BELOIT, Wis., April 29, 2011 /PRNewswire/ -- Blackhawk Bancorp,
Inc. (OTCBB: BHWB) today reported earnings of $639,000 for the quarter ended March 31, 2011, a 2% decrease compared to
$653,000 earned in the first quarter
of 2010. The slight decrease in earnings was due to increased
operating expenses, primarily employee compensation and benefits.
Earnings per diluted share for the quarter decreased to
$0.22 compared to $0.23 the first quarter of 2010. Total
assets increased during the quarter to $558.3 million at March
31, 2011 from $539.9 million
at December 31, 2010. "Core
deposit growth and low funding costs have helped us maintain a
strong net interest margin, offsetting the slowdown in mortgage
refinance activity and increased operating costs," said
Rick Bastian, president & CEO.
"We continue to seek profitable lending opportunities;
however, loan demand has been soft in the face of a slow and
fragile economic recovery. Most creditworthy businesses are
being very cautious about taking on additional debt," he added.
The following table summarizes key performance and asset quality
measures for the quarter ended March 31,
2011 compared to the previous four quarters.
|
|
Key
Performance and Asset Quality Measures
|
1st
Qtr
2011
|
4th
Qtr
2010
|
3rd
Qtr
2010
|
2nd
Qtr
2010
|
1st
Qtr
2010
|
|
|
|
|
|
|
|
|
Diluted Earnings per
share
|
$0.22
|
$0.33
|
$0.30
|
$0.23
|
$0.23
|
|
Return on average
assets
|
.47%
|
.62%
|
.60%
|
.50%
|
.50%
|
|
Return on common
equity
|
6.29%
|
9.62%
|
8.91%
|
7.19%
|
7.12%
|
|
Net interest
margin
|
3.97%
|
4.12%
|
4.07%
|
3.92%
|
3.96%
|
|
Efficiency
ratio
|
71.86%
|
67.93%
|
63.34%
|
68.24%
|
68.4%
|
|
Nonaccrual loans to total
loans
|
1.99%
|
1.73%
|
2.30%
|
2.45%
|
2.55%
|
|
Nonaccrual loans and OREO
to total loans
|
2.73%
|
2.61%
|
2.68%
|
2.70%
|
2.80%
|
|
Allowance for loan losses
to total loans
|
1.86%
|
1.82%
|
1.88%
|
1.79%
|
1.87%
|
|
Allowance for loan losses
to nonaccrual loans
|
94%
|
105%
|
82%
|
73%
|
74%
|
|
Subsidiary bank total risk
based capital
|
13.57%
|
13.57%
|
13.05%
|
13.16%
|
13.48%
|
|
|
|
|
|
|
|
|
|
Net Interest Income
Net interest income for the first quarter increased 5% to
$4.9 million compared to $4.6 million in the first quarter 2010.
Both the average balance of total earning assets and the net
interest margin realized on earning assets increased for the first
quarter of 2011 compared to the same quarter last year. The
average balance of total earning assets for the quarter increased
5.0% compared to the first quarter of 2010. The earning asset
growth included a $15.9 million, or
5% increase in average total loans. The net interest margin
increased 1 basis points to 3.97% compared to 3.96% in the first
quarter of 2010.
The earning asset growth and improvement in the net interest
margin reflect the bank's success in generating and maintaining
core deposits. Average total deposits for the first quarter
increased $49.7 million, or 10%,
compared to the first quarter of 2010. The increase included
a $15.5 million, or 5% increase in
non-maturity deposits such as checking, savings, and money market
accounts. The remainder of the increase in total average deposits
was in time deposits. Strong deposit growth allowed for a
$30.8 million, or 57%, decrease in
the average total borrowings to $23.5
million for the quarter compared to $54.3 million the first quarter of 2010.
Non-Interest Income and Operating Expenses
Noninterest income for the first quarter increased 3% to
$1.8 million compared to $1.7 million the first quarter of the prior year.
The decrease was attributable to a $151,000 reduction in mortgage banking revenues,
which consists of gain on sale of mortgage loans and net loan
servicing income.
Operating expenses for the first quarter increased 10%, to
$4.8 million compared to $4.4 million in the first quarter of 2010.
Increasing compensation and benefit costs accounted for
two-thirds of the increase. Data processing and credit and
collection expense were also up compared to the first quarter of
2010.
Provision for Loan Losses and Credit Quality
The provision for loan losses in the first quarter decreased by
6% to $900,000 compared to
$961,000 in first quarter 2010.
During the first quarter the company had net loan
charge-offs of $819,000 compared to
$436,000 for the first quarter of the
previous year. Nonaccrual loans and other real estate owned
totaled $9.1 million, or 2.73% of
total loans, at March 31, 2011
compared to $8.8 million, or 2.61% of
total loans, at December 31, 2010 and
$8.9 million, or 2.80% of total
loans, at March 31, 2010.
"While many of our business customers have begun to recover from
the economic recession, high unemployment and depressed real estate
values continue to challenge our market," said Bastian. "For
this reason we expect non-performing assets and credit losses to
remain at elevated levels throughout 2011."
The ratio of allowance for loan losses to total loans was 1.86%
at March 31, 2011 compared to 1.82%
at December 31, 2010, and 1.87% at
March 31, 2010. The ratio of
the allowance for loan losses to nonaccrual loans was 94% at
March 31, 2011 down from 105% at
December 31, 2010, but up from 74% at
March 31, 2010.
The following table summarizes the activity in the allowance for
loan losses for the quarters ended March 31,
2011 and 2010, and the year ended December 31, 2010.
|
|
Activity in Allowance for Loan
Losses
|
Quarter
Ended March 31,
|
|
Year
Ended
December
31,
|
|
|
2011
|
|
2010
|
|
2010
|
|
Beginning allowance for loan
losses
|
$
6,142,000
|
|
$ 5,471,000
|
|
$
5,471,000
|
|
Provision for loan
losses
|
900,000
|
|
961,000
|
|
4,544,000
|
|
Charge-offs
|
(858,000)
|
|
(475,000)
|
|
(4,116,000)
|
|
Recoveries
|
39,000
|
|
39,000
|
|
243,000
|
|
Ending allowance for loan
losses
|
$
6,223,000
|
|
$ 5,996,000
|
|
$
6,142,000
|
|
Net charge-offs to average total
loans, annualized
|
1.00%
|
|
.56%
|
|
1.18%
|
|
|
|
|
|
|
|
|
|
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 State 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.
SOURCE Blackhawk Bancorp, Inc.