BELOIT, Wis., April 24, 2013 /PRNewswire/ -- Blackhawk Bancorp,
Inc. (OTCBB: BHWB) today reported earnings of
$583,000 for the quarter ended
March 31, 2013, a 14% decrease
compared to $678,000 earned in the
first quarter of 2012. Earnings per diluted share for the
quarter decreased $0.05 to
$0.19 compared to $0.24 the first quarter of 2012. The
company saw improvements in net interest income and the provision
for loan losses, which were more than offset by a decline in
non-interest income. The decline in non-interest income
was primarily due to a slow-down in mortgage refinance activity,
and a reduction in the net gain on sale of securities and other
assets. "Our net interest income and other recurring revenues
have held up well despite pressure from intense competition for
high quality loans and the pro-longed low interest rate
environment," said Rick Bastian, the
company's president and CEO. "The historically high provision
for loan losses continues to be the primary drag on our earnings,
however we're making progress in our efforts to reduce problem
assets," he added.
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The following table summarizes key performance and asset quality
measures for the quarter ended March 31,
2013 compared to the previous four quarters.
|
Key
Performance and Asset Quality Measures
|
1st Qtr
2013
|
4th Qtr
2012
|
3rd Qtr
2012
|
2nd Qtr
2012
|
1st Qtr
2012
|
|
|
|
|
|
|
|
Diluted
Earnings per share
|
$0.19
|
$0.28
|
$0.25
|
$0.27
|
$0.24
|
|
Return on
average assets
|
.42%
|
.55%
|
.50%
|
.53%
|
.49%
|
|
Return on
common equity
|
4.52%
|
6.69%
|
6.00%
|
6.82%
|
6.03%
|
|
Net
interest margin
|
3.76%
|
3.75%
|
3.72%
|
3.80%
|
3.75%
|
|
Efficiency
ratio
|
74.91%
|
72.92%
|
68.16%
|
67.37%
|
69.94%
|
|
Nonaccrual
loans to total loans
|
2.46%
|
3.09%
|
3.77%
|
3.01%
|
4.19%
|
|
Nonaccrual
loans and OREO to total loans
|
3.07%
|
3.57%
|
4.38%
|
3.76%
|
4.41%
|
|
Allowance
for loan losses to total loans
|
1.77%
|
1.78%
|
1.74%
|
1.98%
|
2.10%
|
|
Allowance
for loan losses to nonaccrual loans
|
72.2%
|
57.11%
|
46.1%
|
65.8%
|
50.8%
|
|
Subsidiary
bank total risk-based capital
|
13.62%
|
13.51%
|
13.62%
|
13.58%
|
13.83%
|
Net Interest Income
Net interest income for the first quarter increased 1% to
$4,731,000 compared to $4,692,000 in the first quarter 2012.
Average total earning assets for the first quarter increased
by $8.3 million to $525.7 million and the net interest margin
realized on earning assets increased 1 basis point to 3.76%
compared to 3.75% for the first quarter of 2012. The growth
in average earning assets included a $23.7
million, or 7%, increase in average total loans.
Average total deposits for the first quarter increased $17.5 million, or 4%, to $494.8 million compared to $477.3 million the first quarter of 2012.
The increase in average total deposits included an increase in
average non-maturity deposits, such as checking, savings and money
market accounts, of $24.9 to
$388.1 million compared to
$363.2 million for the first quarter
of 2012. The increase in average non-maturity deposits was
offset by a $7.5 million decrease in
average time deposits.
Non-Interest Income and Operating Expenses
Noninterest income for the first quarter of 2013 decreased by
$399,000, or 16%, to $2,158,000 compared to $2,557,000 in the first quarter of the prior
year. The decrease included an $80,000, or 10%, drop in mortgage banking
revenue, a $226,000 reduction in
securities gains, and a $102,000
reduction in net gain (loss) on sale of OREO and other
assets. Operating expenses for the first quarter increased
$103,000, or 2%, to $5,267,000 compared to $5,164,000 in the first quarter of
2012.
Provision for Loan Losses and Credit Quality
The provision for loan losses in the first quarter decreased by
$180,000, or 14%, to $1,080,000 compared to $1,260,000 in first quarter 2012.
During the first quarter the company had net loan charge-offs of
$1,175,000 compared to $900,000 for the first quarter of the previous
year. Nonaccrual loans and other real estate owned totaled
$11.1 million, or 3.07% of total
loans, at March 31, 2013 compared to
$13.2 million, or 3.60% of total
loans, at December 31, 2012 and
$15.1 million, or 4.35% of total
loans, at March 31,
2012.
The ratio of allowance for loan losses to total loans was 1.77%
at March 31, 2013 compared to 1.78%
at December 31, 2012, and 2.10% at
March 31, 2012. The ratio of
the allowance for loan losses to nonaccrual loans was 72% at
March 31, 2013 up from 57% at
December 31, 2012, and 51% at
March 31, 2012. The
following table summarizes the activity in the allowance for loan
losses for the quarters ended March 31,
2013 and 2012, and the year ended December 31, 2012.
|
Activity in Allowance for Loan
Losses:
|
Quarter
Ended March 31,
|
|
Year
Ended
December
31,
|
|
2013
|
|
2012
|
|
2012
|
|
Beginning
allowance for loan losses
|
$
6,520,000
|
|
$
6,943,000
|
|
$
6,943,000
|
|
Provision
for loan losses
|
1,080,000
|
|
1,260,000
|
|
5,620,000
|
|
Charge-offs
|
(1,234,000)
|
|
(987,000)
|
|
(6,391,000)
|
|
Recoveries
|
59,000
|
|
86,000
|
|
348,000
|
|
Ending
allowance for loan losses
|
$
6,425,000
|
|
$
7,302,000
|
|
$
6,520,000
|
|
|
|
|
|
|
|
Net
charge-offs to average total loans, annualized
|
1.31%
|
|
1.06%
|
|
1.71%
|
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 STATEMENTS OF INCOME
|
|
(UNAUDITED)
|
|
Three
months ended
March
31,
|
|
2013
|
|
2012
|
|
(Amounts
in thousands, except
|
|
share and
per share data)
|
|
Interest
Income:
|
|
|
|
|
Interest and fees on
loans
|
$
4,692
|
|
$
4,730
|
|
Interest on trading
securities
|
14
|
|
12
|
|
Interest and dividends on
available-for-sale securities:
|
|
|
|
|
Taxable
|
537
|
|
789
|
|
Tax-exempt
|
291
|
|
287
|
|
Interest on federal funds
sold and securities purchased under agreements to resell
|
94
|
|
80
|
|
Interest on interest-bearing
deposits in banks
|
3
|
|
2
|
|
Total interest and dividend income
|
5,631
|
|
5,900
|
|
Interest
Expenses:
|
|
|
|
|
Interest on
deposits
|
747
|
|
952
|
|
Interest on
borrowings
|
98
|
|
219
|
|
Interest on subordinated
debentures
|
55
|
|
37
|
|
Total interest expense
|
900
|
|
1,208
|
|
Net interest and dividend income before provision for loan
losses
|
4,731
|
|
4,692
|
|
Provision for loan losses
|
1,080
|
|
1,260
|
|
Net interest and dividend income after provision for loan
losses
|
3,651
|
|
3,432
|
|
|
|
|
|
Noninterest Income:
|
|
|
|
|
Service charges on deposits
accounts
|
656
|
|
615
|
|
Net gain on sale of
loans
|
771
|
|
899
|
|
Net loan servicing income
(loss)
|
(31)
|
|
(79)
|
|
Debit card interchange
fees
|
544
|
|
561
|
|
Net gains (losses) on
trading activities
|
4
|
|
(16)
|
|
Net gains (losses) on
available-for-sale securities
|
-
|
|
226
|
|
Net other gains
(losses)
|
(76)
|
|
26
|
|
Increase in cash surrender
value of bank-owned life insurance
|
81
|
|
82
|
|
Other
|
209
|
|
243
|
|
Total noninterest income
|
2,158
|
|
2,557
|
|
|
|
|
|
Noninterest Expenses:
|
|
|
|
|
Salaries and employee
benefits
|
2,753
|
|
2,715
|
|
Occupancy and
equipment
|
660
|
|
606
|
|
Data
processing
|
581
|
|
620
|
|
FDIC assessment
|
185
|
|
185
|
|
Advertising and
marketing
|
88
|
|
91
|
|
Amortization of
intangibles
|
35
|
|
35
|
|
Professional fees
|
273
|
|
255
|
|
Office Supplies
|
86
|
|
96
|
|
Telephone
|
87
|
|
76
|
|
Other
|
519
|
|
485
|
|
Total noninterest expenses
|
5,267
|
|
5,164
|
|
Income before income taxes
|
542
|
|
825
|
|
Provision
for income taxes
|
(41)
|
|
147
|
|
Net income
|
$
583
|
|
$
678
|
|
|
|
|
|
Key
Ratios
|
|
|
|
|
|
|
|
|
Basic
Earnings Per Common Share
|
$
0.19
|
|
$
0.24
|
|
Diluted
Earnings Per Common Share
|
0.19
|
|
0.24
|
|
|
|
|
|
Net
Interest Margin (FTE)
|
3.76%
|
|
3.75%
|
|
Efficiency
Ratio (FTE)
|
74.91%
|
|
69.94%
|
|
Return on
Assets
|
0.42%
|
|
0.49%
|
|
Return on
Common Equity
|
4.52%
|
|
6.03%
|
|
|
|
|
|
BLACKHAWK BANCORP, INC. AND
SUBSIDIARIES
|
|
CONSOLIDATED BALANCE SHEETS
|
|
MARCH
31, 2013 AND DECEMBER 31, 2012
|
|
(UNAUDITED)
|
|
March
31,
|
|
December 31,
|
|
Assets
|
2013
|
|
2012
|
|
(Amounts
in thousands, except
|
|
share and
per share data)
|
|
Cash and
due from banks
|
$
8,743
|
|
$
11,579
|
|
Federal
funds sold and securities purchased under agreements to
resell
|
45,215
|
|
25,442
|
|
Interest-bearing deposits in banks
|
1,019
|
|
1,539
|
|
Total cash and cash equivalents
|
54,977
|
|
38,560
|
|
Trading
securities
|
1,439
|
|
1,614
|
|
Securities
available-for-sale
|
132,517
|
|
121,077
|
|
Loans held
for sale
|
4,312
|
|
2,558
|
|
Federal
Home Loan Bank (FHLB) Stock, at cost
|
2,266
|
|
2,266
|
|
Loans,
less allowance for loan losses of $6,425 and $6,520
|
|
|
|
|
at March 31, 2013 and December 31,
2012, respectively
|
355,899
|
|
359,928
|
|
Office
buildings and equipment, net
|
9,116
|
|
8,407
|
|
Intangible
assets, net
|
8,229
|
|
8,274
|
|
Cash
surrender value of bank-owned life insurance
|
9,097
|
|
9,016
|
|
Other
assets
|
8,867
|
|
8,059
|
|
Total assets
|
$
586,719
|
|
$
559,759
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Deposits:
|
|
|
|
|
Noninterest-bearing
|
$
89,492
|
|
$
84,311
|
|
Interest-bearing
|
418,183
|
|
409,510
|
|
Total deposits
|
507,675
|
|
493,821
|
|
Borrowings
(including $2,217 and $2,231 at fair value at
|
|
|
|
|
March 31, 2013 and December 31, 2012, respectively)
|
16,966
|
|
10,010
|
|
Subordinated debentures (including $834 at fair value
at
|
|
|
|
|
March 31, 2013 and December 31, 2012)
|
10,866
|
|
4,958
|
|
Other
liabilities
|
2,968
|
|
3,146
|
|
Total liabilities
|
538,475
|
|
511,935
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
Preferred stock, $0.01 par value, 1,000,000 shares
authorized;
|
|
|
|
|
10,500 shares issued as of March 31,
2013 and
|
|
|
|
|
December 31, 2012,
respectively
|
10,408
|
|
10,383
|
|
Common stock, $0.01 par value, 10,000,000 shares
authorized;
|
|
|
|
|
2,287,496 and 2,279,004 shares issued as
of March 31, 2013 and
|
|
|
|
|
December 31, 2012,
respectively
|
23
|
|
23
|
|
Surplus
|
9,653
|
|
9,619
|
|
Retained earnings
|
26,318
|
|
25,896
|
|
Treasury stock, 83,252 shares at cost as of March 31, 2013
and
|
|
|
|
|
December 31, 2012
|
(909)
|
|
(909)
|
|
Accumulated other comprehensive income (loss)
|
2,751
|
|
2,812
|
|
Total stockholders'
equity
|
48,244
|
|
47,824
|
|
Total liabilities and
stockholders' equity
|
$
586,719
|
|
$
559,759
|
|
|
|
|
|
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, 2013
|
|
Three
months ended March 31, 2012
|
|
Average
|
|
Average
|
|
Average
|
|
Average
|
|
Balance
|
Interest
|
Rate
|
|
Balance
|
Interest
|
Rate
|
|
Interest Earning Assets:
|
|
|
|
|
|
|
|
|
Interest-bearing deposits in banks
|
$
3,818
|
$
3
|
0.28%
|
|
$
3,789
|
$
2
|
0.24%
|
|
Federal funds sold & securities purchased
under agreements to resell
|
30,744
|
94
|
1.24%
|
|
27,248
|
80
|
1.17%
|
|
Investment securities:
|
|
|
|
|
|
|
|
|
Taxable
investment securities
|
93,801
|
551
|
2.38%
|
|
114,062
|
801
|
2.82%
|
|
Tax-exempt
investment securities
|
33,849
|
291
|
5.19%
|
|
32,593
|
287
|
5.20%
|
|
Total Investment securities
|
127,650
|
842
|
3.13%
|
|
146,655
|
1,088
|
3.35%
|
|
Loans
|
363,520
|
4,692
|
5.23%
|
|
339,772
|
4,730
|
5.60%
|
|
|
|
|
|
|
|
|
|
Total
Earning Assets
|
$
525,732
|
$
5,631
|
4.45%
|
|
$
517,464
|
$
5,900
|
4.69%
|
|
Allowance for loan losses
|
(6,260)
|
|
|
|
(7,088)
|
|
|
|
Cash and due from banks
|
13,030
|
|
|
|
12,760
|
|
|
|
Other assets
|
35,834
|
|
|
|
33,547
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
$
568,336
|
|
|
|
$
556,683
|
|
|
|
|
|
|
|
|
|
|
|
Interest Bearing Liabilities:
|
|
|
|
|
|
|
|
|
Interest bearing checking accounts
|
$
158,038
|
$
234
|
0.60%
|
|
$
150,314
|
$
355
|
0.95%
|
|
Savings and money market deposits
|
146,721
|
71
|
0.20%
|
|
138,384
|
120
|
0.35%
|
|
Time deposits
|
106,701
|
442
|
1.68%
|
|
114,152
|
477
|
1.65%
|
|
Total interest
bearing deposits
|
411,460
|
747
|
0.74%
|
|
402,850
|
952
|
0.95%
|
|
Subordinated debentures
|
6,103
|
55
|
3.67%
|
|
4,958
|
37
|
2.99%
|
|
Borrowings
|
15,116
|
98
|
2.63%
|
|
23,070
|
219
|
3.82%
|
|
|
|
|
|
|
|
|
|
Total
Interest-Bearing Liabilities
|
$
432,679
|
$
900
|
0.84%
|
|
$
430,878
|
$
1,208
|
1.13%
|
|
|
|
|
|
|
|
|
|
Interest Rate Spread
|
|
|
3.61%
|
|
|
|
3.56%
|
|
|
|
|
|
|
|
|
|
Noninterest checking accounts
|
83,358
|
|
|
|
74,471
|
|
|
|
Other liabilities
|
3,281
|
|
|
|
6,289
|
|
|
|
Total liabilities
|
519,318
|
|
|
|
511,638
|
|
|
|
Preferred Stock
|
10,392
|
|
|
|
10,296
|
|
|
|
Common Stockholders' equity
|
38,625
|
|
|
|
34,749
|
|
|
|
Total
Stockholders' equity
|
49,017
|
|
|
|
45,045
|
|
|
|
Total
Liabilities and Stockholders' Equity
|
$
568,335
|
|
|
|
$
556,683
|
|
|
|
|
|
|
|
|
|
|
|
Net
Interest Income/Margin
|
|
$
4,731
|
3.76%
|
|
|
$
4,692
|
3.75%
|
|
|
|
|
|
|
|
|
SOURCE Blackhawk Bancorp, Inc.