BELOIT, Wis., April 27, 2012 /PRNewswire/ -- Blackhawk
Bancorp, Inc. (OTCBB: BHWB) today reported earnings of
$678,000 for the quarter ended
March 31, 2012, a 6% increase
compared to $639,000 earned in the
first quarter of 2011. Earnings per diluted share for the
quarter increased $0.02 to
$0.24 compared to $0.22 the first quarter of 2011. Growth in
non-interest income in the first quarter of 2012 more than offset a
decrease in net interest income and increase in the provision for
loan losses compared to the first quarter of last year. Total
assets of the company increased $6.0
million during the quarter to $565.0
million at March 31, 2012 from
$559.0 million at December 31, 2011.
(Logo:
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The following table summarizes key performance and asset quality
measures for the quarter ended March 31,
2012 compared to the previous four quarters.
Key
Performance and Asset Quality Measures
|
1st
Qtr
2012
|
4th
Qtr
2011
|
3rd
Qtr
2011
|
2nd
Qtr
2011
|
1st
Qtr
2011
|
|
|
|
|
|
|
Diluted
Earnings per share
|
$0.24
|
$0.26
|
$0.21
|
$0.13
|
$0.22
|
Return on
average assets
|
.49%
|
.52%
|
.45%
|
.32%
|
.47%
|
Return on
common equity
|
6.03%
|
6.74%
|
5.49%
|
3.50%
|
6.29%
|
Net
interest margin
|
3.75%
|
3.79%
|
3.71%
|
3.83%
|
3.97%
|
Efficiency
ratio
|
69.94%
|
67.19%
|
70.17%
|
73.19%
|
72.03%
|
Nonaccrual
loans to total loans
|
4.19%
|
3.67%
|
2.61%
|
2.31%
|
1.99%
|
Nonaccrual
loans and OREO to total loans
|
4.41%
|
4.11%
|
3.38%
|
3.12%
|
2.73%
|
Allowance
for loan losses to total loans
|
2.13%
|
2.05%
|
1.78%
|
1.83%
|
1.86%
|
Allowance
for loan losses to nonaccrual loans
|
50.8%
|
55.9%
|
68%
|
79%
|
94%
|
Subsidiary
bank total risk-based capital
|
13.83%
|
13.90%
|
13.71%
|
13.78%
|
13.57%
|
|
|
|
|
|
|
"The on-going low interest rate environment, soft loan
demand and intense competition for qualified borrowers are all
factors that continued to compress net interest income in the first
quarter," said Rick Bastian,
president & CEO. "However, we are starting to see an
increase in lending opportunities, especially in the manufacturing
sector, and expect loan growth to pick up the remainder of the
year," he added.
Net Interest Income
Net interest income for the first quarter decreased 4% to
$4.7 million compared to $4.9 million in the first quarter 2011. The
average balance of total earning assets for the first quarter
increased by $11.2 million to
$517.4 million while the net interest
margin realized on earning assets decreased 22 basis points to
3.75% compared to 3.97% for the first quarter of 2011. The
growth in earning assets included a $6.9
million, or 2%, increase in average total
loans.
Average total deposits for the first quarter were essentially
flat at $477.3 million compared to
$478.1 million the first quarter of
2011. While total average deposits were little changed, a
$20.3 million increase in average
non-maturity deposits such as checking, money market and savings
accounts was offset by a $21.2
million decrease in average time deposits. The strong
growth in non-maturity deposits has dramatically reduced the
company's need for brokered deposits or other sources of wholesale
funding.
Non-Interest Income and Operating Expenses
Noninterest income for the first quarter of 2012 increased by
$768,000, or 43%, to $2.6 million compared to $1.8 million the first quarter of the prior
year. The increase was primarily attributable to a
$406,000 increase in mortgage banking
revenues, which consists of gain on sale of mortgage loans and net
loan servicing income. Other increases in non-interest
income included a $145,000 increase
in net securities gains, a $148,000
improvement in net gain (loss) on sale of other real estate and
other assets, and an increase of $110,000 in deposit service fees and debit card
revenue.
Operating expenses for the first quarter increased $305,000, or 6%, to $5.2
million compared to $4.9
million in the first quarter of 2011. This includes an
increase of $276,000, or 11%, in
compensation and benefit costs, which was driven primarily by
variable compensation related to mortgage production and an
increase in the cost of employee health
benefits.
Provision for Loan Losses and Credit Quality
The provision for loan losses in the first quarter increased by
$360,000, or 40%, to $1.3 million compared to $0.9 million in first quarter 2011.
During the first quarter the company had net loan charge-offs of
$901,000 compared to $819,000 for the first quarter of the previous
year. Nonaccrual loans and other real estate owned totaled
$15.1 million, or 4.41% of total
loans, at March 31, 2012 compared to
$13.9 million, or 4.11% of total
loans, at December 31, 2011 and
$9.1 million, or 2.73% of total
loans, at March 31, 2011.
"While we are beginning to see bright spots in the local economy,
our market still suffers from high unemployment and depressed real
estate values," said Bastian. "Although we expect
non-performing assets to remain at elevated levels throughout 2012,
we anticipate improvement throughout the year as we reach final
resolution on certain credits."
The ratio of allowance for loan losses to total loans was 2.13%
at March 31, 2012 compared to 2.05%
at December 31, 2011, and 1.86% at
March 31, 2011. The ratio of
the allowance for loan losses to nonaccrual loans was 51% at
March 31, 2012 down from 56% at
December 31, 2011, and 94% at
March 31, 2011.
The following table summarizes the activity in the allowance for
loan losses for the quarters ended March 31,
2012 and 2011, and the year ended December 31, 2011.
Activity in Allowance for Loan
Losses
|
Quarter
Ended March 31,
|
|
Year
Ended
December
31,
|
|
2012
|
|
2011
|
|
2011
|
Beginning
allowance for loan losses
|
$
6,943,000
|
|
$
6,142,000
|
|
$
6,142,000
|
Provision
for loan losses
|
1,260,000
|
|
900,000
|
|
4,803,000
|
Charge-offs
|
(987,000)
|
|
(858,000)
|
|
(4,407,000)
|
Recoveries
|
86,000
|
|
39,000
|
|
405,000
|
Ending
allowance for loan losses
|
$
7,302,000
|
|
$
6,223,000
|
|
$
6,943,000
|
Net
charge-offs to average total loans, annualized
|
1.06%
|
|
1.00%
|
|
1.20%
|
Outlook
Blackhawk has created a strong credit culture and the processes
to support it; however, the economic recession and depressed real
estate values have resulted in an elevated level of nonperforming
loans. The level of nonperforming loans and 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.
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.
BLACKHAWK BANCORP, INC. AND
SUBSIDIARIES
|
|
|
|
CONSOLIDATED BALANCE SHEETS
|
|
|
|
MARCH
31, 2012 AND DECEMBER 31, 2011
|
|
|
|
(UNAUDITED)
|
|
|
|
|
March
31,
|
|
December 31,
|
Assets
|
2012
|
|
2011
|
|
(Amounts
in thousands, except
|
|
share and
per share data)
|
Cash and
due from banks
|
$
12,653
|
|
$
13,056
|
Federal
funds sold and securities purchased under agreements to
resell
|
29,512
|
|
31,964
|
Total cash and cash equivalents
|
42,165
|
|
45,020
|
Interest-bearing deposits in banks
|
10,128
|
|
1,097
|
Trading
securities
|
2,187
|
|
2,449
|
Securities
available-for-sale
|
135,374
|
|
142,788
|
Loans held
for sale
|
4,328
|
|
4,140
|
Federal
Home Loan Bank (FHLB) Stock, at cost
|
3,055
|
|
4,085
|
Loans,
less allowance for loan losses of $7,302 and $6,943
|
|
|
|
at March 31, 2012 and December 31,
2011, respectively
|
335,400
|
|
326,935
|
Office
buildings and equipment, net
|
8,525
|
|
8,772
|
Intangible
assets, net
|
8,053
|
|
8,102
|
Cash
surrender value of bank-owned life insurance
|
8,801
|
|
8,720
|
Other
assets
|
7,011
|
|
6,879
|
Total assets
|
$
565,027
|
|
$
558,987
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
Deposits:
|
|
|
|
Noninterest-bearing
|
$
79,034
|
|
$
70,578
|
Interest-bearing
|
418,091
|
|
405,049
|
Total deposits
|
497,125
|
|
475,627
|
Short-term
borrowings
|
-
|
|
16,000
|
Other
borrowings (including $2,246 and $2,255 at fair value at
|
|
|
|
March 31, 2012 and December 31, 2011, respectively)
|
15,994
|
|
16,326
|
Subordinated debentures (including $834 and $834 at
fair value at
|
|
|
|
March 31, 2012 and December 31, 2011, respectively)
|
4,958
|
|
4,958
|
Other
liabilities
|
2,660
|
|
2,040
|
Total liabilities
|
520,737
|
|
514,951
|
|
|
|
|
Stockholders' equity
|
|
|
|
Preferred stock, $0.01 par value, 1,000,000 shares
authorized;
|
|
|
|
10,500 shares issued as of March 31,
2012 and
|
|
|
|
December 31, 2011,
respectively
|
10,308
|
|
10,283
|
Common stock, $0.01 par value, 10,000,000 shares
authorized;
|
|
|
|
2,279,004 and 2,279,004 shares issued as
of March 31, 2012 and
|
|
|
|
December 31, 2011,
respectively
|
23
|
|
23
|
Surplus
|
9,516
|
|
9,477
|
Retained earnings
|
24,146
|
|
23,629
|
Treasury stock, 83,252 and 83,252 shares at cost as of March 31,
2012 and
|
|
|
|
December 31, 2011,
respectively
|
(909)
|
|
(909)
|
Accumulated other comprehensive income (loss)
|
1,206
|
|
1,533
|
Total stockholders'
equity
|
44,290
|
|
44,036
|
Total liabilities and
stockholders' equity
|
$
565,027
|
|
$
558,987
|
|
|
|
|
|
|
|
|
BLACKHAWK BANCORP, INC. AND
SUBSIDIARIES
|
|
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
(UNAUDITED)
|
|
|
|
|
Three
months ended March 31,
|
|
2012
|
|
2011
|
|
(Amounts
in thousands, except
|
|
share and
per share data)
|
Interest
Income:
|
|
|
|
Interest and fees on
loans
|
$
4,730
|
|
$
4,854
|
Interest on trading
securities
|
12
|
|
33
|
Interest and dividends on
securities:
|
|
|
|
Taxable
|
789
|
|
1,103
|
Tax-exempt
|
287
|
|
250
|
Interest on federal funds
sold and securities purchased under agreements to resell
|
80
|
|
78
|
Interest on interest-bearing
deposits in banks
|
2
|
|
1
|
Total interest and dividend income
|
5,900
|
|
6,319
|
Interest
Expenses:
|
|
|
|
Interest on
deposits
|
952
|
|
1,188
|
Interest on short-term
borrowings
|
2
|
|
2
|
Interest on long-term
borrowings
|
217
|
|
234
|
Interest on subordinated
debentures
|
37
|
|
33
|
Total interest expense
|
1,208
|
|
1,457
|
Net interest and dividend income
|
4,692
|
|
4,862
|
Provision for loan losses
|
1,260
|
|
900
|
Net interest and dividend income after provision for loan
losses
|
3,432
|
|
3,962
|
|
|
|
|
Noninterest Income:
|
|
|
|
Service charges on deposits
accounts
|
615
|
|
570
|
Net gain on sale of
loans
|
899
|
|
383
|
Net mortgage servicing
income
|
(79)
|
|
31
|
Debit card interchange
fees
|
561
|
|
496
|
Net gains (losses) on
trading activities
|
(16)
|
|
19
|
Net gains (losses) on
available-for-sale securities
|
226
|
|
81
|
Net other gains
(losses)
|
26
|
|
(122)
|
Increase in cash value of
bank-owned life insurance
|
82
|
|
69
|
Other
|
243
|
|
262
|
Total noninterest income
|
2,557
|
|
1,789
|
|
|
|
|
Noninterest Expenses:
|
|
|
|
Salaries and employee
benefits
|
2,715
|
|
2,439
|
Occupancy and
equipment
|
606
|
|
594
|
Data
processing
|
620
|
|
573
|
FDIC assessment
|
185
|
|
240
|
Advertising and
marketing
|
91
|
|
104
|
Amortization of
intangibles
|
35
|
|
62
|
Professional fees
|
255
|
|
207
|
Office Supplies
|
96
|
|
94
|
Telephone
|
76
|
|
69
|
Other
|
485
|
|
477
|
Total noninterest expenses
|
5,164
|
|
4,859
|
Income before income taxes
|
825
|
|
892
|
Income
Taxes
|
147
|
|
253
|
Net income
|
$
678
|
|
$
639
|
|
|
|
|
Key
Ratios
|
|
|
|
|
|
|
|
Basic
Earnings Per Common Share
|
$
0.24
|
|
$
0.22
|
Diluted
Earnings Per Common Share
|
0.24
|
|
0.22
|
|
|
|
|
Net
Interest Margin (FTE)
|
3.75%
|
|
3.97%
|
Efficiency
Ratio (FTE)
|
69.94%
|
|
72.03%
|
Return on
Assets
|
0.49%
|
|
0.47%
|
Return on
Common Equity
|
6.03%
|
|
6.29%
|
|
|
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)
|
Three
months ended March 31, 2012
|
|
Three
months ended March 31, 2011
|
|
Average
|
|
Average
|
|
Average
|
|
Average
|
|
Balance
|
Interest
|
Rate
|
|
Balance
|
Interest
|
Rate
|
Interest Earning Assets:
|
|
|
|
|
|
|
|
Interest-bearing deposits in banks
|
$
3,789
|
$
2
|
0.24%
|
|
$
735
|
$
1
|
0.65%
|
Federal funds sold & securities
|
|
|
|
|
|
|
|
purchased under agreements
to
|
|
|
|
|
|
|
|
resell
|
27,248
|
80
|
1.17%
|
|
27,426
|
78
|
1.15%
|
Investment securities:
|
|
|
|
|
|
|
|
Taxable
investment securities
|
114,062
|
801
|
2.82%
|
|
122,278
|
1,136
|
3.81%
|
Tax-exempt
investment securities
|
32,593
|
287
|
5.20%
|
|
23,035
|
250
|
6.11%
|
Total Investment securities
|
146,655
|
1,088
|
3.35%
|
|
145,313
|
1,386
|
4.27%
|
Loans
|
339,772
|
4,730
|
5.60%
|
|
332,837
|
4,854
|
5.91%
|
|
|
|
|
|
|
|
|
Total
Earning Assets
|
$
517,464
|
$
5,900
|
4.69%
|
|
$
506,311
|
$
6,319
|
5.15%
|
Allowance for loan losses
|
(7,088)
|
|
|
|
(6,385)
|
|
|
Cash and due from banks
|
12,760
|
|
|
|
11,705
|
|
|
Other Assets
|
33,547
|
|
|
|
35,660
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
$
556,683
|
|
|
|
$
547,291
|
|
|
|
|
|
|
|
|
|
|
Interest Bearing Liabilities:
|
|
|
|
|
|
|
|
Interest bearing checking accounts
|
$
150,314
|
$
355
|
0.95%
|
|
$
129,525
|
$
412
|
1.29%
|
Savings and money market deposits
|
138,384
|
120
|
0.35%
|
|
147,110
|
139
|
0.38%
|
Time deposits
|
114,152
|
477
|
1.68%
|
|
135,319
|
637
|
1.91%
|
Total interest
bearing deposits
|
402,850
|
952
|
0.95%
|
|
411,954
|
1,188
|
1.17%
|
Short-term borrowings
|
1,504
|
2
|
0.40%
|
|
1,018
|
2
|
0.56%
|
Subordinated debentures
|
4,958
|
37
|
2.99%
|
|
4,958
|
33
|
2.73%
|
Long-term borrowings
|
21,566
|
217
|
4.05%
|
|
17,526
|
234
|
5.42%
|
|
|
|
|
|
|
|
|
Total
Interest-Bearing Liabilities
|
$
430,878
|
$
1,208
|
1.13%
|
|
$
435,456
|
$
1,457
|
1.36%
|
|
|
|
|
|
|
|
|
Interest Rate Spread
|
|
|
3.56%
|
|
|
|
3.79%
|
|
|
|
|
|
|
|
|
Noninterest checking accounts
|
74,471
|
|
|
|
66,212
|
|
|
Other liabilities
|
6,289
|
|
|
|
4,069
|
|
|
Total liabilities
|
511,638
|
|
|
|
505,737
|
|
|
Preferred Stock
|
10,296
|
|
|
|
10,196
|
|
|
Common Stockholders' equity
|
34,749
|
|
|
|
31,358
|
|
|
Total
Stockholders' equity
|
45,045
|
|
|
|
41,554
|
|
|
Total
Liabilities and
|
|
|
|
|
|
|
|
Stockholders' Equity
|
$
556,683
|
|
|
|
$
547,291
|
|
|
|
|
|
|
|
|
|
|
Net
Interest Income/Margin
|
|
$
4,692
|
3.75%
|
|
|
$
4,862
|
3.97%
|
SOURCE Blackhawk Bancorp, Inc.