||
Real Estate Rental and Leasing | 121,187 | 5,761 | 3,687 | - | 9,448 | 8 | % | |||||||||||||||||
Retail Trade | 43,898 | 261 | 3,444 | - | 3,705 | 8 | % | |||||||||||||||||
High Risk Industries Total | 264,007 | 25,992 | 25,854 | - | 51,846 | 20 | % | |||||||||||||||||
Other Industries and Consumer Total | ||||||||||||||||||||||||
Construction | 33,956 | 255 | 387 | - | 642 | 2 | % | |||||||||||||||||
Manufacturing | 109,364 | 1,744 | 1,829 | - | 3,573 | 3 | % | |||||||||||||||||
Other Industries | 93,981 | 2,361 | 5,106 | 200 | 7,667 | 8 | % | |||||||||||||||||
Consumer, Mortgage and Other | 110,229 | 529 | - | 4,464 | 4,993 | 5 | % | |||||||||||||||||
Other Industries and Consumer Total | 347,530 | 4,889 | 7,322 | 4,664 | 16,875 | 5 | % | |||||||||||||||||
Grand Total | 611,537 | 30,881 | 33,176 | 4,664 | 68,721 | 11 | % | |||||||||||||||||
*Excluding loans held for sale and PPP loans |
FAQ
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