BELOIT, Wis., Feb. 17, 2011 /PRNewswire/ -- Blackhawk Bancorp,
Inc. (OTC Bulletin Board: BHWB) today reported a 52% increase
in earnings for the quarter ended December
31, 2010, to $886,000 compared
to the $582,000 earned in the fourth
quarter of 2009. Earnings per share for the quarter increased
74% to $0.33 compared to $0.19 per share for the fourth quarter of 2009.
The increase in earnings for the quarter included continued
improvement in the net interest margin and a high level of mortgage
banking revenue, which was partially offset by an increase in the
provision for loan losses. "Our determination to emerge from the
Great Recession as a stronger and more profitable organization paid
off," said R. Richard Bastian,
President & CEO.
For the year ended December 31,
2010, Blackhawk reported net income of $3.03 million, a 55% increase compared to
$1.95 million earned in 2009.
Earnings per share for the year increased 64% to $1.10 compared to the $0.67 per share earned in 2009. The year over
year earnings growth was driven by an increase in the bank's net
interest margin. Total assets increased to $540.0 million as of December 31, 2010, compared with $523.3 million at year end 2009. Strong
deposit growth for the year funded the increase in assets and was
also used to substantially reduce borrowings and other noncore
funding, strengthening the company's liquidity position.
"By virtually every metric, including: profitability, return on
equity, net interest margin, non-performing loans, capital and core
deposit growth, we ended the year in a much better position than we
started," stated Bastian. The following table summarizes key
performance and asset quality measures for the quarter ended
December 31, 2010, compared to the
previous four quarters.
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Key
Performance and Asset Quality Measures
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4th
Qtr
2010
|
3rd
Qtr
2010
|
2nd
Qtr
2010
|
1st
Qtr
2010
|
4th
Qtr
2009
|
|
|
|
|
|
|
|
|
Diluted Earnings per
share
|
$0.33
|
$0.30
|
$0.23
|
$0.23
|
$0.19
|
|
Return on average
assets
|
.62%
|
.60%
|
.50%
|
.50%
|
.44%
|
|
Return on common
equity
|
9.62%
|
8.91%
|
7.19%
|
7.12%
|
6.53%
|
|
Net interest
margin
|
4.12%
|
4.07%
|
3.92%
|
3.96%
|
3.86%
|
|
Efficiency
ratio
|
67.93%
|
63.34%
|
68.24%
|
68.4%
|
73.7%
|
|
Nonperforming loans to
total loans
|
1.73%
|
2.30%
|
2.45%
|
2.55%
|
1.90%
|
|
Nonperforming assets to
total loans
|
2.61%
|
2.68%
|
2.70%
|
2.80%
|
2.09%
|
|
Allowance for loan losses
to total loans
|
1.82%
|
1.88%
|
1.79%
|
1.87%
|
1.67%
|
|
Allowance for loan losses
to nonperforming loans
|
105%
|
82%
|
73%
|
74%
|
88%
|
|
Subsidiary bank total risk
based capital
|
13.57%
|
13.05%
|
13.16%
|
13.48%
|
12.92%
|
|
|
|
|
|
|
|
|
|
Net Interest Income
Net interest income for the fourth quarter increased 13% to
$5.2 million compared to $4.6 million in the fourth quarter 2009.
Both the average balance of total earning assets and the net
interest margin realized on those assets increased in the fourth
quarter compared to the same quarter the year before. Average
earning assets for the fourth quarter increased 5.9% compared to
the fourth quarter of 2009 and the net interest margin increased 27
basis points to 4.13% compared to 3.86% in the fourth quarter of
2009. Total average loans increased by $21.8 million, or 6.8%, compared to the prior
year fourth quarter.
For the full year net interest income was up 15% to $19.8 million, compared to $17.2 million for 2009. Average earning
assets and the net interest margin both increased for the full year
as well. Total average earning assets increased over 2009 by
$13.9 million, or 2.9%. The
increase in average earning assets included a $4.7 million, or 1.5% increase in average total
loans, with the remainder of the growth in investment securities
and short-term investments. The net interest margin increased
39 basis points to 4.05% for the year ended December 31, 2010, compared to 3.66% the year
before.
The earning asset growth and improvement in the net interest
margin reflect the bank's success in generating core deposits.
Average total deposits for the fourth quarter increased by
$82.9 million, or 20% compared to the
fourth quarter of 2009. For the year average deposits
increased $57.6 million, or 14% over
2009. Substantially all of the increase in average deposits
for the year occurred in non-maturity deposit products such as DDA,
interest checking and money market. This growth has resulted
in less reliance on borrowings, as the average balance of
borrowings for the fourth quarter of 2010 decreased by $45.8 million, or 60%, compared to the average
balance in the fourth quarter of the prior year.
Non-Interest Income and Operating Expenses
Noninterest income for the fourth quarter increased 101% to
$2.8 million compared to $1.4 million the fourth quarter of the prior
year. The increase for the quarter was primarily due to a
high level of mortgage refinance activity in the fourth quarter.
For the year, non-interest income increased 11% to
$8.4 million compared to $7.6 million in 2009. The increase in
non-interest income for the year reflects an increase in debit card
interchange revenue and a reduction in net losses on securities and
other assets.
Operating expenses increased by $1.0
million, or 23%, to $5.6
million in the fourth quarter of 2010 compared to
$4.5 million the prior year.
For the year operating expenses were up $.9 million, or 5%, to $19.2 million compared to $18.3 million in 2009. The increase in
operating expenses for the year was primarily the result of
increased compensation and credit and collection related
expenses.
Provision for Loan Losses and Credit Quality
The provision for loan losses in the fourth quarter increased by
65% to $1.1 million compared to
$.7 million in fourth quarter 2009.
For the year, Blackhawk recorded a provision for loan losses
of $4.5 million, an 11% increase over
the $4.1 million provision recorded
in 2009. Loans charged off in 2010, net of recoveries,
equaled $3.9 million compared to
$1.6 million in 2009. The
ratio of allowance for loan losses to total loans was 1.82% at
December 31, 2010 compared to 1.67%
at December 31, 2009.
The following table summarizes the activity in the allowance for
loan losses for 2010 and 2009.
|
|
Activity in Allowance for Loan
Losses
|
2010
|
|
2009
|
|
|
|
|
|
|
Beginning allowance for loan
losses
|
$
5,471,000
|
|
$ 2,970,000
|
|
Provision for loan
losses
|
4,544,000
|
|
4,090,000
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|
Charge-offs
|
(4,115,000)
|
|
(1,779,000)
|
|
Recoveries
|
243,000
|
|
190,000
|
|
Ending allowance for loan
losses
|
$
6,142,000
|
|
$ 5,471,000
|
|
Net charge-offs to average
total loans
|
1.18%
|
|
.49%
|
|
|
|
|
|
|
|
Nonperforming assets equaled $8.8
million, or 2.61% of total loans, at December 31, 2010, compared to $9.0 million, or 2.68% of total loans, at
September 30, 2010, and $6.8 million, or 2.09% of total loans, at
December 31, 2009.
Nonperforming loans to total loans was reduced to 1.73% as of
December 31, 2010, compared to 2.30%
at September 30, 2010, and 1.90% at
December 31, 2009. The decrease
in nonperforming loans compared to the previous quarter reflects
resolution of various credits, which has resulted in a $1.7 million increase in other real estate owned.
As of December 31, 2010, the
ratio of the allowance for loan losses to nonperforming loans
equals 105%, compared to 81% as of September
30, 2010, and 88% at December 31,
2009.
Outlook
Blackhawk has created a strong credit culture and the processes
to support it, but the potential for continuing economic weakness
presents a heightened level of risk. For that reason the
company expects to continue fortifying its balance sheet by
conserving capital, strengthening the allowance for loan losses and
maintaining ample liquidity to meet the demands of its customer
base. The company will however continue to seek profitable
growth opportunities in its Wisconsin and Illinois markets, without sacrificing
profitability or credit quality. Blackhawk emphasizes the value of
its personal attention and the service it provides that remain
unmatched by larger competitors.
About Blackhawk Bancorp
Blackhawk Bancorp, Inc. is headquartered in Beloit, Wisconsin and is the parent company of
Blackhawk Bank, which operates eight
banking centers in south central Wisconsin and north central Illinois, along the I-90 corridor from
Belvidere, Illinois to
Beloit, Wisconsin.
Blackhawk's locations serve individuals and small businesses,
primarily with fewer than 200 employees. The company offers a
variety of value-added consultative services to small businesses
and their employees related to its banking products such as health
savings accounts and investment management. The bank has received
numerous accolades for its work with the fast-growing Hispanic
population in the markets it serves.
Forward-Looking Statements
When used in this communication, the words "believes,"
"expects," 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; 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"; and the inability of third party vendors to perform
critical services for the company or its customers.
Further information is available on the Company's website at
www.blackhawkbank.com.
For further
information:
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Blackhawk Bancorp,
Inc.
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R. Richard Bastian, III,
President & CEO
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rbastian@blackhawkbank.com
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Todd J. James, EVP &
CFO
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tjames@blackhawkbank.com
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Phone: (608) 364-8911
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SOURCE Blackhawk Bancorp, Inc.