Blackhawk Bancorp : 2021 Fourth Quarter Financial Statements

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2021 AND DECEMBER 31, 2020
(UNAUDITED)		December 31,			December 31,
Assets		2021			2020
		(Dollars in thousands, except
		share and per share data)
Cash and due from banks	$	10,846	$	12,012
Interest-bearing deposits in banks and other institutions		55,721			42,119
Total cash and cash equivalents		66,567			54,131
Certificates of deposit in banks and other institutions		2,161			4,159
Equity securities at fair value		2,553			2,517
Securities available-for-sale		504,341			349,565
Loans held for sale		2,585			6,096
Federal Home Loan Bank stock, at cost		2,150			2,150
Loans, less allowance for loan losses of $11,125 and $10,764
at December 31, 2021 and December 31, 2020, respectively		696,292			662,225
Premises and equipment, net		20,778			20,254
Goodwill and core deposit intangible		11,628			12,018
Mortgage servicing rights		3,833			3,409
Cash surrender value of bank-owned life insurance		11,440			11,126
Other assets		17,227			13,949
Total assets	$	1,341,555		$	1,141,599
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Noninterest-bearing	$	380,601	$	268,866
Interest-bearing		816,440			718,388
Total deposits		1,197,041			987,254
Subordinated debentures and notes (including $1,031 at fair value at
December 31, 2021 and December 31, 2020)		20,155			5,155
Senior secured term note		11,278			12,833
Other borrowings		5,000			14,000
Other liabilities		6,985			10,602
Total liabilities		1,240,459			1,029,844
Stockholders' equity
Common stock, $0.01 par value, 10,000,000 shares authorized;
3,479,069 and 3,435,348 shares issued as of December 31, 2021 and
December 31, 2020, respectively		35			35
Additional paid-in capital		35,890			35,062
Retained earnings		81,987			69,676
Treasury stock, 630,991 and 62,999 shares at cost as of December 31, 2021
and December 31, 2020, respectively		(18,952)			(941)
Accumulated other comprehensive income (loss)		2,136			7,923
Total stockholders' equity		101,096			111,755
Total liabilities and stockholders' equity	$	1,341,555		$	1,141,599

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)		Twelve months ended December 31,
		2021			2020
	(Amounts in thousands, except per share data)
Interest Income:
Interest and fees on loans	$	32,832	$	33,441
Interest and dividends on available-for-sale securities:
Taxable		7,269			6,328
Tax-exempt		1,550			1,451
Interest on deposits in other financial institutions		183			276
Total interest income		41,834			41,496
Interest Expense:
Interest on deposits		1,576			2,840
Interest on subordinated debentures		548			182
Interest on senior secured term note		412			498
Interest on other borrowings		21			127
Total interest expense		2,557			3,647
Net interest income before provision for loan losses		39,277			37,849
Provision for loan losses		500			7,600
Net interest income after provision for loan losses		38,777			30,249
Noninterest Income:
Service charges on deposits accounts		3,041			3,035
Net gain on sale of loans		8,592			11,080
Net loan servicing income		681			(431)
Debit card interchange fees		4,559			3,738
Net gains on sales of securities available-for-sale		-			535
Net other gains (losses)		106			-
Increase in cash surrender value of bank-owned life insura		314			310
Change in value of equity securities		(28)			70
Other		1,739			1,347
Total noninterest income		19,004			19,684
Noninterest Expenses:
Salaries and employee benefits		24,008			21,948
Occupancy and equipment		4,656			4,278
Data processing		2,614			2,383
Debit card processing and issuance		1,950			1,584
Advertising and marketing		425			297
Amortization of core deposit intangible		390			437
Professional fees		1,660			1,531
Office Supplies		371			363
Telephone		568			577
Other		3,355			2,655
Total noninterest expenses		39,997			36,053
Income before income taxes		17,784			13,880
Provision for income taxes		4,165			3,033
Net income	$	13,619		$	10,847
Key Ratios
Basic Earnings Per Common Share	$	4.47	$	3.25
Diluted Earnings Per Common Share		4.47			3.25
Dividends Per Common Share		0.44			0.44
Net Interest Margin (1)		3.27%			3.82%
Efficiency Ratio (1)(2)		68.63%			63.14%
Return on Assets		1.06%			1.02%
Return on Common Equity		12.99%			10.35%

1. Non-GAAPPresentations: Management discloses certain non-GAAP financial measures to evaluate and measure the Company's performance, including the presentation of the net interest margin and efficiency ratio calculations on a taxable equivalent basis ("TE"). The net interest margin ratio is calculated by dividing net interest income on a tax equivalent basis by average earning assets for the period. Management believes this measure provides investors with information regarding comparative balance sheet profitability.
2. The efficiency ratio is calculated as noninterest expense divided by the sum of net interest income on a TE basis, noninterest income less any securities gains (losses) or other gains (losses), and also includes a TE adjustment on the increases in cash surrender value of bank-owned life insurance.

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Interest Income:

Interest and fees on loans

Interest on available-for-sale securities: Taxable

Tax-exempt

Interest on deposits in other financial institutions

Total interest income

Interest Expense:

Interest on deposits

Interest on subordinated debentures

Interest on senior secured term note

Interest on other borrowings

Total interest expense

Net interest income before provision for loan losses

Provision for loan losses

Net interest income after provision for loan losses

Noninterest Income:

Service charges on deposits accounts Net gain on sale of loans

Net loan servicing income Debit card interchange fees

Net gains on sales of securities available-for-sale Net other gains (losses)

Increase in cash surrender value of bank-owned life insurance Other

Total noninterest income

Noninterest Expenses:

Salaries and employee benefits

Occupancy and equipment

Data processing

Debit card processing and issuance

Advertising and marketing

Amortization of intangibles

Professional fees

Office Supplies

Telephone

Other

Total noninterest expenses

Income before income taxes

Provision for income taxes

Net income

Key Ratios

			For the Quarter Ended
	December 31,	September 30,		June 30,		March 31,	December 31,
	2021		2021		2021		2021		2020
			(Dollars in thousands, except per share data)
$	7,876	$	8,180	$	8,621	$	8,155	$	8,079
	1,960		1,830		1,759		1,721		1,598
	369		419		378		384		384
	33		61		48		41		33
	10,238		10,490		10,806		10,301		10,094
	319		421		421		415		458
	196		195		117		41		41
	98		103		104		107		113
	-		-		-		20		40
	613		719		642		583		652
	9,625		9,771		10,164		9,718		9,442
	-		-		-		500		1,715
	9,625		9,771		10,164		9,218		7,727
	901		787		663		690		781
	1,865		2,147		2,217		2,362		3,572
	186		90		36		369		(177)
	1,168		1,146		1,218		1,027		979
	-		-		-		-		428
	5		52		7		42		-
	77		78		72		87		75
	317		457		479		458		310
	4,519		4,757		4,692		5,035		5,968
	6,403		6,118		5,753		5,734		5,851
	1,109		1,273		1,092		1,182		986
	694		689		641		591		683
	533		489		503		425		384
	115		141		70		99		75
	95		96		96		104		107
	436		434		399		390		373
	127		74		93		77		90
	143		139		144		141		140
	850		865		673		968		637
	10,505		10,318		9,464		9,711		9,326
	3,639		4,210		5,392		4,542		4,369
	728		988		1,337		1,112		1,021
$	2,911	$	3,222	$	4,055	$	3,430	$	3,348

Basic Earnings Per Common Share	$	1.02	$	1.13	$	1.30	$	1.02	$	1.00
Diluted Earnings Per Common Share		1.02		1.13		1.30		1.02		1.00
Dividends Per Common Share		0.11		0.11		0.11		0.11		0.11
Book Value Per Common Share		35.50		35.29		34.97		32.95		33.14
Tangible Book Value Per Share		31.41		31.17		30.81		29.40		29.57
Number of Shares Outstanding		2,848,078		2,848,078		2,842,828		3,359,613		3,372,349
Average Number of Shares Outstanding		2,848,109		2,848,109		3,118,265		3,372,684		3,360,579
Net Interest Margin (1)		3.12%		3.11%		3.37%		3.52%		3.63%
Efficiency Ratio (1)(2)		73.75%		70.70%		63.28%		65.53%		61.80%
Return on Assets		0.89%		0.96%		1.26%		1.16%		1.20%
Return on Common Equity		11.41%		12.57%		15.74%		12.44%		12.08%

1. Non-GAAPPresentations: Management discloses certain non-GAAP financial measures to evaluate and measure the Company's performance, including the presentation of net interest income, net interest margin and efficiency ratio calculations on a taxable equivalent basis ("TE"). The net interest margin is calculated by dividing net interest income on a TE basis by average earning assets for the period. Management believes this measure provides investors with information regarding comparative balance sheet profitability.
2. The efficiency ratio is calculated as noninterest expense divided by the sum of net interest income on an TE basis, noninterest income less any securities gains (losses) or other gains (losses), and also includes a TE adjustment on interest on tax-exempt securities, loans, and the increases in cash surrender value of bank-owned life insurance.

(UNAUDITED)						As of
		December 31,	September 30,		June 30,		March 31,	December 31,
		2021		2021		2021		2021		2020
				(Amounts in thousands, except per share data)
Cash and due from banks	$	10,846	$	16,536	$	16,418	$	15,108	$	12,012
Interest-bearing deposits in banks and other		57,882		104,722		140,073		50,199		46,278
Securities		506,894		472,472		448,072		379,187		352,082
Net loans/leases		698,877		658,323		666,738		700,399		668,321
Goodwill and core deposit intangible		11,628		11,723		11,819		11,914		12,018
Other assets		55,428		54,218		53,629		50,826		50,888
Total assets	$	1,341,555	$	1,317,994	$	1,336,749	$	1,207,633	$	1,141,599
Deposits	$	1,197,041	$	1,169,085	$	1,188,997	$	1,068,197	$	987,254
Subordinated debentures		20,155		20,155		20,155		5,155		5,155
Senior secured term note		11,278		11,667		12,056		12,445		12,833
Borrowings		5,000		5,000		5,000		4,000		14,000
Other liabilities		6,985		11,585		11,131		7,138		10,602
Stockholders' equity		101,096		100,502		99,410		110,698		111,755
Total liabilities and stockholders' equity	$	1,341,555	$	1,317,994	$	1,336,749	$	1,207,633	$	1,141,599
ASSET QUALITY DATA
	December 31,	September 30,		June 30,		March 31,	December 31,
(Amounts in thousands)
		2021		2021		2021		2021		2020
Non-accrual loans	$	5,430	$	7,827	$	8,228	$	6,361	$	7,013
Accruing loans past due 90 days or more		-		-		-		-		-
Troubled debt restructures - accruing		1,843		1,975		1,958		1,996		2,057
Total nonperforming loans	$	7,273	$	9,802	$	10,186	$	8,357	$	9,070
Other real estate owned		24		-		-		-		1
Total nonperforming assets	$	7,297	$	9,802	$	10,186	$	8,357	$	9,071
Total loans	$	710,002	$	669,547	$	677,967	$	711,515	$	679,085
Allowance for loan losses		11,125		11,224		11,229		11,116		10,764
Loans, less allowance for loan losses	$	698,877	$	658,323	$	666,738	$	700,399	$	668,321
Nonperforming Assets to total Assets		0.54%		0.74%		0.76%		0.69%		0.79%
Nonperforming loans to total loans		1.02%		1.46%		1.50%		1.17%		1.34%
Allowance for loan losses to total loans		1.57%		1.68%		1.66%		1.56%		1.59%
Allowance for loan losses to nonperforming loans		153.0%		114.5%		110.2%		133.0%		118.7%
				For the Quarter Ended
		December 31,	September 30,		June 30,		March 31,	December 31,
ROLLFORWARD OF ALLOWANCE		2021		2021		2021		2021		2020
Beginning Balance	$	11,224	$	11,229	$	11,116	$	10,764	$	9,943
Provision		-		-		-		500		1,715
Loans charged off		181		103		61		582		1,334
Loan recoveries		82		98		174		434		440
Net charge-offs		99		5		(113)		148		894
Ending Balance	$	11,125	$	11,224	$	11,229	$	11,116	$	10,764

			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)(1)						For the Twelve Months Ended
			December 31, 2021				December 31, 2020
			Average			Average			Average			Average
			Balance		Interest	Rate		Balance		Interest	Rate
Interest Earning Assets:
Interest-bearing deposits and other	$	90,300	$	183	0.20%		$	31,899	$	276	0.86%
Investment securities:
Taxable investment securities			387,361		7,269	1.88%			247,389		6,328	2.56%
Tax-exempt investment securities			52,435		1,550	3.76%			46,594		1,451	4.01%
Total Investment securities			439,796		8,819	2.10%			293,983		7,779	2.79%
Loans			683,859		32,832	4.80%			675,466		33,441	4.95%

Total Earning Assets	$	1,213,955	$	41,834	3.48%	$	1,001,348	$	41,496	4.19%
Allowance for loan losses		(11,180)							(9,535)
Cash and due from banks		16,640							16,453
Other assets		60,379							58,475
Total Assets	$	1,279,794					$	1,066,741
Interest Bearing Liabilities:
Interest bearing checking accounts	$	299,213	$	636	0.21%	$	281,053	$	807	0.29%
Savings and money market deposits		400,323			366	0.09%			318,169			676	0.21%
Time deposits		78,553			574	0.73%			97,747			1,357	1.39%
Total interest bearing deposits		778,089			1,576	0.20%			696,969			2,840	0.41%
Subordinated debentures		14,689			548	3.73%			5,155			182	3.53%
Borrowings		18,928			433	2.29%			34,227			625	1.83%
Total Interest-Bearing Liabilities	$	811,706	$	2,557	0.32%	$	736,351	$	3,647	0.50%
Interest Rate Spread						3.16%							3.69%
Noninterest checking accounts		356,227							218,254
Other liabilities		6,995							7,357
Total liabilities		1,174,928							961,962
Total Stockholders' equity		104,866							104,779
Total Liabilities and
Stockholders' Equity	$	1,279,794						$	1,066,741
Net Interest Income/Margin			$	39,277	3.27%				$	37,849	3.82%

1. Management discloses certain non-GAAP financial measures to evaluate and measure the Company's performance including a presentation of net interest income with a net interest margin ratio on a tax-equivalent (TE) basis. The net interest margin is calculated by dividing net interest income on a TE basis by average earning assets for the period. Management believes this measure provides investors with information regarding comparative balance sheet profitability. Nonaccrual loans are included in the above-stated average balances.