Hawthorn Bancshares Inc (HWBK) Q2 2024 Earnings: EPS at $0.66, Net Income Reaches $4. …

On July 30, 2024, Hawthorn Bancshares Inc (HWBK, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Hawthorn Bancshares Inc is a financial holding company that, along with its subsidiary, conducts general banking and trust business, offering a wide range of services including checking and savings accounts, internet banking, certificates of deposit, trust services, brokerage services, and safety deposit boxes. The company also provides various lending services such as commercial and industrial loans, personal loans, installment loans, and real estate loans.

Performance Overview

Hawthorn Bancshares Inc reported a net income of $4.6 million for the second quarter of 2024, reflecting an increase of $0.2 million from the previous quarter and a significant rise of $2.1 million from the same quarter last year. Earnings per diluted share (EPS) stood at $0.66, up from $0.63 in the prior quarter and $0.36 in the prior year quarter.

Key Financial Metrics

Several key financial metrics were highlighted in the report:

• Net interest margin (FTE) was 3.33%, a slight decrease from 3.39% in the prior quarter but an improvement from 3.19% in the prior year quarter.
• Return on average assets and equity were 1.02% and 13.75%, respectively.
• Loans decreased by $20.3 million, or 1.3%, compared to the prior quarter.
• Deposits increased by $22.4 million, or 1.5%, compared to the prior quarter.
• Book value per share increased to $19.76, a rise of 1.8% from the prior quarter.

Income Statement Highlights

Net interest income for the second quarter was $14.2 million, a decrease of $0.6 million from the prior quarter. However, non-interest income saw a substantial increase to $4.0 million, up by $1.0 million from the previous quarter, driven by higher earnings on bank-owned life insurance and gains on the sale of foreclosed property.

Balance Sheet and Cash Flow

Hawthorn Bancshares Inc’s total assets were reported at $1.85 billion, with loans held for investment at $1.50 billion and investment securities at $191.2 million. Total deposits were $1.55 billion, reflecting a healthy increase from the previous quarter.

Asset Quality and Capital Ratios

Non-performing loans to total loans ratio improved to 0.30%, down from 0.56% in the prior quarter. The allowance for credit losses was $22.0 million, representing 1.47% of outstanding loans. The company maintained a strong capital position with a total risk-based capital ratio of 14.30% and a tier 1 leverage ratio of 10.94%.

Commentary

“In the second quarter, we continued to see a positive impact from focusing on the core business of the Bank. The sale of our mortgage servicing rights portfolio closed during the quarter, and we remain committed to expanding our products and services to our core customer base, while managing our operating expenses,” said Brent Giles, Chief Executive Officer of Hawthorn Bancshares Inc.

Financial Summary

Analysis

Hawthorn Bancshares Inc’s second quarter results demonstrate a solid performance with notable improvements in net income and EPS. The increase in deposits and the strategic sale of the mortgage servicing rights portfolio indicate a focused approach towards strengthening core banking operations. However, the decrease in loans and net interest income highlights areas that may require attention. The company’s strong capital ratios and improved asset quality metrics provide a robust foundation for future growth.

For more detailed insights and to access the full earnings report, visit the 8-K filing.

Explore the complete 8-K earnings release (here) from Hawthorn Bancshares Inc for further details.

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