Blackhawk Bancorp Announces Record Earnings for 2021

Rhea-AI Summary

Blackhawk Bancorp (BHWB) reported record earnings for 2021, with net income reaching $13.62 million, up 26% from 2020. Diluted EPS increased 38% to $4.47. The year achieved a ROAE of 12.99% and total assets rose by 18% to $1.34 billion. However, Q4 earnings declined by 10% to $2.91 million, and EPS fell to $1.02, despite a share repurchase boosting per-share metrics. Operating expenses spiked by 11% to $40 million for the year due to increased salaries. The bank is optimistic for 2022, citing loan growth and new branches.

Positive

• Record net income of $13.62 million for 2021, up 26%.
• Diluted EPS for 2021 increased 38% to $4.47.
• ROAE for the year was a strong 12.99%.
• Total assets rose 18% to $1.34 billion.
• 6% loan growth in Q4 with total gross loans reaching $710 million.

Negative

• Q4 net income decreased by 10% to $2.91 million.
• Q4 EPS fell to $1.02, down from $1.13 in Q3 2021.
• 11% rise in operating expenses to $40 million due to higher salaries.
• Noninterest income dropped $0.68 million, or 3%, for the year.

BELOIT, WI / ACCESSWIRE / January 24, 2022 / Blackhawk Bancorp, Inc. (OTCQX:BHWB) reported record earnings for the year ended December 31, 2021 with net income of $13.62 million exceeding the previous year's net income of $10.85 million by 26%. Diluted Earnings per Share (EPS) for 2021 increased 38% to $4.47 compared to the previous record of $3.25 reported for 2020. The Company's results for the year ended 2021 produced a Return on Average Equity (ROAE) of 12.99% and a Return on Average Assets of 1.06%.

The increase in earnings for 2021 as compared to 2020 includes an increase in net interest income of $1.43 million and a decrease in the provision for loan losses of $7.10 million. These earnings improvements were partially offset by a $0.68 million decrease in noninterest income and a $3.94 million increase in operating expenses.

The Company reported net income of $2.91 million for the quarter ended December 31, 2021, a $0.31 million, or 10%, decrease compared to the $3.22 million earned the previous quarter, and a $0.44 million, or 13%, decrease compared to the $3.35 million earned the fourth quarter of 2020. EPS for the fourth quarter was $1.02, a decrease of $0.11 as compared to $1.13 for the quarter ended September 30, 2021, and an increase of $0.02 as compared to $1.00 reported for the quarter ended December 31, 2020. The 2021 fourth quarter results produced a ROAE of 11.41% and a ROAA of 0.89%.

The $0.44 million decrease in net income for the fourth quarter of 2021 compared to the fourth quarter of the prior year reflects a $1.34 million decrease in revenue from the sale and servicing of mortgage loans, a $0.43 million decrease in net gain on sale of securities, and a $1.18 million increase in operating expenses. These earnings declines were partially offset by a $1.72 million decrease in the provision for loan losses. Despite the 13% decrease in net income compared to the fourth quarter of 2020, EPS increased by 2%, reflecting the repurchase of 525,546 shares, or 15.6%, of the Company's outstanding common stock in the second quarter of 2021.

"We're extremely pleased to be reporting another year of record earnings," said Todd James, the Company's Chairman and CEO. "While the 2021 performance was boosted by several factors that aren't expected to be as strong going forward such as Paycheck Protection Program (PPP) fees, low provision costs and strong mortgage activity, the Company is well positioned going into 2022. In 2021 we transitioned our Kane County, IL loan production office to a full service branch in downtown St. Charles, IL, added several experienced business bankers to our team, and gained momentum in our campground and RV park lending initiative, all of which contributed to the 6% loan growth we realized in the fourth quarter," added James.

Total assets of the Company increased by $23.5 million, or 2%, to $1.34 billion as of December 31, 2021 compared to $1.32 billion at September 30, 2021. Total gross loans increased by $40.5 million, or 6%, to $710.0 million compared to $669.5 million as of September 30, 2021. Total deposits grew by $28.0 million during the quarter to $1.20 billion compared to $1.17 billion at September 30, 2021.

Total assets of the Company increased by $199.9 million, or 18%, to $1.34 billion as of December 31, 2021, compared to $1.14 billion as of December 31, 2020. Total gross loans increased by $30.9 million, or 5%, and total investment securities increased $154.8 million, or 44%, during the year ended 2021. Total deposits increased by $209.8 million, or 21%, to $1.20 billion compared to $987.3 million at the end of 2020.

Net Interest Income

Net interest income for the year ended December 31, 2021 increased by $1.43 million, or 4%, to $39.28 million compared to $37.85 million for 2020. The increase in net interest income includes a $1.50 million increase in PPP loan fees recognized. As of December 31, 2021, the balance of PPP loans was $22.6 with $0.90 million of deferred fees remaining, which will be recognized in future periods. While net interest income increased, the net interest margin for 2021 decreased by 55 basis points to 3.27% compared to 3.82% for 2020. The decrease in the net interest margin compared to the prior year reflects a $219.1 million, or 24%, increase in average deposits that were deployed in cash equivalent investments and the investment securities portfolio. The deposit growth was driven by the tremendous amount of economic stimulus that was distributed through the various COVID relief programs, which when combined with the labor and supply chain issues being experienced by our commercial customers, dampened loan demand. Average total loans for the year increased by $8.4 million, or 1% to $683.9 million compared to $675.5 million in 2020. Net of PPP loans, average total loans for the full year 2021 decreased by $3.5 million compared to the prior year. The Company achieved a 17 basis point decrease in the cost of deposits to 0.14% compared to 0.31% for the twelve months ended December 31, 2020; however, the decrease was more than offset by a 71 basis point decrease in the tax-equivalent yield on average total earning assets to 3.48% as compared to 4.19% for 2020.

For the fourth quarter of 2021 net interest income totaled $9.63 million, a decrease of $0.15 million, or 1%, compared to the third quarter of 2021, and an increase of $0.18 million, or 2%, compared to the fourth quarter of the prior year. The net interest margin was 3.12% for the fourth quarter of 2021 compared to 3.11% for the quarter ended September 30, 2021, and 3.63% for the fourth quarter of 2020. The tax-equivalent yield on earning assets for the fourth quarter of 2021 dropped 56 basis points to 3.32%, compared to 3.88% for the fourth quarter of 2020, while at the same time, the cost of deposits decreased only eight basis points to 0.11% compared to 0.19% the same quarter the year before. In addition, interest expense on subordinated debentures increased by $0.16 million reflecting the issuance of $15 million of subordinated debt, which was used to fund the share repurchase in the second quarter of 2021. Average total deposits for the fourth quarter of 2021 increased by $203.5 million to $1.16 billion compared to $956.1 million in the fourth quarter of 2020. Average total loans for the fourth quarter of 2021 decreased by $3.5 million, or 1%, compared to the fourth quarter of the prior year. Excluding PPP loans, average total loans increased by $38.4 million to $645.9 million compared to $607.5 million for the fourth quarter of 2020.

Provision for Loan Losses and Asset Quality

The provision for loan losses for 2021 decreased by $7.10 million, or 93%, to $.50 million compared to $7.60 million for 2020. The decrease in provision reflects the improved credit outlook, especially as it related to potential losses related to the pandemic. There was no provision for loan losses recorded for the quarter ended December 31, 2021, or September 30, 2021, compared to $1.72 million for the quarter ended December 31, 2020.

Total nonperforming assets, which include troubled debt restructures performing in accordance with their modified terms, equaled $7.3 million as of December 31, 2021, as compared to $9.8 million as of September 30, 2021, and $9.1 million at December 31, 2020. At December 31, 2021, the ratio of nonperforming loans to total loans equaled 1.02%, as compared to 1.46% at September 30, 2021, and 1.34% at December 31, 2020. The allowance for loan losses to total loans was 1.57% as of December 31, 2021, as compared to 1.68% at September 30, 2021, and 1.59% as of December 31, 2020. The allowance for loan losses to nonperforming loans increased to 153.0% as of December 31, 2021, compared to 114.5% at September 30, 2021, and 118.7% at December 31, 2020. As of December 31, 2021, all but $2.4 million of credits that were granted modifications for COVID relief have been returned to normal payments, or are included in the nonperforming asset numbers above. The majority of this amount relates to one commercial credit that is returning to normal payments in January of 2022.

NonInterest Income and Operating Expenses

Noninterest income for 2021 decreased $0.68 million, or 3%, to $19.0 million as compared to $19.68 million for the prior year, including a $1.38 million decrease in revenue from the sale and servicing of mortgage loans and a $0.54 million decrease in net gains on sale of securities. These declines were partially offset by a $0.82 million increase in debit card revenue.

Noninterest income for the quarter ended December 31, 2021, totaled $4.52 million, a $0.24 million decrease compared to $4.76 million the prior quarter and a $1.45 million decrease from the $5.97 million recorded in the fourth quarter of 2020. The decrease in noninterest income compared to the fourth quarter of 2020 was due to a $1.34 million decrease in revenue from the sale and servicing of mortgage loans and a $0.43 million decrease in the net gain on sale of securities. These declines were partially offset by a $0.19 million increase in debit card revenue and a $0.12 million increase in deposit service fees.

Operating expenses for 2021, totaled $40.0 million, a $3.94 million, or 11%, increase over the twelve months of 2020. The increase compared to the twelve months of 2020 included an increase of $2.1 million in salary and employee benefits.

Operating expenses for the quarter ended December 31, 2021, totaled $10.51 million, an increase of $0.19 million, or 2%, compared to the quarter ended September 30, 2021, and an increase of $1.18 million, or 13%, compared to the fourth quarter of 2020. The increase compared to the fourth quarter of 2020 included a $0.55 million increase in salary and employee benefits.

About Blackhawk Bancorp

Blackhawk Bancorp, Inc. is headquartered in Beloit, Wisconsin and is the parent company of Blackhawk Bank. The combined entity operates twelve full-service banking centers which are located in Rock County, Wisconsin and the Illinois counties of Winnebago, Boone, McHenry, Lake, and Kane. The Company offers a variety of value-added consultative services to its business customers and their employees related to the financial products it provides.

Disclosures Regarding non-GAAP Measures

This report refers to financial measures that are identified as non-GAAP that the Company believes help to evaluate and measure the Company's performance, including the presentation of the net interest margin ratio and efficiency ratio calculations on a taxable-equivalent basis. Non-GAAP measures are also used to assist investor comparison by identifying nonrecurring events such as acquisition-related expenses, nonrecurring securities gains and the impact such items have on the performance measures of return on average assets, return on average equity, diluted earnings per share, and the efficiency ratio. This supplemental information should not be considered in isolation or as a substitute for the related GAAP measures.

Forward-Looking Statements

When used in this communication, the words "believes," "expects," "likely", "would", and similar expressions are intended to identify forward-looking statements. The Company's actual results may differ materially from those described in the forward-looking statements. Factors which could cause such a variance to occur include, but are not limited to: heightened competition; adverse state and federal regulation; failure to obtain new or retain existing customers; ability to attract and retain key executives and personnel; changes in interest rates; unanticipated changes in industry trends; unanticipated changes in credit quality and risk factors, including general economic conditions particularly in the Company's markets; potential deterioration in real estate values, success in gaining regulatory approvals when required; changes in the Federal Reserve Board monetary policies; unexpected outcomes of new and existing litigation in which Blackhawk or its subsidiaries, officers, directors or employees is named defendants; technological changes; changes in accounting principles generally accepted in the United States; changes in assumptions or conditions affecting the application of "critical accounting policies"; inability to recover previously recorded losses as anticipated, and the inability of third party vendors to perform critical services for the Company or its customers. The inclusion of forward-looking information should not be construed as a representation by the Company or any person that future events or plans contemplated by the Company will be achieved. The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information or otherwise.

Further information is available on the Company's website at www.blackhawkbank.com.

Blackhawk Bancorp, Inc.

Todd J. James, Chairman & CEO
tjames@blackhawkbank.com
Phone: (608) 364-8911

Matthew McDonnell, SVP & CFO
mmcdonnell@blackhawkbank.com

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

		December 31,				December 31,
Assets		2021				2020
		(Dollars in thousands, except
		share and per share data)
Cash and due from banks		$	10,846			$	12,012
Interest-bearing deposits in banks and other institutions			55,721				42,119
Total cash and cash equivalents			66,567				54,131
Certificates of deposit in banks and other institutions			2,161				4,159
Equity securities at fair value			2,553				2,517
Securities available-for-sale			504,341				349,565
Loans held for sale			2,585				6,096
Federal Home Loan Bank stock, at cost			2,150				2,150
Loans, less allowance for loan losses of $11,125 and $10,764
at December 31, 2021 and December 31, 2020, respectively			696,292				662,225
Premises and equipment, net			20,778				20,254
Goodwill and core deposit intangible			11,628				12,018
Mortgage servicing rights			3,833				3,409
Cash surrender value of bank-owned life insurance			11,440				11,126
Other assets			17,227				13,949
Total assets		$	1,341,555			$	1,141,599
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Noninterest-bearing		$	380,601			$	268,866
Interest-bearing			816,440				718,388
Total deposits			1,197,041				987,254
Subordinated debentures and notes (including $1,031 at fair value at
December 31, 2021 and December 31, 2020)			20,155				5,155
Senior secured term note			11,278				12,833
Other borrowings			5,000				14,000
Other liabilities			6,985				10,602
Total liabilities			1,240,459				1,029,844
Stockholders' equity
Common stock, $0.01 par value, 10,000,000 shares authorized;
3,479,069 and 3,435,348 shares issued as of December 31, 2021 and
December 31, 2020, respectively			35				35
Additional paid-in capital			35,890				35,062
Retained earnings			81,987				69,676
Treasury stock, 630,991 and 62,999 shares at cost as of December 31, 2021
and December 31, 2020, respectively			(18,952	)			(941	)
Accumulated other comprehensive income (loss)			2,136				7,923
Total stockholders' equity			101,096				111,755
Total liabilities and stockholders' equity		$	1,341,555			$	1,141,599

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

		Twelve months ended December 31,
		2021				2020
		(Amounts in thousands, except per share data)
Interest Income:
Interest and fees on loans		$	32,832			$	33,441
Interest and dividends on available-for-sale securities:
Taxable			7,269				6,328
Tax-exempt			1,550				1,451
Interest on deposits in other financial institutions			183				276
Total interest income			41,834				41,496
Interest Expense:
Interest on deposits			1,576				2,840
Interest on subordinated debentures			548				182
Interest on senior secured term note			412				498
Interest on other borrowings			21				127
Total interest expense			2,557				3,647
Net interest income before provision for loan losses			39,277				37,849
Provision for loan losses			500				7,600
Net interest income after provision for loan losses			38,777				30,249
Noninterest Income:
Service charges on deposits accounts			3,041				3,035
Net gain on sale of loans			8,592				11,080
Net loan servicing income			681				(431	)
Debit card interchange fees			4,559				3,738
Net gains on sales of securities available-for-sale			-				535
Net other gains (losses)			106				-
Increase in cash surrender value of bank-owned life insurance			314				310
Change in value of equity securities			(28	)			70
Other			1,739				1,347
Total noninterest income			19,004				19,684
Noninterest Expenses:
Salaries and employee benefits			24,008				21,948
Occupancy and equipment			4,656				4,278
Data processing			2,614				2,383
Debit card processing and issuance			1,950				1,584
Advertising and marketing			425				297
Amortization of core deposit intangible			390				437
Professional fees			1,660				1,531
Office Supplies			371				363
Telephone			568				577
Other			3,355				2,655
Total noninterest expenses			39,997				36,053
Income before income taxes			17,784				13,880
Provision for income taxes			4,165				3,033
Net income		$	13,619			$	10,847
Key Ratios
Basic Earnings Per Common Share		$	4.47			$	3.25
Diluted Earnings Per Common Share			4.47				3.25
Dividends Per Common Share			0.44				0.44
Net Interest Margin (1)			3.27	%			3.82	%
Efficiency Ratio (1)(2)			68.63	%			63.14	%
Return on Assets			1.06	%			1.02	%
Return on Common Equity			12.99	%			10.35	%

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

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

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

		For the Quarter Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
		2021				2021				2021				2021				2020
		(Dollars in thousands, except per share data)
Interest Income:
Interest and fees on loans		$	7,876			$	8,180			$	8,621			$	8,155			$	8,079
Interest on available-for-sale securities:
Taxable			1,960				1,830				1,759				1,721				1,598
Tax-exempt			369				419				378				384				384
Interest on deposits in other financial institutions			33				61				48				41				33
Total interest income			10,238				10,490				10,806				10,301				10,094
Interest Expense:
Interest on deposits			319				421				421				415				458
Interest on subordinated debentures			196				195				117				41				41
Interest on senior secured term note			98				103				104				107				113
Interest on other borrowings			-				-				-				20				40
Total interest expense			613				719				642				583				652
Net interest income before provision for loan losses			9,625				9,771				10,164				9,718				9,442
Provision for loan losses			-				-				-				500				1,715
Net interest income after provision for loan losses			9,625				9,771				10,164				9,218				7,727
Noninterest Income:
Service charges on deposits accounts			901				787				663				690				781
Net gain on sale of loans			1,865				2,147				2,217				2,362				3,572
Net loan servicing income			186				90				36				369				(177	)
Debit card interchange fees			1,168				1,146				1,218				1,027				979
Net gains on sales of securities available-for-sale			-				-				-				-				428
Net other gains (losses)			5				52				7				42				-
Increase in cash surrender value of bank-owned life insurance			77				78				72				87				75
Other			317				457				479				458				310
Total noninterest income			4,519				4,757				4,692				5,035				5,968
Noninterest Expenses:
Salaries and employee benefits			6,403				6,118				5,753				5,734				5,851
Occupancy and equipment			1,109				1,273				1,092				1,182				986
Data processing			694				689				641				591				683
Debit card processing and issuance			533				489				503				425				384
Advertising and marketing			115				141				70				99				75
Amortization of intangibles			95				96				96				104				107
Professional fees			436				434				399				390				373
Office Supplies			127				74				93				77				90
Telephone			143				139				144				141				140
Other			850				865				673				968				637
Total noninterest expenses			10,505				10,318				9,464				9,711				9,326
Income before income taxes			3,639				4,210				5,392				4,542				4,369
Provision for income taxes			728				988				1,337				1,112				1,021
Net income		$	2,911			$	3,222			$	4,055			$	3,430			$	3,348
Key Ratios
Basic Earnings Per Common Share		$	1.02			$	1.13			$	1.30			$	1.02			$	1.00
Diluted Earnings Per Common Share			1.02				1.13				1.30				1.02				1.00
Dividends Per Common Share			0.11				0.11				0.11				0.11				0.11
Book Value Per Common Share			35.50				35.29				34.97				32.95				33.14
Tangible Book Value Per Share			31.41				31.17				30.81				29.40				29.57
Number of Shares Outstanding			2,848,078				2,848,078				2,842,828				3,359,613				3,372,349
Average Number of Shares Outstanding			2,848,109				2,848,109				3,118,265				3,372,684				3,360,579
Net Interest Margin (1)			3.12	%			3.11	%			3.37	%			3.52	%			3.63	%
Efficiency Ratio (1)(2)			73.75	%			70.70	%			63.28	%			65.53	%			61.80	%
Return on Assets			0.89	%			0.96	%			1.26	%			1.16	%			1.20	%
Return on Common Equity			11.41	%			12.57	%			15.74	%			12.44	%			12.08	%

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

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

(UNAUDITED)		As of
		December 31,				September 30,				June 30,				March 31,				December 31,
		2021				2021				2021				2021				2020
						(Amounts in thousands, except per share data)
Cash and due from banks		$	10,846			$	16,536			$	16,418			$	15,108			$	12,012
Interest-bearing deposits in banks and other			57,882				104,722				140,073				50,199				46,278
Securities			506,894				472,472				448,072				379,187				352,082
Net loans/leases			698,877				658,323				666,738				700,399				668,321
Goodwill and core deposit intangible			11,628				11,723				11,819				11,914				12,018
Other assets			55,428				54,218				53,629				50,826				50,888
Total assets		$	1,341,555			$	1,317,994			$	1,336,749			$	1,207,633			$	1,141,599
Deposits		$	1,197,041			$	1,169,085			$	1,188,997			$	1,068,197			$	987,254
Subordinated debentures			20,155				20,155				20,155				5,155				5,155
Senior secured term note			11,278				11,667				12,056				12,445				12,833
Borrowings			5,000				5,000				5,000				4,000				14,000
Other liabilities			6,985				11,585				11,131				7,138				10,602
Stockholders' equity			101,096				100,502				99,410				110,698				111,755
Total liabilities and stockholders' equity		$	1,341,555			$	1,317,994			$	1,336,749			$	1,207,633			$	1,141,599

ASSET QUALITY DATA
(Amounts in thousands)		December 31,				September 30,				June 30,				March 31,				December 31,
		2021				2021				2021				2021				2020
Non-accrual loans		$	5,430			$	7,827			$	8,228			$	6,361			$	7,013
Accruing loans past due 90 days or more			-				-				-				-				-
Troubled debt restructures - accruing			1,843				1,975				1,958				1,996				2,057
Total nonperforming loans		$	7,273			$	9,802			$	10,186			$	8,357			$	9,070
Other real estate owned			24				-				-				-				1
Total nonperforming assets		$	7,297			$	9,802			$	10,186			$	8,357			$	9,071
Total loans		$	710,002			$	669,547			$	677,967			$	711,515			$	679,085
Allowance for loan losses			11,125				11,224				11,229				11,116				10,764
Loans, less allowance for loan losses		$	698,877			$	658,323			$	666,738			$	700,399			$	668,321
Nonperforming Assets to total Assets			0.54	%			0.74	%			0.76	%			0.69	%			0.79	%
Nonperforming loans to total loans			1.02	%			1.46	%			1.50	%			1.17	%			1.34	%
Allowance for loan losses to total loans			1.57	%			1.68	%			1.66	%			1.56	%			1.59	%
Allowance for loan losses to nonperforming loans			153.0	%			114.5	%			110.2	%			133.0	%			118.7	%

		For the Quarter Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
ROLLFORWARD OF ALLOWANCE		2021				2021				2021				2021				2020
Beginning Balance		$	11,224			$	11,229			$	11,116			$	10,764			$	9,943
Provision			-				-				-				500				1,715
Loans charged off			181				103				61				582				1,334
Loan recoveries			82				98				174				434				440
Net charge-offs			99				5				(113	)			148				894
Ending Balance		$	11,125			$	11,224			$	11,229			$	11,116			$	10,764

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET WITH RESULTANT INTEREST AND RATES
Average Balance Sheet with Resultant Interest and Rates

(Amounts in thousands)

(yields on a tax-equivalent basis)(1)		For the Twelve Months Ended
		December 31, 2021												December 31, 2020
		Average								Average				Average								Average
		Balance				Interest				Rate				Balance				Interest				Rate
Interest Earning Assets:
Interest-bearing deposits and other		$	90,300			$	183				0.20	%		$	31,899			$	276				0.86	%
Investment securities:
Taxable investment securities			387,361				7,269				1.88	%			247,389				6,328				2.56	%
Tax-exempt investment securities			52,435				1,550				3.76	%			46,594				1,451				4.01	%
Total Investment securities			439,796				8,819				2.10	%			293,983				7,779				2.79	%
Loans			683,859				32,832				4.80	%			675,466				33,441				4.95	%
Total Earning Assets		$	1,213,955			$	41,834				3.48	%		$	1,001,348			$	41,496				4.19	%
Allowance for loan losses			(11,180	)											(9,535	)
Cash and due from banks			16,640												16,453
Other assets			60,379												58,475
Total Assets		$	1,279,794											$	1,066,741
Interest Bearing Liabilities:
Interest bearing checking accounts		$	299,213			$	636				0.21	%		$	281,053			$	807				0.29	%
Savings and money market deposits			400,323				366				0.09	%			318,169				676				0.21	%
Time deposits			78,553				574				0.73	%			97,747				1,357				1.39	%
Total interest bearing deposits			778,089				1,576				0.20	%			696,969				2,840				0.41	%
Subordinated debentures			14,689				548				3.73	%			5,155				182				3.53	%
Borrowings			18,928				433				2.29	%			34,227				625				1.83	%
Total Interest-Bearing Liabilities		$	811,706			$	2,557				0.32	%		$	736,351			$	3,647				0.50	%
Interest Rate Spread											3.16	%											3.69	%
Noninterest checking accounts			356,227												218,254
Other liabilities			6,995												7,357
Total liabilities			1,174,928												961,962
Total Stockholders' equity			104,866												104,779
Total Liabilities and
Stockholders' Equity		$	1,279,794											$	1,066,741
Net Interest Income/Margin						$	39,277				3.27	%						$	37,849				3.82	%

(1) Management discloses certain non-GAAP financial measures to evaluate and measure the Company's performance including a presentation of net interest income with a net interest margin ratio on a tax-equivalent (TE) basis. The net interest margin is calculated by dividing net interest income on a TE basis by average earning assets for the period. Management believes this measure provides investors with information regarding comparative balance sheet profitability. Nonaccrual loans are included in the above-stated average balances.

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

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

		For the Quarter Ended
		December 31, 2021												September 30, 2021												December 31, 2020
		Average								Average				Average								Average				Average								Average
		Balance				Interest				Rate				Balance				Interest				Rate				Balance				Interest				Rate
Interest Earning Assets:
Interest-bearing deposits and other		$	61,530			$	33				0.21	%		$	119,991			$	61				0.20	%		$	30,058			$	32				0.43	%
Investment securities:
Taxable investment securities			447,836				1,960				1.74	%			413,853				1,830				1.75	%			285,167				1,598				2.23	%
Tax-exempt investment securities			52,749				369				3.57	%			52,663				420				4.05	%			51,902				384				3.78	%
Total Investment securities			500,585				2,329				1.93	%			466,516				2,250				2.01	%			337,069				1,982				2.47	%
Loans			674,818				7,876				4.63	%			675,070				8,180				4.81	%			678,335				8,079				4.74	%
Total Earning Assets		$	1,236,933			$	10,238				3.32	%		$	1,261,577			$	10,491				3.34	%		$	1,045,462			$	10,093				3.88	%
Allowance for loan losses			(11,192	)											(11,229	)											(10,313	)
Cash and due from banks			16,557												16,821												16,032
Other assets			62,310												61,274												58,663
Total Assets		$	1,304,608											$	1,328,443											$	1,109,844
Interest Bearing Liabilities:
Interest bearing checking accounts		$	308,166			$	116				0.15	%		$	300,935			$	180				0.24	%		$	261,739			$	150				0.23	%
Savings and money market deposits			423,311				77				0.07	%			423,894				109				0.10	%			349,028				98				0.11	%
Time deposits			78,625				126				0.64	%			76,682				133				0.69	%			84,166				210				0.99	%
Total interest bearing deposits			810,102				319				0.16	%			801,511				422				0.21	%			694,933				458				0.26	%
Subordinated debentures and notes			20,155				196				3.85	%			20,155				195				3.83	%			5,155				41				3.19	%
Borrowings			16,306				98				2.40	%			16,670				103				2.45	%			30,186				152				2.01	%
Total Interest-Bearing Liabilities		$	846,563			$	613				0.29	%		$	838,336			$	720				0.34	%		$	730,274			$	651				0.36	%
Interest Rate Spread											3.03	%											3.00	%											3.52	%
Noninterest checking accounts			349,482												381,046												261,182
Other liabilities			7,342												7,381												8,202
Total liabilities			1,203,387												1,226,763												999,658
Total Stockholders' equity			101,221												101,680												110,186
Total Liabilities and
Stockholders' Equity		$	1,304,608											$	1,328,443											$	1,109,844
Net Interest Income/Margin						$	9,625				3.12	%						$	9,771				3.11	%						$	9,442				3.63	%

(1) Management discloses certain non-GAAP financial measures to evaluate and measure the Company's performance including a presentation of net interest income with a net interest margin ratio on a tax-equivalent (TE) basis. The net interest margin is calculated by dividing net interest income on a TE basis by average earning assets for the period. Management believes this measure provides investors with information regarding comparative balance sheet profitability. Nonaccrual loans are included in the above-stated average balances.

SOURCE: Blackhawk Bancorp, Inc.

View source version on accesswire.com:
https://www.accesswire.com/685190/Blackhawk-Bancorp-Announces-Record-Earnings-for-2021

FAQ

What were the net income results for Blackhawk Bancorp (BHWB) in 2021?

Blackhawk Bancorp reported a record net income of $13.62 million for the year ended December 31, 2021, a 26% increase from the previous year.

How did Blackhawk Bancorp's EPS perform in 2021?

Diluted earnings per share (EPS) for 2021 increased by 38% to $4.47 compared to $3.25 in 2020.

What is Blackhawk Bancorp's return on equity for 2021?

The return on average equity (ROAE) for Blackhawk Bancorp was 12.99% for the year ended December 31, 2021.

What were the key challenges faced by Blackhawk Bancorp in Q4 2021?

In Q4 2021, Blackhawk Bancorp faced a 10% decrease in net income compared to the previous quarter, alongside rising operating expenses.

What growth did Blackhawk Bancorp achieve in loans during Q4 2021?

Blackhawk Bancorp achieved a 6% growth in loans during the fourth quarter of 2021.