Blackhawk Bancorp Earns $2.89 Million in First Quarter 2023

BELOIT, WI / ACCESSWIRE / April 21, 2023 / Blackhawk Bancorp, Inc. (OTCQX:BHWB), (the “Company”) parent company of Blackhawk Bank (the “Bank”), today reported net income of $2.89 million for the quarter ended March 31, 2023, a 29% decrease from the $4.05 million earned in the preceding quarter, and a 10% increase compared to the $2.62 million earned during the first quarter of 2022. Diluted Earnings per Share (EPS) for the current quarter was $1.00, a decrease of $0.41, or 29%, compared to the preceding quarter and a $0.08, or 9%, increase compared to the first quarter a year ago. The first quarter of 2023 results produced a Return on Average Equity (ROAE) of 15.09% and a Return on Average Assets (ROAA) of 0.87%.

Results for the first quarter of 2023 included $226,000 (after-tax) of expenses related to the pending merger with First Mid Bancshares, Inc. (NASDAQ: FMBH) (“First Mid”). Excluding these expenses, the 2023 first-quarter net income would have been $3.12 million, a $932,000, or 23%, decrease compared to the linked quarter ending December 31, 2022, and a $501,000, or 19%, increase over the first quarter of last year.

The increase in net income for the first quarter of 2023, compared to the first quarter of the prior year, includes a $2.01 million increase in net interest income, which was offset by a $415,000 increase in provision for loan losses, and a $906,000 decrease in income from the sale and servicing of mortgage loans.

“We finished the first quarter of 2023 strong, despite a volatile banking market and challenging interest rate environment,” said Todd James, Chairman and CEO. “While quarterly loan growth has moderated from the robust levels we achieved during the last few quarters, we generated double digit loan growth year-over-year, while maintaining excellent asset quality. With a stable loan pipeline, strong capital position and ample available liquidity, we are well positioned for continued loan growth.”

“Another highlight of the first quarter was our announced merger with First Mid. We look forward to our customers joining First Mid, which has a strong tradition of providing excellent banking resources and quality customer service s throughout the markets they serve,” said James.

On March 21, 2023, the Company entered into an agreement to merge with First Mid Bancshares, Inc. in a 100% stock transaction. The transaction has been unanimously approved by each company’s board of directors and is expected to close in the second half of 2023, subject to regulatory approvals, the approval of Blackhawk’s stockholders and the satisfaction of customary closing conditions.

First Quarter 2023 Financial Highlights (at or for the three months ended March 31, 2023)

• Net income of $2.89 million, or $1.00 per diluted share, compared to $2.62 million, or $0.92 per diluted share, in the first quarter of 2022.
• Net interest margin of 3.77%, compared to 3.82% in the preceding quarter and 3.13% in the first quarter a year ago.
• Annualized return on average assets was 0.87%, compared to 0.80% in the first quarter of 2022.
• Annualized return on average equity was 15.09%, compared to 10.82% in the first quarter a year ago.
• Excluding Paycheck Protection Program (PPP) loans, average loans held for investment increased $87.7 million, or 12.6% to $785.5 million at March 31, 2023, compared to $697.8 million for the first quarter of last year.
• Total deposits contracted by $51.4 million to $1.15 billion at March 31, 2023 compared to $1.20 billion at the end of 2022.
• Allowance Credit Losses to total loans was 1.46% at quarter end, compared to 1.11% at the end of 2022. The increase includes a $2.64 million adjustment due to the adoption of CECL (Current Expected Credit Losses) accounting standard at the beginning of 2023. The initial adoption resulted in a $1.90 million reduction to retained earnings.
• Nonperforming assets to total assets of 0.34% at March 31, 2023 compared to 0.52% a year ago.
• On March 17, 2023, paid a quarterly cash dividend of $0.12 per share, marking the 35^th consecutive quarterly cash dividend paid.

Net Interest Income

Net interest income totaled $11.67 million for the first quarter of 2023, which was a decrease of $404,000, or 3%, compared to the fourth quarter of 2022, and an increase of $2.01 million, or 21%, compared to the first quarter of the prior year. The increase over the first quarter of the prior year is net of a $539,000 reduction in PPP fees. No PPP fee income was recognized in the current or linked quarter and all PPP fee income has been recognized.

The Company’s net interest margin was 3.77% for the first quarter of 2023, compared to 3.82% for the quarter ended December 31, 2022, and 3.13% for the first quarter of 2022. The tax-equivalent yield on earning assets increased to 4.70% for the first quarter of 2023, compared to 4.44% for the fourth quarter of 2022, and 3.32% for the first quarter of 2022. Total cost of deposits increased to 0.77% for the quarter ended March 31, 2023 compared to 0.50% and 0.11% for the quarters ended December 31, 2022 and March 31, 2022, respectively.

“Our business model is inherently hedged against some of the impacts from changing interest rates, with mortgage banking revenue and net interest margin growth moving in opposite directions as interest rates change,” James said. “Our net interest margin improved year-over-year as deposit cost increases lagged asset repricing throughout 2022, and as expected, deposit costs have caught up somewhat in the first quarter.”

Excluding PPP loans, average total loans increased by $5.9 million, or less than one percent, to $785.5 million for the first quarter of 2023, compared to $779.7 million for the fourth quarter of 2022 and increased $87.7 million, or 13%, compared to $697.8 million for the first quarter of 2022. Average total deposits for the first quarter of 2023 increased by $10.28 million to $1.20 billion compared to $1.19 billion in the first quarter of 2022.

Provision for Loan Losses and Asset Quality

The Company adopted CECL as of January 1, 2023, and recorded an increase of $2.64 million to the allowance for credit losses. The Company recorded a provision for loan losses of $415,000 for the quarter ended March 31, 2023 compared to $450,000 for the fourth quarter of 2022 and no provision in the first quarter of last year.

Total nonperforming assets, which include troubled debt restructures performing in accordance with their modified terms, equaled $4.4 million as of March 31, 2023, as compared to $4.7 million as of December 31, 2022, and $6.9 million at March 31, 2022. At March 31, 2023, the ratio of nonperforming loans to total loans equaled 0.56%, as compared to 0.60% at December 31, 2022, and 0.93% at March 31, 2022.

The allowance for credit losses to total loans was 1.46% as of March 31, 2023, compared to 1.11% at December 31, 2022, and 1.51% as of March 31, 2022. The allowance for credit losses to nonperforming loans increased to 262.9% as of March 31, 2023, compared to 185.1% at December 31, 2022, and 162.0% at March 31, 2022.

Noninterest Income and Operating Expenses

Noninterest income for the quarter ended March 31, 2023, totaled $3.19 million, a $229,000 decrease compared to $3.41 million the prior quarter and a $733,000 decrease from the $3.92 million recorded in the first quarter of 2022. The decline in noninterest income compared to the first quarter of 2022 includes a $906,000 decrease in revenue from the sale and servicing of mortgage loans.

Operating expenses for the quarter ended March 31, 2023, totaled $10.65 million, an increase of $442,000, or 4%, compared to the fourth quarter of2022, and an increase of $475,000, or 5%, compared to the first quarter of 2022. The increase compared to the linked quarter and first quarter of 2022 includes $314,000 of merger related costs.

Capital

Tangible book value per share was $24.02 at March 31, 2023, compared to $22.60 at December 31, 2022 and $26.58 at March 31, 2022. In addition to net income retained, the increase in tangible book value per share during the current quarter included a $3.84 million increase in accumulated other comprehensive income (“AOCI”) due to a decrease in the unrealized loss on available for sale securities. The increase in AOCI was partially offset by the adoption of CECL, which resulted in a $1.9 million decrease in total shareholder equity. Excluding AOCI, tangible book value per share was $35.00 at March 31, 2023, a decrease of $0.03 compared to December 31, 2022 and an increase of $3.73 compared to March 31, 2022.

About Blackhawk Bancorp

Blackhawk Bancorp, Inc. is headquartered in Beloit, Wisconsin, and is the parent company of Blackhawk Bank. The combined entity operates twelve full-service banking centers located in Rock County, Wisconsin, and the Illinois counties of Winnebago, Boone, McHenry, Lake, and Kane. The Company offers a variety of value-added consultative services to its business customers and their employees related to the financial products it provides.

Disclosures Regarding non-GAAP Measures

This report refers to financial measures that are identified as non-GAAP that the Company believes help to evaluate and measure the Company’s performance, including the presentation of the net interest margin ratio and efficiency ratio calculations on a taxable-equivalent basis. Non-GAAP measures are also used to assist investor comparison by identifying nonrecurring events such as acquisition-related expenses, nonrecurring securities gains and the impact such items have on the performance measures of return on average assets, return on average equity, diluted earnings per share, and the efficiency ratio. This supplemental information should not be considered in isolation or as a substitute for the related GAAP measures.

Forward-Looking Statements

When used in this communication, the words “believes,” “expects,” “likely”, “would”, 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 particularly in the Company’s markets; potential deterioration in real estate values, 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”; inability to recover previously recorded losses as anticipated, and the inability of third party vendors to perform critical services for the Company or its customers. The inclusion of forward-looking information should not be construed as a representation by the Company or any person that future events or plans contemplated by the Company will be achieved. The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information or otherwise.

Further information is available on the Company’s website at www.blackhawkbank.com.

Blackhawk Bancorp, Inc.

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2023 AND DECEMBER 31, 2022
(UNAUDITED)
	March 31,			December 31,
Assets	2023			2022
	(Dollars in thousands, except
	share and per share data)
Cash and due from banks	$	14,383		$	16,686
Interest-bearing deposits in banks and other institutions		5,054			6,071
Total cash and cash equivalents		19,437			22,757
Certificates of deposit in banks and other institutions		1,136			1,463
Equity securities at fair value		3,535			3,455
Securities available-for-sale		428,487			443,772
Loans held for sale		2,353			2,190
Federal Home Loan Bank stock, at cost		3,316			1,705
Loans, less allowance for loan losses of $11,469 and $8,714
at March 31, 2023 and December 31, 2022, respectively		770,064			771,468
Premises and equipment, net		16,926			17,192
Goodwill and core deposit intangible		11,206			11,286
Mortgage servicing rights		3,847			3,985
Cash surrender value of bank-owned life insurance		11,850			11,761
Other assets		29,823			30,764
Total assets	$	1,301,980		$	1,321,798
Liabilities and Stockholders’ Equity
Liabilities
Deposits:
Noninterest-bearing	$	272,389		$	352,647
Interest-bearing		875,886			838,469
Total deposits		1,148,275			1,191,116
Subordinated debentures and notes, net of issuance costs		19,871			19,856
Senior secured term note		9,333			9,722
Other borrowings		34,500			18,000
Other liabilities		9,239			7,043
Total liabilities		1,221,218			1,245,737
Stockholders’ equity
Common stock, $0.01 par value, 10,000,000 shares authorized;
3,536,837 and 3,507,220 shares issued as of March 31, 2023 and
December 31, 2022, respectively		35			35
Additional paid-in capital		36,926			36,694
Retained earnings		94,886			94,243
Treasury stock, 641,032 and 640,594 shares at cost as of March 31, 2023
and December 31, 2022, respectively		(19,289)			(19,276)
Accumulated other comprehensive income (loss)		(31,796)			(35,635)
Total stockholders’ equity		80,762			76,061
Total liabilities and stockholders’ equity	$	1,301,980		$	1,321,798

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)	For the Quarter Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2023			2022			2022			2022			2022
	(Dollars in thousands, except per share data)
Interest Income:
Interest and fees on loans	$	10,237		$	10,115		$	9,306		$	8,366		$	7,808
Interest on available-for-sale securities:
Taxable		3,619			3,284			2,913			2,364			2,068
Tax-exempt		299			379			372			369			365
Interest on deposits in other financial institutions		405			246			184			72			24
Total interest income		14,560			14,024			12,775			11,171			10,265
Interest Expense:
Interest on deposits		2,323			1,555			815			375			322
Interest on subordinated debentures		231			219			196			186			195
Interest on senior secured term note		135			120			89			45			91
Interest on other borrowings		204			59			32			24			–
Total interest expense		2,893			1,953			1,132			630			608
Net interest income before provision for loan losses		11,667			12,071			11,643			10,541			9,657
Provision for loan losses		415			450			100			(1,500			–
Net interest income after provision for loan losses		11,252			11,621			11,543			12,041			9,657
Noninterest Income:
Service charges on deposits accounts		982			1,029			1,023			968			913
Net gain on sale of loans		465			551			868			1,063			1,146
Net loan servicing income		177			195			203			209			402
Debit card interchange fees		1,029			1,141			1,177			1,165			1,079
Net gains (losses) on sales of securities available-for-sale		(50)			20			–			(20)			–
Net other gains (losses)		3			–			–			11			(4)
Increase in cash surrender value of bank-owned life insurance		90			79			78			77			86
Other		489			399			392			347			296
Total noninterest income		3,185			3,414			3,741			3,820			3,918
Noninterest Expenses:
Salaries and employee benefits		6,205			5,963			6,422			6,066			6,222
Occupancy and equipment		1,174			1,083			1,176			1,132			1,212
Data processing		785			724			705			681			708
Debit card processing and issuance		565			596			661			528			513
Advertising and marketing		107			81			138			140			108
Amortization of intangibles		80			84			88			88			96
Professional fees		587			439			417			392			389
Office Supplies		103			125			96			97			86
Telephone		129			133			136			146			140
Other		911			976			852			1,984			697
Total noninterest expenses		10,646			10,204			10,691			11,254			10,171
Income before income taxes		3,791			4,831			4,593			4,607			3,404
Provision for income taxes		898			779			1,107			1,129			785
Net income	$	2,893		$	4,052		$	3,486		$	3,478		$	2,619
Key Ratios
Basic Earnings Per Common Share	$	1.00		$	1.41		$	1.21		$	1.21		$	0.92
Diluted Earnings Per Common Share		1.00			1.41			1.21			1.21			0.92
Dividends Per Common Share		0.12			0.12			0.12			0.12			0.12
Book Value Per Common Share		27.89			26.53			24.97			27.89			30.59
Tangible Book Value Per Share		24.02			22.60			21.01			23.91			26.58
Tangible Book Value Excluding AOCI Per Share		35.00			35.03			33.62			32.42			31.27
Number of Shares Outstanding		2,895,805			2,866,626			2,870,754			2,875,430			2,873,528
Average Number of Shares Outstanding		2,880,666			2,867,915			2,872,232			2,874,254			2,864,082
Net Interest Margin (1)		3.77%			3.82%			3.63%			3.31%			3.13%
Efficiency Ratio (1)(2)(3)		71.09%			65.54%			69.04%			68.96%			74.35%
Return on Assets		0.87%			1.19%			1.02%			1.02%			0.80%
Return on Common Equity		15.09%			22.31%			16.73%			16.75%			10.82%
(1) Non-GAAP Presentations: 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
		March 31,			December 31,			September 30,			June 30,			March 31,
		2023			2022			2022			2022			2022
	(Amounts in thousands, except per share data)
Cash and due from banks	$	14,383		$	16,686		$	18,618		$	15,682		$	13,413
Interest-bearing deposits in banks and other		6,190			7,534			60,116			12,990			42,103
Securities		432,022			447,227			452,198			472,977			484,420
Net loans/leases		772,417			773,658			770,279			765,979			716,456
Goodwill and core deposit intangible		11,206			11,286			11,369			11,453			11,536
Other assets		65,762			65,407			67,801			63,109			62,715
Total assets	$	1,301,980		$	1,321,798		$	1,380,381		$	1,342,190		$	1,330,643
Deposits	$	1,148,275		$	1,191,116		$	1,263,183		$	1,220,667		$	1,199,627
Subordinated debentures		19,871			19,856			19,841			19,827			19,812
Senior secured term note		9,333			9,722			10,111			10,500			10,889
Borrowings		34,500			18,000			5,000			5,000			5,000
Other liabilities		9,239			7,043			10,568			5,998			7,414
Stockholders’ equity		80,762			76,061			71,678			80,198			87,901
Total liabilities and stockholders’ equity	$	1,301,980		$	1,321,798		$	1,380,381		$	1,342,190		$	1,330,643
ASSET QUALITY DATA
(Amounts in thousands)	March 31,			December 31,			September 30,			June 30,			March 31,
		2023			2022			2022			2022			2022
Non-accrual loans	$	2,721		$	3,036		$	3,254		$	4,125		$	4,983
Accruing loans past due 90 days or more		36			–			–			–			–
Troubled debt restructures – accruing		1,606			1,671			1,720			1,910			1,802
Total nonperforming loans	$	4,363		$	4,707		$	4,974		$	6,035		$	6,785
Other real estate owned		–			17			–			–			75
Total nonperforming assets	$	4,363		$	4,724		$	4,974		$	6,035		$	6,860
Total loans	$	783,886		$	782,372		$	779,181		$	775,474		$	727,451
Allowance for loan losses		11,469			8,714			8,902			9,495			10,995
Loans, less allowance for loan losses	$	772,417		$	773,658		$	770,279		$	765,979		$	716,456
Nonperforming Assets to total Assets		0.34%			0.36%			0.36%			0.45%			0.52%
Nonperforming loans to total loans		0.56%			0.60%			0.64%			0.78%			0.93%
Allowance for loan losses to total loans		1.46%			1.11%			1.14%			1.22%			1.51%
Allowance for loan losses to nonperforming loans		262.9%			185.1%			179.0%			157.3%			162.0
	For the Quarter Ended
		March 31,			December 31,			September 30,			June 30,			March 31,
ROLLFORWARD OF ALLOWANCE		2023			2022			2022			2022			2022
Beginning Balance	$	8,714		$	8,902		$	9,495		$	10,995		$	11,125
CECL adoption		2,408			–			–			–			–
Provision		415			450			100			(1,500)			–
Loans charged off		135			679			758			95			214
Loan recoveries		67			41			65			95			84
Net charge-offs		68			638			693			–			130
Ending Balance	$	11,469		$	8,714		$	8,902		$	9,495		$	10,995

BLACKHAWK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)	Three months ended March 31,
	2023			2022
	(Amounts in thousands, except per share data)
Interest Income:
Interest and fees on loans	$	10,237		$	7,808
Interest and dividends on available-for-sale securities:
Taxable		3,619			2,068
Tax-exempt		299			365
Interest on deposits in other financial institutions		405			24
Total interest income		14,560			10,265
Interest Expense:
Interest on deposits		2,323			322
Interest on subordinated debentures		231			195
Interest on senior secured term note		135			91
Interest on other borrowings		204			–
Total interest expense		2,893			608
Net interest income before provision for loan losses		11,667			9,657
Provision for loan losses		415			–
Net interest income after provision for loan losses		11,252			9,657
Noninterest Income:
Service charges on deposits accounts		982			913
Net gain on sale of loans		465			1,146
Net loan servicing income		177			402
Debit card interchange fees		1,029			1,079
Net gains on sales of securities available-for-sale		(50)			–
Net other gains (losses)		3			(4)
Increase in cash surrender value of bank-owned life insurance		90			86
Change in value of equity securities		49			(64)
Other		440			360
Total noninterest income		3,185			3,918
Noninterest Expenses:
Salaries and employee benefits		6,205			6,222
Occupancy and equipment		1,174			1,212
Data processing		785			708
Debit card processing and issuance		565			513
Advertising and marketing		107			108
Amortization of core deposit intangible		80			96
Professional fees		587			389
Office Supplies		103			86
Telephone		129			140
Other		911			697
Total noninterest expenses		10,646			10,171
Income before income taxes		3,791			3,404
Provision for income taxes		898			785
Net income	$	2,893		$	2,619
Key Ratios
Basic Earnings Per Common Share	$	1.00		$	0.92
Diluted Earnings Per Common Share		1.00			0.92
Dividends Per Common Share		0.12			0.12
Net Interest Margin (1)		3.77%			3.13%
Efficiency Ratio (1)(2)		71.09%			74.35%
Return on Assets		0.87%			0.80%
Return on Common Equity		15.09%			10.82%
(1) Non-GAAP Presentations: 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
	ANALYSIS of AVERAGE BALANCES & TAX EQUIVALENT INTEREST RATES
	Average Balance Sheet with Resultant Interest and Rates
(Dollars in thousands – unaudited)
(Yields on a tax-equivalent basis) (1)	For the Quarter Ended
	March 31, 2023								December 31, 2022								March 31, 2022
	Average						Average		Average						Average		Average						Average
	Balance			Interest			Rate		Balance			Interest			Rate		Balance			Interest			Rate
Interest Earning Assets:
Interest-bearing deposits and other	$	37,127		$	405		4.42%		$	29,253		$	246		3.34%		$	48,261		$	24		0.20%
Investment securities:
Taxable investment securities		394,967			3,619		3.72%			393,291			3,284		3.31%			448,643			2,068		1.87%
Tax-exempt investment securities		44,379			299		3.42%			54,914			379		3.49%			53,820			365		3.50%
Total Investment securities		439,346			3,918		3.69%			448,205			3,663		3.33%			502,463			2,433		2.04%
Loans		786,195			10,237		5.28%			786,108			10,115		5.11%			714,666			7,808		4.43%
Total Earning Assets	$	1,262,668		$	14,560		4.70%		$	1,263,566		$	14,024		4.44%		$	1,265,390		$	10,265		3.32%
Allowance for loan losses		(11,295)								(8,819)								(11,136)
Cash and due from banks		15,389								15,834								14,956
Other assets		74,551								76,693								65,912
Total Assets	$	1,341,313							$	1,347,274							$	1,335,122
Interest Bearing Liabilities:
Interest bearing checking accounts	$	451,741		$	1,388		1.25%		$	367,443		$	982		1.06%		$	313,986		$	139		0.18%
Savings and money market deposits		371,722			461		0.50%			401,432			320		0.32%			423,755			68		0.06%
Time deposits		96,298			474		2.00%			84,817			253		1.18%			77,755			115		0.60%
Total interest bearing deposits		919,761			2,323		1.02%			853,692			1,555		0.72%			815,496			322		0.16%
Subordinated debentures and notes		19,863			231		4.71%			19,849			219		4.37%			20,037			195		3.94%
Borrowings		31,465			339		4.37%			17,962			179		3.95%			16,071			91		2.29%
Total Interest-Bearing Liabilities	$	971,089		$	2,893		1.21%		$	891,503		$	1,953		0.87%		$	851,604		$	608		0.29%
Interest Rate Spread							3.49%								3.57%								3.03%
Noninterest checking accounts		284,430								375,569								378,414
Other liabilities		8,046								8,151								6,899
Total liabilities		1,263,565								1,275,223								1,236,917
Total Stockholders’ equity		77,748								72,051								98,205
Total Liabilities and
Stockholders’ Equity	$	1,341,313							$	1,347,274							$	1,335,122
Net Interest Income/Margin				$	11,667		3.77%					$	12,071		3.82%					$	9,657		3.13%
(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.

SOURCE: Blackhawk Bancorp, Inc.