Hawthorn Bancshares Reports Results for the Three and Six Months Ended June 30, 2022
Hawthorn Bancshares (NASDAQ: HWBK) reported a net income of $4.5 million for the second quarter of 2022, reflecting a 32.1% decrease from the previous quarter. Earnings per share (EPS) stood at $0.66, down from $0.97 in Q1 2022. Despite these declines, the bank achieved a 7.0% increase in loans, totaling $1.4 billion, and a 5.1% rise in deposits to $1.5 billion. The net interest margin improved to 3.64%, up from 3.50% in the previous quarter. However, non-performing loans increased slightly to $17.8 million.
- Loans increased by $93.9 million (7.0%) to $1.4 billion.
- Deposits rose by $74.7 million (5.1%) to $1.5 billion.
- Net interest margin improved to 3.64%, up 14 basis points from the previous quarter.
- Strong capital ratios maintained, with a Tier 1 leverage ratio of 10.98%.
- Net income decreased by $2.1 million (32.1%) compared to the previous quarter.
- EPS fell to $0.66 from $0.97 in the linked quarter.
- Non-performing loans increased by $0.7 million from the linked quarter.
Second Quarter 2022 Highlights
- Net income of
$4.5 million , or$0.66 per diluted share
- Net interest margin, fully taxable equivalent ("FTE") of
3.64%
- Return on average assets and equity of
1.04% and14.00% , respectively
- Loans increased
$93.9 million , or7.0% , compared to the linked first quarter 2022 (“linked quarter”)
- Deposits increased
$74.7 million , or5.1% , compared to the linked quarter
JEFFERSON CITY, Mo., July 27, 2022 (GLOBE NEWSWIRE) -- Hawthorn Bancshares, Inc. (NASDAQ: HWBK), (the “Company” or “HWBK”) reported net income of
Chairman David T. Turner commented, "Hawthorn Bank continued to perform very well in the second quarter of 2022. Hawthorn Bancshares reported
Turner continued, "We continue to be excited about further growth opportunities in the markets we serve and stand ready as the community bank of choice to support their financial needs."
Highlights
- Earnings – Net income of
$4.5 million for the second quarter 2022 decreased$2.1 million , or32.1% , from the linked quarter, and decreased$0.4 million , or8.2% , from the prior year quarter. EPS was$0.66 for the second quarter 2022 compared to$0.97 for the linked quarter, and$0.71 for the prior year quarter. - Net interest income and net interest margin – Net interest income of
$14.6 million for the second quarter 2022, increased$0.4 million from the linked quarter, and increased$0.9 million from the prior year quarter. Net interest margin, on an FTE basis, was3.64% for the second quarter, an increase from3.50% for the linked quarter, and an increase from3.40% for the prior year quarter. - Loans – Loans held for investment increased by
$93.9 million , or7.0% , equal to$1.4 billion as of June 30, 2022 as compared to the end of the linked quarter. Year-over-year, loans held for investment grew$133.9 million , or10.4% , from$1.3 billion as of June 30, 2021. - Asset quality – Non-performing loans totaled
$17.8 million at June 30, 2022, an increase of$0.7 million from$17.1 million at the end of the linked quarter, and a decrease of$16.0 million from$33.8 million at the end of the prior year quarter. The reduction in non-performing loans in the current quarter and linked quarter as compared to the prior year quarter is primarily due to several large non-accrual loans returning to accrual status described in more detail below. The allowance for loan losses to total loans was1.08% at June 30, 2022, compared to1.30% at December 31, 2021 and1.45% at June 30, 2021. - Deposits – Total deposits increased by
$74.7 million , or5.1% , equal to$1.5 billion as of June 30, 2022 as compared to the end of the linked quarter. Year-over-year deposits grew$149.8 million , or10.8% , from$1.4 billion as of June 30, 2021. - Capital – Total shareholder’s equity was
$124.1 million and the common equity to assets ratio was6.93% at June 30, 2022 as compared to7.74% and7.99% at the end of the linked quarter and the prior year quarter, respectively. Regulatory capital ratios remain “well-capitalized”, with a tier 1 leverage ratio of10.98% and a total risk-based capital ratio of13.97% at June 30, 2022.
The Company's 2019 Repurchase Plan was amended during the second quarter 2021 to authorize the purchase of up to
During the third quarter of 2022, the Company's Board of Directors approved a quarterly cash dividend of
Net Interest Income and Net Interest Margin
Net interest income of
Loans
Loans held for investment increased by
The yield earned on average loans held for investment was
Asset Quality
Non-performing loans totaled
At June 30, 2022,
In the second quarter 2022, the Company had net loan charge-offs of
The allowance for loan losses at June 30, 2022 was
Deposits
Total deposits at June 30, 2022 were
Non-interest Income
Total non-interest income for the second quarter ended June 30, 2022 was
Non-interest Expense
Non-interest expense for the second quarter 2022 was
The second quarter efficiency ratio was
Capital
The Company maintains its “well capitalized” regulatory capital position. At the end of the second quarter 2022, capital ratios were as follows: total risk-based capital to risk-weighted assets
[Tables follow]
FINANCIAL SUMMARY
(unaudited)
Three Months Ended | |||||||||||
June 30, | March 31, | June 30, | |||||||||
Statement of income information: | 2022 | 2022 | 2021 | ||||||||
Total interest income | $ | 16,142 | $ | 15,436 | $ | 15,169 | |||||
Total interest expense | 1,581 | 1,291 | 1,498 | ||||||||
Net interest income | 14,561 | 14,145 | 13,671 | ||||||||
Provision for (release of) loan losses | 1,200 | (2,500 | ) | 400 | |||||||
Non-interest income | 3,648 | 3,726 | 4,661 | ||||||||
Investment securities losses, net | (9 | ) | (4 | ) | — | ||||||
Non-interest expense | 11,540 | 12,227 | 11,841 | ||||||||
Pre-tax income | 5,460 | 8,140 | 6,091 | ||||||||
Income taxes | 971 | 1,531 | 1,199 | ||||||||
Net income | $ | 4,489 | $ | 6,609 | $ | 4,892 | |||||
Earnings per share: | |||||||||||
Basic: | $ | 0.66 | $ | 0.97 | $ | 0.71 | |||||
Diluted: | $ | 0.66 | $ | 0.97 | $ | 0.71 | |||||
Six Months Ended | |||||||
June 30, | |||||||
Statement of income information: | 2022 | 2021 | |||||
Total interest income | $ | 31,578 | $ | 31,272 | |||
Total interest expense | 2,872 | 3,210 | |||||
Net interest income | 28,706 | 28,062 | |||||
(Release of) provision for loan losses | (1,300 | ) | 400 | ||||
Non-interest income | 7,374 | 9,233 | |||||
Investment securities (losses) gains, net | (13 | ) | 15 | ||||
Non-interest expense | 23,767 | 23,622 | |||||
Pre-tax income | 13,600 | 13,288 | |||||
Income taxes | 2,502 | 2,557 | |||||
Net income | $ | 11,098 | $ | 10,731 | |||
Earnings per share: | |||||||
Basic: | $ | 1.63 | $ | 1.56 | |||
Diluted: | $ | 1.63 | $ | 1.56 | |||
FINANCIAL SUMMARY (continued)
(unaudited)
June 30, | March 31, | December 31, | June 30, | ||||||||
2022 | 2022 | 2021 | 2021 | ||||||||
Key financial ratios: | |||||||||||
Return on average assets (YTD) | 1.28 | % | 1.51 | % | 1.30 | % | 1.26 | % | |||
Return on average common equity (YTD) | 16.33 | % | 18.41 | % | 16.46 | % | 16.31 | % | |||
Return on average assets (QTR) | 1.04 | % | 1.51 | % | 1.35 | % | 1.14 | % | |||
Return on average common equity (QTR) | 14.00 | % | 18.41 | % | 16.70 | % | 14.64 | % | |||
Asset Quality Ratios | |||||||||||
Allowance for loan losses to total loans | 1.08 | % | 1.07 | % | 1.30 | % | 1.45 | % | |||
Non-performing loans to total loans (a) | 1.25 | % | 1.28 | % | 1.96 | % | 2.61 | % | |||
Non-performing assets to loans (a) | 1.89 | % | 2.01 | % | 2.76 | % | 3.53 | % | |||
Non-performing assets to assets (a) | 1.51 | % | 1.55 | % | 1.97 | % | 2.68 | % | |||
Performing TDRs to loans | 0.12 | % | 0.13 | % | 0.14 | % | 0.18 | % | |||
Allowance for loan losses to non-performing loans (a) | 86.17 | % | 83.51 | % | 66.36 | % | 55.45 | % | |||
Capital Ratios | |||||||||||
Average stockholders' equity to average total assets (YTD) | 7.81 | % | 8.22 | % | 7.89 | % | 7.70 | % | |||
Period-end stockholders' equity to period-end assets (YTD) | 6.93 | % | 7.74 | % | 8.13 | % | 7.99 | % | |||
Total risk-based capital ratio | 13.97 | % | 14.66 | % | 14.79 | % | 14.66 | % | |||
Tier 1 risk-based capital ratio | 12.53 | % | 13.44 | % | 13.59 | % | 13.20 | % | |||
Common equity Tier 1 capital | 9.85 | % | 10.36 | % | 10.22 | % | 9.91 | % | |||
Tier 1 leverage ratio | 10.98 | % | 10.99 | % | 11.01 | % | 10.49 | % | |||
(a) Non-performing loans include loans 90 days past due and accruing and non-accrual loans.
FINANCIAL SUMMARY (continued)
(unaudited)
June 30, | March 31, | December 31 | June 30, | ||||||||||||
Balance sheet information: | 2022 | 2022 | 2021 | 2021 | |||||||||||
Total assets | $ | 1,789,976 | $ | 1,735,683 | $ | 1,831,550 | $ | 1,708,966 | |||||||
Loans held for investment | 1,427,828 | 1,333,923 | 1,302,133 | 1,293,894 | |||||||||||
Allowance for loan losses | (15,353 | ) | (14,279 | ) | (16,903 | ) | (18,735 | ) | |||||||
Loans held for sale | 1,716 | 909 | 2,249 | 2,487 | |||||||||||
Investment securities | 272,383 | 292,244 | 316,278 | 282,022 | |||||||||||
Deposits | 1,530,808 | 1,456,143 | 1,516,820 | 1,381,001 | |||||||||||
Total stockholders’ equity | $ | 124,058 | $ | 134,387 | $ | 148,956 | $ | 136,503 | |||||||
Book value per share | $ | 18.20 | $ | 19.58 | $ | 21.66 | $ | 19.85 | |||||||
Market price per share | $ | 25.49 | $ | 24.31 | $ | 24.94 | $ | 22.05 | |||||||
Net interest spread (FTE) (YTD) | 3.41 | % | 3.36 | % | 3.45 | % | 3.34 | % | |||||||
Net interest margin (FTE) (YTD) | 3.57 | % | 3.50 | % | 3.62 | % | 3.51 | % | |||||||
Net interest spread (FTE) (QTR) | 3.47 | % | 3.36 | % | 3.52 | % | 3.24 | % | |||||||
Net interest margin (FTE) (QTR) | 3.64 | % | 3.50 | % | 3.67 | % | 3.40 | % | |||||||
Efficiency ratio (YTD) | 65.87 | % | 68.42 | % | 64.81 | % | 63.34 | % | |||||||
Efficiency ratio (QTR) | 63.38 | % | 68.42 | % | 71.75 | % | 64.59 | % | |||||||
About Hawthorn Bancshares
Hawthorn Bancshares, Inc., a financial-bank holding company headquartered in Jefferson City, Missouri, is the parent company of Hawthorn Bank of Jefferson City with locations in the Missouri communities of Lee's Summit, Liberty, St. Louis, Springfield, Independence, Columbia, Clinton, Osceola, Warsaw, Belton, Drexel, Harrisonville, California and St. Robert.
The financial results in this press release reflect preliminary, unaudited results, which are not final until the Company's Quarterly Report on Form 10-Q is filed. Statements made in this press release that suggest Hawthorn Bancshares' or management's intentions, hopes, beliefs, expectations, or predictions of the future include "forward-looking statements" within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended. It is important to note that actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those projected in such forward-looking statements is contained from time to time in the Company's quarterly and annual reports filed with the Securities and Exchange Commission. These forward-looking statements are made as of the date of this communication, and the Company disclaims any obligation to update any forward-looking statement or to publicly announce the results of any revisions to any of the forward-looking statements included herein, except as required by law.
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