Blackhawk Bancorp, Inc. (OTCBB: BHWB) reports net income
of $1,840,000 for the fourth quarter of 2013, a 136% increase
compared to $781,000 earned in the fourth quarter of 2012. For the
year ended December 31, 2013 the company’s net income was
$3,915,000, a 34% increase compared to $2,912,000 earned in
2012.
Earnings per diluted share for the quarter increased $0.47, to
$0.75 compared to $0.28 per diluted share the fourth quarter of
2012. For the full year the company earned a record $1.47 per
diluted share, a 43% increase compared to the $1.03 per diluted
share earned in 2012. The company’s total assets increased 4% to
$583.3 million as of December 31, 2013 compared to $559.8 million
at the end of 2012. The increase in total assets reflects an
increase of $22.3 million, or 6%, in portfolio loans.
“The diluted earnings per share for 2013 exceeded the previous
record of $1.17, which was set in 2008, by $0.30,” said R. Richard
Bastian, president and chief executive officer. “While the results
were boosted by non-recurring securities gains, loan and deposit
growth drove an increase in net interest income; and improving
asset quality resulted in a $1.5 million decrease in the provision
for loan losses compared to the prior year,” he added. The earnings
improvements were partially offset by a drop in mortgage banking
income. Net revenue from the sale and servicing of residential
mortgages for 2013 dropped by $1.7 million, or 36% compared to
2012, due to declining refinance activity.
The following table summarizes key performance and asset quality
measures for the quarter ended December 31, 2013 compared to the
previous four quarters:
4th Qtr
3rd Qtr
2nd Qtr
1st Qtr
4th Qtr
Key Performance and Asset Quality Measures 2013 2013
2013 2013 2012 Diluted Earnings per
share $0.75 $0.36 $0.16 $0.19 $0.28 Return on average assets 1.25%
.67% .35% .42% .55% Return on common equity 17.47% 8.95% 3.66%
4.52% 6.69% Net interest margin 3.79% 3.69% 3.66% 3.76% 3.75%
Efficiency ratio 62.4% 74.4% 68.2% 74.9% 72.9% Nonaccrual loans to
total loans 1.63% 1.97% 1.68% 2.46% 3.09% Nonaccrual loans and OREO
to total loans 2.11% 2.75% 2.55% 3.07% 3.57% Allowance for loan
losses to total loans 1.16% 1.62% 1.86% 1.77% 1.78% Allowance for
loan losses to nonaccrual loans 71.2% 82.3% 110.7% 72.2% 57.11%
Subsidiary bank total risk-based capital 13.51%
13.46% 13.64% 13.62% 13.51%
Net Interest Income
Net interest income for the fourth quarter increased 5% to
$5,014,000 compared to $4,775,000 in the fourth quarter 2012.
Average total earning assets for the fourth quarter increased by
$20.6 million to $542.1 million compared to $521.5 million in the
fourth quarter of 2012. The growth in earning assets includes a
$24.2 million, or 7%, increase in average total loans, which was
offset by a $3.6 million decrease in securities and short-term
investments. The net interest margin realized on earning assets for
the quarter increased 4 basis points to 3.79% compared to 3.75% for
the fourth quarter of 2012. Average total deposits for the fourth
quarter increased by $14.7 million, or 3%, to $502.1 million
compared to $487.4 million the fourth quarter of last year. The
increase in average total deposits includes a $15.5 million, or 4%,
increase in average non-maturity deposits such as demand deposit,
interest checking, savings and money market accounts, which was
offset by a $0.8 million decrease in the average time deposits.
Net interest income for the year 2013 increased by $367,000, or
2%, to $19,383,000 compared to $19,016,000 in 2012. Average total
earning assets for the twelve months ending December 31, 2013
increased by $15.8 million to $537.2 million compared to $521.4
million the year before. The earning asset growth included an $18.5
million, or 5%, increase in average total loans. The net interest
margin for 2013 declined by 3 basis points to 3.73% compared to
3.76% in 2012. Average total deposits for 2013 increased by $16.1
million, or 3%, to $504.0 million compared to $487.9 million in
2012. The increase in average total deposits includes an increase
of $19.4 million, or 5%, in average non-maturity deposits such as
demand deposit, interest checking, savings and money market
accounts. The increase in average non-maturity deposits was
partially offset by a $3.3 million reduction in average time
deposits.
Provision for Loan Losses and Credit Quality
The provision for loan losses in the fourth quarter dropped by
$660,000, or 52%, to $600,000 compared to $1,260,000 in fourth
quarter 2012. For the year 2013 the provision for loan losses
decreased by $1,480,000, or 26%, to $4,140,000 compared to
$5,620,000 in 2012. The decreased provision reflects improving
asset quality. Nonaccrual loans and other real estate owned totaled
$8.1 million, or 2.11% of total loans, at December 31, 2013
compared to $10.4 million, or 2.68% of total loans, at September
30, 2013 and $13.2 million, or 3.6% of total loans, at December 31,
2012.
The company had net loan charge-offs of $5,766,000 in 2013,
compared to $6,043,000 the year before. The following table
summarizes the activity in the allowance for loan losses for the
years ended December 31, 2013 and 2012:
Activity in Allowance for Loan Losses: (In
Thousands)
Year Ended December 31,
2013 2012 Beginning allowance for loan losses 6,520 6,943
Provision for loan losses 4,140 5,620 Charge-offs (6,590 ) (6,391 )
Recoveries 824 348 Ending allowance for loan losses
4,894 6,520
Net charge-offs to average total loans,
annualized
1.55 % 1.71 %
The ratio of allowance for loan losses to total loans was 1.16%
as of December 31, 2013 compared to 1.58% at September 30, 2013,
and 1.78% at December 31, 2012. The ratio of the allowance for loan
losses to nonaccrual loans was 71% at December 31, 2013 compared to
82% at September 30, 2013 and 57% at December 31, 2012. Net
charge-offs for 2013 were down by $277,000 compared to the prior
year and are expected to continue to decrease.
Non-Interest Income and Operating Expenses
Noninterest income for the fourth quarter of 2013 increased by
$1,238,000, or 45%, to $3,986,000 compared to $2,748,000 the fourth
quarter of the prior year. For the year ended December 31, 2013
noninterest income increased $158,000, or 1%, to $11,274,000
compared to $11,116,000 in 2012. During the fourth quarter of 2013
the company recognized net gains of $2,043,000 on the sale of
securities and other trading activities. These gains more than
offset decreases in revenue from the sale and servicing of mortgage
loans of $665,000 and $1,679,000 for the quarter and year,
respectively. The securities gains were realized on private label
mortgage-backed securities that increased in value as the housing
market stabilized.
Operating expenses for the fourth quarter increased $127,000, or
2%, to $5,720,000 compared to $5,593,000 in the fourth quarter of
2012. For the year operating expenses increased by $342,000, or 2%
to $21,695,000 compared to $21,353,000 for 2012.
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 losses
nonperforming loans. While the level of nonperforming loans has
begun to decrease and should result in improved earnings, 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 December 31, 2013 2012 (Amounts in
thousands) Interest Income: Interest and fees on loans $
4,897 $ 4,964 Interest on trading securities 11 15 Interest and
dividends on securities: Taxable 452 424 Tax-exempt 341 291
Interest on federal funds sold and securities purchased under
agreements to resell 75 52 Interest on interest-bearing deposits in
banks 2 2
Total interest and
dividend income 5,778 5,748
Interest Expenses: Interest on deposits 585 760 Interest on
borrowings 26 178 Interest on subordinated debentures 153
35
Total interest expense 764
973
Net interest and dividend income
5,014 4,775 Provision for loan losses 600
1,260
Net interest and dividend income after provision
for loan losses 4,414 3,515
Noninterest Income: Service charges on deposits accounts 722 753
Net gain on sale of loans 596 1,436 Net mortgage servicing income
49 (126 ) Debit card interchange fees 543 552 Net gains (losses) on
trading activities 72 - Net gains (losses) on available-for-sale
securities 1,971 144 Net other gains (losses) (348 ) (163 )
Increase in cash value of bank-owned life insurance 70 72 Other
311 80
Total noninterest income
3,986 2,748 Noninterest
Expenses: Salaries and employee benefits 2,993 2,905 Occupancy and
equipment 667 606 Data processing 577 630 FDIC assessment 212 185
Advertising and marketing 57 59 Amortization of intangibles 35 35
Professional fees 281 279 Office Supplies 93 97 Telephone 89 95
Other 716 702
Total noninterest
expenses 5,720 5,593
Income
before income taxes 2,680 670 Provision for income taxes
840 (111 )
Net income $ 1,840 $ 781
BLACKHAWK BANCORP, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED) Twelve months ended December 31,
2013 2012 (Amounts in thousands) Interest
Income: Interest and fees on loans $ 19,060 $ 19,464 Interest on
trading securities 49 66 Interest and dividends on
available-for-sale securities: Taxable 1,953 2,533 Tax-exempt 1,257
1,159 Interest on federal funds sold and securities purchased under
agreements to resell 367 259 Interest on interest-bearing deposits
in banks 7 13
Total interest and
dividend income 22,693 23,494
Interest Expenses: Interest on deposits 2,591 3,518 Interest on
borrowings 206 816 Interest on subordinated debentures 513
144
Total interest expense 3,310
4,478
Net interest and dividend income
before provision for loan losses 19,383 19,016 Provision for
loan losses 4,140 5,620
Net interest
and dividend income after provision for loan losses
15,243 13,396 Noninterest Income:
Service charges on deposits accounts 2,821 2,792 Net gain on sale
of loans 2,948 5,009 Net loan servicing income (loss) 13 (369 )
Debit card interchange fees 2,230 2,259 Net gains (losses) on
trading activities 112 (49 ) Net gains (losses) on
available-for-sale securities 2,586 666 Net other gains (losses)
(630 ) (279 ) Increase in cash surrender value of bank-owned life
insurance 294 296 Other 900 791
Total noninterest income 11,274 11,116
Noninterest Expenses: Salaries and employee benefits
11,412 11,092 Occupancy and equipment 2,623 2,399 Data processing
2,346 2,536 FDIC assessment 767 740 Advertising and marketing 262
313 Amortization of intangibles 139 139 Professional fees 1,161
1,076 Office Supplies 371 382 Telephone 367 342 Other 2,247
2,334
Total noninterest expenses
21,695 21,353
Income before income
taxes 4,822 3,159 Provision for income taxes 907
247
Net income $ 3,915 $ 2,912
BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2013 AND
DECEMBER 31, 2012 (UNAUDITED) December 31,
December 31, Assets 2013
2012 (Amounts in thousands, except share and per share data)
Cash and due from banks $ 11,350 $ 11,579 Federal funds sold and
securities purchased under agreements to resell 21,064 25,442
Interest-bearing deposits in banks 2,078 1,539
Total cash and cash equivalents 34,492
38,560 Trading securities 314 1,614 Securities
available-for-sale 127,985 121,077 Loans held for sale 1,161 2,558
Federal Home Loan Bank (FHLB) Stock, at cost 2,266 2,266 Loans,
less allowance for loan losses of $4,894 and $6,520 at December 31,
2013 and December 31, 2012, respectively 382,295 359,928 Office
buildings and equipment, net 8,922 8,407 Intangible assets, net
8,128 8,274 Cash surrender value of bank-owned life insurance 9,311
9,016 Other assets 8,392 8,059 Total
assets $ 583,266 $ 559,759
Liabilities and
Stockholders' Equity Liabilities Deposits:
Noninterest-bearing $ 91,450 $ 84,311 Interest-bearing
419,308 409,510 Total deposits 510,758 493,821
Borrowings (including $2,157 and $2,231 at fair value at December
31, 2013 and December 31, 2012, respectively) 10,157 10,010
Subordinated debentures (including $1,031 and $834 at fair value at
December 31, 2013 and December 31, 2012) 11,081 4,958 Other
liabilities 2,968 3,146
Total
liabilities 534,964 511,935
Stockholders’ equity Preferred stock, $0.01 par value,
1,000,000 shares authorized; 10,500 shares issued as of December
31, 2013 and 2012, respectively 10,483 10,383 Common stock, $0.01
par value, 10,000,000 shares authorized; 2,299,496 and 2,287,496
shares issued as of December 31, 2013 and 2012, respectively 23 23
Surplus 9,768 9,619 Retained earnings 29,166 25,896 Treasury stock,
83,252 shares at cost as of December 31, 2013 and 2012,
respectively (909 ) (909 ) Accumulated other comprehensive income
(loss) (229 ) 2,812 Total stockholders' equity
48,302 47,824
Total liabilities and
stockholders' equity $ 583,266 $ 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 December 31, 2013 Three
months ended December 31, 2012 Average Average Average Average
Balance Interest
Rate Balance Interest
Rate Interest Earning Assets:
Interest-bearing deposits in banks $ 2,142 $ 2 0.37 % $ 4,844 $ 2
0.20 % Federal funds sold & securities purchased under
agreements to resell 22,784 75 1.30 % 17,777 52 1.17 % Investment
securities: Taxable investment securities 90,311 463 2.04 % 102,173
439 1.71 % Tax-exempt investment securities 39,512
341 5.13 % 33,519
291 5.20 % Total Investment securities 129,823 804 2.98 %
135,692 730 2.57 % Loans 387,392 4,897
5.02 % 363,234 4,964 5.44
%
Total Earning Assets $ 542,141
$ 5,778 4.35 % $
521,547 $ 5,748 4.50 %
Allowance for loan losses (5,591 ) (6,312 ) Cash and due from banks
12,970 12,687 Other assets 35,865 34,681
Total Assets $ 585,385 $ 562,603
Interest Bearing Liabilities: Interest bearing
checking accounts $ 159,188 $ 125 0.31 % $ 152,076 $ 236 0.62 %
Savings and money market deposits 146,158 57 0.16 % 143,406 69 0.19
% Time deposits 106,248 403 1.50
% 107,092 455 1.69 % Total
interest bearing deposits 411,594 585 0.56 % 402,574 760 0.75 %
Subordinated debentures 15,917 153 5.49 % 4,958 35 2.80 %
Borrowings 11,029 26 0.66 %
15,686 178 4.60 %
Total Interest-Bearing Liabilities $ 438,540
$ 764 0.69 % $
423,218 $ 973 0.91 %
Interest Rate Spread 3.66 % 3.59
% Noninterest checking accounts 90,517 84,862 Other
liabilities 7,596 6,176 Total
liabilities 536,653 514,256 Preferred Stock 10,471 10,367 Common
Stockholders' equity 38,261 37,980
Total Stockholders' equity 48,732 48,347
Total
Liabilities and Stockholders' Equity $ 585,385 $
562,603
Net Interest Income/Margin $
5,014 3.79 % $ 4,775
3.75 %
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) Twelve
months ended December 31, 2013 Twelve months ended December 31,
2012 Average Average Average Average Balance Interest
Rate Balance Interest Rate
Interest Earning
Assets: Interest-bearing deposits in banks $ 3,120 $ 7 0.23 % $
4,910 $ 13 0.27 % Federal funds sold & securities purchased
under agreements to resell 30,112 367 1.22 % 21,834 259 1.19 %
Investment securities: Taxable investment securities 95,545 2,002
2.09 % 108,138 2,599 2.40 % Tax-exempt investment securities
36,561 1,257 5.17 % 33,154
1,159 5.22 % Total Investment
securities 132,106 3,259 2.95 % 141,292 3,758 3.06 % Loans
371,827 19,060 5.13 % 353,372
19,464 5.51 %
Total Earning
Assets $ 537,165 $ 22,693
4.34 % $ 521,408 $ 23,494
4.62 % Allowance for loan losses (6,336 )
(6,783 ) Cash and due from banks 13,051 12,419 Other assets
36,232 34,079
Total Assets $
580,112 $ 561,123
Interest Bearing
Liabilities: Interest bearing checking accounts $ 161,425 $ 667
0.41 % $ 153,891 $ 667 0.83 % Savings and money market deposits
148,800 229 0.15 % 144,699 229 0.26 % Time deposits 106,121
1,695 1.60 % 109,401
2,622 1.70 % Total interest bearing deposits
416,346 2,591 0.62 % 407,991 3,518 0.86 % Subordinated debentures
9,736 513 5.27 % 4,958 144 2.90 % Borrowings 14,553
206 1.42 % 18,286
816 4.66 %
Total Interest-Bearing Liabilities
$ 440,635 $ 3,310 0.75
% $ 431,235 $ 4,478
1.04 % Interest Rate Spread 3.59
% 3.58 % Noninterest checking accounts
87,652 79,886 Other liabilities 3,108 3,496
Total liabilities 531,395 514,617 Preferred Stock 10,430
10,234 Common Stockholders' equity 38,287
36,272
Total Stockholders' equity 48,717 46,506
Total Liabilities and Stockholders' Equity $ 580,112
$ 561,123
Net Interest Income/Margin
$ 19,383 3.73 % $
19,016 3.76 %
Blackhawk Bancorp, Inc.R. Richard Bastian, III, President
& CEOrbastian@blackhawkbank.comorTodd J. James, EVP &
CFOtjames@blackhawkbank.comPhone: (608) 364-8911
Blackhawk Bancorp (QX) (USOTC:BHWB)
Historical Stock Chart
From Jun 2024 to Jul 2024
Blackhawk Bancorp (QX) (USOTC:BHWB)
Historical Stock Chart
From Jul 2023 to Jul 2024