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BLACKHAWK BANCORP, INC.
400 Broad Street, Beloit, WI 53511



                              FOR IMMEDIATE RELEASE

Contact: Keith D. Hill - Vice President, Chief Financial Officer
Phone: 608-364-8911
FAX: 608-364-8946

   BLACKHAWK BANCORP, INC. ANNOUNCES RESULTS OF ANNUAL MEETING OF SHAREHOLDERS

       Shareholder Proposal Defeated, Directors Elected, Dividend Declared


Beloit, WI - May 21, 2001 -- Shareholders at the Blackhawk Bancorp, Inc. annual
meeting voted by a 4-to-1 margin to reject a shareholder proposal seeking the
Company engage an investment banking firm to explore its sale. Blackhawk's Board
of Directors had recommended that shareholders vote against the proposal and
support the Company's continued pursuit of its strategic business plan. Company
Chairman and Chief Executive Officer Dennis M. Conerton commented, "We were
pleased to see shareholders agree that the long term value of Blackhawk Bancorp
is best brought about by improving the Company's performance through the
continued implementation of its strategic plan. With our intensive restructuring
behind us, management is now able to focus on developing our present markets and
continuing to strengthen and build upon our existing customer relationships.
While the last two years have been most challenging as the recently acquired
institutions were merged into the organization, the 120 year old organization
has a solid base to build upon."

Mr. Conerton reviewed key components of that strategic plan that had been
completed during 2000, including the Company-wide consolidation of core data
processing systems, consolidation of retail product lines, continued development
of and growth within the commercial banking functions, consolidation of an
under-performing retail branch into a larger facility, and the divestiture of
much of the Company's loan servicing portfolio. Two non-recurring charges
incurred in the fourth quarter of 2000, as well as associated operating costs
for the related matters, prevented the Company's strategic efforts from
translating to improved earnings. Looking forward to 2001, Mr. Conerton noted
the Company expects to benefit from the Bank's newly introduced courier service
which brings the Bank directly to the business customer's doorstep, the release
of its internet banking product later in the year and the potential to achieve
further leverage from its consolidated operation.


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Mr. Conerton took the opportunity to introduce R. Richard Bastian III, recently
appointed as President and COO of the Company and President and CEO of its
subsidiary, Blackhawk State Bank. Mr. Bastian's appointment brings nearly thirty
years of banking experience, half as CEO, to the organization. Mr. Bastian's
record includes major successes leading banks, both large and small, to improved
performance.

In addition to rejecting the proposal, shareholders re-elected to the Board of
directors for the term of three years Roger K. Taylor, President and CEO of
North American Tool Corporation and Charles J. Howard, Chairman of the Board and
CEO of William Charles, Ltd. Also elected to a three-year term was first-year
nominee Merritt J. Mott, owner and CEO of Rockford Sanitary Systems. In addition
to the Blackhawk Board, Mr. Mott serves as a board member of Landstar System,
Inc. and Landstar System Holdings, Inc, its wholly owned subsidiary. "We are
pleased to have Mr. Mott serving as a Director of Blackhawk with his background,
experience and extensive knowledge of our newer Northern Illinois markets."

In concluding the meeting, Mr. Conerton announced that the Board had earlier
approved a second quarter dividend of $0.12 per share to all shareholders of
record on June 29, 2001, payable on July 11, 2001. This marks the 45th
consecutive quarter that a dividend has been paid to the Company's shareholders.

At a meeting of the Board of Directors following the shareholder meeting, R.
Richard Bastian, III was also elected to the boards of Blackhawk Bancorp, Inc.
and Blackhawk State Bank.

Blackhawk Bancorp, Inc., with total assets of approximately $325.0 million is
the parent company of Blackhawk State Bank, which operates four locations in
Beloit, Wisconsin, two offices in Belvidere, Illinois and office locations in
Rochelle, Oregon, Roscoe and Rockford, Illinois. Blackhawk's stock is traded on
the Over the Counter Market under the symbol BKHB.

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, changes in interest rates, levels of consumer bankruptcies,
customer loan and deposit preferences, and other general economic conditions.

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