Blackhawk Bancorp Announces Richmond and Island Lake Branch Closures

Rhea-AI Summary

Blackhawk Bancorp, Inc. (OTCQX:BHWB) has announced plans to close two banking centers in Richmond and Island Lake, Illinois, expected to occur in August 2022. This decision aims to enhance operational efficiency due to a shift in customer transactions toward digital channels. The company anticipates incurring approximately $1.38 million in pre-tax charges during Q2 2022, primarily for building disposition and employee severance costs. However, these costs are expected to be offset by reduced operating expenses within 30 months.

Positive

• Closure of underperforming branches to improve efficiency.
• Shift towards digital channels aligning with customer preferences.
• Expected reduction in operating expenses within 30 months.

Negative

• Incurring one-time charges of approximately $1.38 million.
• Potential risks due to reduced physical presence in key areas.

BELOIT, WI / ACCESSWIRE / May 4, 2022 / Blackhawk Bancorp, Inc. (OTCQX:BHWB), (the "Company") parent company of Blackhawk Bank (the "Bank"), today announced plans to close two banking centers located in Richmond and Island Lake, Illinois. The Company currently expects the closures to occur in August 2022.

These efforts are being undertaken by the Company as part of its long-term strategy to improve the efficiency and effectiveness of its delivery systems. The Company continues to see migration of customer transactions to digital channels, reducing in-branch traffic and activities. These closures will help to offset the investment in financial technology needed to stay competitive and meet the needs of today's customers.

In connection with the banking center closures, the Company expects to record pre-tax charges of approximately $1.38 million during the second quarter of 2022. These one-time expenses consist primarily of building disposition costs and employee severance payments. It is expected that the one-time expenses will be recouped by reduced operating expenses within 30 months of the closures.

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.

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

SOURCE: Blackhawk Bancorp, Inc.

View source version on accesswire.com:
https://www.accesswire.com/700167/Blackhawk-Bancorp-Announces-Richmond-and-Island-Lake-Branch-Closures

FAQ

Why is Blackhawk Bancorp closing branches in Richmond and Island Lake?

Blackhawk Bancorp is closing these branches to improve efficiency as customer transactions increasingly move to digital platforms.

What financial impact will the branch closures have on BHWB?

The closures will result in approximately $1.38 million in pre-tax charges mainly for building costs and severance payments, expected to be recouped through reduced operating expenses.

When will the Richmond and Island Lake branches close?

The branch closures are expected to occur in August 2022.

How will the branch closures affect BHWB's financial performance?

While the closure will incur one-time expenses, it is part of a strategy to reduce long-term operating costs, which could improve financial performance in the future.